Developing marketing activities for a product/service - Essay Example

Tagfront: A Revolution in Clothing Control (Marketing Report) Executive Summary This report introduces the new marketing activities to be implemented in introducing the Tagfront product-line for Fujitsu Clothing UK. Tagfront refers to a line of clothing in which specialized washable RFID (radio-frequency identification) chips have been inserted, making the garment easily traceable using simple scanning devices. The product was originally developed to help clothing rental companies better track the garments they rent, but the technology can easily be expanded to reduce shoplifting, track trends in the market and even program in-store advertising and displays to more appropriately target the preferences of the individual consumer. While it meets the immediate needs of clothing rental companies, its projected uses could easily streamline the logistics management while painlessly reducing losses from theft. Likely competitors in the field include Checkpoint and Sensoromatic, both companies currently exploring the uses of RFID chips in numerous product types including clothing. The high tech quality of the consumer world today makes such products highly desirable for the business world concerned with easing logistics management issues, more focused cross-selling and greater product security. The product is also desirable to consumers when beneficiaries of the product’s possibilities, but RFID chips have also received high criticism from consumer privacy groups concerned that the chips will enable too much information to be available to the internet community. The key issue regarding this product focuses on the exploitive possibilities the chips provide, including invasion of privacy, with criticism zeroing in on the lack of limiting legislation. The primary segment for this marketing campaign is toward those retailers and outlets that commonly rent clothing. This includes uniform manufacturers and retailers, rental tuxedos and formal dresses. These markets have a great deal of maintenance involved with their product as it must be known which individual is responsible for a given uniform at a given time. Frequently, large batches of clothing must be processed as when they are submitted for cleaning or processed for distribution among a large segment of new associates. Tagfront clothing can be electronically tracked and processed from as much as four feet away, making this sort of batch processing fast and easy while reducing data entry errors. Electronic processing of Tagfront clothing will enable organizations to keep better track of their uniforms, maintenance schedules or more specific issues and reduce the level of lost or stolen uniforms. This appeal to greater safety of the product coupled with more streamlined processing of materials is likely to influence purchasing behavior in favor of Tagfront as opposed to other uniform providers unable to offer these valuable benefits. Place, price and promotion comprise the final segment of the report. Distribution of this product will require no modifications to current distribution channels as the product is simply sewn into the garments during manufacture. Some modification will be necessary to scanning equipment, which can, in many cases, be included in shipments of clothing. Software modifications will depend upon the capabilities of the software used by the intermediaries. Within this use of the product, distribution to the end-user will follow an indirect structure through specialized intermediaries. Pricing is based primarily on a cost-oriented approach with promotion emphasis placed on value-orientation. Contents Tagfront: A Revolution in Clothing Control Today’s world is full of technological innovations designed to make our lives easier, friendlier and more attuned to our individual interests and desires. Some of the most exciting concepts to have been brought forward in recent years has been the possibility of clothing digitally programmed to provide internet services or entertainment while walking or to generate energy for ipods, cell phones and laptops. Unsurprisingly, this type of technology has been applied to more practical use in other areas, such as in the field of garment tracking. In specific markets, the ability to track and retain records on a particular garment is an important ability. Much like the UPC codes on numerous products currently on the market that are easily scanned by register scanners or detected by anti-theft machines placed at entrances and exists, new devices known as RFIDs are now available to be sewn into specialized garments such as uniforms and formal wear as a means of tracking the clothing, gleaning information regarding the wearer and quickly and easily assessing inventory or maintenance records. The current marketing plan for our new product Tagfront proposes presenting this technology for use in rental clothing lines as a means of providing quality service to the end user and providing value-added services to the intermediaries facilitating disbursement of the line. There is little involvement on the part of intermediaries or end users regarding this technology and much of the necessary equipment are already in place to take full advantage of this technology. The following report will provide a detailed description of the product itself including the benefits and expansion possibilities of this technology, an evaluation of the current marketing environment into which this product will be launched including understanding competitors and social issues to be faced, propose segmentation and positioning strategies for the new product and suggesting place, price and promotion approaches. What is Tagfront? Tagfront is an innovative new technology in which small UHF-band washable RFID (radio-frequency indentification) tags encased in soft linen can be built into uniforms and other rental clothing as a means of permitting real-time tracking of the garments. They are embedded within the clothing itself and therefore require no care on the part of the renter or the intermediary distributor. Flexible RFID tag As can be discerned from the above image, RFID tags are highly flexible and measure less than three inches in length. The tag itself weighs less than 2 grams and can withstand the high heats associated with repeated ironing of clothing as well as the rigors of the washing machine for more than 100 washings with little or no effects on its readability. The way these tags work is already familiar to the marketplace. UPC symbols, currently printed on just about every product available on the market, work in much the same way on a limited basis and range. Items bearing an RFID tag will automatically communicate with networks that can be established through scanners, door devices or wireless area networks to transmit information about product purchase and use. Illustrating their use through the familiar process of grocery store shopping, Bonsor & Gibson (2008) promise “no longer will you have to wait as someone rings up each item in your cart one at a time. Instead, these RFID tags will communicate with an electronic reader that will detect every item in the cart and ring each up almost instantly. The reader will be connected to a large network that will send information on your products to the retailer and product manufacturers. Your bank will then be notified and the amount of the bill will be deducted from your account.” The technology has been used to track everything from products to cars and wild animals to people and pets. Benefits of Tagfront Tagfront clothing offers a number of benefits to the retailer or end user. This presentation examines the use of Tagfront clothing in companies with high volumes of issued uniforms as well as for clothing rental outlets. Examples of organizations with high volumes of issued uniforms can include hotels, resorts, security teams, civic services organizations and amusement venues. Clothing rental outlets that may benefit from this product would include bridal and formal wear retailers. The RFID tag within the clothing can be scanned by the system and provide an accurate trace of the status of the clothing and the location of the wearer. By linking the ID number of the uniform with the ID number of the staff member, managers can track who is wearing which uniform. Through this accurate depiction of who was assigned to which uniform and tracing its last possession, retailers and large-scale organizations can reduce losses caused by misplacement and theft. In addition to reducing the levels of loss and increasing the accountability levels of individual employees or renters, the RFID technology enables efficient uniform processing in large quantities. “The tags have high readability and can be read from over four feet away which means that multiple tags can be scanned into one batch without actually touching the uniforms. This eliminates manual counting of returns or errors in entering ID data of the items. It also lessens the time needed to process batches of clothing prior to being sent off for cleaning” (Washable RFID, 2008). The possibilities for this technology embedded in clothing and other wearables are astounding, offering numerous possibilities for future expansion. For example, companion technology currently termed ‘magic mirrors’ enable consumers trying on RFID tagged clothing in retailer dressing rooms will be provided with an accompanying display of personalized information regarding the garment. This information may include a description of the garment’s materials, washing directions, available sizes and colors in stock or available for shipping directly from the warehouse and even guides that may assist the consumer in selecting coordinating items also available in the store or remotely. However, at this time, this type of use may not be the wisest course of action given the current market environment. Tagfront’s Competition An important element in marketing the product is developing a keen understanding for the marketing environment the new product is about to enter. This includes not only an awareness of the potential competitors in the field, but also an awareness of the current social issues and trends that may affect consumer acceptance and sales. Potential competitors are more likely to engage in price wars as a result of the still limited availability and unique nature of the product; however, they have not yet fully embraced niche markets in favor of a more general approach. Consumers are still relatively uncomfortable with the product’s high potential for exploitation and thus need examples of how the product can be utilized in a responsible and reasonable application. In both arenas, real competition and consumer impression, Tagfront faces formidable opposition, making the rental and uniform niche a key stepping stone to wider market application. Principle Competitors The primary competitors for Tagfront are Checkpoint and Sensormatic. Each of these companies have exhibited interest in exploring the possible uses of RFID tags in retail clothing markets as well as in other product areas. Checkpoint already offers RFID devices to clothing manufacturers for use in producing retail clothing with a higher level of interactivity and logistics management control than the average garment (RFID Overview, 2007). Sensormatic focuses more upon the technology’s increased ability to deter shoplifting within the retail setting and more effectively manage inventory, but also includes evidence of customer satisfaction with the increased functionality of the clothing itself in communicating with the organization’s data management system for more effective control of merchandise at all levels of operation (Item Level Intelligence, 2008). As a part of both of these organization’s offerings, the product is paired with software assistance to integrate inventory management and scanning with the RFID devices as well as training for the managers and individuals responsible for running these programs. In the case of Checkpoint, many of the in-store security devices already in place at entrances and exits are developed by the same company, thus making theft deterrent systems quickly adaptable to the RFID devices manufactured by this company through a simple retrofit of the new technology scanners (Albrecht, 2004). This highly integrated and, in some cases, already in place RFID approach to the retail clothing industry can make market entry for a new product line difficult when approached directly, but may be more accessible through a more oblique approach. While expansion into the rental industries is projected to be acute in the future, this trend has not yet seen its blossoming, making the rental sector a viable option for the Fujitsu product launch. Market dynamics Today’s marketplace is a hotbed of new technologies and excitement regarding what these technologies can do. Consumers are eager to test the limits and businesses are increasingly seeking ways of making their daunting task of logistics management integrate more effectively and efficiently. RFID technology enables the retailer to effortlessly track sales, manage inventory, order supplies and communicate with warehouses and factories regarding growing or shrinking trends in the marketplace. Consumers are increasingly excited about the possibility for an aid to shopping that removes much of the guesswork and ensures they emerge from the dressing room looking fabulous and well-coordinated. However, the market environment also incorporates a vocal segment of the population that remains concerned about the adverse elements of this potentially highly invasive technology. While other manufacturers are suspected of emplacing RFID tags in the clothing they create without informing the consumer of their presence, Fujitsu may be able to develop greater consumer confidence by openly incorporating the technology in a sensible and responsible way that appeals to consumers’ sense of logical reasoning through a product launch focused on rental and ‘loaner’ clothing such as uniforms and formal wear. Social implications RFID technology enables anyone with a particular type of scanner to track the movements and status of any RFID card. As has already been mentioned, the device can be detected within a four foot range of any scanner, which can be linked into a grid and made available through remote from any point on the planet. The implications of this are that a criminal running from the law and wearing RFID tagged clothing could potentially be tracked through the scanners available in locations such as retail stores, libraries, airports, bus terminals, train depots and numerous other locations where scanning devices are common. While many may encourage this sort of use, they are not as likely to approve of the same tracking of themselves as they go about their normal activities. However, this is a very real possibility. The use of RFID technology “raises the disquieting possibility of being tracked through our personal possessions. Imagine: The Gap links your sweater’s RFID tag with the credit card you used to buy it and recognizes you by name when you return. Grocery stores flash ads on the wall-sized screen based on your spending patterns … Police gain a trendy method of constant, cradle-to-grave surveillance. You can imagine nightmare scenarios that don’t involve the cops” (McCullagh, 2003). The protest slogan against the use of these tags consistently references the nightmare figure of ‘Big Brother’ featured in George Orwell’s dehumanizing fable 1984. In this story, the main character, Winston Smith, is introduced as a lonely civil servant charged with constantly amending the nation’s propaganda to reinforce the most recent message from ‘Big Brother’ regarding who the nation’s allies and enemies might be and other important news. He begins a rebellion against the system that he knows is constantly lying to him and his countrymen, but with constant surveillance capability and total media control, ‘Big Brother’ is able to track him down in the end and put a silent stop to his revolt. It is this ability of the ‘powers that be’ or ‘Big Brother’ to constantly listen in to Smith’s conversations and watch his every action that has individuals rising up against the use of RFID tags on everything from the shirt on one’s back to the microwave popcorn harmlessly sitting on the grocery store shelves. They are concerned that the strictly inventory control aspect of the technology is already bleeding over into consumer control and manipulation. “Since there is no legal requirement for companies to tell consumers when products they buy contain RFID tags, this may already be happening” (Albrecht, 2004). It is true that the capabilities of the technology may far exceed its intended use and widespread manipulation of the population at large takes place. However, companies that demonstrate limited use, sensible implementation and reasonable incorporation of the technology will have a greater share of the consumer’s trust, an all-important element of effective marketing in the future. Key issues As revealed in this analysis of the current market environment, it is possible to deduce several key issues involved in the launch of this new product. The first of these issues is the ability to compete with large corporations already present in the field. Organizations such as Checkpoint and Sensormatic have established reputations for security and high-technology deployment within the retail setting. Checkpoint is largely recognizable throughout the retail environment thanks to its security devices already installed in many locations as theft deterrents. Sensormatic is equally well-known for its integrated services that incorporate RFID technology with quality software deployment designed to provide the retailer with efficient communications between retail outlet, warehousing and production control. Given this environment, the path of least resistance for Fujitsu’s entry into the field is in the rental market, in which neither of these companies have fully deployed and which remains open and sensible for this type of technology launch. Perhaps more important than this, though, is the social implications of this technology as abuse of the available data is a real possibility. Consumers are easily frightened by anything that may compromise their privacy or their independence and RFID tags threaten both. To gain consumer trust, an important element toward any company’s survival, Fujitsu should take pains to ensure that its use of RFID tags remains perceived as sensible, responsible and wholly focused on providing necessary benefits to the business owner without taking undue advantage of the end user consumer. Segmentation, Targeting and Positioning Segmentation The present marketing campaign is for RFID tagged rental and other ‘temporary use’ clothing. Services provided in the rental market include the rental of men’s and women’s formal wear, costume rentals, theatrical wardrobe rental and the sale of retired rental items (Formal Wear, 2007). Market shares (Formal Wear, 2007) Other ‘temporary use’ clothing refers to the use of specialized uniforms within various settings such as in large hotel chains, some restaurants, resorts and civic services. This segment of the market has specific needs that the RFID tags can target efficiently. Targeting The rental clothing industry has specific needs not always addressed within the greater retail market. “During times of peak demand, such as proms, debutant balls and graduation, savvy firms in this industry need to be able to efficiently manage stock and returns to maximize usage and rental turnover” (Formal Wear, 2007). Tight schedules must often be maintained as the costume, tuxedo or formal dress passes from the intermediary to the renter, back to the intermediary, to the cleaners, the intermediary and out again to the next renter. In addition, these high volume outlets often find it necessary to process large batches of costumes at the same time. This is a special need shared by the large organization concerned with the maintenance of a high volume of uniforms. While uniforms are often assigned to staff members for longer periods of time than rental clothing, the need to keep track of which individual is in possession of which uniform remains important within the large organization as a means of reducing theft or loss. Tagfront clothing meets all of these needs by enabling the intermediary to automatically scan large batches of clothing through the simple process of it passing through a doorway or passed over by a scanner. Rather than individually scanning each item, RFID tags automatically feed their information into the scanner, logging it into the computer software management program thus reducing time and data processing error. The responsible and sensible use of available RFID technology to facilitate logistics management for the intermediary distribution channels will be the primary marketing approach of this campaign. Positioning Fujitsu Clothing UK, through its RFID tagged ‘rental’ line, will therefore position itself as a primary lender of clothing within two large market segments not already targeted by larger competitors in the field. The company will be able to gain a foothold in the marketplace while establishing itself as a responsible and sensible retailer in using RFID information cautiously and judiciously. Value-added services such as software training and retrofitting existing security or scanning devices so as to reduce overall implementation expense will ease transition while focus on the practical need to track merchandise will help to overcome social pressure against the use of such devices. This appeal to greater safety of the product coupled with more streamlined processing of materials is likely to influence purchasing behavior in favor of Tagfront as opposed to other uniform providers unable to offer these valuable benefits. Place, Price and Promotion Place The nature of this product requires very little modification to the production process and little or no required modification to existing distribution channels. RFID tags are simply sewn into the garments already produced by Fujitsu and distributed as non-RFID uniforms would be. Some modifications may be desired in the form of installation of scanning equipment at various points of exchange as a means of taking full advantage of the RFID capabilities. While concerns may persist regarding the ability to fully integrate RFID technology into existing software systems, common applications such as Microsoft, IBM and SQL Server are working out various ways in which RFID technology can be incorporated into existing structures, thus reducing the need for specialized services, software development or specialized hardware equipment (Evans, 2005). In addition, the tags require no action on the part of the intermediary or the individual renter to remain effective. Thus, through no effort on their part, the technology can be simply included as a type of ‘bonus’ feature of the clothing purchased. Price In keeping with the positioning of the product as the brainchild of a responsible and trustworthy corporation, the pricing for these units will be based primarily on the cost-oriented approach. Pricing is based primarily on a cost-oriented approach with promotion emphasis placed on value-orientation. As a premium product due to its functionality and technological capabilities, the RFID tagged uniforms can easily focus on a more value-oriented approach to command a steeper price. However, economic downturns in many of the world’s markets as well as the need to remain highly esteemed as a reputable company makes this approach unadvisable. By basing price on production cost, with a modest markup percentage of 20 percent, the company will be able to make a handsome profit on the RFID tagged clothing without seeming to take advantage of the novelty (Holland, 1998). This strategy will enable the company to avoid criticisms in future regarding the willingness to exploit the market at a time when the cost of the technology is steadily dropping and the consumer cannot afford great increases in expenditures. Promotion It is felt the most effective promotional method to follow for this product line is direct marketing to those organizations and retail outlets that specialize in the rental or ‘temporary usage’ clothing area. This campaign will include the use of telephone sales, catalogs, brochures and sales videos that present the various advantages RFID tagged clothing can provide the intermediary coupled with data sets illustrating time savings and testimonials regarding the efficiency of tracking, stocking and ordering for replacement sets. Direct marketing will enable Fujitsu representatives to discuss individual concerns with potential clients as well as help foster a closer relationship with intermediaries thus fostering greater brand loyalty. This up-front approach to promotion will also facilitate a greater sense of honesty and sincerity associated with the brand to help overcome societal doubts about the potential abuse of the system. Conclusion The rental and temporary use clothing industry has special needs for the tracking and maintenance of its products that exceed the needs of the general retail clothing market. These needs are met by the unique capabilities of RFID technology, which can be unobtrusively sewn into each garment produced by Fujitsu Clothing UK as a part of the production process and distributed along existing distribution channels. While there are already large competitors in the industry, these remain focused primarily upon the general retail market, providing room for Fujitsu to make its own mark within this specialized industry and thus build up the brand name. Social concerns regarding potential abuses of this technology and the invasion of individual privacy rights can be overcome by a loyal consumer base and a strong association between the company name and the concepts of sincerity, responsibility and reserved implementation. By focusing on the logistical management issues of the rental industry and a concern with meeting these particular needs, Fujitsu can begin developing a reputation for concerned personal involvement with its intermediaries, thus establishing itself as the type of company one could trust with powerful technology such as the RFID tags represent. Having gained this reputation through the rental industry and a responsible approach to business practices, Fujitsu will then be in position to launch into some of the many other applications RFID tags suggest, such as cross-marketing to consumers and fully integrated factory to consumer service. References Albrecht, Katherine. (September 27, 2004). “RFID Tracking Devices to Go In Consumer Clothes.” Rense. Available January 5, 2009 from Bonsor, Kevin & Candace Gibson. (2008). “How RFID Works.” How Stuff Works. Available January 4, 2009 from Evans, Bob. 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