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Key Concepts of Toms Shoes Company Marketing Strategies and Important Factors

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1. Executive Summary

In the era of globalization and highly competitive business world, it is the goals and desire of every company to take a good portion of market share for their products in the market place. People in different geographic locations are more connected ever than before with advancement of internet and air travels. Online blogs, YouTube and social networking web sites have changed new socio culture across demographics especially in younger generations. Consequently, consumers are also becoming well informed about the brand and products, value conscious and their purchase decision are made beyond the quality of product and its face value alone.

The aim of this study is to analyse the key concepts of Toms Shoes Company marketing strategies and important factors that influence the success of this relatively new shoes company under current market environment. Toms is a shoes company that gives a new pair of shoes to a child in need for every pair of shoes a customer purchases. The company was founded in 2006 by an American entrepreneur who inspired to start a shoes company after his visit to Argentina where he saw shoes giving movement by non-profit organizations. Toms shoes has capture hearts and mind of many customers because its strategies and well executed actions and the company is gradually growing in relatively short period of time.

2. Situation Analysis

The shoes are basic need product in everyone's daily life. There are numbers of well known shoes brands and companies in global shoes market and as a new brand, Toms shoes has to face challenge to win over all other established competitors in the market. In order to attract new customers, Toms need to implement strategy that consumers can differentiate the new brand and the value in its shoes. Toms shoes has successfully implemented with its own customer driven marketing strategies in order for the company to penetrate the market, position itself and to take the market share with the lowest cost. Toms shoes applied Cause- Related Marketing (CRM) and it use "one for one" strategy that the company states "with every pair of shoes a customer purchase, Toms will give a pair of new shoes to a child in need."

Cause-related marketing is effective because consumers can directly link it to corporate social responsibility (CSR) of the company. CSR can be defined as concept of business integrates social and environmental concerns in their corporate operations and in their interaction with their stakeholders on a volunteer basis (Demetriou et al, 2010). Studies have shown that cause-related marketing can benefit enhancement of corporate brand reputation, demonstration of corporate or brand values, raising of brand awareness, development of customer locality, differentiation of products and services, increase in sales volume, building relationships with stakeholders, providing differentiation, and making CSR and corporate investment visible (Adkins, 2005, as cited by Demetriou et al., 2010).

Because of globalization and interconnected world, "increasingly, a combination of heightened sense of empathy or awareness among consumers, coupled with the increasing significance of world-wide social causes or movements has resulted in consumers who are more interested in consequences of their purchase behaviours" (Brunswick,2010). Toms has successfully captured this trend and applied appropriate strategy in the right time. For consumers, brands play an essential and important role in identifying and differentiating products and services through their symbolic nature (Enally and Chernatony, 1999 as cited in Alcaniz et al, 2010). Consumer perception on Toms brand is becoming an ethical brand for doing-good cause and its shoes bring more value for consumers.

3.1 The trends in the marketing environment

Cause-related marketing become more popular in recent years due to increasing trends of consumer's perception on corporate social responsibility and socially connected marketing environment. Toms understand the concept "exposure to any type of well conceived promotional initiative for a brand leads in theory to more positive feelings and judgements about the brand in consumer's mind (Bloom et al., 2006). Toms's strategy is also more effective especially in the environment internet and social networking sites are influencing word-of-mouth marketing as never before.

With this changing market environment and social trend, Toms shoes has successful take leverage of cause-related marketing combined with word-of-mouth marketing into its strategy. In addition, the consumers in its target market segment are also the most active demographic in online as well as they are highly interactive in the actual world. Some research has reported that word-of-mouth marketing strategy has very strong impact on new customer acquisition and it can have larger and longer lasting effects than traditional marketing activities (Trusov et al., 2010).

If a company has the best product, but if its strategy does not fit with the market environment, it will not be successful in the target market. In fact, scanning and understanding market environment is vital for the success of a company. The clear marketing strategy of Toms was already in place when the company started manufacturing shoes. Toms shoes creates the strategy to fit to the changing market environment, consumer behaviours at target segment of demographic. The company founder and most of the staffs at the Toms shoe are in the same demographic and as majority of its customers and that factor can also be advantage for Toms in brainstorming strategies and executing its plans.

Toms's on online marketing video convey the message to its customers in the form of social awareness



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