An Example Go-To-Market Strategy

Background

This was originally published for my EMBA Marketing Strategy assignment. The task was to produce a go-to-market strategy in 10 days for a client who owned a factory and wanted to produce and distribute a brand new product to serve the Canadian market. References were not required but I'd like to thank Mark Ritson, Roger L. Martin, Les Binet & Peter Field, Karen Nelson-Field, Dr. Grace Kite, Dan White, Paul Dyson and The Ehrenberg-Bass Institute for their guidance.

?Executive Summary

Swarmers (swim + warmer) is a new swimming apparel company whose terry cloth onesies are designed specifically for Canadian youth. The inspiration behind the product was a mom who said she and a friend made this very product to keep their kids warm and dry as they were transported to and from their swimming lessons.?A comprehensive investigation of both online and offline retailers confirms that there are no products like this in the Canadian market. The closest competing products are polyester sleepwear onesies sold for $49.99 at Old Navy. Swarmers intends to use the Malaysian factory to produce these purpose-built jumpers then market them in Canada to both moms (the purchasers) and kids (the end users).?The remainder of this document outlines the marketing mix (4Ps) analysis for a fictious client who owns a factory in Malaysia and is interested in bringing a product to the Canadian market.

Market Orientation

Swimming is most popular activity for Canadian youth between the ages of 3-17.?Though Canadians are a hockey-obsessed culture, kids are twice as likely to be involved in swimming.?A recent survey estimated that 1.1M kids participate in organized swimming activities which represents 40% of all Canadian youth between 3-17.?Swimming programs run year-round throughout all the four seasons. During the fall, winter, and spring it’s common for wet kids to leave a pool and get into a cold car. During the winter, wet kids often trudge through snowy parking lots to their awaiting cold cars while parents shuttle their children and siblings’ home or to the next activity. This market overview is meaningful because there is an unmet consumer need get kids dry and keep them warm while they transition from the pool to home.

In Canada as well as globally, swimming is growing in part to the appealing affordability of the sport. The swimwear market is also expected to grow at 6.3% compound annual growth rate (CAGR) which makes it an appealing market to invest in and serve.

Google Trends has been referred to as the world’s largest database of human intention.?Recently, several marketing researchers have proven the predictive link between Google Search trends and company revenue in multiple B2B and B2C categories through a metric called Share of Search.?As illustrated by the Google Trends graphs below, there is a clear upward trend in the number of searches for swimming lessons since 2004.?This data also shows a double peak in searches for swimming lessons that could be helpful for timing the product launch; one in the spring and one in the fall. Furthermore since 2011, Canadians have dramatically increased the number of searches for jumpsuits and onesies which represents a favourable tailwind for Swarmers.?Specifically, onesies consistently peak during the Christmas shopping season in December and jumpsuits peak in the fall during back-to-school shopping. These trends are useful in determining when to market the Swarmer product and what keywords to target with paid search ads.

Segmentation

?According to Statista, kids between the boys between the ages of 0-17 make up 3.7% of the population while girls of the same age represent 3.55%.?Based on a population of 38M, this means there are approximately 2.7M kids under the age of 17.?Within that group, there are approximately 565,278 boys and 534,722 girls who participate in organized swimming.?The 40% of Canadian kids who participate in swimming lessons is an attractive, underserved business opportunity for this product solution.?

Target Segment

The target segment for the Swarmer product line is the 1.1M kids under the age of 17 who participate in swimming. While the product will be designed for these kids, parents are likely the people paying for the product and should be also be considered in the target segment. ?In fact, it was a recent conversation with a couple of parents that highlighted the market need. Several parents in the swimming community have been making their own warming onesies because they can’t find a suitable option to purchase through stores or online.?

An online search for this product confirms there are no comparable solutions in the Canadian market. Speedo, Billabong and SportChek (Canada’s largest sporting goods retailer) do not sell any comparable products. The most comparable product is an Old Navy micro-fleece hooded pyjama retailing at $49.99.?

Kids are an attractive segment to serve because the high rate of repurchase as they outgrow clothes quickly.?Swarmers anticipate an average customer will need to purchase at least once per year.?In cases where kids are involved competitive swim programs, they may need to cycle through two or three different Swarmers in a week while the others are being washed.?

To validate the market fit and customer demand for this product, Swarmers will launch a pilot program in June 2022 requiring and investment of $210,000.

** Setting the ad budget at 5% of revenue is a fast and easy but Zero Based Budgeting is likely best method.

The pilot program will coincide with the annual increased demand for swimming lessons and apparel in the fall. This demand should turn inventory quickly and put Swarmer’s into a position to re-order from Malaysia in early October. This would allow Swarmers to resupply inventory in time for the holiday shopping season. During this pilot, Swarmers expects to sell out an initial run of 5000 units at a 29% profit margin.

Assuming the pilot is successful, Swarmers anticipates a conservative first year revenue forecast of $649,000 and a profit of $185,000.?Investor(s) will be asked for $200,000 to cover the initial pilot program and in return, offered an 8% annual dividend on profits. Over 3 years, the investor(s) can expect a 134% return on their initial investment which will continue to grow over subsequent years.???

** After watching a few episodes of the Dragon's Den I thought about the range of profits I was willing to share for the initial investment. ?

Positioning

?????????** I believe this comes from the book Conversations that Win the Complex Sale

Defensible against competitors

As previously stated, there isn’t a comparable product in the Canadian market. Old Navy’s polyester onesie shown above is the closest alternative solution. However, it’s not designed for, or marketed to, swimmers. Swarmers closest competitors are from the UK. Combining the UK brand designs with ethnographic research from Canadians provides a great outline for positioning the product in Canada.

Important to Prospects

Parents of swimmers frequently pick up and drop off kids at pools all year round. The majority of Canada has very short summers which means that kids need extra cold-weather protection from the elements during the during the typical organized swimming season from September to May. In addition, COVID has impacted many parents’ willingness to change and dry their kids in crowded change rooms before going outside to the parking lot. Both kids and parents have a need for a simple solution that can keep them warm and dry and get them in and out of change rooms quickly after being in the pool.

Unique to Swarmers

The water absorbent towel terry cloth cotton material is the most distinguishing product feature.?This is the main differentiator between the product designed for swimmers (cotton terry cloth) and one designed for sleeping (polyester). Polyester is a hydrophobic material that doesn’t absorb water very well.

Brand Name

Swarmers: Swimming Apparel Designed for Canadians

A brand name is a distinctive asset for the company.?Unique names that are easy to spell and pronounce have an advantage as they don’t have any other competing mental associations or baggage to confuse the customers.?Names such as like Google, Uniqlo, Shopify all fit into this category and overtime became famous as the company and products grew. On the other hand, brand names like Casper or Avocado mattresses have a distinct disadvantage from the start.?Yes, the names are famous however the brand managers need to spend considerable amount of time to retrain consumers to understand that both are DTC mattress companies and not a friendly ghost or a fruit that goes well with chips and salsa. ?

Swarmers would benefit from consumer market research to understand the strength and weaknesses of their name.?Swarmers is not totally unique, and the name may have other meanings that could hurt the brand. For example, there is a company called Swarm Technologies, swarming behaviour is seen in bees and is sometimes used to describe shoppers during black Friday events.?There is a movie and video game both named swarm and it’s a form of intelligence from decentralized self-organizing systems.

In addition to the brand name, the company owners should think carefully about other supporting distinctive assets in the packaging, logo design, characters, sonic jingles etc that could help make the brand more recognizable and unique.

Product

The following chart provides a comprehensive overview of how the product features and benefits will meet the market needs.

Sample designs of the swim-specific UK based products are seen below.?The Swarmers product line will be designed according to specifications listed in the table above.

Price

An overview of pricing is included below. Swarmers believes value-based pricing is the best approach for this product line and has no intention of offering discounts to increase perceived value.?Since there are no direct competitors, consumers in the space “satisfice” and find products that are adequate to meet their needs.?Since Swarmers will compete with these satisficing products, they are accustomed to a price point of $50. Further market research would be useful to find the consumers expectations, lower and upper price thresholds as well as understand the quality cues that both signal to the customer. ?

Place

Swarmers will initially be a direct-to-consumer (DTC) and launch the product through the Shopify eCommerce platform.?After the first year or two, Swarmers expects the actual sales forecasts, compound annual growth rate and inventory turnover to provide valuable information to sell this product into buyers of specialty and large sporting goods retail stores in the Canadian market. ?Since the product will be sold online, special attention should be given to the online shopping experience and include customer reviews, product photography and descriptions, sizing assistants like True Fit and search engine optimized web pages to attract organic (not-paid) traffic searching for this type of product.

Promotion

The focus of Swarmer’s promotional activities should be two-fold.?

First, Swarmers needs to build the brand. The brand needs to build recognition within the minds of the category buyers specifically when those people are in buying situations.?The brand needs to inform, educate and/or entertain all potential customers by using their distinctive assets and linking the brand and product to the category entry points that initiate future customer purchases. The creative is key and a bigger driver of ad profitability than every other lever the brand can pull at this time. Swarmers needs to consistently reach as many of the target segment prospects as possible with great photo and/or video creative on high-attention channels like YouTube, forced pre-Roll networks like Bell Media or Roku. Well branded photo-based ads should be placed in location that parents register kids for swimming. When budget allows, more expensive channels like TV and OOH should be considered.

Secondly, the Swarmers will need to capture existing demand and drive traffic to their online or pop-up stores. Since people use Google to search for product solutions, paid search and product listing ads on Google are incredibly powerful and efficient at converting existing demand into qualified website visitors that have a high propensity to purchase.?Additional channel considerations are ads that retarget the Swarmers website and product-level pages via dynamic product as on the Facebook network (Facebook, Instagram, Messenger, and Facebook Audience Network). ?Portable pop-Up stores can be easily transported to any gathering of the target-rich segment such as foyers of public pools or local markets.?

Balancing Short- and Long-term Activities

Balancing Digital and Traditional Media

Optimizing the Digital Media Mix