MKT 761

INDIVIDUAL ASSIGNMENT

PADINI VS UNIQLO

WAN KHAIDIR BIN WAN OMAR

(2019936775)
Article 1: Padini’s Next Growth Phase to Come from Brands Outlet

1.0 Introduction

Padini is a local apparel manufacturer, based in Malaysia and has been operating in
manufacturing, trading and supplying garments for retailers and distributors across the
country. It has expanded its operation through its local network of retail outlets comprising
standalone stores, consignment counters and franchise stores for its mainstream brands such
as Vincci, Padini Authentics, PDI, Padini, Seed, Miki and P&Co. All these outlets are mainly
in urban malls.

Now Padini is looking to tap into the market in suburban areas where competition is low. Padini
introduced Brands Outlet into the market which brings a new concept to the company in order
to increase their market shares by targeting less saturated apparel market in areas which have
less to none competition from big players such as Uniqlo, Zara and H&M. As at to date, Padini
has 27 Brands Outlet in several states.

1.1 Competitive Positioning Strategy

Padini decided to move out from the stagnant and saturated apparel market which targeted
mainly on urban residents with high quality merchandise and premium price where it saw the
sales generated from its premium brands have started to stall.

Brands Outlet has been positioned by the company to be a value for money clothing stores,
offering merchandise at low price and acceptable level of quality. The executive director of
Padini personally mentioned that this brand is for the people who is concerns on the budget
but still wants to have stylish clothes with low price tag. Obviously, the quality would not reach
to the level as per what high quality brands offer such as Zara and Uniqlo, considering the low
price

Since then, several outlets were opened in Kelantan and other states and the company is
expecting to open more outlets in the future.

1.2 Base of Padini’s Competitive Advantage

Padini’s competitive advantage lies on its ability to drive the price down at a level where it
would be hard for other competitors to beat. The main reason why Padini was able to do so is
because of the cheap raw materials available locally and also abundant supply of domestic
labours.

1.3 Target Market and Factors Which Affect Purchasing Behaviour

Brands Outlet clothing line is aimed at toddlers to tweens and those aged 18 to 35. These are
the people who usually just started working and have limited budget with low disposable
income but still have the desire to be fashionable.
They are price sensitive and will always economize their purchases by comparing price and
end up buying lower one. Any slight increase or decrease in price of clothes will affect the
demand significantly.

Article 2: Uniqlo, The Strategy Behind the Global Japanese Fast Fashion Retail Brand

2.0 Introduction

Uniqlo is a Japanese brand name, established in 1984 by Tadashi Yanai and has been very
successful globally, thanks to the aggressive expansion plan implemented by Tadashi. Since
its inception, Uniqlo was perceived to be a discount retailer selling cheap and low quality
apparel to suburbs. Now the perception has completely changed after Tadashi made the
decision to position Uniqlo as a retailer selling middle to high price apparels with high quality
after he opened a 3-storey store in Harajuku, central of Tokyo in 1998.

Since then, Uniqlo has created a strong presence in global market and has been accepted by
consumer all over world with more than 1,300 stores in 15 countries across Asia, Europe and
US.

In Malaysia, Uniqlo is seen as a brand at par with other top international brands such as Zara,
H&M and Forever21. Currently it has 48 stores located mainly in big malls such as Sunway
Pyramid, 1 Utama, and IOI Malls.

2.1 Competitive Positioning Strategy

The company adopted a differentiation strategy to position its brand. It takes pride on its
commitment to innovation and company culture and views itself as a brand which offers unique
functional performance clothes owing to in – house fabric and design innovation.

Uniqlo differentiates itself from the competitors by branding its signature innovations with
names like HeatTech, LifeWear and AIRism. In addition to that, it also provides first rate
physical shopping experience by successfully managing its store through inculcation of
positive vibes among employees and interactive consumer interaction by having in – store
technology like video tutorials that describe product features.

All Uniqlo stores were purposely opened in prime areas especially in central cities to avoid
from being perceived as a low quality brand.

2.2 Base of Uniqlo’s Competitive Advantage

Uniqlo’s competitive advantage comes from its ability to design the clothes based on ongoing
innovation which emphasise on unique functional performance. Besides, clothes design is not
the only strong success factor where Uniqlo leverages on its in-store customer service which
goes beyond the normal standards.
2.3 Target Market and Factors Which Affect Purchasing Behaviour

Uniqlo’s target market is basically everyone. The brand philosophy ‘Made for All’ positions its
clothing to transcend age, gender, ethnicity and all other ways to define people. It does not
have any particular target market since it always believes that the clothes are made to be
simple, essential yet universal where they can be worn by almost everyone.

The biggest factor which affect the purchasing behaviour of consumer is the design of the
clothes produced. Uniqlo’s consumer buys the clothes because of their unique functional
performance. Each cloth is designed to cater to a very specific needs of consumer. For
example, HeatTech is designed for those who wear cloth to keep their body warm and
comfortable during winter or cold weather.

Any design which does not take into account the needs of consumer will see the demand
reduces significantly. For example, the sales for HeatTech apparels in Malaysia were not
performing very well since most of the time, the weather here is always hot and humid.

3.0 Which Strategy is Superior: Padini or Uniqlo?

Based on the discussion above, competitive strategy adopted by Uniqlo proved to be

sustainable and superior.

Competing through differentiation strategy enables the company to stay relevant and sustain
in the market. Generic competitive strategy through low price initiative will not give the
company a very strong competitive advantage since it will instantly lose if new competitors
started to offer lower price in price war.

Being innovative enables Uniqlo to be one step ahead of its competitors. Through innovation,
it would be difficult for other competitors to imitate and to be able to come out with similar
innovation, competitors have to invest heavily in research and development. Realising that,
now Uniqlo brings the definition of being innovative to a higher level by differentiating itself
through its fabric innovations.

These new fabrics are all branded and copyrighted, which poses a struggle for competitors to
come out with similar fabrics and attempt to match this point of differentiation. Uniqlo’s founder,
Tadashi Yanai used to say that Uniqlo’s largest competitor is Apple because of the company’s
desire to be the most innovative company in the wold.