Toms Shoes- Case Study ------------------------------------------------Table of Contents 1. Executive Summary....3 2. Situation Analysis .....................................................................................4 3.

Analysis of case issues using marketing theory 3.1. The trends in the marketing environment .. 5 3.2. Creating value for customers.......................................................6 3.3. Fitting in with the changing marketing environment...................7 4. Conclusion...............8 5. References...9 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 everyones 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 consumers 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 consumers mind (Bloom et al., 2006). Tomss 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. Tomss on online marketing video convey the message to its customers in the form of social awareness movement rather than commercial advertisement. For example one of Tomss 2011 one day without shoes movement video convey the message of how poor and bare foot children in developing nations have to walk for miles for food, clean water or to seek medical help and cut and sores on their feet, serious infection or even not being able to go to school. It also share the story of some children with disfiguring disease like Podoconiosis, caused by walking bare foot on the volcanic ground in Ethiopia, and how it can be prevented by making them wear a pair of shoes. These kind of messages and narrative are effective and appealing to its target segment of customers. 3.2. Creating value for customers It is the simple fact that a customer will not buy a product that he or she perceives if the value of product or service is not up to his/her expectation. The main factor for Tomss success is its ability to add value in Toms shoes beyond the face value of its simple product like shoes. Tomss marketing strategy and primary goal is about creating value for customers rather than just to serve children by giving away shoes for those in need. Giving away shoes is a key part of Tomss marketing strategy and also a mission to make partnership with its customers and other stakeholders. By allowing individuals to participate to its cause related mission of giving away shoes to the needy children in developing countries, Toms has created more value to its customers. For the customers, every pair of shoes they purchase from Toms will make them achieve additional benefits of charity work .As the consequence their purchase decision will make the customers feel good and fulfilment and longer lasting satisfaction. Those existing customers will retell about Tomss stories to the other people around them after their purchase of products from Toms as they become a part of Tomss greater good cause and Toms movement. Tomss marketing strategies satisfy four requirements for effective segmentation; measureable, accessible, substantial, differentiable and actionable (Amstrong and Kolter,

2010). Its target segments of shoes market are mainly young adults who are internet savvy generation and the most active age group in online community. Toms understand the interest, purchasing power, psychographs and behaviour of its targeted demography. This segment of market is substantially growing and it can be easily and effectively accessible via online with lowest cost for the company to engage in regular basis. Under those given market environment, Toms uses appropriate and effective marketing mix concepts of four Ps; product, price, place, promotion (Amstrong and Kolter, 2010). Toms essentially sets the price for a pair shoes at around 30$-80$ range and it is reasonable and affordable to majority of target segment consumers especially young adult age group. The shoes are sold online or in the stores. Toms marketing advertisement are mainly word-of-mouth in person or online. Advertisement and promotional events are almost no cost for the company as they are mainly done in the form of cause-related events and through online media by stimulating social interest. 3.3 Fitting in with the changing marketing environment Toms shoes created its strategy to fit this changing social environment as internet becomes one of the most active market place for marketers, customers and competitors nowadays. Consumer also share enormous amount of information related to market, brand or product and company activities online easily and instantly. This changing internet social culture also nurtures the word-of-mouth marketing in this new market place. Word-of-mouth marketing strategies significantly lower costs for the Toms shoes as the company save millions of money from expensive commercial advertisements such as on TV. This type of customer communication and engagement also help first delivery through internet especially social networking sites. One of Toms shoes strategies for cause related marketing and mobilizing the people is its annual event called one day without shoes. There were 250,000 people from different countries participated in 1,600 events for TOMSs one day without shoes events in 2010. The participants of the event walk one day without shoes as part of the movement or public awareness campaign to remember those children without shoes and to remind their suffering consequence of walking in bare foot. One day without shoes event is a big success for Toms marketing campaign and the company gains substantial amount of public interest as well as main stream media attention. Free media coverage of the event can be translated as free advertisement for the Toms shoes brand. Moreover, Tomss one day without shoes movement is a fun activity for the good cause and the event creates the environment for emotional bond of the people and the brand. Part of the marketing activities, Toms organizes to form TOMS campus clubs in different university campus. The company also actively recruit interns and its internship program is also designed to bond young students with the company and its movement. Both Toms campus clubs and internship programs allow the participating students to develop valuable experience in marketing, promotions, viral marketing, event planning, networking and leadership. These activities will again bond the participants with the

brand and all respective individuals involve the company marketing activities and all of them collectively become part of the marketing force of the company. Toms one for one strategy, its shoes donations and shoes delivery to needy children also stimulate the interest of individuals with volunteerism. About 62.8 million people volunteered through or for an organization at least once between September 2009 and September 2010 in the United States which is 26% of nation total population (U.S department of labor, bureau of labor statistics 2010). These numbers are also indication of increasing people interests in volunteer in developed countries especially in the United States. Toms is also able to tap into this segment of market by its strategy. Stories, events, news and personal activities are shared by millions of people in every hour in online social media. Toms effectively use online social media and continuously communicate and engage with its customers. In addition to the interested individuals who view Toms web site, Toms shoes company now has over 1.4 million Facebook fans and twitter followers. These fans and followers continue retelling Toms shoes story to other people around and consequently maintaining the good reputation of brand and expanding the market. Conclusion Because of Tomss brand innovation by the use of caused-related marketing, the company is respected as ethical company and consequently builds trust by its customers and achieve retention of customers. Toms driving of cause-related mission and words-ofmouth marketing strategies make the company is uniquely stand out and Toms brand and product are differentiated from among many other shoes brand in the market. Its socially responsible mission also attracts advertisement of big brand marketing partners such as AT&T. Rapid change of socio-culture and market environment, the trend of cause-related consumption will continues and increasing numbers of consumer will engage more with the brand that has good reputation as socially responsible behaviour. In its own website, Toms states that the company has given over one million pairs of new shoes to children in need through giving partners around the world as of 2010 which is the strong indicator for the success of this relatively young shoes company. Because of its continuous engagement with customers by using effective tools and fitting in with changing market environment, Toms is expected to well maintain its customer equity. As long as Toms keep promoting its brand image as socially responsible company while improving appealing shoes design with competitive price and quality for its target market, Toms is expected maintain its long term sustainability and high growth in the years ahead. References

Armstrong, Gary and Kotler, Philip. (2011). Marketing: an introduction, 10th edition, Pearson Prentice Hall, USA. Alcaiz, Enrique., Cceres, Ruben., Prez, Rafael. (2010). Alliances between brands and social causes: The influence of company credibility on social responsibility image. Journal of business ethics, 96 (2), p169-186 Brunswick, Gary J. (June, 2010). Consumer purchase behaviour and helping: An exploration of this approach to marketing strategy. Summer Internet Proceedings, Vol. 12, p108-112 Bloom, Paul N., Hoeffler, Steve., Keller, Kevin Lane., Meza, Carlos E. Basurto.( 2006). How social-cause marketing affects consumer perceptions. MIT sloan management review, 47 (2), p49-55 Demetriou, Marle., Papasolomou, Ioanna., Vrontis, Demetris. (2010). Cause-related marketing: Building the corporate image while supporting worthwhile causes. Journal of brand management, 17(4) p266-278 Trusov, Michael; Bucklin, Randolph E.; Pauwels, Koen. (2010) Monetary value of wordof mouth marketing in online communities. Marketing intelligence review, 2(1), p26-33 Bureau of labor stastics, United States department of labor (2010): Economic news release, Volunteering in the United States 2010. Retrieved from http://www.bls.gov/news.release/volun.nr0.htm Toms Blog (2011). Retrived from http://www.toms.com/blog/ Tomsshoes channel (2010). One day without shoes .Retrieved from http://www.youtube.com/user/tomsshoes#p/c/D5837B5856648DC1