INTRODUCTION
Businesses, large and small, implement strategies to maximize profits and reduce costs and are often defined by the market and audience targeted by the business. These strategies are long-term plans that allow a business to achieve goals in ways that strengthen their brand identity and are focused towards a beneficial aim.
Strategies can be developed for the purpose of gaining competitive advantage within a market to increase a company’s market share while growth strategies are intended to expand a brands reach and offering.
This report will analyse a local company called Vannie Kaap and identify the strategies used to develop the brand to its current position in the market. Areas for outsourcing will be design and marketing and further strategies suggested for cost, differentiation, focus and development will be discussed in relevance to the brand.
GLOSSARY OF TERMS
STRATEGY
Approaches or plans of action to achieve long-term goals or objectives.
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DIVERSIFICATION
A corporate strategy to enter into a new product or service to new markets, involving substantially different skills, technology and knowledge.
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VERTICAL INTEGRATION
An arrangement in which the supply chain of a company is integrated and owned by the company.
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MERGER
A strategy for when two or more companies combine and put together resources to form a single entity.
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OUTSOURCING
The business practice of hiring a party outside the company to perform services and create goods that were traditionally performed in-house by the company’s own employees.
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DIFFERENTIATION
A business strategy developed to provide consumers with something unique, different and distinct from competitors in the marketplace.
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SLA
Service Level Agreement is a commitment between a service provider and a client that outline the quality, availability and responsibilities of the service provider.
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PRODUCT LIFE-CYCLE
The stages a product goes through in the market made up of development, introduction, growth, maturity and decline.
1.
THE BUSINESS
1.1 Vannie Kaap apparel and gifting
Vannie Kaap (VK), was created by self-taught graphic designer, Bernie Fabing, in celebration of Cape Coloured culture and the creole-like language known as “Kaaps”. The language itself was developed from the combination of the Khoi language traditional dutch Afrikaans within the Cape Flats and Coloured community (Williams, 2021). VK began on Facebook by posting relatable and familiar phrases and memes, and as the following on social media grew, so did the product line. Simple, typographic content with a minimal colour palette, became identifiable as the VK brand and the popular phrases were printed onto mugs and sold in local Pick and Pay stores in the Cape Town area.
VK expanded their merchandise range to apparel that included t-shirts, hoodies, caps and novelty accessories available on their online store and delivered nationwide. Later, VK opened their first store in Canal Walk and have since expanded to 2 additional stores in Malmsbury and a kiosk in Blue Route mall (Fabing, 2021).
Although the merchandise material of apparel and novel gifting is not new, the content and branding on simple items has made VK a unique addition to the cultural representation of a previously disadvantaged community that was racially segregated during the Apartheid era in South Africa. Studies have shown that audiences are more receptive to content that they are able to relate to and are represented in (Ma, 2016: 153). The representation of the Cape Coloured culture through humour and relatable phrases, has allowed VK to hold a segment of the buying market through a cultural demographic and has been able to expand its audience to include Coloured and Afrikaans communities both nationally and internationally.
Since the products sold are not uniquely crafted or designed, the material costs are able to remain relatively low resulting in an affordable product for the purchasing audience. This also helps VK stay relevant as the content on the products is able to change with the market and current affairs while keeping suppliers constant.
VK remains in contact with the intended audience through social media and also maintains a following through their news blog through which they uplift community members. The ability to understand, represent, engage and represent a unique target audience through language and visual communication has differentiated VK within the apparel and gifting market.
1.2 The market life cycle
Consumer behaviour changed when the COVID-19 pandemic began and the limitations on movement, retail regulations and job losses occurred (Mbunge, 2020). With so many livelihoods affected, purchasing behaviour shifted to essential goods and the novel nature of gifting and apparel became a luxury. This meant that there was a large decline in brick-and-mortar retail sales. However, the pandemic shifted more consumers into an e-commerce and social media environment for marketing. Since VK established an online market space early on, they were able to adapt to the shift to virtual shopping.
Market life-cycles begin with development of products and strategies followed by the introduction to the market. Introduction to the market can be slow initially as consumers need time to see products, systems and understand platforms. In relation to e-commerce for clothing, this would entail advertising and explanations of delivery costs and options, reliable payment methods and returns policies. The market then moves into the growth phase where there is an increase in sales and consumer usage as awareness and understanding of the platform grows. The growth phase is supported by social media and the audience as word-of-mouth spreads and trust in brands increases. Once a market reaches maturity, it is in the prime of sales and the return on investment has been reached so sales and engagement will be stable at an effective rate. This is considered to be the highest point of the market life cycle and requires minimal marketing efforts as the industry is known and trusted (Wohlner, 2020).
The e-commerce industry for clothing and apparel was already established pre-pandemic, with many companies operating solely in the online space. However, smaller companies and vendors needed to make the shift allowing the market to enter a new growth stage. The growth stage was evident on social media with more companies advertising their abilities to deliver nationwide and door-to-door through a variety of marketing strategies that included free gifts, delivery costs and rewards programs (Business Insider SA, 2020). However, the introduction of new vendors in the e-commerce market was met with some hesitancy since there was also an increase in online fraud and privacy breaches, this meant that e-commerce platforms have to have ongoing messaging to communicate privacy and safety of consumer information to ensure trust between consumers and businesses.
Product life-cycles are similar to market life-cycles with companies developing products, introducing it to the market and encouraging a growth in sales through marketing campaigns. For VK, this involved launching products with new themes or audiences such as the baby grower range or the collection produced in response to the pandemic. Most companies aim to have as many products in the maturity phase for as long as possible by maintaining market interest through innovative campaigns and marketing materials. The final phase of the product life cycle is the decline, the stage at which the market loses interest in the product and a reduction in sales is notable. As a cycle, products can return to the development stage after the decline to be modified, re-designed and re-introduced to the market (Wohlner, 2020).
The nature of VK products have the flexibility for new content to be designed and printed onto locally supplied items, this meant that there was still a market for the representation of a unique community experience in a pandemic by returning declining products to the development stage and updating the content according to current affairs. Social media platforms have been integral to the increase in representation of minorities and experiences across the world and increased even more during the global pandemic.
2.
STRATEGIES
2.1 Generic Strategy
Cost leadership - VK could sell simple items which are cheap to produce, and it would still sell because of the supporters that the business has. They could get into contact with more local suppliers and take more time to decide which would be the most effective way to go in terms of the ratio of cost to quality because planning and analysing goes a long way. Cost leadership would be the way to go as the business already utilises differentiation with a unique design style and language, targeting a unique audience which hardly any other businesses aim for. Leaning more towards e-commerce instead of over-the-counter sales would also result in lower overhead costs when it comes to running the business, spending less on things such as electricity.
2.2 Development Strategy
Conglomerate Integration - A merger with a popular, affordable transport service provider such as Didi, Uber or Taxify to help with deliveries of products to customers as e-commerce popularity has grown due to the pandemic.
Vertical Integration - Merging with a local supplier of fabrics such as Fibre2Fashion would mean more control over the supply of materials needed for the products that the business will create and sell.
2.3 Outsourcing:
Partial Design Outsourcing - Collaborating with another local clothing brand, such as BRAhSSE, to create new, interesting designs and communicating with both client bases.
Marketing Outsourcing - Vannie Kaap could do sponsorships or collaborations with local (South African) influencers or celebrities who they feel are part of their target market, such as Yusriq Meyer. This collaboration would boost popularity by gaining support from an influential individual who is also supported by potential customers who form the exact culture that Vannie Kaap was built upon.
CONCLUSION
By using social media as the main form of communication with the target audience, it allows Studio A to adapt as the campaign runs according to feedback without incurring excessive expenses or loss of productive time. Once the campaign is completed, it would be beneficial to analyse the responses, impressions and feedback from both current and new clients. A simple survey could serve as a tool for gaining information such as how the client found out about Studio A, the most common forms of media used etc. These insights would then be used to tailor future campaigns to be suited even more uniquely to the target audience or allow for information into alternate audiences and services that could be used to grow Studio A into other avenues.
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