Eddie Bauer Case Analysis
Eddie Bauer Case Analysis
Eddie Bauer is a clothing store chain Headquartered in Redmond, Washington and a subsidiary of Eddie Bauer Holdings (formerly Spiegel, Inc.) They are a company originally founded in Seattle in 1920 by Eddie Bauer (1899-1986) who invented the first down parka.
Most of the companies that already exist have a huge variety of product so the product line needed to be introduced into this market has to be extensive. The area of catalogs and Internet shopping is needed and also the retail stores are of advantage. Initial investment is huge for the introduction of a new brand into the market. Competition is fierce and this will be harsh on a new brand to create awareness, knowledge and trial and also initial advertising investment will be needed to create all of these just mentioned. The market is quite saturated with these types of clothing apparels.
Eddie Bauer has many fierce competitors through out the different channels of operation. Competition can be seen through many perspectives; retail apparel; catalog apparel, and Internet shopping for clothes within that range. The competitors that compete with Eddie Bauer within the same range of clothing items and retail are The Gap, Abercrombie & Fitch, Old Navy, Victoria Secret, and Banana Republic. As for the catalogs, Eddie Bauer competes with Land’s End, L.L. Bean, and Victoria Secret. As for Internet shopping, they compete against The Gap and Victoria Secret. All of these will compete in the range of customer service, availability of items, fast and efficient delivery, quality items, durable items, and fashionable items.
The raw materials needed to make the apparel sold by Eddie Bauer are very basic, such things as cotton, wool, spandex, nylon, fleece, and yarn. Therefore, these raw materials could be purchased from any supplier if they are not satisfied with the supplier that they use now if prices are raised or quality is lowered.
Due to many alternatives offered in the market if the prices are raised or the quality is lowered and customers are not satisfied the customer will most likely switch to another competing brand. Switching costs are very low, this means that customers can switch easily from one clothing brand to another.
Generally substitutes for clothes are very limited. You do have an option in wearing pants, shorts, dresses, or skirts if you are a woman and pants or shorts if you are a man. But everyone needs clothes to wear and options in the market are endless with prices in every range and distinctive quality.
The clothes industry could fall into both growth and the maturity stage due to the following facts. Since the industry of clothing is in constant change due to fashion and different demands of customer. This is why the industry is classified as growth. Another fact is that the industry is mature due to the alternatives and movement in the life cycle curve. Alternative ways to make clothes are all researched and achieved and materials are all used up to ease the production process. Therefore, the clothing industry as a whole is mature. Internet shopping is considered in embryonic or growth stage due to the uncertainty of Internet shopping, lack of computers, and lack of confidence. Catalog shopping is in growth due to the ways of making the purchase a bit more real. I believe that there are ways that you can make a purchase through a catalogue a bit more real and easier for the customer.
When a customer is shopping for apparel/clothing the first part of the process is create a demand. The customer needs to have the need or the desire to shop for a certain product. Then the customer needs to search for the alternatives of the product that the market offers. What type of quality is he/she looking for? What price range is he/she willing to pay? Are they going to purchase via retail, catalog, or the Internet? Once they know the method they are going to use and the price range then they would compare one brand from the other and see the advantages and disadvantages they offer. Once that is established then they would make a purchase decision and buy the product. If the buying process was favorable/positive then they might create brand loyalty or liking.
Buying Criteria: Brand loyalty is a possible criterion in the buying process. Satisfaction with the product; how it fits, how it looks. Price is a definite criterion in the buying process. Quality of the product is a criterion and also will it meet the need of the consumer. Is it fashionable and is it in the range of what society follows and wears? Size is a criterion that will be very important; especially when you are a rare size and if you are does it meet that demand? Color and textures are criteria that consumers look for when they purchase clothing. How does it wash; is it dry clean or is it fit for the laundry?
Availability of catalogs, computers, and going to the retail will vary if you buy the product or not. The presentation of the catalogs and the web site will influence the purchase of the consumer.
Buying Center: Family and friends influence the decision of the consumer and also their experience with the brand. Media will influence a consumer greatly when they make their decision. The catalog, web site and retail presentation will influence the buyer. The fashion industry will influence the way consumers buy the products. Price discounts will alter the way they think about purchasing a product.
Size and Growth: The size of the market is huge in which the amount of consumer demand for clothing is very large. There are consumers that have different lifestyles and different wants and there fore there is a market for everyone. The Internet shopping is an endless world where the company has to create awareness and portray confidence for the buyer to go along with an Internet purchase. Growth is quite hard due to the saturation of the market. A company has to create a comparative advantage and grow to prosper, either be in quality, price, alternatives, etc.
This concept of One Brand, One Vision, One Customer is a very successful and smart way to do business. Those consumers that are in the retail and want to purchase a product they can actually touch, feel, see the product before buying it. They also have the convenience of a phone to place the order in the store and have assistance if needed by members of the company that are experts in the field. The ability to return a product in the store if it was bought through a catalog I think is fantastic. Sometimes a consumer might be skeptical about returning a purchase they made through mail because of the uncertainty of the mailing system. With this system you have the confidence of returning a product at the store and getting immediate refund. Also if you have uncertainty of the size you are and of the color or material before placing an order through a catalog you can go to the retail and get assistance and then place the order in the store without having to move a finger. As an advantage to the store, a seller can persuade your purchasing decisions before you make an order on the phone and when you are at home you do not have the assistance that is available.