Survey

Recently our Team conducted the survey dedicated to the reasonobility of entering American Apparel into the Russian market. Moreover the results of the survey might help us to draw some prelimenary conclusions about the pricing strategy, marketing strategy of AA on the first stages of its penetrating the Russian market. In the survey participated 229 people.

So, here we present the results:

We can admit that the survey is representative:
- 229 people participated
- the proportion of men and women is close to natural in Russia: 45% / 55%
- 74 % of respondents represent the segment of outmost importance for our company: 19-23 years old

Thus we can base our conclusions on these results.

Based on questions 4 and 5 we assume that it is posible to highlight 2 significant groups of young cloth-buyers in Russia:

- those who want to be individuals and look different (34%) are tend to buy clothes once in 1-3 months
American Apparel in Russia is basically oriented on this group. Individualistic style and American origin fully satisfies their needs. Unusual marketing campaign supports these benefits and attracts potential customers more efficiently.

- those who buy clothes only as necessary and want to satisfy this basic need (43%) usually go shopping once in 3-6 months.
 American Apparel does not mainly orient on this group of customers but with high level of posibility will attract them by:
---liberate pricing strategy (only 14 % of respondents are ready to pay less for outerwear and 11% - for jeans and trousers)
---broad range of basic models of high quality and color variability - great for clothes "as necessity"

Pricing strategy

We have supported our assumptions with questions 6 and 7 results and developed our pricing strategy.
In our survey we offered our potential customers the question of how much they are ready to spend for the overcoats and jeans, paying attention that these categories of clothes are the most usual and essential   in wardrobe of the average customer. So looking at the results we can state that the relative majority of the respondents (47%) are ready to spend 6-8 thousands rubles for the jacket or coat. Official price for the outerwear is in average 80-145 dollars depending on the model.  So it means that not only those who under the survey are ready to spend the determined sum of money but also  the first group of residents who determined the comfortable price gap of 3-5 thousands (see the survey in the previous post). It means that we will make an increase in price about 25-30% so that Russian customers are willing and able to buy the American Apparel brand clothes. Looking at the willingness for paying for the jeans we can notice that only 11 percent of the respondents don’t want to spend for the jeans or pants more than 1.5 thousands rubles. And again 89 percent of the residents are able to pay in average 2 thousands rubles and more.

 So we as a Department of Marketing can state that the margin will be about 25-30% of the original price and the final price for the item will in any case be very comfortable for Russian customer. The price-quality correlation remains to be the most optimal, besides that we sure that the quality of the brand in such pricing category is unusual for the country’s residents. You can also see our previous post where we analyze the brands which already exist in the Russian market, they stay at the same price level but at the same time the vast majority of the brands produce their products in China, and usually customers notice poor quality of the clothes no matter that they pay considerable for them sum of money. So the quality of the American Apparel brand which has been formulated into the slogan “100% American” is our fundamental competitive advantage.

Future success.

Based on questions 8, 9 and 10 we can assume that American Apparel has all the chances to win the hearts of Russia customers.


Current data:

- only 2% (!) of the target customers are addicted to certain brand.

76% enjoy multi-brand clothes and 22% have a desire to try something new.
In the consequences of low switching costs in garment industry  for American Apparel it means a lot of
potential buyers even on the first step

 - only 4% (!) of the target customers are not willing to buy original American clothes.

So Russian customers can be really touched by American origin of the clothes. It proves that our solgan "100% American" will work!
67% of respondents showed an active interest in our proposal and 29% acnoledge the posibility.

These are great results!

- brand awareness 34%

34% of respondents have heard about American Apparel. It is a high level of brand awareness especially for a company not presented in the market right now.
It is an uncommon situation when target customers are ready to buy the product but it does not exist in the market. We can say that there is unsatisfied nessecity in the market and still there are no ways to satisfy it.

It is high time to cease this untapped opportunity.

[Now look some scrinshots that prove the readiness of the market for American Apparel product.
No doubt you will be amused what potential the market has and already how long customers have known and even have admired (!) American Apparel.]