CROCS

BSBA 31-B
“Come As You Are”. Crocs is also
deploying “Be Yourselfie”, a GIF
generator that allows consumers to
express what makes them unique in a
fun, sharable way.
 I. Background
 Crocs, Inc. is a world leader in innovative casual footwear
for men, women and children. Crocs offers a broad
portfolio of all-season products, while remaining true to
its core molded footwear heritage. All Crocs shoes feature
Croslite material, a proprietary, revolutionary technology
that gives each pair of shoes the soft, comfortable,
lightweight, non-marking and odor-resistant qualities that
Crocs fans have known and love. Crocs celebrates the fun
of being a little different and encourages fans to “Find
Your Fun” in every colorful pair of shoes. Since its
inception in 2002, Crocs has sold more than 300 million
pairs of shoes in more than 90 countries around the world.
Over the past 13 years, Crocs has sold more than 300 million
pairs of shoes. Crocs™ shoes are sold in more than 90
countries. The iconic clog-style shoe that Crocs is so well
known still accounts for more than 45% of Crocs footwear
sales. Globally, Crocs has more than 500 retail locations and
continues to grow. Since 2007, Crocs has donated more than
3 million pairs of shoes to people in need around the world
as part of its global Crocs Cares corporate social
responsibility platform. Headquartered in Niwot, Colorado,
Crocs has more than 4,000 employees globally.

Popular around the world, Crocs shoes are some of the

unique shoe designs that you can find in the market. While
they are renowned for their distinctive look, a lot of people
do not really know about the benefits that they bring to your
feet.
Crocs, Inc. is a shoe manufacturer founded by Scott
Seamans, Lyndon "Duke" Hanson, and George Boedecker, Jr.
— to produce and distribute a foam clog design acquired
from a company called Foam Creations. The shoe was
originally developed as a boating shoe. The first model
produced by Crocs, the Beach, was unveiled in 2002 at the
Ft. Lauderdale Boat Show in Florida, and sold out the 200
pairs produced at that time. It has since sold 300 million
pairs of shoes.

Crocs are made in a variety of styles. They are manufactured

in Crocs facilities in Mexico and China, and contract
manufacturers in Italy, Romania, Bosnia and Herzegovina,
Vietnam, China and Argentina.
II. Market Situation
Crocs has been in the Philippines for 8 years. Globally, it sold
over 200 million pairs in over 90 countries.
Whenever someone mentions Crocs, an image of brightly
colored rubber clogs comes to mind. But not many may be
aware that the Crocs brand doesn't just have clogs, but a
surprisingly wide array of styles. There are stylish wedge
sandals and boots to suede loafers and sneakers, which are
stylish and as comfortable as the clogs everyone loves.
Asians, especially Filipinos, have embraced Crocs with open
arms. Asia now accounts for 41% of the company's total
sales.
 III. Current Marketing Situation
 Product Situation
 The shoes are produced in an array of colors depending on the model.
The Classic styles are available in more than 20 colors; most other
styles are produced in a palette of four to six colors or two-color
combinations. There are different styles of Crocs that are made so
they can be worn in any season.
 Crocs also sells other fashion accessories. Jibbitz are decorations that
can be clipped to the ventilation holes in the shoes. These include
designs, mainly aimed at children, which feature Disney characters.
The company has also released a line of purses in a variety of colors.
 The Crocs Shoes price starts from Php1400. Crocs Shoes will be your
perfect go-to shoes. Once said to be the ugliest rubber shoes ever by
fashion standards, Crocs has since proved that people prefer comfort
more over looks.
Competitive Situation
The global casual footwear and apparel industry is highly
competitive. Although we believe that we do not compete
directly with any single company with respect to the entire
spectrum of our products, portions of our business compete
with companies such as, but not limited to, Nike Inc., Heelys
Inc., Deckers Outdoor Corp., Sketchers USA Inc. and
Wolverine World Wide, Inc. Our retail locations also compete
with footwear retailers such as Macy's Inc., Nordstrom Inc.,
Dicks Sporting Goods Inc., and Collective Brands Inc.
Distribution Situation
Crocs customers are located in many countries worldwide,
however the majority of sales are in the USA. The
competition is heating up with new brands entering the
footwear industry one of them is Sketchers. Sketchers uses
another type of retailers, while Crocs uses the more
specialty product retails, Sketchers and its "Cali Gear"
captured all the major retailers and has easily taken the in-
store display in these stores. Although Crocs achieved a lot
of success in expanding its product lines to attract more and
a wider range of customer, compared to their competitor it
is not enough.
Macro Environment Situation
As result of the 2016 credit crunch, solid majorities of Americans across
all income categories are watching their spending closely and are cutting
back. With a recession underway, people are unlikely to buy multiple
pairs in a way they might have a couple of years ago as this would run
into hundreds of dollars. Consumer confidence is reflected.

According to the Average annual expenditures on Footwear of the

Consumer Expenditures Survey by the U.S Bureau of Labor Statistics,
almost all categories went down in expenditures on Footwear, with the
exception of the husband and wife consumer with oldest child 6 to 17.
They had a minor increase from Php25,101.09 to Php25,559.33 on annual
base.
Other economic factors influencing the operations of crocs are higher
fuel and material costs, a weak U.S dollar and rising costs in China.
IV. Situation Analysis
Opportunities/Threats
The opportunities that crocs has are as follows:

--Add more segments to strategy beyond working class.

--Expand to include a wide range of products in addition
to shoes.
--In the future offer customization of crocs, including
accessories.
--In various current job segments, companies and
institutes are willing to invest in croc gear.
--Athletic shoes are becoming more popular among
women and children.
The threats that crocs has are as follows:
 Competitors can easily copy the basic elements of Crocs' products with only
minor modification
 As competition heats up, retailers could potentially opt for lower-priced
alternatives to crocs in response to Crocs online distribution.
 Market has become filled with more and more "knock off/ imitations" crocs.
 Imitators provide more accessible products
 Competitors have established more thorough distribution channels
 Bad Publicity around safety issues
 Anti-Crocs sentiment in the market
Strengths/Weaknesses
 Some main strengths are as follows:
 Niche market value the "original" Crocs and would hesitate to switch to
competitors.
 Just in time inventory management, where retailers could order only several
weeks in advance and order low amounts to deliver currently popular styles
and colors quickly to costumers.
 Has control over manufacturing and timing, not depending on other
companies.
 Crocs avoid margin squeezes often associated with retail price incentives.
 Well-known brand, linked to brightly-color, lightweight shoes
 High-customer loyalty (true friends) with Crocs brand
 Patent on most of Crocs footwear as well as design elements of their more
popular styles in all areas of the world.
 Lifestyle / Attitude Brand
Some main weaknesses are as follows:

 Risk investors are taking on a concept that may or may not be a fad
 Crocs does not utilize incentives to retailers, discourage retailers from
using price concessions to help clear out inventory build-ups
 Relatively limited distribution channel
 Seasonal usage
 Company financial performance is highly concentrated and dependent
on footwear sales
Issues Analysis
Crocs must consider the following issues:
 Crocs faces severe competition from established competitors who run
a more efficient distribution system.
 Expansion Problem; Crocs are forced to expand their product line to
prevent becoming the above mentioned 'one trick pony'.
 Competitor find it easy to imitate the popular Crocs concept.
V. Financial Objectives
 Company sets these financial objectives to have a good financial
performance in the business:
 The Company expects second quarter 2017 revenues to be between
Php1.525 and Php1.575 billion.
 The Company expects gross margin for the second quarter to be
approximately 150 basis points higher than the second quarter of
2016.
 The Company expects SG&A to be relatively flat to last year, including
approximately Php150 million of charges associated with our SG&A
reduction plan.
VI. Marketing Objectives
 This financial objectives should be converted to marketing objectives.
To achieve the target profit, the company set goals to make the
financial objectives successful. These are the marketing objectives:
 Using a promotional tool to inform and persuade potential customers.
Creating favorable publicity for their brand.
 Improve Product Awareness
 Build an effective internet campaign to bring new customers.
VII. Marketing Strategies

Target Market
 Crocs doesn’t defines their target by age or demographics, but rather
by a mindset. Their core audience is people who are comfortable with
themselves. They are adventurous and spirited. They are people who
get more out of life and are always willing to try something new. The
inherent self-confidence of this group allows them to appreciate the
quirkiness of Crocs and enjoy Crocs for what they really are—a fun,
comfortable shoe.
Positioning
 Crocs as high-end products in the U.S, they notified customers if an item
was out of stock or when new items were due to be introduced. Crocs
manages risk through constant review of our policies and procedures and
ensure that stock loss targets are met and to develop, implement an
agreed expansion strategy for the brand and to conduct store/mall
feasibility.

Product Line
 Broadly, Crocs new products mix does not vary much from the original.
Ocean minded and Bite merged so Ocean minded shifted to the sports
category. The new brand Gators was added to style footwear. Crocs new
casual shoes are added to every day’s footwear since it are comfortable
durable shoes for suitable for almost every occasion.
Product Pricing
 Pricing of Crocs product has been consistent, even as a variety of
styles have emerged. The brand/cost as association remains appealing
to consumers. The Crocs shoes sold are within the Php1400 to 80%
range, with the most common style and colors competitively price at
Php1400. This helps to keep the shoes affordable, but not 'cheap' in
the minds of consumers.

Distribution Outlets
 Manufacturing of the crocs is predominantly separated over factories
in Leon, Mexico and Shenzen, China. From these locations, the shoes
are shipped to a warehouse in the United States. From Aurora, Ontario
and Boulder, warehouses of 264,000, 399,000 and 16,000 square feet
respectively, the products are distributed to regional retailers, crocs
stores and the customer orderings at the crocs web shop.
Service
 Crocs has a customer services to answer all questions regarding their
product through their website, E-mail, Store locations, and phone-
calls. The company also offers 60-days product return to the
customers who are not satisfied with the product.

Sales Promotion
 After a short period of time, Crocs introduced coupons and various
discount codes that allowed customers to buy the shoes for a more
attractive price. It refers to consumer promotions. These codes and
coupons were placed on their own websites. By downloading or
copying the codes, discount is granted.
Advertising
 Especially magazines were targeted thoroughly. Fashion magazines such as
Vanity Fair and Curve included ads with the quote 'Ugly can be beautiful',
aiming n the critics that defined Crocs to be the most ugly shoes in the world.
And of course, with the imminent role of the internet, online promotion
increased. They mainly focused on making people aware of Crocs and create
special discount tools that would be attractive for customers. Crocs is also
doing sponsorship, folk/rock campus tours and segment licensing deals.
Research and Development
 They are fortunate to have a very devoted and passionate base of customers
online. In the coming months, they will be launching key programs across
social media platforms that deepen their fan engagement and provide
avenues in which they can “share the love” with others. This campaign
represents Crocs’ first integrated marketing effort around a single message—
“Feel the Love”—with worldwide execution. The “Feel the Love” campaign is
fully integrated across all consumer touch points with the intention of
reaching a target consumer we feel represents the core of our business,
ultimately driving the sales and increased brand awareness for Crocs.
Marketing Research
 Crocs is an international company and it has so many retail stores. To know more
about the operation of the business we interviewed Jovilla A. Abogado, a worker of
a crocs' retail store placed in the KCC mall of Gensan. The retail store is said to be
handled by SM. It opened on March 2017, just this year and was able to have a
sales of 430,000+ for their first month. While their daily sales is said to be
21,700+, although the amount still varies. A promo of 20% off for all their products
was implemented on their very first day. And according to her, their best-selling is
the clogs. Materials are 100% American and all are manufactured in Vietnam and
China. They have new designs yearly but their packaging changes rarely. Their
customers are most likely women who aged 40 to 50 years old. Our team also
surveyed about 50 people. 25 males and 25 females, age ranges between 18-50
years old about on what do they prefer, Clogs or other brand? 45% of them
preferred the other brand for its cheaper and way more affordable. Hence, the
55% still chose crocs over the other brand. For the reason that as long as the
product is fully pact with quality and is able to satisfy them greater than any
brands could, they don't really mind the price. 40% decrease in promotional
expenses, Promote traditional clog style Crocs only, Brand awareness, Quarterly
market survey.
VIII. Action Program
Crocs will carry out its marketing strategy by:
MONTH ACTION PLAN COST

Crocs will have a “New Year

January- March Bonus Treat”. In every 2
pairs purchase of any Php1,200,000
product, you can get free
any of the following: Mini
flush toy, Button pin, and
Baller.

Crocs will have a summer

contest on Facebook and
April-June Instagram where customers
are encourage to post their Php2,000,000
summer adventure wearing
the crocs product.

The company will have a

July-September “Back to school” promo. All
of the student have a 10% off Php1,000,000
and receive any of the
following: Free flash drive,
Lanyard, and Bag tag.

Crocs will give a Christmas

freebies, gifts and coupons
October-December for buying a minimum pair
worth of Php5,000 and get
any of the following: Php1,500,000
Discount Calendar, Ball pen
and Keychain.