crocs case study
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DESCRIPTIONCrocs, Inc. was established in 2002 in Colorado, USA by three friends- lyndon duke Hanson, Scott Seamans and George Boedecker and it is today amongst the fastest growing brands and companies in the world. Love them or hate them, the tremendous popularity of Crocs shoes is an undeniable business success story.
- 1. A PRESENTATION ON CROCSPresented By-AshwaniDadhich
2. INTRODUCTION Crocs, Inc. was established in 2002 in Colorado, USA by threefriends- lyndon duke Hanson, Scott Seamans and GeorgeBoedecker and it is today amongst the fastest growing brandsand companies in the world. Love them or hate them, the tremendous popularity of Crocsshoes is an undeniable business success story. The U.S. footwear industry in 2002 was $49.3B in annual sales1,split about 60%-40% between fashion and athletic. Within thefashion footwear segment, categories are well established withshoes representing 55%, sandals representing 25%, and bootsand other 20%2. 3. The 1,000 pairs made available at the site were sold out inthree days. Crocs challenged key industry assumptions and conventionsby creating a brand new type of casual shoe, a clog that waspartly a shoe and partly a sandal. The broad appeal of the clog cut across traditional segmentsto envelop customers from all walks of life. 4. How Crocs Challenged Conventional Assumptions of Competition To Create ABlue Ocean Crocs challenged key industry assumptions and conventions bycreating a brand new type of casual shoe, a clog that was partly ashoe and partly a sandal. It used fun, whimsy, and imagination to create a blue ocean bymaking brightly-colored, comfortable and light weight clogs withthe perfect balance of functional and emotional appeal. 5. Crocs Features with Functional Utility &AppealMaterial has acushiony feel forHoles increase airflowlong wearingcomfortHeel straps hold feet in orcan be folded in frontfor easy slip on and off Material is odor and Bacteria resistantSoles are slip resistantand non marking Small nubs on the inside help prevent slipping and increase blood circulation 6. THE PRODUCT Crocs shoe wasrebellious and an anti-theses of fashion. Most popular clogsBeach and Caymanwere almost nebulous inshape and sited byfashion enthusiasts asbeing ugly, quirky andwhimsical. 7. Material The company used a proprietary materialcalled Cros-lite molded plastic resin tocreate a unique clog design with perforatedholes. Although the holes made the clogs lookfunny and cheese-like, this made them moredistinctive and original. The holes also madethe shoes more comfortable since feet couldbreathe. The material also had special properties thatmade the shoes lightweight, cushiony andvery comfortable to wear, odor-resistant, non-slip, skid resistant, easy to clean, andwaterproof.Compared to traditional materials used bythe industry such as leather, Crocs materialwas inexpensive, less variable in terms ofquality, longer lasting, and required minimalmanual labor for production. 8. Styles and Sizes Unlike traditional shoemakers having toproduce multiple new styles each season,Crocs only had two styles of clog when itlaunched and these were intended toappeal broadly to women, men, andchildren. Because of the loose-fitting nature of theclogs, Crocs could also produce fewer sizesthan was typically required. Crocs didnt focus on particulardemographics or segments. It designed forbroad appeal across income brackets, ages,and genders. 9. Colors and Fun One of the boldest moves Crocsmade was to launch its product in awide range of vibrant solid colors.Bright oranges, reds, pinks, andyellows to grab attention andcapture shoppers imagination. By breaking traditional colorboundaries, Crocs created its ownfashion phenomenon. Adding to thefun, Crocs created a crocodile facelogo to build a light-hearted brandimage. 10. Purchase Accessibility For retail customers, Crocs changed the game by allowing themto order as few as 24 pairs and stock them in a matter of weeks,not months. For consumer customers, Crocs designed a broad and extensivedistribution system so its shoes were available in a variety ofretail outlets from specialty stores to department stores andlarge shoe store chains. It discouraged overstocking and the subsequent clearance salesallowing consistent pricing in long run. 11. Marketing & Promotion Crocs used creativemerchandising (out-of-boxvertical displays) and word-of-mouth marketing to buildbuzz and momentum withouthaving to spend as much astraditional manufacturers onadvertising or payingcelebrities for endorsements. Key feature of promotion wasCroslite in animated form as alovable, kind -hearted foamyfriend of the feet. . 12. Celebrities like Al Pacino, Jack Nicholson, Nicole Appleton and formerU.S. President George Bush many others were seen wearing the clogs and once the media caught on, Crocs benefitted from significant free, viral marketing 13. Sustaining Differentiation While competitors were stressing on fashion or functionality,Crocs was able to adopt a dual positioning as an extremelycomfortable option on account of its unique properties ,as wellas a revolutionary fashion statement .The company entered into a host of licensing agreement withNHL,NFL,NBL in order to control over the youth market. MARVEL got into a license agreement there by giving anaccess to the likes of Captain America , Fantastic four ,Spider-Man, and X-man. Similar agreement made with Disney , Nickelodeon , Nascar . Acquisition of Jibbitz was another feather in crocs cap . 14. Towards 2007,the company began to realize that it could notrely on the clog alone for future growth .It soon began to expanding to products like apparel, umbrellas,bags knee pads, beach towels, sunglasses.It introduced 28 new models in 2008 included styles like flipflops , heels, boots and slip-ons . 15. Challenges Oversupply- Flooding the market with a product may result inphenomenal short term sales but in long term it is likely toadversely impact the brands appeal.Costly Line Extensions -Crocs stretched itself too widethereby diverting from its core positioning of comfort andfunctionality, product line swelled to over 350 styles catering tomen , women and children across categories. Acquisitions - Crocs made considerable investments buying upcompanies that provided possibilities of line extension. itbought EXO Italia and Fury Hockey and Ocean Minded. 16. Love to Hate Crocs An entire community ofpeople has emerged that loveto hate Crocs. So much so that there existsan I hate Crocs dot comwebsite that sells t-shirtsspoofing the brand withslogans like Friends Dontlet friends wear Crocs. An anti-Crocs page in Facebook boasts of 1.5 millionfans. 17. Being nominated as no. 6on the Worst list ofMaxims The 10 best&worst things to happen tomen in 2007. In 2008 ranked no.1brand in the athleticspecialty sporting goodschannel. 18. Revival-Going ChicThe increasing debt and persistent demand from stakeholders to diversify , forced the designers to think beyond the bulbous bright resin clogs and move towards other slimmer, strappierfootwear. Launched a host of newcollections,once being you,OceanMinded and Rx line. It was attempt to rejuvenate thebrand and raise the stylequotient. 19. Such initiatives enabled itto clock revenue of $167mn in the first quarterof 2010,up 23.7% from$135mn during first quarterof 2009. Launched You summer2010 collection whichfacilitated expression ofindividual style andtraditional comfort. 20. CONT FEEL THE LOVE Campaign.. Debuted Spring summer collection 2010. Campaign is Crocs first integrated marketing effort spanningacross TV , print, social networking and digital media. Intent was to reinforce the Croslite heritage , encouragecustomers to take a fresh new look at the designs and helpthem to realize that Crocs is much more than One shoeWonder. 21. How Factors That CrocsEliminated, Reduced, Raised, andCreated Achieved Differentiationand Lower Costs. 22. To Conclude.. The story of Crocs, Inc., is a great example of a company thatcreated a hugely successful new business by redefining rule ofthe game. After launching in the U.S. in 2002, the company quickly grewto achieve a global presence by staying true for a time to theprinciples of value innovation. maintaining a low cost structure through use of inexpensivematerials and efficient, low cost production whilesimultaneously creating a leap in buyer value through colorful,unique casual shoes that were comfortable, fashionable andfun to wear. 23. Cont.. Proved criticism of experts wrong and ableto emerge stronger post-recession. Adapted its product line with the changingtime , thereby drawing in more customers. Augmentation and expansion intointernational markets has provided Crocswith considerable growth opportunities.. 24. Thank you forlistening to me! Do you have anyquestion?