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EXECUTIVE SUMMARY

There are three main aims of this report. It aims to provide a better understanding about the impact of internal and external factors on consumer behaviour. In so doing, Lacose, which produces apparel, was chosen for this. At first, it will examine the segmentation and identify target market for the company. The second purpose is to explain the role of internal and external factors affecting consumer purchasing decision on Lacoste. Due to space limit, only three factors will be considered: two internal factors of perception and motivation and one external factor of lifestyle. Another aim is to make the recommendations for establishing market strategies. Research for this report included a review of current marketing literature and some effective strategies for the future of Lacoste.

The results of the analysis are:

  • The market segmentation by the Lacoste company are 45-50 year old people, belonging to the high society and the young people from suburbs
  • The target market for the company is young people with luxury lifestyle
  • Internal and external factors have a significant impact on consumer behaviour which has been proven in the success in marketing strategy of Lacoste

It is clear that Lacoste has got some success from its knowledge about internal and external factor. However, Lacoste must take consideration to some recommendations below to have the better marketing strategy:

  • More promotions and a beautiful website should be used to increase perception of consumer
  • Increasing price can have a positive impact on motivation and demand for lifestyle

Introduction

Over the decades, understanding consumer behaviour has become extremely important to achieve success for a company. Consumer behaviour is strongly influenced by both internal and external factors. Therefore, researching the internal and external factors is indispensable when the company want to set up a better marketing strategy for consumer behaviour. According to Chester et al. (2007), internal factors include perception, emotion, motivation, learning, memory, personality and attitude while external factor include demographics, lifestyles, household, group influence and culture. Among these factor, perception and motivation for internal factors and lifestyle for external factor has been choose to describe in this report. In the fashion world, Lacoste is one of the most famous brand name with over 50 million products that had been sold in 110 countries in 2005 (Wiki, 2007). This success results from the understanding of Lacoste about the external and internal factors which has a great impact on consumer behavior.  The marketing campaigns of Lacoste have crucial influence on consumer perception (Moosmayer , 2010). Moreover, Lacoste attempt to position itself on luxury brands of clothes because consumers have much motivations in purchasing luxury products (Husic, 2007). This report will investigate to how Lacoste uses knowledge about internal and external factors in establishing its strategies and identify some limitations of these strategies.

Lacoste  and opportunity

History of Lacoste
Lacoste is global apparel licensee which was established in 1933 by René Lacoste and André Gillier. The crocodile logo comes from René Lacoste who wore a shirt with crocodile image on the chest during the final match of Davis Cup in 1925. The significant growth had appeared under Bernard’s management who took over the management form his father René. Lacoste had become popular in US during 1970s and 300000 product had been sold every year. Range of lacoste product became more diversify with perfume, sunglasses, tennis shoes, walking shoes, watches, and various leather goods. Lacoste have spread throughout the world by licensing its trademark to various companies. Until recently Devanlay owned the exclusive worldwide clothing license, though today Lacoste Polo Shirts are also manufactured under licence in Thailand by ICC and also in China. Pentland Group has the exclusive worldwide license to produce Lacoste footwear, Procter & Gamble owns the exclusive worldwide license to produce fragrance, and Samsonite holds the worldwide license to produce Lacoste bags and small leather goods.

Opportunity
When economy is developing, demand for higher social status is also increase especially young people. One of ways to show social status is shopping. With a luxury brand like Lacoste, owning product can satisfy that demand. In addition, need for sport are raising because level of stress was higher over the years. For that reason, Lacose can look for a brilliant future with a sport style brand name.

Market segmentation
The notion of market segmentation has been emerged for more than 50 years (Smith 1956). Market segmentation, which is a crucial tool to enhance the competition of a company, used widely across business sectors to manage diverse customer needs and to target marketing resources (Weinstein 2004; LaPlaca 1997; McDonald and Dunbar 2004). Consumer orientation is the main function of market segmentation because company must keep in touch closely with consumer to ensure more efficient resource allocation and resulting in marketing programs which are better attuned to customer needs (Albert 2003; Beane and Ennis 1987; Freytag and Clarke 2001). Realize the role of market segment, In the past, the brand from Paris more like the Americans do the job: dull, formal, middle-class style, men’s Polo shirt style monotonous, even more terrifying is the diehard fans who love it The average age of close to 40 years. Unsurprisingly, Lacoste has been concentrate on the target consumer who is 45-50 year old people, belonging to the high society. They are seen to be loyal, classical, and to strongly share the brand values. In addition, their sensibility to price is low; they look for quality and comfort, easiness of maintenance. What they look for in the brand, is the possibility to relax in sport or during week-ends far from towns, through casual, sportswear. However, in recent years, the market began to change and reasons for consumer bought the products changed too. A new potential market appeared: the young people from suburbs. Therefore, a new approach for this market area can’t be ignored. For this segment, to own a prestigious brand, and moreover wear it, must be a distinctive sign of social ascension or a sign of success. At least concerning clothes, they are finally on the same step of equality with young rich people. Furthermore, we can add that by feeling to be apart from this rich sign of recognition, they logically want to be more a member of the community. They just want to show that they also can wear Lacoste clothes, that they own enough money for it, and to prove that these wears are not reserved to elite. In fact, even if this segment can’t be compare with the traditional segment about brand identity and reputation, it also brings a lot of money. For this reason, Lacoste considered this kind of consumer as a target market. Form that, lacoste built a new fashion trend, now this is not only the old sport brand with a Polo shirt but it is also gradually developing a versatile range of clothing. Lacoste brand owners to look younger looking, Lacoste tender over the world began to taste the sweetness of fashion.

Internal factors

Perception of consumer
Perception is a critical part of the human brain’s information process system. This system involves a series of interlinked activities by which stimuli are transformed into information and stored (Quester et al., 2007). The process of perception can be divided into several main stages: exposure, attention, and interpretation

Exposure
People see thousands of brand images in an average day. Given how ubiquitous brands have become in people’s everyday lives. Lacoste is one of most famous brand name in clothing industry so they is easy to exposure to consumers when they see the crocodile logo. The first exposure of Lacoste comes to consumer when René Lacoste won the final Davis cup with the Lacoste shirt. Lacoste is the first brand has logo embroidered on the chest. In a recent paper, Skinner and Stephens (2003) noted the vast complexity of the 21st-century media environment, and the heavy volume of advertising to which consumers are exposed, they must decide which advertisements to screen out and which to process and something they choose to avoid exposure and attention to marketing communications messages. Therefore, Lacoste advertisements always focus on the simplicity, pleasure and fresh style which are easier to keep watcher staying in front of TVs. In addition, billboards also play a significant role in advertising strategies. Taylor et al. (2006) has suggested that for a billboard to be effective, it must communicate a relevant message in a clear, interesting, and readable manner to the appropriate audience. Base on that, Lacoste has design the billboards containing fresh and active messages and built at advantageous places to create effective exposure to consumer. For instance, Lacoste dominate the island of Manhattan via tunnels, bridges and interior roadways with billboards and walls. In the design, LACOSTE Men’s and Women have been in place for younger approach, tinted youthful. Lacoste brands, countless self-confidence, have excellent taste to wear choice
However, the layout of retail shops is not enough colourful and especial to exposure to consumer. Decoration inside shops did not create the elegance and warmth as well as a mobility of shelves in order to lead to a diversity viewing for consumers.

Attention
According to Quester et al. (2007), attention occurs when a stimulus activates one or more sensory receptor nerves and the resulting sensations go to the brain for processing. In fact, consumers don’t attend to everything they see or hear of touch and they focus on something while ignore others. For this reason, some companies go to great length to try to assure that their target consumers will attend to their advertising message. To make attention, Lacoste has created promotional strategy. Lacoste understand that movie has a great influence on the fashion choice of young people so they emphasized product placement in popular movies and TV shows. For example, the US Lacoste established a special division called Propaganda Entertainment Marketing in Los Angeles which support to Lacoste product can appear on Hollywood movies. That is easy to realize the Lacoste brand worn by Gwyneth Paltrow in the movie The Royal Tenenbaums, Lindsay Lohan in Mean Girls, Mathew Broderick in The Stepford Wives and Lacoste also provide free clothing to celebrities.
On the other hand, Lacoste must confront to counterfeit. Counterfeiting has become a significant economic phenomenon in the last two decades (Bian and Moutinho, 2009). The numbers of fake logos are increasing that cost a lot for company not only in core value as quality and authenticity but it is also brand image and consumer intention. Beside, the Lacoste has still not focus on advertising on TV and magazine when the number of advertisement is still a few.

Interpretation
As a brand, Lacoste always go together with sport clothes. When consumers watch Lacoste advertisements, they can fell the relaxation, freshness. Because messages form Lacoste always aim to a personal state. Lacoste usually display to consumer affecttionale of fresh styles and color. Over the years, consumer realized lacoste as a brand which commonly provide product with fine workmanship, high quality and noble. Lacoste products contain combination of fashion and personality which can be recognized throughout the shoe, polo shirt.

Motivation
Motivation is defined as the activation of internal desires, needs and concerns which energize behavior and send the organism in a particular direction aimed at satisfaction of the motivational issues that gave rise to the increased energy (Pittman, 1998a, b). In shopping for clothes, people make decisions that directly affect their appearance. The clothes they select become a means for communicating and enhancing personality, attractiveness, and social roles (Lurie, 1981). How a person shops depend on that motivation in the shopping situation. Primary motives for shopping for clothes are demand for traveling to shop and buying clothes. However, Lacoste is classified into luxury product so motives for buying is not only basic demand but it also include needs for personal and social orientation.

During the 1980s,  Lacoste was consider as a cheap brand because it is its over-exposure in the market available in non-luxury retailer store. When Siegel came, he intended to reposition Lacoste as a luxury brand. Most importantly, he planted to Lacoste products were sold only at upscale department stores and specialty boutiques. While economic is developing, demand for self-esteem of people is also increasing. Therefore, when Lacoste reposition as a luxury brand and sportstyle, it mean needs for buying Lacoste product are also raising. In fact, with the global growth in disposable and discretionary incomes, young middle- and lower-class consumers aspiring to the lifestyle of the wealthy have become valuable target segments for luxury goods marketers (Truong. 2008). Some studies have indicated that consumers ready to pay more may serve to generate considerably more status for the users than any direct utility (Mason 2001), and a price premium may paradoxically have positive effects on consumers’ decision-making processes. Individuals who engage in conspicuous consumption often do so in order to emulate the consumption patterns of the group of people socially situated either directly or considerably above them (Ericksen 1996; Mason 1998). Form that, there is a fact that Lacoste will gain more market share when it consolidate itself as a top brand name. Some surveys have indicate that high proportion of luxury products were bought by young consumers.

Social emulation as reflected in the desire to gain higher status through conspicuous consumption still seems to shape preferences for products and services that are noticed by others (Corneo & Jeanne 1997; Trigg 2001; Dholakia & Talukdar 2004). However, not every consumer practises conspicuous consumption – some are motivated by such non-conspicuous benefits such as the quality of the product (Vigneron & Johnson 1999, 2004). Twenty years after the publication of Veblen’s still influential text, Mencken (1919) counter-argued that consumers’ willingness to pay extra for luxury goods could be attributed to the search for quality rather than to social aspiration. Superior product quality is in fact commonly accepted as one driver of apparent conspicuous consumption, especially among those who can afford to value quality over status demonstration (Dubois et al. 2005; Luxury Institute 2007). Moreover, Silverstein and Fiske (2003, 2005) argue that a large proportion of luxury consumers who trade up are motivated mainly by self-directed pleasure – that is, they buy luxury goods to treat themselves, with little or no desire to signal status or wealth. Understanding those aspects, Lacoste not only focus on brand but it is also aim to raising quality. Lacoste clothing always provides ease and generally accepted by majority of consumer class. It is used the method which inject creativity and style in Lacoste products collection. To do that, lacoste has chosen great designer who can keep the originality and quality of products while new tendency is still created. For example the company has chosen to modernize the colour of its collection which will focus on acidulous colours for summer and develop more than 55 nuances per season. This creation will provide a wide range chance for target consumer- young rich persons. Moreover, the quality and style of these products were made even more stronger with the coming of Christophe Lemaire, a French designer who had been contributing his efforts and time in creating the best fashion lines of Lacoste. Beside, as a tool to contact with up-market, lacoste used defiles including one in New York that exited classical look and laid emphasis on stretched polo shirts. That way, such a defile provided luxury associations to the customers’ minds.
However, Lacoste is still not attract much people for high class because the price of Lacoste is moderate and lack of press on luxury. In addition, Lacoste can increase value by reduce sale point and focus on quality.

External factor (Lifestyle)
The lifestyle concept is one of the most widely used in modern marketing activities. According to Chester et al.(2007), life style is the expression of the individual’s situation, life experiences, values, attitudes and expectation. It provides a way to understand consumers’ everyday needs and wants and a mechanism to allow a product or service to be positioned in terms of how it will allow a person to pursue a desired lifestyle (Michman and Mazze, 2009). . Luxury lifestyle is becoming common, owing to the rise in disposable income (Twitchell, 2001) of the middle classes. In addition, Silverstein et al. highlight how the middle-market consumer selectively trades up to better products and services and trades down in others to pay for his or her premium purchases As mentions above, nowadays, people have more motivation in buying luxury product which is not only to satisfy basic demand but it is also provide social identity. For this motive, consumers choose products not only on basis of products’ attribute but also to create and maintain a personal lifestyle. In that regard, brands are often view as an important means to communicate facets of one’s identify and to interact with other people (Belk, 1988; Fournier, 1998; Muniz and O’Guinn, 2001). Therefore, the young rich persons will pay attention to high brand product because it plays an important role in building a personal lifestyle and a desired social identify. On the other hand, luxury lifestyle is not only to show the social status but it also come from demand for self-directed pleasure (Silverstein and Fiske, 2003, 2005). Therefore, people always want to try new sight form product which will be satisfied buy Lacoste. Lacoste with the continuous innovation campaign and developing product thought every season will constantly attract consumer.
Nowadays, when competition between businesses is increasing, stress and obesity are also emerge problems. Therefore, sport lifestyle, which is a part of Lacoste brand, can be a target for a numbers of consumers. For example, Sportswear label is launching a new ‘Sports Lifestyle’ range of shoes. The new collection draws back from the brand’s core values of authenticity and elegance. Using premium materials, rich finishes and luxury combinations of leather and Suede, these styles offer a versatile alternative to classic sports-inspired shoes. The shoes offer a European mix of styling, with flashes of colour and rich fabric combinations. The Sports Lifestyle collection gives a nod to 80s classic sports styling wearable throughout the day.

Recommendations
Colour of shop has a important impact on consumer behavior so black and white should be concerned for assuring meaning. In addition, the elegant and warmth can come from wooden furniture with circular form. To provide a clear and attractive vision for consumer, the shops windows can be change monthly and mannequins will be placed faced to the street and separated maximum one meter. Price should be increased to attract wealthy people because increasing price is not mean that a reducing in demand in up-market. Moreover, they can sell product further to suburbs with more expensive price with purpose expand market and not devaluate brand. E-shopping is growing worldwide, having topped US$100 billions in the US by 2006 (Seock and Bailey 2008). There is a major opportunity for e-retailers to combine social networking with e-shopping. In fact, internet is a good tool to conquest the target market (18-35) because this market is easy to expose to new teachnology. Therefore, Lacoste should launch the website with various visuals and animations. Lacoste should increase in advertising to exposure to more consumers. In addition, sponsorship and celebrity endorsement is also a great way to raising brand name. Company should push up this activity by sponsorship for more players and it will be preferable for brand to sponsor some young player in golf and sail because this is another favourites market of Lacoste

Conclusion
This case study report intends to identify the important of understanding consumer behaviour, which was influenced by internal and external factor. Main finding indicate that Lacoste was defined on fashion world as a luxury sport brand and target market is the young rich person. In marketing strategy, Lacoste has used advertising and some sponsorship to create perception in the mind of consumer. Lacoste has position itself as a luxury brand which created a motivation for consumer about self esteem or social status. Motivations come from lifestyle so luxury lifestyle is the root for luxury aspiration.
Lacoste seem to be quite successful when it developed strategies base on knowledge about consumer behaviour. However, lacoste should consider some recommendation about improving consumer perception ( advertising, store layout, and e shopping) and create more motivations (increasing price)

References

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