Realistic Business Improvements Within Marketing A Case Study Of Samsonite Corporation

2956 words - 12 pages

1. IntroductionMarketing, which involves getting a product or service into the market, promoting it, influencing behaviours, and encouraging sales, is a broad topic that covers a various range of aspects (Geld, 2006). Companies without a marketing mind-set are at a disadvantage in today's business world. Therefore, how to use marketing strategies to improve the business become extremely important in any industry nowadays.The global luggage industry has experienced increasing production costs and stiffer competition, especially in the non-luxury, high-volume, and low-price segment (RobSearch, 2006). Various factors such as the increase in business and leisure travel, emergence of women buyers ...view middle of the document...

1 luggage maker for decades. However, at the difficult time of all luggage industry, Samsonite had to start adjusting its marketing strategies for improvements from the low market demands. The luggage maker that is days away from its second bankruptcy in a decade after the post-9/11 meltdown but now hopes to float as a $2bn global lifestyle conglomerate. The plan at Samsonite was to transform a troubled luggage company into a global, multi-brand, lifestyle group. Samsonite's rebound has already been remarkable. Its 2007 turnover reached $1.07bn (€729m) and it enjoyed gross profits of $550m (€375m), a double-digit rise. Roughly, 40% of the sales are in Europe, 35% in the US and 20% in Asia (source from Samsonite Official Website). The following table 1 shows figures of Samsonite in recent years.Fiscal Year ending 31 January (USD)2004200520062007Net Revenues$776,451902,896966,8861,070,393Gross Profit (%)44.8%46.2%48.7%51.0%Adjusted EBITDA $91,024101,423121,444134,668Adjusted EBITDA (%) 11.7%11.2%12.6%12.6%Total Debt $333,677354,346307,228501,915Debt, Net of Cash$304,153297,968221,780423,367Interest Expense $43,52835,20630,49630,285Working Capital Efficiency22.9%19.6%16.6%15.4%Based on rolling 12 month statistics Source: Samsonite Official WebsiteTable 1, Samsonite Financial Figures3. Market Segmentation of SamsoniteMarketing opportunities increase when customer groups with varying demands are recognized. Markets can be segmented on a variety of factors: geographic factors, demographic characteristics, and etc. Segments or target markets should be accessible to the business and large enough to provide a solid customer base. It is suggested that market segmentation leads to a better understanding of customers, which can assist in the design of more suitable marketing programmes (Dibb et al., 2002). In this part, four different kinds of segmentations of Samsonite Corporation will be discussed.3.1. DemographicDemographic segmentation regards to the issues, including age group, gender, education level, ethnicity, income, occupation, social class, marital status, etc. According to Samsonite's company files, the company's marketing and distribution strategy focuses on the broad middle segment of the luggage market, which includes all sorts of age groups which over 18+, mid-age families and professionals. In the United States, the Samsonite brand has historically been positioned as high quality, innovative luggage, targeted at frequent business travellers; and the Samsonite Blacklabel has been positioned as premium luggage targeted at first and business class travellers. In Europe, the Samsonite brand and Samsonite Blacklabel enjoy more of a premium image than in the United States, and are targeted at first class and frequent business travellers. However, in the recent interview with media, Samsonite CEO Bottoli did mention Samsonite wants to influence younger markets as well as fresher-faced consumers. The following Table 2 shows the customers'...

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