Hispanic Marketing Final Project

Lacoste: Appealing to Hispanic Youth

Seth L. Proctor

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Hispanic Marketing Final Project
Hispanic Marketing Final Project

Company Background

     Tennis player Jean Rene Lacoste formed his namesake clothing line with Andre Gillier, the president of the largest French knitwear manufacturer at the time, in 1933. Foundations for the Lacoste brand, however, came about during the 1926 U.S. Open championship in which Lacoste wore a cotton polo shirt by Gillier’s company which was supposed to reduce sweat during his winning game- it was the first sport-based performance clothing. After his win one of Lacoste’s friends drew a crocodile logo for him which he subsequently had embroidered onto the chesto of his shirts. Supported by its founders’ exploits on the court prior to the 1933 launch, the crocodile logo and the “1212” polo, the brand soon caught on and became popular amongst players and public alike. Lacoste’s mission is to offer sports wear products that are both comfortable and technologically innovative in the luxury casual clothing market. Lacoste desires to give customers an experience in both comfort and elegance.(1)

Competitors

     Lacoste has positioned itself successfully within the luxury casual clothing market. Lacoste’s sustained presence and growth over its lifetime attests to the brand’s ability to adapt to changes in market trends, and advances in knitwear and sports technologies. However, they have a number of competitors within their marketspace. Their most continuous and prominent competitors in the market are Abercrombie & Fitch, Nike, Tommy Hilfiger, Ralph Lauren, and Fred Perry, though there are many other lower-level holders of market share. (2) Lacoste’s overall revenues for 2011 were a record 1.6 billion euros, with their best selling item segments being clothing (60%) and footwear (17%). (2)

Current Target Group and Marketing Mix

     Lacoste currently has a broad statement regarding their target customer. It states its customer as being “all sports[people] and fashion conscious people who wish to look sporty and trendy.”(1) However, to narrow this down a bit, one sees that Lacoste’s largest share of the market comes from customers aged 18-35. This strong foothold in this age demographic bodes well for specific targeting of Hispanics in the same age bracket in an effort to expand Lacoste’s market share. Further, considering that Lacoste’s brand image is that of a luxury casual clothes bodes well for targeting these young, Hispanic consumers. The cities boasting the largest Hispanic populations in the continental U.S. are all, with the exception of El Paso, Texas, major hubs of fashion (see Figure 1 below).

     Lacoste’s current pricing range is in line with their desire to stay a luxury clothing brand. Their classic polo shirts cost $80-$100, shoes are $85-$185, sweaters are $195-$495, pants are $145-$275, watches are $95-$295, fragrances are $39-$69, bags are $95-$225, and sunglasses are $138-178. 

Figure 1:

Hispanic Marketing Final Project
Hispanic Marketing Final Project

     This pricing strategy has worked well for Lacoste in recent years, and is congruent with their current target market. Lacoste’s Christian Lemaire states the brand’s current mission as being “to attract younger customers, but at the same time…balance this against the fact that Lacoste is timeless and above trends.” (3) Following Lemaire’s statement, Lacoste has been implementing a strategy which positions them favorably in targeting for the young Hispanic market for expansion. Lemaire’s expansion of the Lacoste brand’s offerings now feature “ultra-bright colors, schoolgirl knee socks, day-Glo elbow pads, and that… alligator logo supersized on Scarface-style gangsta robes.” (3) Though their current stated target market is “preppies with attitude” (3), it is felt that the style and design offerings coming from the Lacoste design team support a move to specifically target young Hispanics in the 14-35 year old age bracket. 

Strengths, Weaknesses, Opportunities, and Threats in the Market

    Lacoste’s biggest strength, I believe, is that it is highly accessible despite its statedly more affluent, niche segment. Compared to similar brands competing within the market Lacoste offers reasonable price points. Furthermore, as one can see from the price breakdown above, Lacoste has an extensive, elaborate line of products. From their “classic” polo to new perfume and cologne lines, to socks, bags, and wallets, Lacoste already has the product structure and production capabilities to put out a cohesive, cross-matching line of bright, individual products across clothing mediums. 

     The weakness of the Lacoste brand is their vulnerability to fake, imitation products. both their sales and overall brand image are subject to harm from poor quality imitators and knock-off copycat styles from lesser known, less exclusive, less costly brands. Additionally, Lacoste runs the risk of having some recent claims regarding environmental issues affect their image. In addition to these accusations of nefarious environmental policies, the company has also been accused to using hormone-affecting chemicals on, and in, their t-shirts. This is an especially concerning fact when considering that many Hispanics reported a higher consciousness of the environment and living a “healthy lifestyle” than Caucasians and African-Americans in the survey I issued (see Figure 2 below).

Hispanic Marketing Final Project
Hispanic Marketing Final Project

     In Lacoste’s case there are significant opportunities for brand expansion and growth. Among these lies that their current customers are not largely Hispanic, nor are they youths. Despite this lacking of Hispanic youths in their customer base, Lacoste has an opportunity to really get into this market segment as there seems to be a high level of awareness among this segment of the Lacoste brand. According to my own research 66% of valid Hispanic respondents indicated they had an awareness and interest in the Lacoste brand. In addition to this there is a growing worldwide demand for “green” clothing products. Should Lacoste decide to explore this and possibly begin incorporating “natural” fibers in their product and practice “green” production methods they stand to not only lower the impact of one of their current brand weaknesses with Hispanic consumers, but also stand to gain market share (especially among the statedly environmentally conscious Hispanic consumers). Additionally, Lacoste could consider introducing some ‘active sportswear’ into their current product line. (4)

     Currently the main threats to Lacoste’s market shares are coming from lifestyle brands such as H&M and ZARA. However, in addition to known, fashionable retail brands, Lacoste faces competition from brands like Adidas and Nike. Traditional sportswear brands are now branching out into the lifestyle clothing market and capitalizing upon their large resources, current customer base, and name recognition to begin getting a foothold in the market and begin to make themselves viable options against brands like Lacoste. Further, Lacoste is threatened by the number of counterfeit items in the world market. Both on a national and global scale Lacoste has found itself in the unenviable position as being one of the most imitated brands on the market. Also, despite their continuing resurgence, Lacoste is still facing lost market share to traditionally similar brands such as Ralph Lauren and Fred Perry.

Current Strategy

     Lacoste has created a brand image that evokes the classic image of a champion and of an elegant, authentic wearer.  As mentioned the brand’s current pricing is on the higher end, and seeks to keep the brand elevated and clearly definable as a luxury brand. Lacoste, however, has not priced the product up to a point of inaccessibility to the common buyer. Lacoste has over 2,500 points of sale in their licensed and department stores in 114 countries worldwide. (2) Though the majority of their stores (41%) are in Europe, the Americas holds a strong 26% of them (2) – making the choice to promote them to Hispanics viable as there would be an opportunity to purchase outside of Lacoste’s online store. 

     Lacoste’s promotional strategy is a multi-channeled one. The brand’s current promotional mix strategically focuses upon what it has deemed “four key areas:” Wholesale, e-commerce, outlets, and the brand’s signature boutiques. (1,2) Lacoste’s advertising covers all the major mediums of communication. Currently the brand is utilizing new media sources of advertising such as social media sites like Facebook and Twitter, as well as more traditional web-based communication paths via their own website, email lists, and brand blogs. The Lacoste brand also makes use of traditional print publications to advertise. However, in doing this they do not focus upon newspaper and similar mediums. Rather they preference placing their advertising in magazines such as Vogue, Elle, Harper’s, and high-circulation sports publications (Sports Illustrated, Velo, etc.). In doing this Lacoste is able to make use of the higher print quality and added segmentation targeting created by utilizing these mediums. Finally, Lacoste also makes use of traditional television, movie, and outdoor advertising – though their outdoor advertising is limited to areas directly surrounding their distribution points and regions where the population of their “typical” customers are high. (2,3) When it comes to television and movie advertising Lacoste is also selective. Though it has a large advertising budget Lacoste prefers to carefully select their television-based advertising slots, and forego in-theater advertisements in favor of product placement within films. (2,3)

Research and Results

     In seeking to discern the best methods to begin exploring to better position the Lacoste brand to Hispanic youths (ages 14-35), a survey was conducted (105 valid respondents), and a series of ethnographic interviews were undertaken. It would be advised that if possible one further test these results and a mock-up of possible campaign components in a series of focus groups as, though this option was desired, it simply could not be brought to functional fruition. 

     Recent studies have found that 61% of bilingual Hispanics aged 18-29 “want to make a unique, current style statement.” (5) This was supported by my own research which found a similar figure(65%) among valid Hispanic respondents when asked how they described their style (x=68, n=105). Multiple resources also found that Hispanics in this age range enjoy experimenting with new clothing styles (5,6), and enjoy experimenting with “unique clothing styles.” (5) These findings were also supported in the research one for this project during the ethnographies. All of the Hispanic respondents used adjectives such as “unique,” “fashionable,” “bright,” and “different” when describing their ideal clothing and current clothing purchasing trends, compared to only 1/3 of non-Hispanic interviewees. 

     It was found, however, that young Hispanics are not only interested in clothing that is fashionable, cool, or eye-catching. Interviewees also indicated that when purchasing clothing they needed it to be “long lasting,” and “reasonably priced.” These phrases, however, were also popular among non-Hispanic interviewees and survey respondents, with 93% of valid respondents indicating them as being important influencers in their purchasing decisions. When examining the influence of celebrities and sports upon young Hispanics’ style and purchasing patterns there were some clear trends.

     Both within the survey issued for this report, the ethnographies, and outside research it was found that many Hispanics, both male and female,  have a celebrity whose fashion choices they most associate with. (6) Other studies have found that for Hispanic women the most oft referenced celebrity looks are those of Selena Gomez and Taylor Swift, while most males stated that they see Drake and Justin Timberlake as being celebrities whose style they connect with and respect. (5, 6) This rung true in my own survey which found 85% of female Hispanic respondents indicating at least the aforementioned women as being guides in fashion, and 82% of male Hispanic respondents selecting one of the above artists when queried. Further, during the ethnographic interviews all Hispanic interviewees mentioned one of the four celebrities listed above when discussing who they saw as being the celebrity whose style choice(s) most often reflected their own desires and eventual choices. This however, may be skewed as all interviewees were inside the 19-25 year old age group, and valid Hispanic respondents in the survey all were between the ages of 17 and 28 – certainly not a full sampling of the desired 14-35 year old age bracket.. Additional, more extensive research, interviews, and certainly focus groups relating to the information derived should be explored.

     Now, when examining how sports and sports figures could come into play with influencing young Hispanic purchasing patterns, there were also key insights found. It has been found that amongst acculturated Hispanics soccer is the most popular sport, and amongst acculturated Hispanics American football has a slight edge in popularity. However, both of these groups were found to enjoy the sport of baseball.(6) These findings were echoed in my own survey where all of the valid Hispanic male respondents selected baseball as one of the sports they both enjoyed participating in and followed closely. Additionally, during the interviews that were conducted, it was found that Hispanics view sports as an opportunity for  recreational and social activities more than a necessary sort of exercise when compared to non-Hispanic interviewees. 

Recommendations

     With all of these trends having been noted, there seems to be a number of ways in which Lacoste could frame their advertising to appeal to this target market. However, it is felt that a singular strategy, focused on cultural cues and distributed in Hispanic-frequented media would best serve this purpose.
    Being that approximately a full two thirds of the Hispanic segment in the United States is under the age of 25, it would be advisable to make sure that the advertising Lacoste creates features Hispanics in the 20 to 30 year old age range. Hispanics in this age range, especially acculturated ones, still maintain many traditionally held views on the flexibility and closeness of interpersonal relationships. (6) However, while still holding to many traditional viewpoints, the Hispanics in the target age bracket hold similar views as the general market on things such as boy-girl relationships and have similar patterns of product consumption as well. (4,6)

     David Burgos broke the Hispanic market into five distinct sub-groupings: “Pragmatic, Social, Virtuous, Go Getter, and Progressive.” (6) Of these five groups the final two, Progressive and Go Getter, seem to be most applicable to the group Lacoste should consider targeting in their marketing. The Progressive section is stated as being the youngest segment, having two thirds below $30k in income, being entrepreneurial, independent, open minded, ascribing similar weights to both personal and familial development, and desiring to stand out in a crowd. Go Getters are young as well, but have the highest income levels (11% over $100k), are yuppie-leaders seeking to power, highly image oriented, adventurous, and the most liberal thinking of the five groups. While these two Hispanic sub-groups are clearly different, the combination of their age, desire to stand out and portray a certain individual image, and willingness to spend money to do this, make them ideal customers for what Lacoste represents.

     With these facts in mind the look and feel of Lacoste’s advertising can begin to come together. Their advertising should focus upon Lacoste’s sporty side. This, however, does not mean that they should attempt to position themselves as a sportswear brand – much as Nike and Adidas. Rather, Lacoste should show the brand’s ability to function in a sporty, active lifestyle. In doing this they should depict Hispanics wearing Lacoste clothing while partaking in outdoor activities such as riding a bike, kicking a soccer ball around, or playing baseball leisurely. In these advertisements focusing upon how the clothing the people within them are wearing sets them apart from others in the background – their clothing is brighter, their clothing looks nicer, those wearing Lacoste seem to be having more fun than those not, those wearing Lacoste clothing seem to be more stylish and well off, and so forth. Additinoally, while it is certainly an added cost, making use of celebrity endorsement within these ads would likely add value. Lacoste should consider putting a big-name Hispanic baseball player on an endorsement contract and make use of him as part of their advertising, as well as for the media exposure garnered during post-game interviews and casual, out-of-game pictures of him. This same tactic could be used with the artists Drake or Selena Gomez. Having either of them under endorsement would allow for someone who is highly visible and looked to by Hispanics in the target age range to be associate with the brand and promoting it – be it actively in advertising or inactively by simply wearing it daily. These thoughts regarding endorsement(s), however, should be carefully considered due to their high investment cost and the chance that this investment may not pay the same returns desired. Deeper analysis of how the targeted segment would respond to this is advised. 

     This brings one to the exactly how this image and advertising should be distributed most effectively. Lacoste should consider a three-pronged approach for this. First of all Lacoste should look to place advertising on television. While a high-cost option this is somewhat mitigated by the fact that it is not recommended that they advertise during traditional prime-time evening hours. Rather than taking this approach Lacoste should look to place their advertisements, in English, on channels such as Teen Disney, Teen Nick, and during the late afternoon hours on traditional Spanish-language networks. This will allow them to target the lower and middle sections of the 14-35 year old market during the times they will be viewing television. A similar tactic can be used in strategically placing television advertising to mitigate costs for the middle and upper ranges of this age group. By focusing on placing advertising during non-primetime hours sporting events Lacoste can effectively get their message across without wasting money exposing large portions of the non-target audience to it. This should be done by choosing to place Lacoste ads (featuring their endorsed sportsman or not) in slots during baseball and non-championship international soccer matches, as well as during sports-related programing often used as background (such as Sportscenter). By finding out which teams and individuals Hispanics in this segment follow most intensely Lacoste will be able to place their advertising in the most effective, yet also efficient, manner to garner the most views and least wasted reach. 

     The second approach that should be utilized is magazine-based print advertising. Being that Lacoste is associated with bright, vibrant colors and needs to display exactly how fashionable, clean, and quality their products are, using a print media that allows for rich colors and quality photographs is a perfect fit. While the issue of clutter is always on the table, the fact that Lacoste’s clothing is able to stand out by itself via its vibrancy offsets this. Further, simply getting Hispanics in the target range to see these ads, even if it is glancing as they turn the page, will begin to add visibility to the brand and work to begin depicting Lacoste as a viable fashion option for them after repeated exposures. This advertising should be similar to what is portrayed within the television ads and be stills showing people who are part of the target audience, and possibly featuring endorsed celebrities as well, having fun and socializing in a sporty, relaxed atmosphere.

     Finally, similar to how magazine-based advertising works add to Lacoste’s ability to target this segment successfully and raise brand awareness via simply being visible to them, it is also recommended that Lacoste pursue outdoor advertising. This should be the lowest cost of the three media recommendations. In pursuing outdoor advertising Lacoste should look to place stills similar to what is utilized in their magazine advertising on billboards that are a) in high Hispanic-trafficked areas, or b) near one of their points of sale. Additionally Lacoste should look into purchasing ad space on public transport. This should be mainly focused on larger mediums such as busses and as large stand-like advertising in train stations. In doing this Lacoste will be able to better take advantage of the eye-catching nature of their product and be placing it in areas where there will be the highest levels of repeated, valid exposure.

Conclusions

     Having considered all of this the decision to look further into pursuing a Hispanic youth-oriented campaign would be advisable. Based on the rising percentage of Hispanics in the United States, the rising percent of first generation, acculturated Hispanics, and the rising Hispanic buying power the investment into position Lacoste to appeal to them – in addition to their current base clientele – would likely be well and worthwhile. In beginning to have a separate set of advertisements specifically targeting Hispanic youths Lacoste keeps any additional line expansion costs to a minimum, as well as works to capitalize brand attributes they are already known for. Should Lacoste do the additional market research and compare that with the anticipated financials of launching this Hispanic-targeted campaign, the brand will likely see that they will be opening up to a whole new segment of the population which is willing and capable of purchasing their products, but has so far been largely neglected for specific targeting within the luxury clothing and lifestyle market.

References:

1. "LACOSTE – United States Of America." LACOSTE – United States Of America. Lacoste, n.d. Web. 19 Apr. 2013. <http://www.lacoste.com/univers>.

2.  "Company Overview: Lacoste." Bloomberg Business Week. Bloomberg, Jan. 2012. Web. 19 Apr. 2013. <http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=23875296>.

3. Staff. "Corporate Comebacks: Lacoste." Minyanville Business News. Manyanville, 14 Apr. 2009. Web. 21 Apr. 2013. <http://www.minyanville.com/investing/articles/jcp-rl-m-ANF-lacoste-brby/4/14/2009/id/21997Cite a website by entering its URL or by searching for it.>.

4. Frenier, Kurt. "Brilliant Brands Series: LACOSTE [an Unsung Hero]." The Red Hot Marketing Blender. N.p., 25 Jan. 2013. Web. 23 Apr. 2013. <http://www.redhotmarketingblender.com/2013/01/brilliant-brands-series-lacoste-an-unsung-hero/>.

5. Saylor, Erica. "Hispanic Millennials on Fashion and Shopping." Viacom Corporate. Viacom, 13 Feb. 2013. Web. 23 Apr. 2013. <http://blog.viacom.com/2013/02/hispanic-millennials-on-fashion-and-shopping/>.

6. Burgos, David, and Hortensia Aldana-Milward Brown. "The Truth About Hispanic Men." The Cab.tv. N.p., n.d. Web. 1 Apr. 2013. <http://www.thecab.tv/main/bm~doc/hispanic-men.pdf>.

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