Our idea for or project is to take the brand we chose, Steve Madden Ltd and take it from the decline stage where it is create new interest and a new life cycle for it. We feel that it is a good solid brand with a lot to offer the fashion world and we feel that it deserves more attention. Our goals are to make the Steve Madden more profitable through more advertising and to elevate the brand. This will allow for new possibilities for expanding the brand and better sales.
Steve Madden was founded in New York in 1990 by its namesake. The company was established as a woman’s footwear outfitter. The shoes were originally sold in small Manhattan stores. It was in these stores that designers like Betsy Johnson and Jill Stewart saw Madden’s design and used them in their fashion shows. This attention from such popular designers allowed the business to grow. At this time Steve Madden became best known for it’s chunky super high platforms a decidedly dated 90’s look. It became a publicly owned company in 1993 and is traded on the NASDAQ under the ticker SHOO. In 1993 Madden opened it’s first retail store in SoHo, to this day Madden has many retail stores but does the bulk of its sales through department and specialty stores like Belk. In 1995 the company acquired Adesso Shoes and the subsidiary Adesso-Madden, Inc became a buying agent for the import of private label shoes. In 1996 it acquired the David Aaron brand. By 1997 Madden’s “funky” shoes had become very popular with celebrities and trendsetters. For the next few years the company made great strides in innovative ways, licensing, and expanding the line. Steve Madden has been quoted saying “You have to keep updating. The worst thing that happens is you get comfortable in your success and stand around and tell yourself how great you’re doing, and then you’re not doing so great anymore.” Madden’s brand has continued to update itself with new styles both trendy and classic, however the Steve Madden image is still that of the young girl in big platform heels from the 1990’s. This is something we aim to change.
Strengths: Known for unique and interesting style, popular with celebrities
Weakness: Brand positioning in consumers mind as dated or too expensive.
Opportunities: Create demand for product by updating consumer’s idea of the company. The brand has the criteria to be seen as a high fashion line widening the target market.
Threats: Kenneth Cole, Jessica Simpson, not being able to save the brand from decline.
Current Market Conditions and Consumers
Research shows that the women’s footwear market, after taking into account inflation has declined 7 percent from 2002 to 2007. This is due to more discount retailers entering the market and companies lowering their prices in order to compete. There is good news in the women’s footwear market as well because of newer styles of shoes becoming staples of the fashion scene rather than fleeting trends, shoes styles like flats, Crocs, and Sperry. These things now make up a larger percent of the market and their widespread popularity helps to ensure continued sales. There is also a growing demand for design and style in all footwear a factor that can only benefit the already fashion conscious Steve Madden. One article I used for research was discussing the fact that most people cannot afford the shoes worn by celebrities stating “While most consumers cannot afford these shoes, which cost hundreds of dollars at a minimum, they can and do buy similar styles such as those sold by Steve Madden.” So as the price of gas and groceries go up women are looking for alternatives to the more expensive brands and they are shopping more with mid-price brands. Consumers are looking more towards discount shoe stores like pay-less who offer much lower prices than department stores and have recently partnered with a designer to create more stylish shoes for them. The also bought Stride Rite Inc, giving them a large arsenal of popular brands. So the consumers are looking for the style and value that Steve Madden offers but are not looking to them for it because Steve Madden does not advertise to inform their target market. Celebrities also heavily influence people so Steve Madden should capitalize on its popularity with celebrities buy using a celebrity spokesperson like Rihanna in their advertisements.
The idea behind market segments is that there are customers who want the same product for example a greeting card or in our case a shoe, but they want different things from a shoe. Some women want a work shoe, something professional but stylish and comfortable. Other women want a cute everyday shoe, and then there are the sexy and super trendy shoes. People who are looking for an athletic performance shoes are not going to buy Steve Madden but that is not the target market for Madden. While Steve Madden has sneakers they are the kind that you wear to the mall rather than the gym. Then there is market segmentation by price, there are people who do not want to spend a lot of money on shoes and then there are people who won’t buy shoes if they are not top dollar or the most fashionable which often go hand and hand. Steve Madden has the great position of being able to offer a wide verity of shoes; they have shoes that are appropriate for work, going out to a club or on a date, and causal styles. Their shoes are very much cutting edge and stylish but they do not cost as much as shoes from Jimmy Choo or Manolo Blahnik. The also have a large celebrity fan base, large enough for them to have a “celebrity sightings” page on their website listing famous people who were seen in their store and the styles they bought. The fact that celebrities like and purchase Steve Madden products is a great endorsement.
The target market for Steve Madden is the 16 to 28 year old woman. These women are fashion conscious but do not want to spend five hundred dollars on the latest trends. Madden’s products are not cheap knock-offs of the latest trends but are a good value alternative to the high dollar designer wear that most people cannot afford. Their price is the same as many department store brands and many can be found for a great deal on sale on the website. I feel that Steve Madden is a perfect fit for this target market because they have so many different styles to offer. I think that Steve Madden has many opportunities for growth. I know that they have an accessories line but that it is not sold along with their shoes in the department stores. The used innovative packaging in the 1990’s shipping out t-shirts in Chinese food takeout containers and soda cans. Steve Madden also have a really cute line of dresses that I did not know about until this project.
Analysis of Competition
The major competition to Steve Madden is the brands that it has to contend with side-by-side in the department store. Kenneth Cole has the Reaction line that is sold at stores like Belk and Macy’s right next to Steve Madden; these shoes are in a similar price point with a similar target market. The reaction line also has the benefit of the designer Kenneth Cole name that has a higher perceived status because of the higher end lines that Kenneth Cole has. The Jessica Simpson line of shoes is also available in many of the same places as Steve Madden and they are both trendy and up to date. I think that the market is big enough for all of them but that Steve Madden could control a large share of the market if they worked towards better name recognition and updating the companies image in the eye of the consumer.
Current Position and Effectiveness
Steve Madden is positioned as a mid-tier retailer and designer with an assortment of products. The sell men’s and women’s shoes as well as dresses and accessories in stores tat are Steve Madden retail stores as well as in department stores and boutiques. I think that their current positioning is not effective because it doesn’t do anything to set itself apart from other brands that it competes with. In order to be more effective they need to set themselves apart from other brands in order to give people incentive to chose Steve Madden.
Steve Madden has had a slight decline in their stock performance lately. Also, their sales have dropped significantly since 2006. Steve Madden is headed down a ruff road and need to turn their decline around now before it gets any worse. We plan to counteract this slight decline by bring in new consumers by introducing the line to them through increasing our marketing budged to include commercials; our celebrity spokes person, and magazine ads. We predict that our new marketing campaign will create a new hype about the brand and will increase our sales.
Standards & Poors Stock Information
• Shoes between $60-$200
• Clothing between $100- $250
• Accessories $20-$200
We have chosen to execute a fairly simple, yet effective marketing campaign. We have decided to use TV commercials; a celebrity spokes person, and magazine ads. We will hire Rihanna to be our celebrity spokes person, as she is classy, cute, edgy, popular and sexy, yet she has innocence about her which makes her loveable and represents the brand well.
We will make two commercials, one featuring Rihanna and one featuring the products with Rihannas song “Breaking Dishes” in the background. The products commercial will feature Rihannas song “breaking dishes” cut and mixed so that only the intro and the lyrics “I don’t know who you think I am” are heard on the commercial. The commercial will first show part of a Steve Madden run way show, then a series of pictures of women on the street, on dates and in the office, then finally the Steve Maddens logo will appear on the fashion posed image of Rihanna. This commercial will appear on Style network and bravo, as our target market watches those channels. The commercial of Rihanna will feature basically “a day in the life of rihanna” and show rihanna wearing Steve Maddens throughout her entire day. The Rihanna commercial will be played on MTV, E!, NBC during Heroes, and ABC during Grays Anatomy.
The magazine ad will be very similar to the high fashion image of Rihanna at the end of products commercial. It will show Rihanna wearing Steve Maddens and will be black and white. We place theses ads in Vogue, Elle, Marie Claire, and Cosmo. We will also do a look for my page” in Vogue and Elle, so that new consumers will know where to purchase the brand.
Our plan will create customer loyalty by having a celebrity spokes person. Many 16-28 year olds love Rihanna and want to be just like her as she exemplifies grace, class, edge, and sex appeal. Guys want to be with Rihanna and girls want to be just like her, which will ultimately bring a whole new set of loyal customers into Steve Madden. Our brand produces quality shoes that have a high fashion designer look for half the cost. Customers can wear Steve Maddens and know that they are looking stylish and sexy at a lower price without looking cheap. Steve Madden already has many loyal customers and by introducing the brand to new consumers using commercials and magazine ads Steve Madden will gain more loyal brand loving customers.
Steve Madden currently has stores in Australia, Canada, Columbia, Israel, Mexico, Panama, UAE, and Venezuela. In Australia alone, Madden has eight selling locations. Steve Madden is constantly being feature in the media through celebrity citings. These celebrity citings have given the brand a recognizable name and has significantly raised the status of the shoes. Foreign countries, like many Americans, are obsessed with celebrities and want to wear whatever they are wearing. Having celebrities being cited in magazines wearing Madden shoes has raised the demand of the brand overseas.
We plan to expand maddens international success and place boutiques in Milan, Paris, and London. We are going to Madden into some of the fashion capitals of the world to bring the brand ultimate global success and raise the level of prestige for the brand. Foreign competitors for the brand include: BCBG, Gucci, and Jimmy Choo. By keeping our price point lower and selling the same designer quality shoes for less, we will ensure that the brand will have a good defense against these foreign brands. Using our celebrity spokes person will also maintain our defense, as she is not American and she has a universal look.