Introduction
ETRO is an Italian fashion brand in the textile industry. It was established by Gimme ETRO, an Italian designer, in 1968. The brand became popular for its quality products and refined prints. In 1981, Gerolamo Etro introduced the paisley pattern, promoted in all its forms and color variations (Scarpellini, 2019). The paisley pattern ended up becoming the signature of the brand. In the 1990s, ETRO unveiled its first men’s and women’s ready-to-wear collections. The brand started and remained a family business since a family atmosphere is experienced in its entire headquarters. The brand management has been passed on to Gimmo’s four children, namely Jacopo, Kean, Ippolito, and Veronica (ULUSOY, 2020). Therefore, ETRO is an Italian luxury brand that aspires to be recognized for its well-crafted one-of-a-kind quality product.
Overview of The Luxury RTW Market
Today, the luxury RTW market is becoming attractive to most textile industry firms due to its potential and growth. It involves designing, selling, and promoting high-end products in the market. In 2018, the global luxury apparel market was worth $67.85 billion, and it is expected to grow at a rate of 3.5% over the next five years (Grand View Research, 2022). As more millionaires become richer, so will the number of people who love their favorite brands. The demand for the product is growing because people think that luxury goods make them more popular with other people. Demand is also growing because people have more money and spend more on luxury goods. As a result, the luxury RTW market has been doing well, attracting many firms over the years.
Research Problem
One of the main problems facing the ETRO brand is the lack of diversity. In this era of globalization, firms are expected to embrace diversity in the workplace. Unfortunately, the ETRO brand is among the organizations that have an issue with diversity in the fashion industry. In 2020, individuals slammed the brand for the absence of black influencers at the Milan fashion show (Richardson, 2020). On Instagram, ETRO shared portraits of 24 influencers who attended the show, and only one of them was non-white. As a result, the brand is only for whites, and other races are not welcomed. As a brand situated in Italy, the discrimination witnessed during the show confirms the perception that racism towards immigrants is still an issue. Therefore, with this perception, it would be challenging for the brand to sell its products across the globe.
Research Question
A research question is what the research project aims to answer. In this research, the research question is what are the implications of the lack of diversity at ETRO fashion brand? Diversity is an important issue in the contemporary business environment. Lack of diversity is defined as the exclusion of some people from an organization’s operations because of their gender, race, and other aspects. ETRO, as a company, has received reports of a lack of diversity, especially in their Milan show (Richardson, 2020). As a result, the research question will help understand the possible impacts of the lack of diversity for the ETRO fashion brand.
Findings
As per the literature reviews, a lack of diversity can negatively affect the performance of an organization. People across the globe are becoming conscious of the issue of diversity, and they expect organizations to embrace it through their activities (Richardson, 2020). One of the potential impacts of a lack of diversity is reputational damage. For example, the public is more likely to associate the organization with discrimination and bias. Eventually, the organization will lose customers, especially from other countries, who only want to support socially responsible organizations. As a result, a lack of diversity is detrimental to an organization because it affects its image and fosters a poor relationship with the general public.
The second finding is that most of the ETRO brand’s customers are from different ethnic backgrounds and gender. It is among the world’s most esteemed brands through its online platform. Customers from across the globe believe that the company provides quality products. Apart from different ethnicity, most of the brand’s customers’ age range is about 20 to 75 years. However, these customers want the company to embrace diversity through its operations. They believe that the brand did wrong by failing to include different ethnic backgrounds during the Millan show.
Analysis
Target
The target markets for the brand are men and women who have a distinct taste for expensive, stylish, and exquisite designer items with patterns and colors (Robinson, 2021). The first category of its customers is people who want quality products. From the online survey, one of the brand’s strengths is the provision of products that support the needs of the customers. The second category of customers is celebrities who want to be unique and value taste. These people are not bothered by the product’s price because all they want is a distinction. In addition, the brand focused on men and women who want ready-made products.
ETRO fashion uses the segmentation, targeting, and positioning (STP) strategy to achieve its marketing objectives. In the segmentation strategy, the brand separates its customers based on gender and age (Debra, Gonzalo, and Michael, 2019). For example, there are products for women and men in their stores. The brand targets customers who value uniqueness and quality products in terms of targeting. However, to compete effectively, the company should start manufacturing brands targeting children. This means that their market increases; hence, it is possible to increase their sales. The brand is recognizable in the market due to its paisley design.
Competitive Mapping
Competitive mapping shows that the prices of ETRO’s products are high, and its differentiation is low compared to its competitors. As shown in the figure below, the competitors of ETRO are analyzed based on price and differentiation. The first competitor is Acne Studious; the price and differentiation of products are low compared to others. Second, Alexander Wang is an American fashion brand that deals with men’s and women’s products (Torquato, 2021). MONSE’s products are highly-priced and differentiated. It is an indication that ETRO should also focus on its product differentiation. Therefore, competition in the market is intense because all the rivals offer products that meet the customers’ needs.
The Offer
Drawing from the observation from the physical store and e-shop, the brand offers a variety of products. They provide products for men and women in the market. For example, men’s designer shirts are uniquely decorated with the company’s logo (ETRO, 2022). These types of products are made to achieve the needs of customers. In addition, there are women’s suits, dresses, tops, silk sarongs, and many more. Again, these products are designed with the needs of customers in mind. On the e-shop, the company users various marketing techniques to attract more customers. For example, they offer discounts on some of their products. The different products found in the physical and online stores can meet the needs of men and women who want a taste of their products.
Communication
ETRO uses various communication tools to help facilitate sharing of information between people. The company uses technology to make its communication effective. For example, the ETRO Communication Tracker app enables brand owners to track site visits. This gives the company information about customer traffic (APK Tools, 2017). Apart from the application, the brand also uses social media platforms to communicate with its customers in the market. However, the brand should also involve communication experts, especially public relations, to communicate effectively. Therefore, the organization takes its communication seriously and understands that it boosts its performance.
Distribution
Distribution involves the delivery of products to customers across the globe. Several travel retail doors bring the ETRO expertise to major international cities and a carefully chosen wholesale selection of leading department stores and multi-brand boutiques (Wilson, 2021). ETRO’s direct-to-consumer journey is also becoming more important through its online platform. The company has distribution channels that help deliver products directly to its customers. The brand has its stores in Europe, the United States, and Japan. At the same time, the company has worked with the most important digital marketplaces to create unique partnerships. Therefore, the brand has an effective distribution network to facilitate the movement of its products.
SWOT Analysis
SWOT analysis is crucial in analyzing the internal and external environment of a business.
Table 1. SWOT analysis
Operational Strategy
Marketing Objectives
Marketing objectives are an important part of marketing strategies. The brand’s objective is to promote diversity in its operations to resonate with customers from different ethnic backgrounds (Richardson, 2020). The company should create a team to handle the change and adopt a culture that supports diversity in the next six months. In addition, the brand is supposed to integrate diversity in its communication strategy. For example, they should ensure that the communication team considers diversity when sharing information, especially those intended for the public. In addition, they should ensure that appropriate policies are set to support diversity.
Marketing Plan Section
Event Marketing and Promotion Plan
Table 2. Event plan
The management of ETRO will observe the market relative to the direct and indirect competition from other brands. The following market segmentation, target, and positioning will be followed in the upcoming six months.
Using existing market analysis, ETRO develops its marketing plan by segmenting its consumers based on age. The findings of the analysis show that for ETRO’s targeted consumers, those under 35 years old are projected to purchase slightly above 50 percent of branded fashion clothes. From the table above, the consumer segment with the highest purchase prevalence is aged between 25 and 34 years. Consumers belonging to this age group purchase more branded fashion products compared to any other age, and will result in the greatest per capita for ETRO in the six months. Young female consumers, 18-24 years old, will be projected to be the second largest intense customers after the 25-34 age clients. Consumers from this population group are considered very stylish and being second to the 25-34 age, they present an opportunity for ETRO to sell more products. With the main consumers projected to be between ages 25-34 and 18-24, ETRO will significantly position itself in the market to capture this market segment. However, the attention given to the other two segment will not be equally strong.
Traditionally, ETRO has been associated with discrimination based on skin color, and the organization’s longstanding image has been impacted over time. Particularly in the Milan Show; however, part of the innovative strategy utilized in the marketing plan is to incorporate diverse models in the upcoming shows. Going by racial representation, the SMART objective for ETRO is to incorporate diverse models, based on their populations. For example, in Italy, the number of colored models might be slightly less compared to shows in other countries where the brand has branches.
Digital Marketing Objectives
Digital marketing objectives help to improve the online performance of a brand. The first objective is to increase brand awareness within six months. One of the threats to the brand’s reputation is the issue of diversity. As a result, the company should ensure that its digital platform remains active to deconstruct the perception (Kingsnorth, 2019). The second objective is to improve the conversation rate on the website and other online platform. The content used on these platforms should be diverse sensitive to promote inclusion. The third objective is to increase the company’s market share. The brand’s existence in the market depends on a good market share.
RACE Framework
RACE consists of four steps or online that are supposed to assist brands in engaging their customers.
Table 2. RACE Model
Marketing Campaign
KPI of the Marketing Campaign
The key KPI marketing campaign for the planned company will include visitors, leads, opportunities and conversion rates. Visitors will be the first key performance indicators that will be taken into account. The visitors that will be visiting the site will have to be recorded and the data taken. Leads inclusion of the qualified ones will be the next KPI in the plan. The existing opportunities will be taken into account to ensure that all the aims of the business will have an open area to market the planned site. Finally, the conversion rates are importance and will also be implemented in the entire plan to ensure that everything goes as planned. Since the KPI are metrics, an organization tracks to help determine the overall effectiveness of a business’s marketing and sales effort, the four main stated KPI’s will ensure that my business becomes productive (Bhosale et al., 2020). Based on this, an effective marketing campaign should promote the retention of customers.
In other words, the marketing campaign should be designed to explore the company’s KPIs. This includes the use of monitoring platforms-they can either be developed by the company itself or purchased as a commercial product in the marketplace. Thus, the use of user activity monitoring platforms becomes a significant step in the management strategy being developed. The step being developed is also interested in the actions that will be performed with the data being collected. In particular, these metrics are used to work on them analytically to adjust the campaign. For example, if KPIs show that the majority of users visit the online store in the evening, this can be used by the company to introduce key promotions and market offers — which should be sold first — in the evening; such a solution would increase the number of leads and improve company profits. As part of increasing inclusivity and diversity, the company can use the metrics collected to assess users’ geographic data and match it to historically ethnically diverse communities. Indeed, a business must be socially responsible and unselfishly concerned about increasing diversity, especially if it has a history of reputational damage. However, there is no denying the fact that the primary purpose of business is always to make a profit. Thus, ETRO must take care of this goal by enhancing the social value of the brand. By comparing geographic data, it is possible to understand which ethnic groups most often use the online store. Based on this data, the company can increase the representation of ethnically diverse models so as to increase user loyalty through ethnic matching. These are just two of the examples of actions that can be implemented during the use of a marketing campaign — essentially, the point of this step comes down to adapting sales management based on user behavior.
Budget of the Marketing Campaign
Table 3. Budget
Recommendations
ETRO should adopt a diversity communication strategy to ensure that only appropriate content is shared with people in public. They should ensure that communication is inclusive, diverse, and thinks about people (Maiorescu-Murphy, 2020). The absence of diversity is an issue that can drive away customers from an organization. For example, the content used on social media platforms such as Facebook, Instagram, and others should support inclusion and diversity. Since communication is an important tool in marketing, it should be designed to solve the issue of diversity within the organization. As a result, communication should be used to achieve the brand’s marketing objectives.
Conclusion
ETRO brand requires a diversity communication strategy to solve the issue of diversity that threatens its performance as a global business. The previous brand’s event at Millan sparked a public reaction. People wondered why the brand could lack even one black among its influencers during the event. The result shows that diversity is a serious matter that an organization in the status of ETRO should take seriously. As a result, it can reduce the sale of its products, especially through its online platforms. One way to solve this issue is to use a diversity communication strategy. This strategy will ensure that the contents used by the organization promote inclusivity. It is also important for the brand to create a culture that supports diversity. To determine the success of this strategy, especially in achieving marketing objectives, the company should use indicators such as revenue and customer retention.
References
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Baltaci, A. (2021) Financial Ecosystem and Strategy in the Digital Era. Springer, Cham.
Bhosale et al. (2020) ‘Role of business intelligence in digital marketing,’ International Journal of Advance & Innovative Research, 7(1).
Debra, Z., Gonzalo, D.M. and Michael, D. (2019) Social Marketing in Action: Cases from Around the World. Springer, Cham.
ETRO. (2022) Shop by Collection. Web.
Grand View Research. (2022) Luxury Apparel Market Share | Industry Report, 2019–2025. Web.
Kingsnorth, S. (2019) Digital marketing strategy: an integrated approach to online marketing. Kogan Page Publishers.
Maiorescu-Murphy, R. D. (2020) Corporate Diversity Communication Strategy. Springer International Publishing.
Nayak, MSDP and Narayan, K.A. (2019) ‘Strengths and weaknesses of online surveys,’ Technology, 6, p.7. Web.
Richardson, H. (2020) Italian fashion house ETRO has NO black influencers at the show. Web.
Robinson, R. (2021) L Chatterton Adds Italian Luxury Lifestyle Brand ETRO to Its Growing Roster. Web.
Scarpellini, E. (2019) Italian Fashion Since 1945. Palgrave Macmillan, Cham.
Singer, S. (2019) ETRO Fall 2019 Ready-to-Wear Collection. Vogue. Web.
Torquato, J. (2021). Penetration Positioning Competitors USP. Web.
ULUSOY, N. (2020) ‘Open space,’ Intellect, 7(2). Web.
Wilson, M. (2021). Global luxury fashion retailer ETRO named CEO. Web.
Zargani, L. (2021) ETRO RTW Fall 2021. Web.