Was Marketing Research Absent from Liz Claiborne’s Strategy to Target Younger Consumers?

Yesterday’s Wall Street Journal reported that Liz Claiborne’s efforts to appeal to younger female consumers may have been the company’s downfall. This month, J. C. Penney will launch an exclusive line of Liz Claiborne clothing, home and accessories. As part of the agreement, Claiborne cedes control of production and marketing and converts the label into a mass market line in exchange for royalties, the article reported. In five years, Penney also has the option to buy U.S. rights to the Liz Claiborne name.

This may well be the concluding chapter in what appears to have been a failed attempt by Liz Claiborne to broaden its appeal to younger women. Apparently, Claiborne realized correctly it would need to move to a younger consumer, as most of its customers had been working age Baby Boomers, who have begun to retire. However, the Wall Street Journal indicates that its efforts to target the younger female consumer actually did more to harm the brand.

In trying to appeal to the younger crowd, Liz Claiborne nixed, sold off, or licensed out tried and true lines; it changed designs so much that it confused its existing customer base; it introduced lower priced items, eroding its appeal as a high-end brand; and it alienated its long-term relationship with Macy’s.

As I read the article, I couldn’t help asking myself whether Liz Claiborne did its homework. I don’t know whether Claiborne did or didn’t do marketing research, but deciding to pursue a new target market requires extensive marketing research, because so many mistakes can be made because of unaided judgment. Among other things, it is important to have surveyed the younger female shoppers to understand what they needed for workplace casual attire; and to have looked for common ground between existing product lines and the new, emerging fashions that the younger crowd was embracing. Most likely, the research would have led Claiborne to develop lines that were new enough to appeal to the younger working woman, but traditional enough to maintain loyalty with its existing boomer customer. If the research showed that the younger women wanted something drastically different in the way of style, then Claiborne could have used that information to develop a completely different line (likely by launching a whole different brand) aimed at those preferences.

When appealing to a new target market, it is also important to do pricing research. Surely younger consumers don’t have the discretionary income that older ones do. But that doesn’t necessarily mean a company should introduce lower-priced apparel. As Van Westendorp pricing theory suggests, a price can communicate one of four things to consumers: a good buy, a luxury item, an overpriced item, or a cheap, low-quality item. I could only wonder whether the introduction of lower priced merchandise might have led consumers to believe the newer lines of Liz Claiborne were of lower quality.

Companies that don’t conduct marketing research – or conduct it inadequately – increase their risk of failure, declining sales, customer defections, and increased competition.

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