Flip-flops and Beach Shoes Market

At the time, Alpacas as not paying attention to customer perceptions and did not invest in the brand. Partly because of the difficult economy prevailing in Brazil during the sass’s, the company did not need a strategy as it was selling nearly 100 millions pairs of sandals each year and controlled 90 per cent of the domestic market. Until 1990, the brand was perceived as being for the working class, worn by construction workers and maids. However, the local economy started to improve in the early ass’s; Brazilian had more money to spend and started to turn away from the “cheap” Havana slippers.

Unfortunately for the brand, the consequence of this development led to the entry of new competitors and the Havana sales dropped by 35% in 1993. This consequent loss forced Alpacas to change its marketing strategy radically. It was clear that the brand could no longer survive as Just a commodity. The company reinforced the brand by investing heavily in promotional campaigns and by introducing new colors, displays and packaging. In 1994, Havana became really successful with the upper and middle-class. The brand was associated to an irreverent and relaxed attitude by customers, and by 1996 Havana became an anchored national brand.

Two years later, during the World Cup in 1998, they introduced a special edition flip- flop pairs with the Brazilian flag that became their logo and trademark. From 65 million pairs in 1993, sales rose up to 105 millions pairs in 1999. By 2000, the brand became a hit through celebrities and models endorsement and begun to target the international market. The popularity of Havana was spreading abroad. It was first distributed in the Latin America neighborhood to reach progressively the US and Europe. In 2007 and 2008 the company launched the Havana brand in New

York and Paris. The Brand now sells its products in about 82 countries. Latin America is still the most valuable market while the rest of revenues mostly come from Europe and the US. What makes the brand so successful is that the company has taken great attention to colors, fun, youthfulness… It is now the global leader in the beach shoes market. The positive brand image has enabled the company to transform the flip-flop into a real fashion accessory. Eight Brazilian under ten have already bought a Havana product and an estimated 160 millions flops are sold every year.

The brand remains strong today and is now targeting emerging markets such as India. It also keeps in line with consumer’s expectations by always introducing exclusive editions and by making valuable partnerships. Strengths Weaknesses Market Leader Global Expansion – 60 countries Brand Image – Awareness Economies of Scale Wide product range Environmental friendly – 90% recycled rubber Good quality Competitive price – $16 Wide target market Communication campaigns – Street Marketing Strategic partnership Informal More expensive than other competitors One concept store- Brazil

Counterfeiting – Imitations Suppliers Dependency Seasonality Lack of international adaptation Opportunities Threats People are more and more sensitive to the trends and fashion products. Women expenses in shoes are twice bigger than men expenses. Free barrier trade in Europe. Eastern Europe is one of the biggest opportunities for apparel retailers in 2012 (+12%). Height street meets high fashion: more and more collaboration (H/Lanvain, Explanation, Converse/ Come des garçons etc.. ). Making shopping has become an enjoyable experience, trend of bespoke and personalization.

International crisis context; people spend on useful goods more than on pleasure goods. So footwear and apparel expenses have been penalized. Agile group, rubber shoes specialist, has opened 30 point of sales in Asia and knows a good expansion. Cross has expanded faces a lot of product of substitution such as sneakers which are part of a very huge market with important competitors: Nikkei, Addis etc.. 2. SOOT analysis 3. Customer profile The main target of Havana is young and active people. The exact segmentation group are the 15 to 25 years old. The brand symbolizes an ambitious and dynamic out.

Even though the main consumers are women, the brand does not want to use gender segmentation in the targeting. As the target is quite young, they have small revenue. Having is mainly focused on urban and warm cities or at least one warm season. Precisely, the focus is on the middle to high segment of the coastal area of Ecuador, as their design is the most suitable for the type of weather. The Havana main target market is in the city of Quailing, Salinas and Imitation Punt Blanch. However, the Havana brand is recognized worldwide, has opened market in Quito,

Mambas and Sanguineous. It is important to mention that the middle to high segment of the market is looking for fashion, quality and special status that differentiates them from others when purchasing the product. This is precisely what gives Havana, because it is a world- renowned brand. If we compare a vehicle with sandals, we could say that Having is a BMW. And everyone wants to feel the comfort and luxury of a BMW. 4. Recommendations In order to optimize the strategy and the revenues of Havana different recommendations must be taken into account :

An increased positioning and trendiest based on high fashion collaboration (which has already been done in the past but can be increased – ex : Miss, Matthew Williamson ) Less colorful product to increase customer perception and target a wider segment of customers (older, higher, richer) = higher positioning Less diversification (concentrate on shoes instead of losing brand image with clothes, bags,etc… ) More differentiation : do personalization of shoes and bespoke kit. In the idea of the Nikkei concept: “customize and buy’ available on their website and in shops. 5. References