Forever 21 target market demographics

Running Head: MMIP 2

Running Head: MMIP 2 9

BUSI 520: MMIP 2
Faith Chibuzor Ogbonna

Liberty University

September 13, 2020

MMIP - Consumer Analysis, Market Segmentation, and Market Coverage Questions (Chapters 6–9)

Q1. Describe and discuss the cultural, social, personal, and psychological factors that influence the purchase of the product/service. (Ch. 6)

One major factor that has influenced consumers to purchase Forever 21 products is the fast fashion. In this case, Forever21 produces clothing and other accessories that typically wear out faster than normalaverage. However, consumers are not bothered by this due to the low prices. Hence, they are more likely to shop for more products and a low price and also discard them quickly without the feeling of guilt due to loss in quality. According to Joung (2014), fast fashion can positively be linked to consumer disposal behaviors. One major perk of fast fashion is the ability for consumers to get on board with the latest fashion at a low price. This can also influence consumers psychologically. This is because they can easily look like their peers without breaking the bank; therefore, they may be inclined to buy more products. Jung and Jn in (2016), claimed that both the fashion brand Zara as well as Forever 21 has tripled and recorded huge tremendous growth and increased sales of over 80% in the United statesStates. Unlike many big brands, Forever21 is more likely to be on sale for a longn extended period, of time which is a culture that can influence consumers to purchase more of their products. Comment by Lorna DeShay: Citation needed

Q2. Explain the needs that are met for each of the firm’s target markets. (Ch. 6)

Forever 21is an organization that focuses its targets mostly on teenagers from ages 18-24, although they have expanded to include all ages. Therefore, they are expected to meet the needs of different categories of consumers, and these includes; moms, plus size ladies and men, and even babies. However, in recent times, Forever21 no longer seems to meet the target needs of their its biggest consumers (teens between the ages of 18-24) and has since experienced a major significant decrease in sales leading to bankruptcy. The reason behind this drop-in sale can be associated with a decline in fast fashion by their biggest consumers, which was their major primary source of sales. According to a Washington Post interview by Bhattarai in 2019, Annmarie Eovaldi a 21-year-old, who was fond of shopping at Forever 21 claimed to have stopped shopping there due to their low-quality product. While the company seems to have met the needs of fashion, they have failed in meeting the need of for quality materials for their target market. Comment by Lorna DeShay: Citation needed Comment by Lorna DeShay: Who? Comment by Lorna DeShay: Needs correct citation Comment by Lorna DeShay: It would have been ideal to cover Maslow’s Hiearchy of Needs

Q3. Explain how potential global markets will be evaluated for potential entry. Discuss the most likely mode or modes of global market entry (Ch. 8)

Forever 21 has recently re-launched its international online store in a bid to target more customers on a global perspective. This market expansion will target consumers in Canada, Asia, as well as Latin America. The company would be partnering with cross border e-commerce platform Global-e (Howland 2020). The Global-e platform is important essential because it would give Forever 21 the opportunityallow Forever 21 to operate its site using about 95 currencies or more as well as multiple payment options or alternatives. The platform also gives consumers the option chance to operate manage the site in more than 21 languages, which would makemaking purchases and returns easier. Although they recently filed bankruptcy, this global expansion could potentially help them revive the company without having to closeclosing down most of their international stores. Forever 21’s president claims that, "Ecommerce forms a large chunk of the profitable core of their operations and as part of their new global strategy, Forever21 will leverage Global-e's technology to offer international customers an outstanding online experience” (Howland 2020). They have also paid attention to countries where online shopping made up about 60-80% of sales while ignoring regions where they only attribute about 16% of sales to online shopping. E-commerce could potentially be the company’s most likely mode of global market entry. Comment by Lorna DeShay: Unclear Comment by Lorna DeShay: Needs correct citation for direct quote

Q4. Describe the variables (demographic, psychographic, and behavioral) used to segment the firm’s target markets. Explain how the firm evaluates the attractiveness of each identified market segment. (Ch. 9)

With regards to demographics, while the firm has expanded to cater for the needs of consumers of all ages, their biggest demographic remains teens from ages between 18 and 24. This has influenced their products and fashion sense to meet the demands of these young individuals. Forever 21 basically segments young females, especially, and they have a part of their website dedicated to the latest trends. According to Bhasin (2018), “The specialty retail store has positioned itself based on young, trendy and fashionable offerings which create the image of being young or ahead of fashion.” They have the look book and Instagram section specifically for young people to see and purchase products based on the latest trends. In regard to Psychographic variables, Forever21 has managed to maintain their its affordable prices for almost all their products. Hence, helping highly fashionable women and men maintain the latest trend on a low budget. The disposable clothing system also contributed to their increase in sales at some point because many consumers do not feel guilty for dumping clothes after a short period of time due to their low prices. Behavioral segmentation is basically targeting what consumers do and how they interact with the brand in general. In this case, Forever21 would be focusing on how consumers react when they have sales or during each season. This can be beneficial because it helps the company evaluate which season pays them better. This is because they would know what their consumers want and value and thereby produce more accordingly. Comment by Lorna DeShay: Explain how the firm evaluates the attractiveness of each identified market segment. Measurable, substantial, accessible, differentiable, and actionable

Q5. Should the firm pursue full market coverage, multiple segment specialization, single-segment concentration, or individual marketing? (Choose one and omit the others) (Ch. 9)

I strongly recommend that the organization focuses on the single segmentation. This is because of their demographic. I believe they would increase sales if they make more products that are considered fashionable and trendy. In recent times, social media has influenced a lot ofmany brands and the majority of people on social media are young people ranging from pre-teens to young adults below the age of 40. Hence, Forever21 should focus on making products that suits their needs in order to expand and increase sales. While they are trying to bounce back from bankruptcy, using multiple segmentation may be too much for them to handle at a time and they may not be achieving their aim or hitting their target market. For now, I recommend they concentrate on single segmentation and then expand later if they wish.

References Comment by Lorna DeShay: References need proper format

Bhasin. (2018, February 06). 10 Types of Retail Stores – Retail Outlets 10 Types explain. Retrieved September 13, 2020, from https://www.marketing91.com/10-types-of-retail-stores/

Bhattarai. (2019, October 03). A tipping point in fast fashion': Forever 21's bankruptcy signals the shifting priorities of young shoppers. Retrieved September 13, 2020, from https://www.washingtonpost.com/business/2019/10/03/tipping-point-fast-fashion-forever-s-bank ruptcy-signals-shifting-priorities-young-shoppers/

Howland. (2020, January 07). Forever 21 relaunches international e-commerce. Retrieved September 13, 2020, from https://www.retaildive.com/news/forever-21-relaunches-international-e-commerce/569922/

Joung.(2014). Fast-fashion consumers’ post-purchase behaviours. In International Journal of Retail & Distribution Management (Vol. 42, Issue 8, pp. 688–697). Retrieve September 13, 2020 from https://doi.org/10.1108/ijrdm-03-2013-0055

Jung. (2016). From quantity to quality: understanding slow fashion consumers for sustainability and consumer education. International Journal of Consumer Studies, 40, 410– 421. Retrieve September 13, 2020 from https://doi.org/10.1111/ijcs.12276.