Osh Kosh B`Gosh, baby sub-brand Brand

Transcription

Osh Kosh B’Gosh, baby sub-brand Brand
BRAND ANALYSIS
INTRODUCTION
Osh Kosh B’Gosh has a long history of strong brand presence in the children’s clothing market. The baby
sub-brand has become weakened by inconsistent naming: OKB, Baby B’Gosh, Osh Kosh, and Osh Kosh Baby
(Figure 1). In addition, logos have been selectively and inconsistently manipulated to fit the needs of clothing
design. Package design varies from piece to piece and overall there is no indication that any piece of clothing
or packaging is related to any other (Figure 2).
Within the retail department store outlets, Osh Kosh B’Gosh’s baby clothing are displayed throughout the
store counter-intuitively. In order to find all that the brand offers, a shopper must peruse every section of the
store. While this sounds like a good strategy for store coverage, the reality is that consumers are unwilling
to spend a lot of time hunting for a specific clothing brand and will more likely pick up a competitor’s clothing
that fits their needs. Shoppers are unwilling to spend the extra time to find an Osh Kosh B’Gosh clothing item
- even though it may fit their needs better than the competitor’s clothing. The subjects of brand image and
product availability are the two largest problems plaguing Osh Kosh B’Gosh today.
The baby brand needs a new name, a new look, and a new flexible family of logos. Osh Kosh B’Gosh needs to
seriously reconsider their current marketing strategy, focus on their core competencies, and develop a new
marketing mix. They are already underway in deals to move their fashion design team to New York, launch
a series of brick and mortar retail outlets, and increase availability of their product through a new licensing
agreement with Target Stores, Inc. I will discuss how their new strategies either fit or don’t fit into my recommendations, as well as make suggestions for how they can take their brand to the next level. In my recommendations, no longer will the brand identity be subservient to the clothing.
HISTORICAL BACKGROUND
Founded in 1895 in Oshkosh, Wisconsin, Osh Kosh B’Gosh, Inc. has grown from a small-town manufacturer
of adult work wear into a global marketer of children’s clothing and accessories. Best known for its rugged,
men’s hickory-striped bib overalls. The Company began making the pint-size version in the early 1900’s, so
that children could dress like their fathers. It wasn’t until a local mail order firm featured a pair of children’s
bib overalls in its national catalog that sales of the item took off. Prompted by the strong response, Osh Kosh
B’Gosh expanded distribution into specialty and department stores, and gradually broadened its children’s
wear line.
SITUATIONAL ANALYSIS
A strong brand name is a key element in the company’s financial stability. Osh Kosh B’Gosh, Inc. has earned a
profit every year for more than 75 years. Osh Kosh B’Gosh’s vision statement states:
“Our vision is to become the dominant global marketer of branded products for children ages newborn
to ten.
© 2003-2008 Incitrio | web: incitrio.com | tel: 858.202.1822
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This will be accomplished by leveraging our existing brand franchise in Osh Kosh B’Gosh and utilizing
our core competencies to supply the market with all appropriate products for children where quality,
durability and fashion innovation are important.
Secondarily, we will pursue niche opportunities, where appropriate, in adult apparel where our century
old heritage can provide meaningful differential advantage to address the needs of the marketplace.”
Osh Kosh B’Gosh uses their core values of: Integrity, Innovation, Teamwork, Continuous Improvement, and
Financial Success to accomplish these goals.
Product
Today, the core strength of their business remains the Osh Kosh B’Gosh brand name, recognized nationally
and internationally for its classic American style, durability and quality. They’ve grown from a small town
manufacturer into an incredibly strong and powerful consumer brand. Over the years, they’ve extended their
strong brand name to include products in a variety of size ranges. In addition to the Osh Kosh B’Gosh name
brand for boys and girls sizes 12 months to 6x/7, the Osh Kosh B’Gosh family of brands now includes Osh
Kosh B’Gosh Baby for newborns to size 6/9 months, Genuine Girl for girls sizes 7-16 and Genuine Blues for
boys sizes 8-16. Their products include bib overalls, pant, shorts, shirts, and swimwear, as well as a layette
line for newborns. The children’s wear and youth wear category is divided into two groups: Fashion and Replenishment. The Fashion group is organized primarily in a collection format of seasonal themes and Replenishment consists of staple denim products. The Group operates 154 retail stores under three formats: factory
outlet stores, showcase stores, and strip mall stores.
Osh Kosh B’Gosh merchandise also includes a variety of licensed products such as car seats, strollers, bedding, eyewear, plush toys, hair accessories, shoes, socks and sleepwear. One problem with their many licensing agreements is that the company does not have control over the quality of the products and has suffered
from the partnership agreements they’ve made – particularly with car seats. The design and low pricing of
the majority of these brand extension products are inconsistent with regard to the company’s core values and
brand image: quality and innovation.
Place
Currently, the company distributes their clothing and accessories through a variety of distribution channels.
Their primary distribution lies with major department stores such as: Dillards, Famous-Barr, and JC Penney’s
as well as baby/kids specialty stores like: Babies ‘R Us and Kids ‘R Us. At this time, they offer virtually the
same clothing product lines in each department store. In the baby specialty stores, however, they offer their
full line of clothing as well as brand extension products such as car seats. In addition, the company sells
their clothing line through their own bricks and mortar stores in select areas. They also offer factory outlet
stores remotely located outside major cities. Several years ago, they established an online presence with an
e-commerce web site (www.oshkoshbgosh.com) – this virtual store offers even less clothing products than
the baby specialty stores and appears to be used as a clearing house for any surplus clothing products they
were unable to sell. Osh Kosh also suffers from problems with stores and product distribution on a global
scale. Finally, the company has entered into a licensing agreement with Target Stores, Inc. to create a specialty clothing line, “Genuine Kids,” which will debut in Fall 2003.
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Promotion
Osh Kosh B’Gosh does not take advantage of promotions or advertising. Their website while offering an online
presence, does not sell the brand but devalues it through their limited offerings of clearance clothing products.
While the company does use a couple of poorly located and poorly designed display racks within Babies ‘R
Us, they do not use custom display racks to draw attention to their clothing/brand located within department
stores. Osh Kosh B’Gosh does not use any television or print advertising to my knowledge.
Price
Osh Kosh B’Gosh prices their clothing at a medium-high range consistent with the company’s heritage and brand
equity. Their high-quality products are reflected by appropriate pricing structures. One problem, however, is that
the baby specialty store clothing line is devalued due to constant mark-downs and the online store used as a
clearance center sends a negative image. In addition, they suffer from poor licensing agreements which hurt the
brand image and ultimately the consumer perception of the clothing line. For example, poor quality car seats
with the Osh Kosh B’Gosh name are marked as clearance items and placed near the baby girl’s Osh Kosh clothing section of Babies ‘R Us. This sends a negative message to car seat and baby clothing consumers.
Costs & Capabilities
In 2002, the company’s revenues consisted of retail sales which accounted for 57%, Domestic wholesale
which accounted for 42%; and Procurement, nominal and Others, 1%. Between 2001 and 2002, the company
suffered a slight drop in sales consistent with the rest of the clothing industry. In addition, they experienced
lower operating income and lower net income consistent with the industry. Their PE Ratio is low compared to
their main competitors, and their EPS is relatively high. This could indicate either the stock is undervalued, or
that the market feels the company does not have good growth potential. I believe the stock is undervalued
due to poor brand perception. Osh Kosh, while suffering from the market effects of 9/11, does seem to be a
strong stock capable of growth.
Customer Based Brand Equity
Cute &
Innovative
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BABY
History &
BABY Heritage
History &
Cute &
Innovative
Quality
10
8
Store Design
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Store Design
Heritage
WOMEN
KIDS
KIDS
MEN
MEN
WOMEN
High
QualityHigh Overalls
Quality
Overalls
Color Palette
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Price
8
5
7
4
6
3
5
2
4
1
0
3
Price
Value
2
1
0
Color Palette
Product Availability
High Price
Innovation
High Price
Innovatio
Clothing Design
Osh Kosh B'Gosh
Low Quality
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Quality
10
Carter's
Baby
GAPDesignGymboree
Clothing
High Quality
Osh Kosh B'Gosh
Incitrio | web: incitrio.com
Lo©
w Qu2003-2008
ality
High Quality| tel: 858.202.1822
Low Price
Carter's
Baby GAP
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Gymbore
Brand Leverage
Osh Kosh B’Gosh is unable to leverage their brand with regards to their current product line. While the company produces products of high quality, the poor quality of their licensed brand extensions creating problems
for the company. In addition, their wide distribution strategy could be cannibalizing the purchase of products
from their own brick and mortar stores as well as their ecommerce website.
Internal Conflicts
Recently, Osh Kosh B’Gosh hired a new president due to the death of their previous leader. In addition to
this shake-up in the leadership position of the company, they have decided to move their design offices from
Wisconsin to New York in the hopes of becoming more contemporary. Their justification for the move was that
they were unable to entice great designers to relocate to Wisconsin. This is a major departure from their longstanding heritage of being a home-grown mid-America corporation.
Company Strengths
The Osh Kosh B’Gosh brand name is recognized for its classic American style, durability and quality. They’ve
grown from a small town manufacturer into an incredibly strong and powerful consumer brand. Over the
years, they’ve extended their strong brand name to include products in a variety of size ranges. Their product
strengths lie in high quality, innovative, and attractive clothing. They have a strong presence in the children
and baby clothing market.
Company Weaknesses
The Osh Kosh B’Gosh brand suffers from a brand split-personality. The inconsistency of using four different
baby brand names, is weakening them. Inconsistent logo design/application, and inconsistent packaging further fragments the brand.
Their presence within the stores is also disorganized. Their current strategy is to place different products in
different areas of the baby/kids clothing departments. While their intent may have been to saturate the areas,
the actual result is a hit-and-miss approach where only loyal Osh Kosh B’Gosh consumers might take the time
to search for their various products. The company also suffers from inadequate availability of their products
within a metropolitan area. The company distributes small, identical groupings from select clothing lines to
each department store. This lack of segmentation hurts them by giving consumers no clear incentive to go
to one location over another to obtain a specific product. To add to these issues, there is no visible presence
within the stores due to a complete lack of Osh Kosh clothing displays. Any consumer may be altogether unaware that Osh Kosh B’Gosh products are sold within department store outlets.
Their final major weakness lies with the licensing agreements they’ve made with various children accessory
product manufacturers. It appears that Osh Kosh does not have any quality or price control. Such lack of
quality could lead consumers to think that Osh Kosh products are of low quality, especially if their first experience of the brand is with a licensed product. Therefore they are not benefiting or controlling their brand but
hurting it and devaluing it. The brand image is suffering due to these licensing agreements, and will continue
to suffer unless major changes are made.
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Cute &
Innovative
BABY
History &
Heritage
Store Design
Competitor Analysis
WOMEN
KIDS
There are three major competitors in the baby clothing market: Carter’s, Gymboree, and Baby GAP. Carter’s
is the largest competitor due to their overwhelming saturation of the market and their appeal to the every-
High
Overalls
Baby GAP is a growing threat due
to their strategy of trying to keep every member of the family in GAP
Quality
consumer. Gymboree has excellent brand perception due to a successful branding strategy.Color
TheyPalette
target the
MENinteractive mom with vibrant clothing and gym/music classes offered at their activity centers.
design-savvy,
clothes. Their target consumer is likely the mom who already buys clothes from the GAP for herself, as evidence by the proximity of the baby/kids clothing stores and the female GAP clothing stores.
Perceptual Map
High Price
Osh Kosh B'Gosh
Low Quality
High Quality
Low Price
Carter’s
Carter’s is the behemoth with a major share of the baby clothing market. Their strengths include: a strong
heritage, a saturated market strategy, excellent distribution channels, low prices, and strong brand equity.
Their weaknesses are: low quality products, no online presence, and poor clothing design. Carter’s also faces
the problem of creating a majority of their clothing for the baby girl or baby unisex market and offers a limited variety of baby boy clothing options. Carter’s continues to control a large share of the market due to their
broad distribution strategy. They offer their clothing at every possible location that mom might shop; from
discount stores like Sam’s Club, to EDLP stores like WalMart, throughout every department store. Add to that
their own factory outlet stores – often located very near Osh Kosh B’Gosh’s factory outlet stores, and their
coverage is comprehensive.
Gymboree
Gymboree is a relatively new up-and-comer with a targeted strategy. Their strengths are: their fun brand image, partnership of classes and products, appealing identity system, good brand equity, and loyalty program
(GymBucks). Gymboree targets two types of consumers: the interactive mom and the incentive shopper. The
interactive mom might participate in Gymboree classes with her baby and later be enticed to buy Gymboree
clothing. The incentive shopper is seduced by Gymboree’s loyalty program which offers more GymBucks with
every purchase. Their weaknesses are: an unfocused clothing design strategy, a lack of proximity between
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their distribution stores and activity centers, a fragmented brand presence, and limited distribution of their
products due to a small number of stores. Another weakness that Gymboree faces is that there clothing offerings are targeted more to little girls than little boys – this a major component of the problems with their
unfocused design strategy.
Baby GAP
Baby GAP targets the mom who wears GAP clothes and buys them for her baby, too. Baby GAP’s strengths
reside with: their family of brands, good baby brand equity, excellent parent brand equity, their customer-forlife strategy, great clothing design, good quality, innovative characters and color schemes. Their weaknesses
derive from: their pricing structure and product availability. Currently, Baby GAP prices their products very
high. However, due to the GAP company’s fast and periodic markdown strategy, the clothing sells faster the
lower the price goes. Rather than using this data to find the right pricing formula, Baby GAP tries to sell as
much as they can at the highest price and then uses price cuts to get rid of their inventory. It is interesting to
note that at this time, the company has adopted a new way of marking down their clothing items. Rather than
putting stickers on the pricing tags of clothing, they have put up small signs indicating what items are on sale
and what their new sale price is. It appears this is working to their disadvantage due to the fact that many
consumers are unwilling to pay high prices and may not see the small signs that list all clothing items on sale.
Additionally, due to the clothing industry’s problems with inconsistent labeling of clothing styles – it is difficult
for the consumer to discern which clothing is actually marked down. While this new strategy may have been
designed to encourage the perception of the Baby GAP’s high quality, high price brand image – the reality may
be that they will suffer from greater lost sales and still not fix the constant markdown pricing problem.
Competitor Opportunities
Carter’s poor quality, Gymboree’s relatively short history, and Baby GAP’s inconsistent pricing structure all offer opportunities for Osh Kosh B’Gosh to gain market share. Currently, Osh Kosh B’Gosh leverages their high
quality, strong heritage, and med-high pricing structure to their advantage. If the company can jump on these
opportunities and strengthen their position, they will definitely increase their presence and sales in the baby
clothing market. In addition, Osh Kosh needs to capture more of the baby boy market share neglected by
Carter’s & Gymboree, and the online market share that Carter’s is currently not attempting to acquire.
Competitor Threats
Carter’s has saturated the market – the fact that a consumer can buy Carter’s virtually anywhere poses a
major threat to Osh Kosh B’Gosh. Gymboree’s loyalty program poses another threat to Osh Kosh – they have
devised a successful promotion that continues to encourage repeat business. Baby GAP may be stealing innovative designs from its competitors. Many product innovations have shown up at Baby GAP within weeks or
months of new product distribution of Osh Kosh B’Gosh baby clothing products. While these may be coincidences, Osh Kosh needs to stay on top of their innovation strategy before Baby GAP steals that core competency from them and makes it their own.
Demand Analysis and Consumer Behavior
For the purposes of this paper, I created two surveys: one for a focus group and one for one-on one interviews. Each survey attempted to gain different insights. The focus group survey sought to discover who the
main target market was for Osh Kosh products and their perceptions of competing baby clothing manufacturers/stores. The psychographic survey attempted to discover consumer awareness, perception, availability, and
other intangible values that may factor into a new strategy for Osh Kosh B’Gosh.
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Quantitative Survey Data
Osh Kosh B’Gosh’s current target market consists of mom’s age 28-40, with an average household income of
$50,000+, who own their home and car, work part-time or have a flexible schedule, and some college education. Their secondary target market consists of friends/family of these moms who may be encouraged to buy
Osh Kosh baby clothing to fit with baby’s existing wardrobe.
Psychographic Survey Data
In an analysis of the psychographics of consumers, I tested two hypotheses: 1. that there is a direct correlation between the type of grocery store a mom shops at, and the type of baby store a mom shops at. 2. A
correlation between the type of food a mom purchases/makes for her baby, and the type of clothing a mom
purchases for her baby. What I learned was very interesting – there is a direct relationship between these
groups. In attempting to understand how and why consumers choose their grocery stores, I discovered that
on average the consumers that purchase Osh Kosh baby clothing prefer a smaller, local, intimate grocery
store that offers easy-to-find, quality products. The food items they purchase are typically wholesome, not too
fancy, and the quality of what “mom would make.” This discovery is particularly relevant as it relates to my
recommendations, discussed later in the analysis.
The consumers of Carter’s and other baby clothing stores typically shopped at major grocery stores, and purchased name brand basic baby food. Non-Osh Kosh consumers chose their grocery stores based on proximity
to their house and ease of getting in-and-out of the store. In addition, they chose their baby food based on
promotional mailings with coupons, advertising in magazines, and baby food brands with name recognition/
equity. Wholesomeness or quality was not an immediate issues as nutritional value and appropriateness was
assumed appropriate based on advertising and heritage of baby food company, such as Gerber’s. From this
information, I can conjecture that their entire philosophy for choosing baby stores and baby clothing is very
different from the Osh Kosh consumer.
New, Evolving Segments
The company can capitalize on trends in socially aware purchasing behavior that benefits the consumer as
well as makes the world a better place. There are also community-oriented marketing strategies, and the
challenges of marketing to a growing global economy. Osh Kosh has several new and evolving market segments they could pursue.
Macro-Environmental Issues
There are several macro-environmental issues which could indirectly affect Osh Kosh B’Gosh. The political
environment is very unstable due the republican President’s economic policies and the conflict in IRAQ. This
could provide an opportunity to capitalize on current patriotic sentimentalities. The stock market has been
suffering ever since the 9/11 terrorist incident and the current decline in spending. The technological environment provides opportunities because the market currently rewards innovation. The “Martha Stewart Phenomenon” has created a market that is color and design savvy – this opportunity falls directly inline with Osh
Kosh’s current innovation core value. With regards to the social environment, there is no longer one nuclear
family stereotype. This poses a challenge with regards to advertising. The company must take care not to
exclude any potential market by using “traditional” family stereotypes in their advertising. It is important that
they target every family within their target whether they have a non-traditional family structure or a minority race configuration. In addition, the company should target both baby boys and baby girls, as well as baby
unisex markets. It is crucial that they find a way to appeal to all babies, not just one race or gender. Osh Kosh
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could also benefit from the current cultural environment in which consumers support the “Made in America,”
“Buy America,” and “Support America” trends. With regards to demographic trends, the baby clothing market is growing - every 8 seconds a new baby is born in the United States and Osh Kosh can be there for all of
baby’s layette needs.
Opportunities of Macro-Environmental Issues
Osh Kosh could create a line of America-centric clothing. They have the advantage of already being a company that is based in America and makes clothing in America for Americans. They should take advantage of
this positioning to create a patriotic clothing line timed to release before the 4th of July. For example, they
could use their signature product, their overalls, to create a line of red, white and blue overalls complemented
by shirts, hats, and socks that match. Additionally, they could pursue an advertising campaign to be shown
only in the United States in which they emphasize their core values as well as create a new slogan: “Made in
America for Americans.”
Osh Kosh could also create a line of socially aware clothing through a licensing agreement with Unilever to cobrand a line of baby clothing called “Ben & Jerry’s Lil’ Yummies.” The licensing agreement would enable them
to use the existing designs and patterns used by existing ice cream flavors produced by Ben & Jerry’s. Since
their target market already shops at grocery stores that likely carry Ben & Jerry’s, this would be an unusual
but delicious way to show that they know their core consumer and have a sense of humor, too. To continue
along the lines of socially aware positioning, like Ben & Jerry’s, a portion of their proceeds could go to nonprofit organizations. Osh Kosh could choose organizations that help babies – like the March of Dimes.
Threats of Macro-Environmental Issues
Due to the unstable market economy and military action overseas, Osh Kosh, like the majority of the children’s clothing industry, will continue to face an uphill battle in its fight to return to pre- 9/11 profitability and
income. In addition, negative political perception of America due to the military conflict in Iraq could extend to
American companies and cripple Osh Kosh’s global sales efforts.
Recommendations for the General Marketing Strategy
Product
The company should continue to maintain their current quality level and innovative clothing design strategy.
By staying true to their core competencies of quality and innovation, Osh Kosh should be able to launch themselves ahead of the competition and gain greater market share. It is important that the company keep in mind
the design-savvy and color-sensitive attributes that the target audience already possesses. Osh Kosh should
establish new clothing lines: the patriotic “America” line and “Lil’ Yummies” Ben & Jerry’s line. Osh Kosh
should rescind their current licensing agreements with any baby clothing accessory manufacturer that does
not meet Osh Kosh’s high standards. They should renegotiate licensing agreements with existing companies
and negotiate to a higher quality standard and allow on-site audits at partner companies by Osh Kosh selected
representatives.
Osh Kosh should create several different lines, in keeping with their current design strategies. However, they
should distribute select lines to each store chain with minimal overlap between chains. Combinations could be
determined based on the department store’s data and target market demographics. Osh Kosh B’Gosh could
use this information to determine which lines would be best suited for each market/store. This mix-and-match
strategy could entice consumers to check out the Osh Kosh display at each department store they frequen
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because one store may offer something another does not. This could also address potential cannibalization issues competing stores suffer when located in the same mall. The full line of all their clothing could be offered
exclusively through Osh Kosh stores and their online store. This would also encourage consumers to check
out the website or store more frequently to see what new products have come out and encourage purchases
through company-owned distributions channels.
Production Design/Facility
In keeping with the move of their design office to NY, Osh Kosh should establish another satellite design office
in CA. In addition, to ensure quality control and keep expenses down, the company should establish two new
production facilities – one in New Jersey for the NY design office and one in CA near the CA office. By setting
up these production facilities near the design offices, Osh Kosh can maintain greater control over their products and brand; and decrease design-to-ship timing.
Package/Identity
The image Osh Kosh B’Gosh presents to the public needs to be consistent and strong. I propose that they
rename their baby clothing line to “OSH Baby” and design a new family of “OSH Baby” logos that will provide
flexibility for the clothing designers and consistency for the brand image. In addition, the company could rename the children’s clothing line to “OSH KOSH Kids” and design a new family of logos for that portion of their
brand. The design principles used in the new logos should be extended to every facet of the brand image.
Osh Kosh needs to design attractive store clothing displays so that a consumer can find their products easily
anytime and anywhere. Clothing displays would be designed in keeping with the new look and feel, as well as
use the new name/logo. All Osh Kosh products would be conveniently located and contained within the company provided display. In this way, Osh Kosh could help direct traffic to their specific locations within the stores.
The company needs to design new hang tags, clothing tags, boxes, bags, and most of all a new website. Their
current website is poorly designed and reflects negatively on the brand. The home page is difficult to navigate
and once you do find the type of clothing you want by gender and age, the product offerings are poorly displayed and counter-intuitively organized. By revamping the look and appeal of their current website, Osh Kosh
can maintain brand perception at every level. As of 5/5/03, Osh Kosh has attempted to update their website –
the new look and navigation is an improvement, but not yet at the level it needs to be.
The company must control how the consumer enters the site and allow for clear and easy navigation. The new
look I propose would be in keeping with the new name/logo strategy to create a cohesive and comprehensive
brand feeling. Clothing should be sorted by gender and size in accordance with Osh Kosh’s current sizing/
labeling strategy. To complement that, Osh Kosh should implement an advanced search engine that enables
customers to select from a set of variables (gender, size, weight, length, age, and clothing type) to find exactly what they are looking for the first time around. As survey data has suggested, customers are unwilling
to waste time hunting around for what they want. This is even more applicable in an online setting in which
upload time and ease of navigation can make or break an online site.
The brick and mortar Osh Kosh stores should also be redesigned to match their online presence and maintain
consistency. By using the data collected from the grocery store to baby store analysis, they can rearrange
store interiors to fit the cozy, warm, easy-to-navigate feeling to match the desires of their existing customer
base. By creating a look and feel that is matched throughout every aspect of the brand’s image, the company
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can improve consumer awareness of the brand and thereby enhance their overall brand equity.
Promotions
Osh Kosh B’Gosh needs to develop a strong marketing/advertising strategy to educate the consumer about
their new look/strategy. The company should create advertising campaigns that speak about their core values,
their new America-centric clothing line, and their new name/look which is stronger and more appealing. It is
important to note that Osh Kosh must avoid family, gender, and race stereotypes in their advertising. There
are three ways in which they can accomplish this goal: 1. focus on tone by using all races and genders coexisting together and wearing Osh Kosh products to communicate harmony, 2. focus on personality by using
illustrated characters to communicate Osh Kosh’s heritage and appeal, and 3. focus on core competencies by
showing only Osh Kosh products and what makes them better than the competition to communicate aspects
of quality and innovation.
TV ads could be strategically placed during progressive shows which mom and dad might watch after baby is
asleep or other shows that mom might watch during the day, such as: Baby Story on TLC or Martha Stewart
Living. To complement the television spots, Osh Kosh should develop a series of magazine ads that showcase
their new name, new look, and exciting new clothing lines. Ads could be placed in such magazines as: Martha
Stewart Baby, Junior, and Mothering Magazine. By selecting more progressive baby magazines, where the
other companies may not be currently advertising, Osh Kosh could stand apart from their competitors’ saturation strategies and showcase their designs.
In addition, Osh Kosh needs to develop some sort of loyalty program to compete with Gymboree’s lucrative
GymBucks program. They could offer incentives to consumers to purchase online or at their stores and receive a coupon for any Osh Kosh product at any store. In this way, the initial purchase would be made at their
own virtual/online store and hook them in to their Osh Kosh product line. In this way, they could keep the
customer regardless of where the consumer prefers to purchase their baby clothing products.
Osh Kosh must redesign their website to keep current with online purchasing trends that are consistent with
their target audience. The website has the potential to be used as a promotional tool if they create sections to
educate customer about product quality and innovation to tell stories about what makes their company better.
Also, they could stay ever-present in their consumer’s minds by offering html-based newsletters that combine
information and products. Moms could register themselves and their babies to receive monthly newsletters
which discuss baby developmental issues as well as products that solve those issues. For example, when your
baby is getting ready to walk, that would be the time to switch from footed coveralls to footless coveralls –
babies learn to walk better and faster when their feet are bare. This tool would enable Osh Kosh to encourage
moms to return to them for wardrobe updates and speak to moms that the company knows what they need
due to their long-standing heritage and history in the baby clothing industry.
Place
For the short term, Osh Kosh should definitely keep the agreements they share with existing department
stores. The company should also pursue adding other department stores such as Nordstrom’s. Stores, like
Nordstrom’s, would be in keeping with their higher-end image and improve overall brand perception.
In the long term, Osh Kosh B’Gosh needs to invest heavily in expanding company-owned stores. Their two
major competitors: Baby GAP and Gymboree compete strongly on this level and it is only a matter of time
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before they begin stealing even more market share from Osh Kosh. If they want to maintain their high-quality
perception, they need to begin distancing themselves from every-location children’s clothing companies like
Carter’s. In-store design should reflect survey data results which recommend that customers prefer a smaller,
more intimate shopping experience in which products are high quality, and easy to find.
Osh Kosh’ joint venture with Target Stores, Inc. could be a boon or a disaster. To prevent brand destruction,
Osh Kosh must emphasize Target’s newer, high-end status and distribute a line specifically created for Target
customers. At this time, the company plans to call the line Genuine Kids, but it is unclear if the products offered will be their own separate line or an identical line with different labeling. It is imperative that Osh Kosh
separate this line from their department store lines and attempt to design a line in keeping with current Target
design trends such as: Mossimo and Michael Graves. Consumers are just beginning to perceive Target Stores,
Inc. as a step above WalMart and Kmart. Osh Kosh has a responsibility to foster this perception if they want
to properly leverage their brand.
Profit/Unit
Osh Kosh must attempt to maintain or increase their current profitability levels in this unstable economy.
Their current EPS of 2.54 compared with GAP’s .54 and Gymboree’s .16 indicate that this is an attainable
goal. As stated earlier, the company must increase the number of units sold by creating new department store
agreements, short-term and expanding rapidly their own retail stores, long-term.
People
The company’s new hiring in NY and proposed new hiring in CA pose a potential threat to the company’s existing corporate culture. Previously, this was not an issue because everyone was located in the same place – Osh
Kosh, WI. Now, with two new design offices and two new production facilities, Osh Kosh must take major
steps to ensure their corporate culture is preserved. As a company with excellent benefits and employee-care
programs, this should be easy to attain. In addition to current practices, Osh Kosh could hold quarterly “family
reunion” events in which member of the satellite offices could come to the WI headquarters for team-building
events.
Partner/Support
The licensing strategy for Target Stores, Inc.’s proposed “Genuine Kids” line must clearly support both brands
by distributing a specially-designed line just for Target’s customers. Department store distribution strategies
should include a mix-and-match approach in which each department store will offer some similar products to
other department stores but also some unique products to only their store. This will reduce cannibalization
and improve department store/company relationships. Finally, Osh Kosh should enter into a licensing strategy
with Unilever’s “Ben & Jerry’s” division to utilize existing ice cream names/package designs and adapt them
for a new line of “Lil’ Yummies” clothing for babies.
Persistence and Focus
Overall, Osh Kosh must focus their efforts on the re-launch of the new and improved Osh Kosh B’Gosh baby
and kids clothing lines. They must re-focus their brand identity and presence in every area: from department
store displays to logos to packaging to online commerce.
11
Summary of Recommendations
Osh Kosh B’Gosh is a strong brand with a long history and heritage of making quality children’s clothing. To
maintain brand equity, they must stay focused on their target market and how they will position their products
to their customers. Short-term plans should include re-development of department store relationships, renegotiation of licensing agreements, and re-designing of name/logo families and the overall image the brand
presents to the public. Long-term plans should include extensions of design/production facilities, expansion of
company-owned stores, re-development of online commerce site, and a comprehensive advertising campaign.
In addition to traditional promotional methods, Osh Kosh should develop a loyalty program to compete with
Gymboree’s GymBucks program.
Competitor retaliation is a possibility, and is something for which the company must plan. The current status
of market share among the competitors is comfortable as evidenced by the minimal advertising dollars spent
by the major members of the baby clothing industry. Once Osh Kosh attempts to gain larger market share,
they must initiate brand-building campaigns to help avert such retaliation. Competitors may try to adopt Osh
Kosh’s core competencies make them their own and use them against Osh Kosh in advertising and promotional campaigns. If Osh Kosh can successfully place themselves within their niche in the mind of their consumers
prior to store launches, they can more easily defend any competitor onslaughts.
If they begin phase one with a logo/name redesign, clothing line extensions and department store re-negotiations, the company can take their time moving into phase two without giving their competition obvious
advance notice. It is imperative that Osh Kosh rebuild the brand and strengthen their equity so that they are
able to withstand any retaliation and expected competitor backlash.
Osh Kosh is a great brand, but they have the potential to become so much more. They already have the essential building blocks in place, all they need to do is evolve into the company they were meant to be. By
following the recommendations made in this paper, I believe that Osh Kosh B’Gosh can gain market share to
become the category leader.
Figure 1: Osh Kosh B’Gosh – Inconsistent Logos and Naming Practices
12
Figure 2: Osh Kosh B’Gosh – Inconsistent Packaging
Figure 3: Key Financials for Osh Kosh B’Gosh
Key Financials
Y2002
Y2001
Y2000
Sales
436.99
463.07
453.06
Operating Income 41.30
45.46
47.41
Net Income
32.05
32.81
32.22
Total Assets
153.45
157.04
153.31
Total Liabilities
61.07
83.34
108.83
EBITDA
59.88
63.54
65.93
Market Cap
347.38
Source: Worldscope - Millions USD
Figure 4: Osh Kosh B’Gosh - Key Ratios
Key Ratios
P/E Ratio*
11.52
Dividend Yld
0.96
Price to Book
4.00 1
Yr Tot Return
-26.79
Price To CF
8.62
Beta**
0.09
1Yr Sales 1Yr EPS
incitrio
brand
analysis:
Osh Kosh B’Gosh,
-5.63
-2.68 baby sub-brand
Growth
Growth
Source: Worldscope,*IBES,**Worldscope
Figure
5: Osh Kosh B’Gosh - Stock Chart
Figure 5: Osh Kosh B’Gosh - Stock Chart
Figure 6: Osh Kosh B’Gosh – Per Share Data
13
Figure 6: Osh Kosh B’Gosh – Per Share Data
PER
SHARE
DATA
12/31/02
12/31/01 12/31/00
Figure
Osh
Kosh
B’Gosh
– Per –
Share
Figure6:6:
Osh
Kosh
B’Gosh
Per Data
Share Data
12/31/99 12/31/98
PER SHARE DATA
12/31/99 12/31/98
12/31/02 12/31/01
12/31/00
Net Operating EPS
n/a
n/a
n/a
n/a
n/a
EPS
Net Operating EPS
2.54
n/a
2.61
n/a
2.58
n/a
1.99
n/a
1.52
n/a
Fully
EPS Diluted EPS
2.54
2.54
2.61
2.61
2.58
2.58
1.99
1.99
1.52
1.52
Fully Diluted EPS
2.54
2.61
2.58
1.99
1.52
Figure 7: Osh Kosh B’Gosh - 5 Year Summary: Sales, Net Income, EPS
Scale:
Figure1000000
Osh
Kosh
B’Gosh
- 5Summary:
Year Summary:
Figure
7:7:
Osh
Kosh
B’Gosh
- 5 Year
Sales, Net Sales,
Income,Net
EPS Income, EPS
5
YR SUMMARY
Scale:
1000000
12/31/02 12/31/01
12/31/00
12/31/99 12/31/98
5 YR SUMMARY
12/31/02 12/31/01
12/31/00
12/31/99 12/31/98
Sales
436.99
463.07
453.06
429.79
423.23
Net
SalesIncome
32.05
436.99
32.81
463.07
32.22
453.06
32.45
429.79
29.34
423.23
EPS
Net Income
2.54
32.05
2.61
32.81
2.58
32.22
1.99
32.45
1.52
29.34
2.54
2.61
2.58
1.99
1.52
EPS
Osh Kosh B’Gosh Brand Analysis by Angela Hill © 2003 incitrio (www.incitrio.com) or contact [email protected]
29
29
Figure8:8:
Osh
Kosh
B’Gosh
– Profitability
Figure
Osh
Kosh
B’Gosh
– Profitability
Ratios Ratios
PROFITABILITY
12/31/02 12/31/01
12/31/00
12/31/99 12/31/98
RATIOS
Return On Equity
43.48
73.77
137.45
31.50
25.92
Reinvestment Rate
39.23
67.88
127.22
28.48
23.11
Return On Assets
20.87
22.37
28.65
21.19
17.48
Return On Invested Capital
33.54
38.77
52.81
32.44
26.16
Cash Flow To Sales
10.57
9.83
8.94
10.51
8.91
7.33
7.08
7.11
7.55
6.93
Net Margin
Figure 9: Osh Kosh B’Gosh – Growth Ratios
GROWTH RATIOS
12/31/02 12/31/01
12/31/00
12/31/99 12/31/98
Sales 1Yr Growth
-5.63
2.21
5.42
1.55
7.09
Sales5 Yr Growth
2.03
0.81
0.94
3.41
4.47
Operating Income 1Yr
Growth
-9.15
-4.12
2.59
13.46
40.74
14
Return On Invested Capital
33.54
38.77
52.81
32.44
26.16
Cash Flow To Sales
10.57
9.83
8.94
10.51
8.91
Osh Kosh B’Gosh,
baby
sub-brand
Brand
7.33
7.08
7.11
7.55
6.93
Net Margin
Figure9:9:
Osh
Kosh
B’Gosh
– Growth
Figure
Osh
Kosh
B’Gosh
– Growth
Ratios Ratios
GROWTH RATIOS
12/31/02 12/31/01
12/31/00
12/31/99 12/31/98
Sales 1Yr Growth
-5.63
2.21
5.42
1.55
7.09
Sales5 Yr Growth
2.03
0.81
0.94
3.41
4.47
-9.15
-4.12
2.59
13.46
40.74
7.37
15.40
21.10
38.84
19.42
Net Income 1Yr Growth
-2.33
1.83
-0.71
10.61
30.04
Net Income 5Yr Growth
7.27
96.53
24.10
35.75
45.34
Net Margin 1Yr Growth
3.50
-0.37
-5.81
8.93
21.43
Net Margin 5Yr Growth
5.14
94.95
22.94
31.27
39.13
EPS 1Yr Growth
-2.68
1.16
29.65
30.92
49.75
EPS5Yr Growth
20.14
125.26
43.43
51.42
57.87
Equity 1Yr Growth
25.36
65.72
89.74
-77.25
-8.96
Equity 5Yr Growth
-3.97
-11.80
-21.59
-31.80
-9.74
Growth
Growth
Figure10:
10:
Gymboree
- 5Summary
Year Summary
Figure
Gymboree
- 5 Year
5 YR SUMMARY
01/31/02 01/31/01
Sales
01/31/00
01/31/99 01/31/98
505.38
448.61
437.08
457.22
373.44
Net Income
4.58
-36.87
-10.60
6.24
35.17
EPS
0.16
-1.38
-0.44
0.26
1.41
Figure 11: GAP – 5 Year Summary
(Note: Baby GAP’s information cannot be broken out from the GAP parent company’s
information.)
5 YR SUMMARY
Sales
01/31/03 01/31/02
01/31/01
01/31/00 01/31/99
14,454.71 13,847.87 13,673.46 11,635.40 9,054.46
Net Income
EPS
477.46
-7.76
877.50
1,127.07
824.54
0.54
-0.01
1.00
1.26
0.91
15
Net Income
4.58
5 YR SUMMARY
-36.87
01/31/02 01/31/01
EPS
0.16
-10.60
01/31/00
6.24
35.17
01/31/99 01/31/98
-1.38
-0.44
0.26
1.41
Sales
505.38
448.61
437.08
457.22
373.44
4.58
-36.87
-10.60
6.24
35.17
Net Income
Figure
11: GAP – 5 Year Summary
EPS
0.16
-1.38
-0.44
0.26
1.41
information.)
(Note:
Baby GAP’s information cannot be broken out from the GAP parent company’s information.)
5 YR SUMMARY
01/31/03 01/31/02
01/31/01
01/31/00 01/31/99
information.)
Sales
5 YR SUMMARY
14,454.71
01/31/03
01/31/0213,847.87
01/31/01
Net Income
477.46
Sales
13,673.46
11,635.40 9,054.46
01/31/00 01/31/99
-7.76
877.50
1,127.07
824.54
14,454.71 13,847.87 13,673.46 11,635.40 9,054.46
EPS
0.54
Net Income
-0.01
1.00
1.26
477.46
-7.76
877.50
1,127.07
824.54
0.54
-0.01
1.00
1.26
0.91
EPS
0.91
Figure 12: Carter’s – 3 Year Summary (5 Year Summary - not available due to non-public status)
Figure 12: Carter’s – 3 Year Summary
Historical
Financials
& Employees
(5
Year
Summary
- Summary
not
available
due to- not
non-public
status)
Figure
12: Carter’s
– 3 Year
(5 Year Summary
available due to
non-public status)
Income
Statement
Historical
Financials & Employees
Income Statement
Year
Revenue
Revenue ($
Year
Dec 01
mil.)
($ mil.)
Dec 01
518.5
Dec 00
Dec 00
463.4
Dec 99
406.9
Dec 99
518.5
Net Income
Net Profit
Net Income
($ mil.)Net Profit
($ mil.)
Margin
(4.2)
(4.2)
12.7
463.4
--
12.7 2.7%
(3.8)
Margin
--
(3.8)
6,083
6,083
2.7%6,948
--
406.9
Employees
Employees
6,948
7,244
--
7,244
Figure 13: Sales Comparison of Top 4 Competitors in Children’s Clothing Industry
(Note: Baby GAP’s information cannot be broken out from the GAP parent company’s information.)
$16,000.00
$14,000.00
$12,000.00
$10,000.00
$8,000.00
$6,000.00
$4,000.00
$2,000.00
$0.00
Osh Kosh B'Gosh
Gymboree
GAP
Clothing
Sales 02
Carter's
Companies
Sales 01
Sales 00
$1,600.00
$1,400.00
$1,200.00
16
$8,000.00
$4,000.00
$6,000.00
$2,000.00
$4,000.00
$0.00
$2,000.00
$0.00
Osh Kosh B'Gosh
Gymboree
GAP
Carter's
Gymboree
GAP
Sales 02 Sales 01 Sales 00
Clothing Companies
Carter's
Clothing
Osh Kosh B'Gosh
Companies
Figure 14: Operating Income Comparison of Top 4 Competitors in Children’s Clothing Industry
02 Sales 01 Sales 00
(Note: Baby GAP’s information Sales
cannot
be broken out from the GAP parent company’s information.)
$1,600.00
$1,400.00
$1,600.00
$1,200.00
$1,400.00
$1,000.00
$1,200.00
$800.00
$1,000.00
$600.00
$800.00
$400.00
$600.00
$200.00
$400.00
$0.00
$200.00
-$200.00
$0.00
Osh Kosh B'Gosh
Gymboree
Osh Kosh B'Gosh
Gymboree
-$200.00
Clothing
Companies
GAP
Carter's
GAP
Carter's
Op Inc 02 Op Inc 01 Op Inc 00
Clothing Companies
Op Inc 02
Op Inc 01 Op Inc 00
Figure 15: Net Income Comparison of Top 4 Competitors in Children’s Clothing Industry
$1,000.00
(Note:
Baby GAP’s information cannot be broken out from the GAP parent company’s information.)
$1,000.00
$800.00
$800.00
$600.00
$600.00
$400.00
$400.00
$200.00
$200.00
$0.00
$0.00
-$200.00
Osh Kosh B'Gosh
Gymboree
Osh Kosh B'Gosh
Gymboree
-$200.00
Clothing
Companies
GAP
Carter's
GAP
Carter's
Net Inc 02 Net Inc 01 Net Inc 00
Clothing Companies
Net Inc 02
Net Inc 01
Net Inc 00
Figure 16: PE Ratio Comparison of Top 4 Competitors in Children’s Clothing Industry
(Note: Baby GAP’s information cannot be broken out from the GAP parent company’s information. Carter’s is
35.00
not
a publicly traded company at this time.)
30.00
25.00
20.00
15.00
10.00
5.00
0.00
Osh Kosh B'Gosh
Gymboree
GAP
Clothing
Carter's
Companies
3.00
17
15.00
10.00
5.00
0.00
Osh Kosh B'Gosh
Gymboree
GAP
Clothing
Carter's
Companies
Figure 17: EPS Comparison of Top 4 Competitors in Children’s Clothing Industry
(Note: Baby GAP’s information cannot be broken out from the GAP parent company’s information. Carter’s is
not a publicly traded company at this time.)
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Osh Kosh B'Gosh
Gymboree
GAP
Clothing
Carter's
Companies
Figure 18: Brand Equity Chart
Quality
10
Cute &
Innovative
9
BABY
History &
Heritage
8
Store Design
Price
7
6
5
4
WOMEN
KIDS
3
2
High
Quality
MEN
1
0
Color Palette
Overalls
Quality
10
Cute &Figure 19: Spider
BABYChart
Innovative
9
History &
Quality
Heritage
10
8
Store Design
9
&
e
Store Design
KIDS
Low Quality
High
Quality
3
Overalls
2
1
0
Color Palette
ls
4
Price
3
High Price
Clothing Design
2
5
4
Innovation
5
6
MEN
N
8
WOMEN7
Price
7
6
High Price
1
0
Color Palette
Osh Kosh B'Gosh
Value
Baby GAP
High Quality
Value
Low Price
Carter's
Innovation
Clothing Design
Innovation
Osh Kosh B'Gosh
Carter's
Baby GAP
Gymboree
Clothing
High QDesign
uality
Low Quality
© 2003-2008
Incitrio
| web:
| tel: 858.202.1822
Osh Kosh
B'Gosh
Carter's incitrio.com
Baby GAP
Gymboree
igh Quality
Low Price
18
Gymbore
High
Quality
MEN
Overalls
1
0
Color Palette
Figure 20: Perceptual Map
High Price
Clothing D
Osh Kosh B'Gosh
Low Quality
High Quality
Low Price
Figure 21: Survey Data – Quantitative
Please rank the following children’s clothing companies in terms of quality, price, value,
innovation, clothing design, product availability, color palette, and store design on a scale from
one to ten.
Figure 22: Survey Data – Results based on an average of data responses collected (total: 30).
Figure 22: Survey Data – Results based on an average of data responses collected (total: 30).
Osh Kosh B'Gosh
Carter's
Baby GAP
Gymboree
Quality Price Value Innovation Clothing Design Product Availability Color Palette Store Design
10
8
8
10
9
4
8
4
4
5
5
3
6
10
7
7
8
6
7
8
10
8
10
8
7
9
6
7
8
6
9
9
Figure 23: Survey Data – Demographics and Each Company’s Ratings
(Please see following Excel spreadsheets.)
Figure 24: Psychographic Survey
1. What is your biggest complaint about children’s clothing design?
2. What frustrates you about using children’s clothing?
3. If you could design your own baby clothing what would you do differently?
4. What is your biggest complaint about the baby clothing shopping experience?
5. Do you ever or regularly purchase products from Ben & Jerry’s or Paul Newman’s?
6. Do the social policies of a company have an impact on your decision to buy their products?
7. Which is your favorite baby clothing brand? When and how often do you purchase this brand?
8. What is your favorite grocery store and why?
9. Where do you do most of your grocery shopping?
10. Do you make your own baby brand food or buy it at the store? If you buy it, what brand do you buy?
11. What three words would you use to describe yourself as a caregiver?
12. Have you heard of Osh Kosh B’Gosh? What is the first thing that comes to mind?
19
Carter's
13. If yes, what do you think of Osh Kosh B’Gosh’s baby clothing line? What do you think of their other baby
products?
incitrio
brand analysis: Osh Kosh B’Gosh, baby sub-brand
14. How does Osh Kosh compare to other brands in terms of quality and innovation?
15. Does availability affect the frequency of Osh Kosh clothing purchases you make? Why?
Figure
25: New
Baby
16. What
doOSH
you
like logo
or
dislike
Kosh’s
baby clothing line or other baby products?
incitrio
brand
analysis:
Osh
Koshabout
B’Gosh,Osh
baby
sub-brand
Figure 25: New OSH Baby logo
Figure 25: New OSH Baby logo
Figure 26: New OSH KOSH Kids logo
43
43
20
Sources
Popular Articles about: Osh Kosh B’Gosh, Carter’s, Gymboree, and baby GAP
http://web.lexis-nexis.com/universe
search by company name and dates
Company-based information about: Osh Kosh B’Gosh, Carter’s, Gymboree, and baby GAP
http://www.oshkoshbgosh.com/default.asp
http://www.carters.com/main.html
http://www.gymboree.com/index.jsp
http://www.gap.com/asp/bb_directory.asp?wdid=50
Logo and Package Graphics
Babies ‘R Us store
Osh Kosh B’Gosh website: http://www.oshkoshbgosh.com/default.asp
Investment Information and Tables, Thomson Analytics
http://analytics.thomsonib.com/pw/?ExpressCode=wustlbasic
search: GOSHA (Osh Kosh B’Gosh)
search: GPS (GAP)
search: GYMB (Gymboree)
Investment Information and Tables, Hoovers Financials
http://www.hoovers.com/annuals/4/0,2168,52644,00.html
search: Carter’s Holdings, Inc.
21

Osh Kosh B`Gosh, baby sub-brand Brand

Transcription

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