VIBRAM FIVEFINGERS STRATEGIC
MARKETING PLAN
Prepared for: Mary Charleson
Prepared by: Wanda N, Vivian W, Marjorie S, Josh K, Amanda T
Date: June 18, 2014
BMKT 161
Table of Contents
Executive Summary ....................................................................................................................
Strategic Focus Plan ....................................................................................................................
Mission Statement ..................................................................................................................................
Corporate Goals.......................................................................................................................................
Core Competency and Sustainable Competitive Advantage....................................................
Situation Analysis ........................................................................................................................
Analysis of:
Industry...................................................................................................................................................................
Competitors ...........................................................................................................................................................
Company .................................................................................................................................................................
Customers ..............................................................................................................................................................
SWOT Analysis .........................................................................................................................................
Marketing and Product Objectives ........................................................................................
Objectives ..................................................................................................................................................
Target Markets ........................................................................................................................................
Points of Difference ...............................................................................................................................
Positioning ................................................................................................................................................
Marketing Program .....................................................................................................................
Product Strategy .....................................................................................................................................
Pricing Strategy .......................................................................................................................................
Distribution Strategy.............................................................................................................................
Promotional Strategy ............................................................................................................................
Evaluation and Control ..............................................................................................................
Conclusion ......................................................................................................................................
Bibliography ..................................................................................................................................
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Executive Summary
The following plan outlines the marketing strategy and tactics for Vibram Fivefingers, a
minimalist barefoot shoe used to provide footwear for fitness, running, water spots, yoga,
hiking, and other sports.
Vibram will look among what makes them unique from their competitors in the barefoot
shoe industry, and how to make sure they remain the number one brand.
Vibram will aim to increase sales by 5 million this fiscal year and increase brand
recognition within their targeted audience by 10%. Vibram will achieve this by first
identifying their targeted audience. Vibram will then increasing brand awareness among
their targeted audience with information representatives at select retail stores and test
runs of their product in the outdoor environment. Trade in incentives will also focus on
targeting existing customers into purchasing more Vibram goods. Vibram will also
promote their brand name in selected marathon events. Changes in Vibram's distribution
line will also be made in order to meet growing consumer demand.
Strategic Focus and Plan
Mission Statement
Our mission is to market Vibram FiveFingers as a high-quality performance product for
running, fitness and outdoor sports for consumers looking for a unique product to
naturally train the way we were built, varying at an affordable to premium price
respectively.
Corporate goals
Our goals are to increase market share, profitability, expanding employee retention rates,
improve customer service, efficiency and grow the business operation. Vibram
FiveFingers footwear is specifically designed for users that want a barefoot sensation
during workout. It provides flexibility and natural movement, which allows user to move
in a natural way while it protects over a variety of surfaces. Cutting unnecessary costs,
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designing new designs and raising profit margin will increase profitability of the
company. Improving employee retention rates reduces the amount of money and time
spent on training new hires which helps profitability.
Core Competencies and Sustainable competitive advantage
Vibram Fivefingers has many unique core competencies that set it apart from the
competition and ensure they are able to last in the market. Firstly, 'before Vibram
FiveFingers were introduced, there was no minimalist footwear constructed with
individual toe pockets that encouraged natural, barefoot movement, while at the same
time providing enhanced grip and protection'(Douglas,2012).
This innovation of technology has aloud Vibram to patent the product of a minimalist
footwear with 5 individual toe pockets ensuring that there's no copyists and
counterfeiters. Secondly Vibram has "over 75 years of product research which has aloud
them to be named one of the best inventions of 2007, has given them the Italian Award
for Creativity and Grand Design Etico International Award in 2008, and has been featured
in "sport design" an exhibition dedicated to the Italian Design in Sport gear"("What we
do",2014). Vibram also has a unique testing center in its headquarters that let clients
"come to the VTC and stay for a week as they brainstorm, conceptualize, and create the
prototype of the product they want, hence the need for a hotel and recreational facilities
to accommodate their guests. What would normally take months to do, the process has
been reduced to as short as 12 days, which is surprisingly very fast and this is what sets
Vibram apart from other companies'("Latest Footwear Technologies, 2012). Wanting to
better understand the needs of specific sport disciplines, Vibram formed the " Vibram
Tester Team", a team that cooperates with top level athletes that consitute how to create
soles that guarantee the highest performance in relation to the surface and specific
requirements of each activity("About Us", 2014). Other facts that set Vibram apart from
the competition are its commitment to creating over 150 new models a season to satisfy
all requests. Unlike many shoe/fitness retailers Vibram is present in 120 countries and
partnered with more than 1000 shoe makers in order to satisfy the needs of all their
clients, further empathizing their goal to ensure high quality product and customer
satisfaction.
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Situation Analysis
Industry Analysis
Vibram is one of if not the main company in the barefoot minimalist shoe industry. The
barefoot minimalist shoe industry is an extremely niche market in the athletic shoe
market.' Sales of minimalist running shoes have grown into a $1.7 billion
industry'(Mirshak, 2012).
Minimalist shoes are marketed globally but their biggest market remains in North
America. 'The athletic shoe market in Canada is worth approximately $1.3-billion dollars
with about 30 per cent of that going to running and jogging shoes. The U.S. running shoe
market is worth approximately $6.5-billion. The minimalist category makes up about 15
per cent of that.'(Mcginn,2012).
Time, however, hasn't been friendly to the minimalist shoe market. "According to sports
research firm Sports One Source, minimalist shoes reached peak sales in the U.S. of
$400-million in 2012. A 30% increase in the market from 2011 to 2012 dropped to a
meager 3% by the end of 2012, followed by a 13% decline in sales in the first quarter of
2013." (Barker, 2013)
All companies in the barefoot minimalist shoe industry must abide to government
standards and regulations that apply to footwear products. These include CPSIA, GB
Standards, EN Standards, ASTM standards, ISO standards, and AAFA restricted
substance list. ("Restricted Substance list", 2012), ("Standards catalogue", 2012).
The industry also has to be aware of false advertising of their product. In 2012, both
Vibram and Adidas were sued in the United States "regarding allegations of deceptive
claims of increased training efficiency, foot strength, and decreased risk of injury" (Little,
2012) . "Sketchers and Reebok have also had false claims that their barefoot shoes
provide unique health benefits" (Rovell, 2012).
Competitors Analysis
In terms of direct competitors Vibram faces in the barefoot running market there are a
few. Merrell, Saucony, Brooks, New Balance, and Vivobarefoot all produce their own
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type of barefoot minimalist shoe("Minimalist Shoes", 2014).
Prices are even among Vibram and their competitors with the only main difference being
the design of the shoe, Vibram holds the patent for the Fivefinger design which seperates
them from the competition. Indirect competitors such as Nike and Adidas that used to
only offer runners now offer minimalist running shoes as well, companies that have the
resources to provide serious concern to Vibram.
Vibram also has counterfeit competitors popping up online. According to
BirthdayShoes.com, "in 2010, more than half of the Google search results for Five
Fingers led to counterfeit sites" (Gittleson, 2012). In response to the high number of
counterfeiters Vibram "offered vouchers to customers who had unwittingly bought fake
Five Fingers, so that they could buy the real product at cost price. The company also put
up a page on its website alerting customers, enlisted the help of bloggers and asked fans
of its Facebook page to get the word out. Within a year, the deluge of complaints from
customers who had bought fake products slowed to a trickle" (Gittleson, 2012). Though
Vibram has been able to fight this form of counterfeit competition, counterfeiters still
remain online, something Vibram has to be aware of.
Company
Vibram is an Italian company named after its founder, Vitalie Bramani. Bramani
"invented the first rubber soles for mountaineering boots in 1935" ("About Us", 2014).
Vibram is the undisputed leader in soling technology that are targeted towards the
outdoor, work, recreation and orthopedic markets. Vibram has over 75 years of product
development research which has allowed them to remain on top of these markets. Vibram
soles guarantee quality, innovation, performance, safety and design. All soles produced
by Vibram are consistent to Vibrams company objectives: "to guarantee the best
performance, the maximum level of comfort, and quality over time" ("About Us", 2014).
Customer Analysis
Vibrams customers are a unique target market. Firstly Vibrams customers are runners and
fitness enthusiasts, these people are found to live in urban cities primarily in first world
countries. Vibrams target market also includes both men and women from ages 18-55.
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Vibram also appeals to people trying to live a more natural and healthy life style in the
form of footwear. Vibram also captures people who love running but have suffered from
knee and back injuries.
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Vibram FiveFingers SWOT Analysis
Strengths
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First original designer of five fingers shoes
Improves overall foot health. (strengthens muscles and
tendons in the foot that aren’t normally used)
Recommended by physicians for people with knee or back
pain
Success rate of 95% for perfect fit achieved by consumer
Company has 75 years of product development research
One-year warranty provided by manufacturer
Partner with 1000 shoemakers
Present in 120 countries
360 degree photography of products aids most realistic
high street shopping experience on the web
Opportunities
Celebrity endorsements
Further advertisement to raise awareness of product
Create more manufactures to keep up with high demand
Appearances at events marketed to the target audience
(marathons, races, hiking events)
Weaknesses
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Appearance/Attention given received when wearing the
shoe may not appeal to the customer
Many people are skeptical towards zero support on a shoe
Difficulty keeping up with high demand for product from
retailers
Market targeted is too specific
Threats
Many fraudulent versions sold online
Fraudulent versions lack in quality and warranty giving a
bad impression in their company and their actual product
Other shoe companies are relaying false information about
the product to the consumer
Competitors are creating their own versions
Immediate soreness in feet and calves cause by exercising
weakened muscles may turn consumers away from the
product
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Marketing and product objectives
Objectives
Our objectives are as follows:
 To produce more product to meet increasing demand
 To increase brand awareness amongst the target audience
 To inform customers how to select and use the product, while removing any incorrect
information
 To educate and inform facts and awareness on the targeted audience by 10% by the
end of the year
 To enhance the Fivefinger image amongst a well defined target of running and fitness
enthusiasts. And to generate the need and want in the consumer for purchasing Vibram
fivefingers
 To increase sales by 5 million globally for the 2014 year.
Target Market
 Men and women aged 18-55
 Runner and fitness enthusiasts
 Naturalists
 People with knee and back injuries, especially due to running
Points of Difference
 Design: only shoe to have a 5 finger type of fitting that gives consumer a personal
feeling to their foot
 Offers unique health benefits for knee and back problems
 Brand personality, people think of Vibram when they hear about five finger shoes
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Positioning
Having a high quality unique design for any sort of fitness enthusiast that offers health
benefits and promote barefoot movement.
Marketing Program
Product Strategy
Design and concept. Vibram Fivefingers shoes follows the shape of consumers' foot,
individually pocketing each toe and working as a second skin to offer exceptional
protection while enhancing sensory awareness.
Product Line. Vibram Five Fingers shoes, retailing from $60 to $190 is available in a
wide range of selections. The selections include fitness, running, multi-use, outdoor,
casual, golf and watersport. All of the product lines are available for men, women and
children.
Unique Product Quality. Vibram sole platform: patented, thin and lightweight. This sole
is realized with Vibram TC1 non-marking compound, ideal for high performances and
best grip both on wet and dry surfaces. The soft and elastic Polyamide® upper stretches
to follow the shape of your foot and secure the platform in place. ("Vibram fivefingers",
2014).
Pricing objective
To provide a broad spectrum of pricing anywhere from affordable to premium to apply to
a vast global market.
Pricing adjustments
Vibram offers fair pricing in comparison to their competitors. Retailing from 60-190
dollars Vibram Fivefingers can be purchased by price conscious consumers and
consumers that are looking for a more luxurious product. Due to Vibram’s fair pricing
there is no need to make any special adjustments.
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Projected Revenues
Vibram experienced a steep hike in sales during the first few years of their launch in 2006
(Alsever, 2010), but we project a more steady growth for the company's future. With
capacity and factory growth in mind, we expect a steady increase of 50,000 units per year
for the next years. Prices will remain in a broad range reflecting its relative design and
features to apply to our global market.
Average sales per unit = $100
sales
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
sales
2010
2014
2015
2016
2017
2018
actual
year 1
year 2
year 3
year 4
year 5
*2010 actual sales based on an article by CNN (Alsever, 2010).
units
800,000
600,000
400,000
units
200,000
0
2010
2014
2015
2016
2017
2018
actual
year 1
year 2
year 3
year 4
year 5
*2010 actual units sold based on Vibram Five Fingers contact information on their
website ("Contact info", 2010).
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Distribution Strategy
Currently Vibram sells their product in over 120 countries, with distribution coming from
three primary channels; outdoor specialty shops, running specialty shops and premium
independent shoe stores. Vibram decided against selling to internet-only retailers sixyears ago because the in-store sales professionals could best ensure consumers a proper
fit of the five-toed shoe. This approach helps ensure that consumers know that they are
buying from authorized dealers. These retailers must have a traditional “Brick and
mortar” store.
Over the course of the next two years, we plan to increase distribution in retail outlets in
the west coast region, where hiking and outdoor activities are prominent. We’ve decided
to not try and retail our product in big athletic stores such as Nike, and Adidas as these
companies are direct competitors and don’t give our customer the product information
they need.
Promotional Strategy
IMC Objectives
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To move customers in our identified target market from unawareness to awareness.
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To build sales through new product offerings aimed at our target market.
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To facilitate the successful introduction of the new product offering.
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To gain consumer trust and loyalty.
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To offer a product that is unlike any other in the market today, aimed specifically at
revolutionizing the athletic world.
To properly inform potential and existing customers of our product
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Budget
Our promotional budget is $50,000 for our first year. $9,000 will go towards setting up
free trial samples in hiking trails where our target market is to be prominent. Another
$10,000 will go towards promoting the Vibram brand name in marathons. $30,000 will
go towards spreading information about Vibram Fivefingers with the use of
representatives in our largest retail stores. And our final $1,000 will be used for an
online trade-in program where customers can receive 20% off a new pair of Fivefingers
for trading in their old pairs.
Promotional Program
Our Promotional program is as follows. $9,000 of our $50,000 budget will go towards
setting up a sample booth ,using key push strategies, on well known hiking trails, for four
Saturdays, in our case this hiking trail will be the grouse grind. We will have a booth at
the start of the trail offering hikers to try their hike in Vibram Fivefinger shoes, with us
holding their shoes for them until they return back down the mountain. If the customer
enjoys the product enough to want to buy it we will offer them a 15% discount, we will
also offer a coupon for family and friends of said buyer. We estimate that this will cost us
$9,000, with us paying three information representatives $25 a hour for 4 eight hour days,
as well as the costs of getting enough product in the location in order to fit various
customers shoe sizes and paying grouse mountain to let us set up shop there.
Another promotional strategy we will use is marketing our brand name in marathon
events. We will offer participants of the race a free Vibram bag with information
pamphlets after they complete the race in order to get the Vibram name out there in our
targeted market. This will cost a estimated "5,000 dollars according to sponsorship fees
set by the Chicago marathon"("Marketing opportunities"). We will be planning on
sponsoring the Chicago marathon and the BMO Vancouver marathon for a combined
total of 10,000.
Another key promotional strategy we will be doing is placing Vibram representatives in
the largest retail outlets that sell our product to better inform potential customers about
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our product, and fix any misconceptions they might have. We will be placing these
representatives during the month of the highest projected sales that Vibram has on the
West Coast. We will place 15 representatives across the largest 15 retail outlets that carry
our product. This will cost us $30,000, with money being allocated at 2,000 dollars a
representative for the two weeks they will be working to inform customers.
We will also be offering special trade in discounts where customers can mail their old
Vibram shoes to receive an online 20% discount on a new pair of Vibram Fivefingers.
This is to drive sales up from our existing customers. This trade in program will be
advertised on our website to keep promotional costs at a minimal. Our final $1,000 is
used to pay for the website editor to make these changes.
Evaluation and Control
Monthly sales targets have been determined and sent out for Vibram Five Fingers
retailers for each metropolitan area in each country of distribution. Actual shoe sales will
be compared with these targets on a monthly basis to effectively analyze areas of
improvement and to determine which promotional tactic(s) work best. A marketing team
will be appointed to analyze these results at the end of each month to modify promotions
to reflect the demographical differences in each area. Monthly evaluations and innovative
changes should allow Vibram to meet its consistent sales growth annually.
Conclusion
The marketing plan for Vibram outlines its corporate goals and corresponding strategic
marketing projects to ensure consistent growth for the next 5 years. Our marketing team
has completed an in depth research, analyzed and created an effective marketing plan for
Vibram Five Fingers.
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972
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