A PRESENTATION ON CROCS

Presented By-Ashwani Dadhich

INTRODUCTION• Crocs, Inc. was established in 2002 in Colorado, USA

by three friends- lyndon duke Hanson, Scott Seamans and George Boedecker and it is today amongst the fastest growing brands and companies in the world.

• Love them or hate them, the tremendous popularity of Crocs™ shoes is an undeniable business success story.

• The U.S. footwear industry in 2002 was $49.3B in annual sales1, split about 60%-40% between fashion and athletic. Within the fashion footwear segment, categories are well established with shoes representing 55%, sandals representing 25%, and boots and other 20%2.

• The 1,000 pairs made available at the site were sold out in three days.

• Crocs challenged key industry assumptions and conventions by creating a brand new type of casual shoe, a clog that was partly a shoe and partly a sandal.

• The broad appeal of the clog cut across traditional segments to envelop customers from all walks of life.

How Crocs Challenged Conventional Assumptions of Competition To

Create A Blue Ocean

• Crocs challenged key industry assumptions and conventions by creating a brand new type of casual shoe, a clog that was partly a shoe and partly a sandal.

• It used fun, whimsy, and imagination to create a blue ocean by making brightly-colored, comfortable and light weight clogs with the perfect balance of functional and emotional appeal.

Crocs™ Features with Functional Utility & Appeal

Material has acushiony feel forlong‐wearingcomfort

Heel straps hold feet in or can be folded in frontfor easy slip‐on and off

Soles are slip‐resistant and non‐marking Small nubs on the inside

help prevent slipping and increase blood circulation

Material is odor andBacteria resistant

Holes increase airflow

THE PRODUCT• Crocs shoe was

rebellious and an anti-theses of fashion.

• Most popular clogs “Beach” and “Cayman” were almost nebulous in shape and sited by fashion enthusiasts as being ugly, quirky and whimsical.

• Material• The company used a proprietary material

called Cros-lite™ – molded plastic resin – to create a unique clog design with perforated holes. Although the holes made the clogs look funny and cheese-like, this made them more distinctive and original. The holes also made the shoes more comfortable since feet could “breathe.”

• The material also had special properties that made the shoes lightweight, cushiony and very comfortable to wear, odor-resistant, non-slip, skid resistant, easy to clean, and waterproof.

• Compared to traditional materials used by the industry such as leather, Crocs’ material was inexpensive, less variable in terms of quality, longer lasting, and required minimal manual labor for production.

Styles and Sizes Unlike traditional shoemakers

having to produce multiple new styles each season, Crocs only had two styles of clog when it launched and these were intended to appeal broadly to women, men, and children.

Because of the loose-fitting nature of the clogs, Crocs could also produce fewer sizes than was typically required.

Crocs didn’t focus on particular demographics or segments. It designed for broad appeal across income brackets, ages, and genders.

Colors and Fun• One of the boldest moves

Crocs made was to launch its product in a wide range of vibrant solid colors. Bright oranges, reds, pinks, and yellows to grab attention and capture shoppers’ imagination.

• By breaking traditional color

boundaries, Crocs created its own fashion phenomenon. Adding to the fun, Crocs created a crocodile face logo to build a light-hearted brand image.

Purchase Accessibility• For retail customers, Crocs changed the game by

allowing them to order as few as 24 pairs and stock them in a matter of weeks, not months.

• For consumer customers, Crocs designed a broad and extensive distribution system so its shoes were available in a variety of retail outlets from specialty stores to department stores and large shoe store chains.

• It discouraged overstocking and the subsequent clearance sales allowing consistent pricing in long run.

Marketing & Promotion• Crocs used creative

merchandising (out-of-box vertical displays) and word-of-mouth marketing to build buzz and momentum without having to spend as much as traditional manufacturers on advertising or paying celebrities for endorsements.

• Key feature of promotion was Croslite in animated form as a lovable, kind -hearted foamy friend of the feet.

• .

Celebrities like Al Pacino, Jack Nicholson, Nicole Appleton and former U.S. President George Bush many others were

seen wearing the clogs and once the media caught on, Crocs benefitted from significant free, viral marketing

Sustaining Differentiation• While competitors were stressing on fashion or functionality,

Crocs was able to adopt a dual positioning as an extremely comfortable option on account of its unique properties ,as well as a revolutionary fashion statement .

The company entered into a host of licensing agreement with NHL,NFL,NBL in order to control over the youth market.

• “MARVEL” got into a license agreement there by giving an access to the likes of Captain America , Fantastic four ,Spider-Man, and X-man.

• Similar agreement made with Disney , Nickelodeon , Nascar .• Acquisition of Jibbitz was another feather in croc’s cap.

Towards 2007,the company began to realize that it

could not rely on the ‘clog’ alone for future growth.

It soon began to expanding to products like apparel, umbrellas, bags knee pads, beach towels, sunglasses.

It introduced 28 new models in 2008 included styles

like flip flops , heels, boots and slip-ons.

Challenges• Oversupply- Flooding the market with a product may

result in phenomenal short term sales but in long term it is likely to adversely impact the brand’s appeal.

• Costly Line Extensions -Crocs stretched itself too wide thereby diverting from its core positioning of comfort and functionality, product line swelled to over 350 styles catering to men , women and children across categories.

• Acquisitions - Crocs made considerable investments buying up companies that provided possibilities of line extension. it bought EXO Italia and Fury Hockey and Ocean Minded.

Love to Hate Crocs• An entire community of

people has emerged that ‘love to hate Crocs’.

• So much so that there exists an I hate Crocs dot com website that sells t-shirts spoofing the brand with slogans like “ Friends Don’t let friends wear Crocs”.

• An anti-Crocs page in Face book boasts of 1.5 million fans.

• Being nominated as no. 6 on the “Worst” list of Maxim’s “The 10 best& worst things to happen to men in 2007”.

• In 2008 ranked no.1 brand in the athletic specialty sporting goods channel.

Revival-Going Chic The increasing debt and

persistent demand from stakeholders to diversify , forced the designers to think beyond the bulbous bright resin clogs and move towards other slimmer, strappier footwear.

• Launched a host of new collections,once being you,Ocean Minded and Rx line.

• It was attempt to rejuvenate the brand and raise the style quotient.

• Such initiatives enabled it to clock revenue of $ 167mn in the first quarter of 2010,up 23.7% from $135mn during first quarter of 2009.

• Launched ‘You’ summer 2010 collection which facilitated expression of individual style and traditional comfort.

CONT…

• “FEEL THE LOVE” Campaign..

• Debuted Spring –summer collection 2010.

• Campaign is Croc’s first integrated marketing effort spanning across TV , print, social networking and digital media.

• Intent was to reinforce the ‘ Croslite ’ heritage , encourage customers to take a fresh new look at the designs and help them to realize that Crocs is much more than ‘One shoe Wonder’.

•How Factors That Crocs Eliminated, Reduced, Raised,

and Created Achieved Differentiation and Lower

Costs.

To Conclude..

• The story of Crocs, Inc., is a great example of a company that created a hugely successful new business by redefining rule of the game.

• After launching in the U.S. in 2002, the company quickly grew to achieve a global presence by staying true for a time to the principles of value innovation.

• maintaining a low cost structure through use of inexpensive materials and efficient, low cost production while simultaneously creating a leap in buyer value through colorful, unique casual shoes that were comfortable, fashionable and fun to wear.

Cont..• Proved criticism of experts wrong

and able to emerge stronger post-recession.

• Adapted its product line with the changing time , thereby drawing in more customers.

• Augmentation and expansion into international markets has provided Crocs with considerable growth opportunities..

Thank you for listening to me!• Do you have

any question?