Its Original Line Of Footwear L.A. Gear example essay topic

LA GEAR Named in favor of the city of Angels, L.A. Gear was best known in the 1990's for its blinking children shoes, L.A. Lights (Hoovers, 2003). The company's tumultuous history has evolved into one that is now a licensor for a variety of product lines, including apparel, watches, and its original line of footwear. L.A. Gear has gone from being a major player in the highly competitive field of athletic shoes, to bankruptcy, to a company with a new focus and new lines. Robert Greenberg started L.A. Gear as a single women's clothing store on Melrose Ave in Los Angeles. Selling mostly other brand names, he also offered his own line of women's casual footwear and clothing under the store's name, L.A. Gear. The 1980's saw the emergence of "female" sports such as Aerobics and created a need and trend for sporty but fashionable apparel. L.A. Gear's footwear fit this need perfectly with its interesting choice of colors and shapes (University, 2001).

Exploiting this strong niche in the fashion segment of the athletic footwear market with shoes such as the Canvas Workout and Street Walker, the company became a nationwide success. L.A. Gear went public in 1986 and added numerous lines in order to penetrate the children's and men's market. Their overall success could be attributed to their superior target marketing and trend spotting. By 1989, L.A. Gear had reached third place in the athletic shoe market (University, 2001). Trying to shake the fashionable female image and gain more market share in the men's "performance" shoe market, the company's new advertising campaign "Unstoppable" featured basketball stars in 1989 as well as Michael Jackson in 1990. The milestone blinking sneakers for kids elevated L.A. Gear to a household name in that segment. However, the huge investment in the men's market did not bring the expected results.

Financial troubles, management turmoil and unclear strategies followed all through the 1990's. A licensing deal with Wal-Mart in 1994 and the closure of all of their own retail outlets the following year, further distorted their image as a high-end player in the sports footwear market. After emerging from bankruptcy protection in 1998 L.A. Gear became a licensor only having almost disappeared from the athletic footwear market. Kid fusion (LA, 1998) is licensed to develop and produce swimwear and related apparel for kids under L.A. Gear's name. Los Angeles-based footwear company ACI International, acquired LA Gear in 2001 (Warm, 2002) and now markets throughout the United States and Canada. SWOT Analysis: Strengths SS High brand recognition by women and children.

SS Specializes in sneakers that symbolize the Southern California lifestyle. SS Quick in spotting trends in the market. SS Own a strong niche in the market of athletic shoes. SS Good combination of advertising and merchandising.

SS Creation of new product lines, such as by Nouveau Eyewear. Weaknesses SS Not a man's preference in shoes. SS Aimed at too many conflicting target groups (women and fashion vs. men and performance) SS Not enough capital to contract celebrity for advertising campaign necessary for image rebuilding. SS Cannot promote the performance aspect of their athletic shoes.

SS Create confusion to consumer if the company is a shoe or apparel centric. SS Little financial resources Opportunities: SS Shift focus to include the men's appeal for athletic shoe. SS Develop shoe products with performance aspect for men. SS Develop more athletic apparel for men.

SS Maintain market share for women's apparel and shoes. SS Offer complete new products through licensing (eyewear, swimwear etc.) SS Options of licensing deals to target the lower end mass market without hurting the brand image Threats SS Image rebuilding takes a long time while competitors are gaining major market share. SS Investment capital need is a major concern to re-launch the lost image. SS Technological innovation by competitor is threatening the product line. SS While attempting to push the athletic image in men, the women's perception might be working against LA Gear. SS Without manufacturing facilities, LA Gear is not in the control position to manipulate the pricing structure or the quality of its product.

SS Sales through discount retailers could hurt the image in their traditional target markets even more. Even with the difficulties that L.A. Gear has experienced, it still enjoys tremendous brand recognition (Most, 2002). Current marketing efforts, target kids and young women 18 to 25. Advertising and product selection have been made to merchandise to this segment of the market. Using the Southern California lifestyle, the company is promoting the product lines to other parts of the country. New product lines like eyewear by Nouveau Eyewear (Hoovers, 2003) helped to show the marketplace that L.A. Gear is back on the scene. L.A. Gear has traditionally focused on women and children's shoes, which left a large segment of the market, mainly young and middle-aged men, out of reach for their product lines.

They were never able to garner more than third place in the marketing share against giant Nike and Reebok. When the economy slide in the early 1990's, L.A. Gear was unprepared to handle the loss of revenue and unable to focus their marketing to other areas. The company's role in the shoe industry as a fashion product was clouded with the introduction of clothing lines. Much thought and discussion was centered on developing a men's performance athletic shoe, which was a completely new field for them to develop and manufacture. The future appears to be strong for L.A. Gear. As a licensor, the company can easily move into areas, such as men's athletic shoes and apparel with companies that are already manufacturing quality products, but lack the name recognition that L.A. Gear still maintains.

The loss of distributor confidence is an area with which the company still has to deal. They will continue to spend significant dollars to gain back their reputation that was tarnished when bankruptcy was filed and fire sales of product were left on the shelves. Having the name, L.A. Gear, associated with multiple consumer lines should provide the company with some insulation from an economic downturn experienced in the early 1990's. With the limited resources available to L.A. Gear, they will be well off not to go head-to-head with Nike and Reebok. There are several areas that should be pursued to improve their company growth. First, they should continue to bring innovative ideas and products to the core buyers: kids and young women.

These groups are very brand conscience and readily recognize L.A. Gear. Women in particular have been the company's focus since the 1990's, so it should be easier to target their tastes. This group continues to have high recognition for L.A. Gear products and a significant of the marketing dollar should continue to be spent on them. Second, the company should find a niche to develop that doesn't bring them initially up against the big boys, Nike and Reebok.

Something like golf shoes and golf apparel should be pursued and seek to establish a significant market share. Golf has gained a prominent place in the sports industry and having a well-known golfer that is often featured on weekend events can leverage the advertising dollar. Contracting with gyms to promote new products, i.e. men's athletic clothing and accessories (sport bottles / gym's duffel bags) would capitalize on the existing health trend of many people that already know the L.A. Gear name. Another avenue to pursue would be a new brand, if they desire to go after the men's lines. The company would have the ability to bring out a new product line and not have it associated with the strong women's image, the name L.A. Gear enjoys. This concept could be developed around a creative marketing strategy that would be distinctive to L.A. Gear, such as McDonalds and the Golden Arches.

The company is looking for a new image and new marketing schemes should be part of their plan. Developing distribution lines that include the mid-tier stores like Sears and Kohl's will strengthen their base consumer. Marketing in these stores will allow L.A. Gear to hold their pricing structure to a higher level, which should translate to a better bottom line. Buyers are more willing to spend their money on products they perceive as good quality and brand name. L.A. Gear is a company with great potential and tremendous name recognition, in spite of the bankruptcy filing that many felt they could not recover from in such a short period of time. L.A. Gear has evolved from a highly successful trendsetter in the fashionable women's sports shoe and apparel market to a major player in the men and women's athletic shoe market. Financial and management troubles as well as too widely spread target marketing efforts have reduced them to a strict licensor as of today.

It seems extremely difficult and expensive for L.A. Gear to attempt the men's performance athletic shoe market at this point. Low brand recognition and the still apparent image as a fashionable women and children's shoe manufacturer are two hurdles they would need to overcome. The best strategy at this point seems to be concentrating on the lower end mass market and product diversification through licensing. Continuing to improve their image has helped to recover many of their distributors, key to the overall success of L.A. Gear. Moving out from mainly manufacturing of women's shoes to licensing numerous consumer goods is a bold move. Only history and the consumer will tell, if this was the right one.

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Sporting Goods Business. Retrieved on June 7, 2003 from web Warm Memories Meet Cold Reality. July 01, 2002. Sporting Goods Business. Retrieved on June 7, 2003 from web University of Phoenix. (Ed.

). (2001). Marketing management [University of Phoenix Custom Edition e-text]. Boston: Irwin McGraw-Hill.

Retrieved May 27, 2003 from University of Phoenix, Resource MKT 551, Marketing management of Business Web site: web.