Uniqlo is Japanese brand, the meaning of brand is unique clothing. Uniqlo had 700 subbranches all over the world. The slogan of Uniqlo is made for all. This brand is famous for it’s low price, and high quality. Product major target the young girls from 25 to 35 years old. Uniqlo is use non price competition strategy to maintain the low cost and selling in low price.
The pricing objective of Uniqlo is sales oriented. For example, most of Uniqlo price is less than 200 dollars, jeans have fixed price 25 dollars, T-shirt fixed price is 15 dollars, the more you buy the more discount you have. Sales-oriented purpose is to expand market share. In addition, Uniqlo also is a product quality leadership brand, it use non price competition to provide unique product. For instance, it had technology of HEATTECH to produce maintain heat and sweat-absorbent underclothing. What’s more, it had AIRism technology to make clothes quick dry and light like air, let customer keep comfortable in humid area (Narita T, 2015).In order to control the yield quality, Uniqlo use SPA model, which means integration the design, produce and retailing to ensure the quality. (Narita T, 2015).
Uniqlo’s price sensitivity is high. In 2014, Uniqlo’s price had increase 5%, until 2015 it became 10%, the result is the customer traffic had quickly decrease 6,3% (IWATO H, 2016 ). In oder to increase profit, Uniqlo discount all the product 300 yen, but the result did not change. The reason is that, Uniqlo had substitutes brand, such as Gap, Zara and H&M. These brand all provide low price and fashion clothes, so the sensitivity of customer demand is high.
Control the costs
Costs are include fixed costs and variable costs. For the variable costs, Uniqlo use outsourcing strategy. 90% of Uniqlo product made in China, but the material is from Japan (SARMA D, 2015). Furthermore, Uniqlo pay attention to quality rather than fashion, produce in large scale to control the cost. They also had large quantity of Fabric material oder, to make the material cost decrease (SARMA D, 2015). Uniqlo had subbranches all around world, so they can selling summer clothes in northern hemisphere and send the last year winter clothes to southern hemisphere, this make produce stable and continue in high efficient.
competitor price analysis
Uniqlo had competitor of H&M, GAP and ZARA but the difference is that the other brand is focus on fashion trend, Uniqlo only focus on quality (Parietti M, 2015).Uniqlo use non price competition can provide the clothes make people comfortable. Uniqlo also cooperate with Hermes designer and artist Kaws. In 2016, the Kaws had produce UT T-shirt which price is only $99, and as the fast selling merchandise, every customer are limited buy 30 T-shirts.
Choose price strategy
Uniqlo price always ending in 99, for example, 19.9 dollars for a T-shirt. 9.9 dollars for a socks. In addition, it always have discount. For instance, the price before is 19.9 and now is 9.9 dollars, they also give customer 30 dollars voucher. Furthermore, they had limited time discount for buy 50 dollars minis 5, buy 100 dollars minis 5. Temporary discount will make customer feeling happy and think they are smart.
On the contrast, I think Uniqlo still lack of brand image, that make the customer lack of brand loyalty and have high price sensitivity. For my opinion, I think Uniqlo still need to advertised their product to establish strong brand image make customer have high loyalty. What do you think?
By SHUANGCHEN HU (214295999)
IWATO H, 2016,Uniqlo still paying the price for its hikes, NIKKEI ASIAN REVIEW,
retrieved 21 April 2016, <http://asia.nikkei.com/Business/Companies/Uniqlo-still-paying-the-price-for-its-hikes>.
Narita T, 2015,UNIQLO: What’s behind the low-cost high-quality casual wears, Harvard business school,retrieved 21 April 2016, <https://rctom.hbs.org/submission/uniqlo-whats-behind-the-low-cost-high-quality-casual-wears/>.
Parietti M, 2015,H&M Vs. Zara Vs. Uniqlo: Comparing Business Models, INVESTOPEDIA, retrieved 21 April 2016, <http://www.investopedia.com/articles/markets/120215/hm-vs-zara-vs-uniqlo-comparing-business-models.asp>.
SARMA D, 2015,3 key strategies behind Uniqlo’s billions in revenue, Tradegecko, retrieved 20 April 2016, <https://www.tradegecko.com/blog/3-key-strategies-behind-uniqlos-billions-in-revenue>.