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Running head: Comprehensive Marketing Analysis
Comprehensive Marketing Analysis of TOMS Shoes Company
Katie Rexrode
BUS 310
Kline
November 26, 2013
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Marketing Analysis of TOMS
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Introduction
The company that I selected to analyze is TOMS shoes. This company was founded in
2006, by Blake Mycoskie who is currently 36 years old. The initial business of the company was
to sell shoes, and for every pair of shoes that was purchased, a child in need would receive a pair,
also. The business has since grown to include sunglasses, clothing, a variety of men’s, women’s,
and children’s shoes, and most recently (2013), the Marketplace with a huge variety of items.
TOMS started out as a small entrepreneurship venture and has grown into a multi-million dollar
business. In the spring of 2013, TOMS gave away, and therefore sold, their 10 millionth pair of
shoes. With the growth that the company is currently experiencing, they are projected to sell/give
10 million more pairs within the next 18 to 24 months (Chu, 2013).
The environments in which the company does business are ever-changing, and TOMS is
working to compensate for these changes. The social-cultural environment includes teens and
adults are culturally aware and have a desire to help those in need. Today’s society is becoming
more culturally aware with increased use of technology to share information. In the economic
environment, TOMS seems to be doing well because of the recovering economy of the United
States and improvements within the labor market. With more people employed, customers will
have more money to spend on TOMS products. The political environment is more delicate, “An
increased tax rate could potentially hurt TOMS sales” (Ahsmann, 2011). In the technological
environment, TOMS is excelling. With a large majority of their sales and advertising being
through their website and emails, the increased technological world is a huge boost for their
advertising and business. The competitive environment for TOMS is growing, as the company
becomes more popular, there are more companies trying to imitate their products. One of their
leading competitors is BOBS, by Sketchers; they are made almost identically to TOMS and
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advertise that they too are “Saving the World.” While these environments could be potentially
dangerous for a company, TOMS is very active and aware of the characteristics and changes in
their market.
Company Marketing Strategy
When examining the marketing strategy of TOMS, short-term it appears that they place
most of the attention on the shoes product aspect of the company. Shoes are what the company
began with, so it is in their best interest to focus their strongest marketing efforts there. In
Mycoskie’s book, Start Something That Matters, he describes his overall idea for the TOMS
business model, “With every pair you purchase, TOMS will give a pair of new shoes to a child in
need. One for One” (2011). The largest emphasis in the marketing is based online through their
website and social networking, where their target audience would be most likely to be reached.
Long term, TOMS will work to develop awareness and sales of their new Marketplace portion of
the company’s website that sells a variety of items, from scarves and purses to headphones and
bicycles. The Marketplace section of the website was just created this year, 2013.
The micro-marketing environment seems to be an asset for the company. Currently,
Mycoskle is still the CEO and the second employee ever hired to the company is still the
manager of marketing for TOMS eyewear (Chu, 2013). These strongly invested top employees
give the motivation to lower level employees and have been very successful in maintaining and
growing the initial vision for the company in 2006. Customers and resellers have also remained a
focus for the TOMS Company. They focus on their customers by listening to their comments and
using the feedback to improve the product and variety. They have also asked for customer
feedback in the form of pictures to post to their website page to show others how people wear
their TOMS in all sorts of situations, from hiking to their wedding day.
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TOMS is working very efficiently to adjust and react to their macro-marketing
environment. Economically, potential customers may not have as much money to spend on the
products that TOMS sell, so TOMS has made their products more valuable to their customers by
adding the aspect of donating to charitable causes when a purchase is made. TOMS is very
technologically active and advanced. Their website (toms.com) allows them to reach and be
available to a large variety of customers, with a focus on their target market, teens to adults. Just
by visiting their website page, it also publicizes the many social networking ways to
communicate with TOMS: Facebook, Twitter, Pinterest, YouTube, and Google+. TOMS has
become very popular on social networking, with 2,106,286 likes on Facebook and 2,209,492
followers on Twitter (2013). Culturally, TOMS does well with fulfilling many of the core values
that their target market has, such as fashion and generosity. By purchasing TOMS products, you
will have a successful feeling of helping those less fortunate, and by wearing their label, other
will know you have done this, too. It appears that, in the near future, TOMS will only continue to
grow their variety of products and grow in sales of their developed products, as well.
Company Marketing Assets
TOMS relies on a large majority of their marketing through their website, but they have
also created market research situations. Closer to the beginning stages of the company, a focus
group was created to gather information about the market. The group consisted of 15 college
students, both male and female. They were asked a variety of questions about their perceptions
and opinions of TOMS. The findings were that the One for One movement, of giving a pair
shoes to children for every pair purchased, was extremely influential on their purchasing
decisions and that the simplistic look of TOMS was appealing to them. Observational research
was also conducted in an Urban Outfitters in Syracuse, NY. The findings here concluded that
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without a point-of-sale the brand got very little attention, and when the shoes were spread out
through the store on different tables, this did not increase interactions with the brand (Ahsmann,
2011).
The beginning stages of marketing for TOMS did not take much effort or money on their
part at all. In Mycoskie’s book, he tells the story of when the company experienced its first real
growth spurt. The Los Angeles Times fashion writer, Booth Moore, had heard about their
company and loved the story behind it, so he interviewed Mycoskie and wrote an article about it.
Not long after, his Blackberry was constantly receiving emails, so many that it died. These
emails were sent every time an order was placed for a pair of shoes on toms.com. Almost
immediately after the article had been published the amount of orders on the website went from
one or two a day, to 2,200 by the end of the first day (2011). Positive publicity got the TOMS
shoes company off to a great start.
TOMS relies heavily on relationship marketing through email and their website. Like
many other web-based companies, when purchasing a TOMS product, they ask for your email at
the checkout. This can serve to be sure you receive the correct product and are satisfied, and also
for marketing for years to come. Even if a customer does not purchase a product from the
website, as soon as a potential customer visits the page, a pop-up box appears and blocks the rest
of the page off. The box says, “Join us! Sign up for emails- we’d love to have you!” There is
then space to enter an email address, an optional first name, zip code, and to select areas of
interest, such as shoes, eyewear, giving, women’s, men’s, or kids (2013). The wording of the
pop-up email sign up is very friendly and relaxed so that customers do not feel an obligation to
give their email, but are greeted by friendly words that may encourage them to. Through email,
TOMS is able to stay connected with past, present, and future customers, allowing them to stay
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up to date on the latest styles of shoes that TOMS releases, as well as their new varieties of
products.
Consumers have responded very well to the TOMS idea of a product with a story.
Generation Y, which the textbook identifies as people born between 1979 and 1994, is giving
TOMS a lot of attention. In a Fast Company article, Generation Y is identified as wanting it all:
to shop, socialize, and save the world at the same time (Ferenstein, 2010). As of 2010, over
1,200 TOMS university clubs had been established. These clubs are established on college
campuses, and they raise awareness of the brand and market to the targeted population, while
also teaching event planning, marketing, and promotions to leaders of the clubs (Ahsmann,
2011). Even more appealing to Generation Y are the facts that, TOMS shoes are made from
hemp and recycled bottle parts, mandate fair wages and sound labor conditions from overseas
manufactures, and even have vegan-friendly shoes” (Ferenstein, 2010). The same article
concludes with, “The younger generation is equal parts expression, consumer, and world
changer” (Ferenstein, 2010). TOMS has recognized this and responded accordingly with the
younger generation in mind.
Because of the One for One campaign, TOMS has become known as more than just a
shoe company. Customers place high value on the products that TOMS sells because of the
charitable aspect, as well. The value that TOMS places on its product is, “A stylish, affordable,
and practical shoe that donates to a child in need when they purchase a pair” (Ahsmann, 2011).
While this statement only relates to the shoe product, the same can be said for the eyewear that
TOMS sells. Every eyewear purchase goes towards protecting and helping the sight of others,
“More than 150,000 pairs of sunglasses have been given away in the past two years” (Chu,
2013). With the newest Marketplace line of products, the TOMS website even gives the
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customer the ability to select what charitable effort they would like to purchase a product for,
such as water, education, nutrition, job creation, or health. It also allows the opportunity to select
which of 6 continents you would like to support with the purchase, as well. Giving the customer
more say in selecting where their charity will impact, helps to give the customer more perceived
value.
The prices of TOMS shoes ranges from $44 for a classic pair to a high $98 for the wrap
boots (Ahsmann, 2011). Although TOMS is slightly more expensive than their competitors, like
Keds and BOBS, they are not concerned with the difference because the perceived value is like
buying a pair for yourself and giving another for a child in need. Most of their competitors
cannot propose the same value, except for BOBS, and many still charge relatively higher prices.
The brand name and brand mark that TOMS has displayed on the back heel of their shoes can
also be seen as valuable to their customers. A wide variety of companies have attempted to
produce a cheaper version of a TOMS style of shoes that are sold at stores like Wal-Mart, but
they do not contain the TOMS brand mark on the outside heel as TOMS shoes do. The brand
name does carry a high value in a company like TOMS that has received so much positive
publicity.
Company Marketing Efforts
The TOMS Company has been successful in segmenting their market and making an
impact. As an overall target, TOMS is aimed at teens, college students, and single men and
women who are price conscious. When segmenting the market, each of these criteria are also
considered. Geographically, TOMS are found in predominately the western United States and are
targeting their advertising in the U.S., but TOMS are available in over 30 countries via the
internet. Demographically, the focus is on 13-30 years old men or women with a high school or
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college degree, of all races. The psychographic characteristics of TOMS customers include,
media-savvy, interested in social causes, music, and art, and middle class. The stage of
customers in the family life cycle could range anywhere from teens to parents with young
children, who would purchases children’s TOMS for them. Behaviorally, the target market
would need fashionable, yet comfortable, every day shoes at an affordable price (Ahsmann,
2011).
The marketing mix of TOMS includes their product, price, promotion, and place and the
important role that technology plays. The product began as simply a designed pair of shoes; it
grew to include a variety of shoes including boots, wedges, and flats, as well as children’s shoes.
When purchasing a pair of TOMS, in the shoebox is a free canvas bag to keep the shoes in and a
TOMS sticker; these add to the value of the product. Around 2011, TOMS launched their new
sunglasses line that donates to helping eyesight of people in impoverish countries. Most recently,
the TOMS website presented the Marketplace section which sells a wide variety of specialty
products that give money to specific areas of the world for specific reason, such as education or
clean water.
The price of TOMS shoes currently range from around $50 for the basic design in a
variety of patterns to $140 for wedge heels, found by browsing the website. This price is seen as
slightly higher than competitors, but competitors do not deliver the same value or the TOMS
brand mark. This price can also be viewed as including a donated pair of shoes for a child.
TOMS is careful to keep their prices reasonable, because they want to maintain their loyal target
market of teens, college students, and single men and women in their twenties. Currently, on
their website, TOMS is offering free shipping on any of their products. This will make the price
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even lower for customers looking to purchase, but they will still know the high value of the
product they are receiving.
The promotional aspect of the TOMS Company is largely influenced by the use of
technology. As mentioned earlier, TOMS relies heavily on email to market to their loyal and new
customers. TOMS does have a paper catalogue to use to market but only a limited number are
sent out regularly, and they can be requested on the website. In Mycoskies’ book, he mentions a
collaboration that served to promote a, then, not very well known brand. “As part of our
collaboration with Element, we made a limited-edition line of shoes and One for One
skateboards” (p.160). This collaboration was a successful effort in marketing to their target
market, as well, because those customers who are brand loyal to Element share many of the
qualities of TOMS’ target market, as well. Publicity of their One for One movement, in print and
online, has also positively impacted spreading brand awareness. Overall, TOMS seems to be
using promotion to their advantage in all of the right places.
In regards to the last aspect of the marketing mix, place/distribution, TOMS is growing.
To keep the product unique, the company does not have intensive distribution strategy but rather
selective distribution with only a few in a single area. To keep a polished, high class image
TOMS are sold in retail stores such as Urban Outfitters, Nordstrom, and Neiman Marcus, as well
as specialty boutiques that are considered high-end and cater to the target market of the products
(Ahsmann, 2011). The largest distribution of TOMS products come from the TOMS website,
which could be seen as a specific market segment, such as those who are confident shopping
online, like the younger generation that TOMS is targeting.
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Managing the Marketing Effort
The marketing channels for TOMS Company are not as complicated as some companies.
TOMS has factories in Ethiopia, China, and Argentina. The distribution as described in
Ahsmann’s TOMS Public Relations Plan, shows the product leaving the manufacturer then either
traveling to a retailer, such as Nordstrom, or to an online distributor, including toms.com,
zappos.com, amazon.com or karmaloop.com (2011). After the consumer makes a purchase of
shoes, a new pair is donated to a child in need and will arrive to them in four to six months time.
The overall social responsibility of TOMS marketing is to sell their product for profit and
donate one pair of shoes for every pair sold. TOMS is a social responsive company that is active
in helping the world. There is nothing that this company and market unethically. By sending
emails about new products, TOMS is connecting with customers who they know have, or have
had, some interest in their product. Socially the company wants to speak out and help children of
the world who are in need, even in the United States through the sales of their shoes, sunglasses
and the growing variety of products. To coordinate the advertising, public relations, selling and
promotional efforts, TOMS likes to keep it simple. Their company is not booming, but it is
successful. The leaders in the company see the vision of TOMS and are inspired to help those
who are less fortunate in world and get others involved in the giving, as well. Since TOMS was
so successful in the business of shoes ,and later sunglasses, it is hard to tell in what areas the
company will succeed and expand next, “He envisions a TOMS empire that encompasses all
sorts of everyday products” (Chu, 2013).
Managing the Competition
The two main competitors analyzed by Ahsmann in the TOMS Public Relations Plan
included Keds and BOBS. First, Keds is a shoe company that has been in existence since 1916,
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giving them the advantage of a well-established brand and customer awareness. Their products
include sneakers, boots, casuals, and lace-less shoes designed for men, women, and children. The
prices of their shoes range from $35 to $75, and they are thought to be a reasonably priced
product with a variety of designs to choose from. Some weakness that can be identified is that
they are sometimes considered “old-fashion.” Keds are also intensively distributed so they are
not as difficult to find, which could decrease their value for some customers. The quality of Keds
could also be considered a weakness because they are made of mostly plastic and are not water
resistant.
The line of shoes, BOBS was created in 2010, by Sketchers as a direct competitor,
producing an almost identical style of shoes as the original TOMS. BOBS offers a variety of
different colors and patterns of flats, only for women and children. The shoes range from $30 to
$45 and can be found in retail stores but do not have their own website. A strength that BOBS
does have is that they donate money from the sales of their shoes to Soles4soles, which
purchases 2 pairs for children in need. Another strength is in the simplistic design of their shoes
and the variety of colors and patterns that are available; however, the consumers are limited to
only women and children. There biggest weakness is that they are described as a TOMS knockoff, because they were created 4 years after them and have a very similar design and goal
(Ahsmann, 2011).
To adjust to their competition, TOMS has grown the varieties of shoes they have to
include classics, vegans, wrap boots, wedge sandals, flats, moccasins, and many other styles,
available in women’s, men’s, and children’s sizes. TOMS also stands out for their original
designs as well as classic colors that can be paired with nearly any outfit. Currently on toms.com,
they have a Haitian collection of shoes that are hand painted by 30 local artists in Haiti, creating
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jobs where there are very few. This collection make the consumer feel that they have made even
more of a difference by purchasing from the Haitian collection. Also, to adjust to the competition
TOMS has expanded their company to include a large selection of high quality sunglasses and a
new collection of Marketplace items that each donate money to different causes in different
countries in the world when purchased. TOMS is extremely active in the competitive market and
striving to be the market leader.
Global Marketplace
The global marketplace has not been of extreme importance to TOMS thus far. While
TOMS are available for sale in 30 countries, the international sales are not substantial enough to
focus marketing efforts in these other countries. Globally, TOMS has made the largest impact
through their giving. Shoes have been given to children by the company in over 59 countries and
eye care has been provided in 13 countries (Chu, 2013). With the TOMS Company expanding as
it has over the past 7 years, it will not being surprising if they begin to made a larger, global
impact in the shoes and sunglasses market within the next 7 years, as well as in their giving
efforts.
Conclusion
In conclusion, TOMS started out as a very small company with a leader, Blake Mycoskie,
who had a vision to sell shoes and help children of the world. Positive publicity in the Los
Angeles Times really boosted the company in its beginning stages. As the company developed,
Sketchers saw the value in Mycoskie’s idea and decided to make their own, very similar version
of TOMS shoes. Within its market, TOMS has been very successful thus far. Beginning with a
simple shoes design, TOMS has now expanded to a wide variety of shoes. In 2011, TOMS
released their high-fashion sunglass line, and most recently, TOMS developed the Marketplace
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portion of their website that sells a wide variety of products that donated to a specific cause in a
specific location when purchased. The target market of TOMS is men and women, ages 13-30,
predominately in the United States. These customers are fashion-oriented but also want
comfortable shoes at an affordable price. This focus of the market is very media-savvy, which is
great for the TOMS Company which relies heavily on email and social networks to maintain
their relationship marketing and their website for a large majority of sales. Overall, what TOMS
is doing as far as marketing seems to be very successful. They have been very successful in
spreading their brand awareness and reaching their target market. It appears that TOMS current
marketing strategies are extremely well received, as well as their constant attention to the market
and how it is developing and developing their own company, too.
Personally, I love TOMS shoes and the company in general. I currently own five pairs of
TOMS original design of shoes, and I love them! I also love the idea behind them, that for every
pair I purchase, a child in need is given a pair. As far as marketing, I observe a lot of TOMS
relationship marketing efforts because I am such a frequent customer. The company sends me
emails that notify me when new styles and patterns are released, as well as when TOMS begins
selling new products, like the Marketplace. TOMS also keeps in touch with me by sending a
catalogue to my home address about twice a year; the catalogue may be able to reach an even
larger number of individuals in the target market and encourage them to purchase. I would
personally never, ever buy a pair of BOBS, because I see them as knock-off TOMS. As a
customer, I perceive the brand as valuable and original, and I do not except any substitutes. I am
proud to wear my TOMS shoes that display the company name on the heel. I see myself
purchasing many more pairs in the future and contributing to the growth of the company. This
research has only increased my support and respect for the TOMS Company and brand name.
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References
Ahsmann, A. (2011). TOMS Public Relations Plan. Retrieved from: averima.files.wordpress.com
Chu, J. (2013). Toms sets out to sell a lifestyle, not just shoes. Fast Company. Retrieved from:
www.fastcompany.com
Ferenstein, G. (2010). Toms shoes generation Y strategy. Fast Company. Retrieved from:
www.fastcompany.com
Lamb, C. W., Hair, J. F., & McDaniel C. (2013). MKTG. Mason, Ohio: South-Western, Cengage
Learning.
Mycoskie, B. (2012). Start Something that Matters. United States: Spiegel & Grau.
TOMS Facebook page, found at: www.facebook.com/toms, on 11/17/13.
TOMS Twitter page, found at: twitter.com/TOMS, on 11/17/13.
TOMS website, found at: www.toms.com, on 11/17/13.