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Paez

Solution Id Length Case Author Case Publisher
1998 1259 Words (6 Pages) Jill Avery, Maria Fernanda Miguel, Laura Urdapilleta Harvard Business School : 316085
This solution includes: A Word File A Word File

The unique thing that Paez has and represents its DNA is its originality and authenticity. This factor is absent in most of its competition. They still had their roots in Argentina, although they had relocated their headquarters to Barcelona due to the economic and political situation in the country. The Argentinian roots were still embedded within the company's soul and hence, could be used to portray their originality and heritage. Hence, the brand could be built around the heritage that it had acquired and had a rich history of how this alpargatas were being used initially by the common people. 

Case Study Questions Answers

1. The criteria used for analysing the positioning statements are the 3C's framework, which analyses how well the positioning statements fit the company's resources, meet consumer needs, and do not overlap with the competition. 

Positioning Options

Company

Competitors

Customers

Option 1:
The Authentic Argentine Alpargata

Required additional investment for reopening its Argentine factory.
 

Position it as Original Argentine Alpargata – not foreign imitation like TOMS

Appeal consumers who are interested in knowing where their products came from – Original Argentine Alpargata.

Option 2: Fashionable Alpargatas at a Bargain Price

Resources required to make cheaper products.
Exclusivity would be lost

Competitive response from TOMS was expected in terms of pricing.

It would appeal to the price sensitive customers and help in skimming off a portion of the Alpargata market.
From fashion to hardworking shoes of the people.
Lower-priced product means lower quality.

Option 3:
The Underdog

Growth would seem counterintuitive in this case as it would demolish its position of being an underdog.

Directly attacks competition.

It would be popular with millennials and baby boomers.
The proposition doesn’t have much for the consumers; focused on the company.

Option 4:
An Argentine Lifestyle Brand

Requires investment for retail and product development.
Growth could enforce a lifestyle image here.
Allows for product extensions.

Would be able to carve out a niche.

The market trend was towards reinventing oneself and personalized footwear.
Provided a consumption lifestyle.
Market behaviour was also driven by feel and aesthetics.
It creates an emotional connect with the consumer.

Option 5:
A Brand for Social Good

May require a large marketing budget for promoting social mission.

Overlapping with TOMS on a social cause.
Monetizing white guilt.

Fair trade was one of the key issues for consumers.
Again, the proposition wasn’t related to the consumer’s lifestyle.

In conclusion, Option 4: An Argentine Lifestyle Brand seems the best fit for the company as it allows the brand to build upon the know-how of the Argentine culture. Further, it also gives room if positioned along with values on the brand value pyramid to extend into other categories for growth. This growth would help in reinforcing the lifestyle image. It also propagates a consumption lifestyle where consumers will be able to build their whole lifestyle with Paez’s products to meet their ideal self. Further, the purchase behaviour being driven by feel and aesthetics allows the brand to introduce new fresh products i.e., product extensions. The twist elements will help them competing against TOMS as they’d be providing consumers with products that interest them and could be accommodated in their daily lifestyle. This lifestyle message will help in inspiring the consumers in terms of being independent, appreciating their lifestyle, and infusing a fun element within their lives.  

2. TOMS has crafted a unique business model for itself, which allows it to bank upon a social cause called 'One to One' mission. The company, through this mission, sold a basic product at a higher price point, portraying that the customer is donating the second pair of shoes for free to someone needy, whereas in actual he/she was buying two pairs of shoes. Despite this, TOMS had been successful in propagating this idea to the consumer who, under the false impression, felt good about purchasing these shoes as they believed that they were contributing towards a social cause.

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