1.
Introduction
a.
In
1984, Fast Retailing which is headed by Tadashi Yanai, opened the first UNIQLO
store in Hiroshima, Japan. In 1997, UNIQLO was the first company in Japan to
establish a SPA (Specialty store retailer of Private label Apparel) strategy
which means they would produce their own clothing and sell it exclusively. By
continuously refining its SPA model, UNIQLO successfully differentiated itself
from other companies by developing unique products that were made for anyone of
any age (FAST RETAILING CO.,LTD, 2013) . As the founder of UNIQLO says, “UNIQLO
clothes are MADE FOR ALL- highly finished elements of style in clothes that
suit your values wherever you live.”
The reason of why we chose UNIQLO as our company is because it is a global
clothing retailer and is soon to overtake H&M and Zara as the largest
global clothing retailer. In Malaysia, UNIQLO currently has 9 stores located in
Klang Valley and Penang.
b.
UNIQLO
is based on monopolistic competition market structure. (McConnell, Brue and
Flynn, 2012) characterize monopolistic competition by a large numbers of firms
selling differentiated products and with easy entry to or exit from the
industry. It is very competitive between firms in the monopolistic competition
because of the easy entry and large number of firms selling their products.
c.
The
issues that we are currently addressing are the factors of demand such as taste
and preference, price of related goods and consumer expectations. These are the
factors that fluctuates sales for a company. McConnell, Brue and Flynn (2012, p.84)
state that demand is the desire to obtain something which is more than just a
necessity in order to be satisfied and demand will only work if you are capable
of obtaining the items by having the purchasing power. One of the factors of
demand is taste and preference, if the consumers prefers product A over product
B, the demand for product A will increase even though both prices stay
constant. For example, people would prefer to purchase a smartphone rather than
a normal phone. In this case, if customers prefer to purchase a T-shirt from
UNIQLO instead of H&M, ceteris paribus, the demand for UNIQLO will rise.
This is to identify how much a consumer is willing to pay for the product they
prefer. Next, complements are goods that can be used together. With a decrease
in the price of one would result in an increase in the demand for the
complementary good. An example would be petrol and cars. In our case, if UNIQLO
are willing to lower the price of jeans, it would result in an increase in
demand for belts. Not only that, a substitute good is a product that can serve
as a replacement for one another. When the price of good A increases, demand
for the substitute product increases. In our case would be an increase in the
price of a T-shirt in UNIQLO resulted in an increase in demand of a T-shirt in
H&M. This is to gather information on the number of loyal customers willing
to spend more on UNIQLO’s product. Lastly, consumer’s expectations on future
prices would shift the demand curve. If expectations are such that the price of
a product would fall next month, demand for the product for this month will
fall because most of the consumers would wait for the price to fall. If
consumers are aware of UNIQLO’s upcoming sale , the demand for UNIQLO’s product
will fall before the sale. This would help to identify if a price increase or decrease
would affect the demand of consumers towards the product.
d.
Some
of the limitation that we faced in conducting this survey was that few people
purchased UNIQLO’s product and are not aware of the brand. They prefer to buy
products with the best quality and high price instead of buying products with
good quality and low price. Other than that, lack of experience in conducting
this survey was also one of the limitations. With zero exposure to the public ,
we found it hard to start the interview.
