Billabong's Internation Limited

Billabong International Limited (BBL)

Table of Contents

1. History 3

2. Marketing Issues 4

3. Alternative Solutions 5

4. Best Solutions 6

5. Advantages 8

6. Disadvantages 9

7. Cited Works 10

History of Billabong International Limited (BBL)

In 1973, Gordon and Rena Merchant began producing handmade board shorts. They were made to withstand the elements and the roughness of local surfers. Two local juniors Guy Omerod and Rabbit Bartholomew were the first to be given the trunks. Billabong was born.

Gordon worked in his North Burleigh factory and in a few years became an established label. After a lot of hard work the Australian Surfing Industry noticed Gordon work and desire to product high quality best cut board shorts on the market and by the early 80's, Merchant had achieved his goals. (HR, 2009)

Billabong went international, exporting in California, Japan, New Zealand, and Europe and then licensing. Gordon did not license until he had achieved his benchmark of dedication, honest and prudent business savvy from each of his international licensee. (HR, 2009)

Gordon surrounded himself with some of the finest minds in the industry in Australia and abroad who steered Billabong to the helm of the world of surfing. He built brand imaging by using high profile athletes and surfing events to sponsor his surf wear with athletes such as Joe Engel, Mark Occhiupo, Sunny Garcia to name a few. These athletes and sponsorships gave Billabong international credibility and worldwide exposure that ensured an elite surfing brand. (HR, 2009)

In the 1990's Billabong had assumed the #1 status in Australian waters and consolidated on the international market. In 1998, the 25th Anniversary of Billabong, a new state of art factory was opened. This factory featured the Polynesian Style Retail Showroom that displayed the largest range of Billabong product anywhere in the world. (HR, 2009)

Billabong, an iconic brand, for 25 years based in Australia, began with a quality handmade board shorts that was able to handle the roughness and elements of local surfers. To grow the branding identity, young athletes were used to sponsor and build their brand. Billabong used athletes that did not rely on brand values, however loved the sports. Billabong stopped building their core brand and lost their target market (12-25) to market in a one-stop-shopping industry.

Billabong has four main marketing concerns:

1. Targeted Market

2. Brand Image

3. Marketing Strategies

4. Core Branding

The targeted market failed because Billabong failed to remain focused therefore, they lost their consumer base who did not feel the psychological needs of the product. They lost their branding image, because neither investors nor consumers could identify with the brand although; they maintained their quality, sponsorships of athletes and sporting events.

Ms. Webster stated that in 1973, Billabong was everything a youth brand should be. "It captured the spirit of the Australian ethos-the surf, sand and the sea. That whole surf culture was a sub-culture that we called our own. Over 30 years ago, that was quite powerful within the Australian youth." However, "The world has changed dramatically... It's just that surf, as an aesthetic, is no longer the hippest fashion look." (Carapiet, 2011). An analyst said that Billabong's poor performance was due to dire global retail environment.

They continued to market their products however were challenged by smaller up and coming brands with newer and innovative products for a lower cost. Inman says Billabong did not make a mistake going into retail; but it did make mistakes in the way it did so.

Per Ms. Webster, a program director of fashion at RMIT, "Billabong has lost its integrity by going so large." She also pointed out that discount department stores such as K-Mart and Target have entered the surf wear market creating an association with surf wear being less expensive and in turn, uncool. She also stated that once a brand becomes homogenized all that left to fight is price. A on line search shows board shows board shorts at Target for $23.40 and a similar pair from Billabong for $79.99. (Carapiet, 2011)

Their most crucial issue was the "core branding". It lost its branding identity, the high quality of the board shorts that attracted the young adults who view surfing as cool and were able to identify with the product and the sport. The targeted market idolized the young athletes that represent the brand however during the growing expansion of manufacturing and selling of all types of products, they lost their "niche" consumer. They had become the one-stop-shop. They opened many brick and mortars to sell these products in addition to the availability of on- line shopping. I believe that if the company remained focused on their core branding product they would not have found themselves in such a financial crisis. A company cannot explore every aspect of a market; this will cause them to lose the needs and wants of their targeted market, product and make segmentation impossible. As a company grows and develops it core product, it can manufacture associated products to complement the core product. However, the associated products cannot be designed to reach a totally new consumer. These products are essential to the core product. If these products target a new market the company can and usually does lose focus of your branding image and therefore lose