Test marketing could generate millions

29 Jun, 2006 07:00 PM

THE Woolmark Company's (TWC) US$6.6 million test marketing project (TMP) could generate retail benefits of US$500 billion for Australian Merino wool.

Farm Weekly exclusively named the two key US retailers participating in the TMP, Saks Fifth Avenue and Dillards, last month.

It has been 10 years since Australia has actively funded marketing campaigns in the US.

Saks was estimated to achieve a 3.5 to one return from retailers on TMP invested funds and Dillards was estimated to achieve a three to one return on TMP funds.

Both companies have committed to the TMP and are likely to establish apparel lines from Australian fine and superfine wool for luxury high-end fashion, everyday casual clothing and underwear.

Luxury US retailer Saks' chief operations officer Andrew Jennings said their goal would be to elevate Australian wool in the eye of discerning customers.

Saks will start a campaign in September called Want It, to identify the latest looks for the upcoming winter fashions.

Extra fine Merino wool in women's wear will play an important role in the Want It campaign.

He said authenticity was the new premium for apparel in the US and he could see Australian fine Merino wool being marketed like fine wine.

The key to The Woolmark Company's (TWC) latest marketing campaign in the US will be to influence the influencers.

TWC is also working on a staff training presentation for point-of-sale tips when selling Australian woollen garments.

Some industry sectors have claimed funding spent on wool promotion had no direct impact on prices woolgrowers received at the farm gate.

TWC could not divulge the proportion of TMP funding distributed to Saks and Dillards.

However, US$3.1 million in funding is expected to be raised for the TMP by the end of the year.

TWC executive director and TMP director Brenda McGahan updated WA industry members last week in Fremantle.

Ms McGahan warned delegates not to expect the TMP to be the silver bullet Australian woolgrowers needed to boost the industry.

A US market survey conducted for the TMP found wool was the forgotten fibre and did not enjoy latent appreciation.

The survey reported US consumers made their clothes buying decisions based in order of style, colour and fit. Fibre was last on the list.

"Part of this whole project is to educate and learn," Ms McGahan said.

"Woolmark has a little dust on it but it is still strong.

"Our biggest challenge is to change old perceptions."

Ms McGahan said educating consumers on wool's attributes remained the key to the TMP's success.

She said TWC needed to ensure funding went into quality woollen products.

Australian Woolgrowers Association chairman Martin Oppenheimer said it was crucial TWC was providing proof of its expenditure in the TMP.

The wool industry has had a mixed success in marketing campaigns over the past decade.

Compared to the widely popular red meat advertisements, most wool campaigns have faded into oblivion.

But Mr Oppenheimer said TWC has fortunately reacted to the most recent of consumer and retailer demands and will again tackle the problem of marketing wool effectively.

"The TMP should be a good case where TWC can prove the consumer chains they can make," he said.

Mr Oppenheimer called for a national strategic plan for the marketing of Australian wool to ensure duplication and crossover between industry organisations was avoided.

"Until we have an overall strategic plan for the industry we will have more ad hoc arrangements, where different parts of the industry are performing different roles," he said.

"We need to have some strict goals in place on what we actually want to achieve."



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