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Vera Bradley is a start-up company which began from the basement of a home and grew to be a successful design-oriented bags & luggage company. As sales grew rapidly, Vera Bradley is currently facing some issues, one of among which will be addressed in this paper. About Vera Bradley The company is founded by Barbara Beggared and Patricia Miller. They wanted to make functional bags for everyday use and travel at a price that would give them a broader audience. They first needed to identify their target audience for which they needed market research.

They made their first design and exhibit them in a trunk show. Performance was good and it was a sign that middle aged women liked their brand. They also wanted to see whether younger segment also liked their product and used their daughters in college to do so. The bags passed the test for college girls too. After seeing the potential of the products, they started to go on with their start-up idea. Design products were usually demonstrated in trade shows and venues, but the owners decided not to attend such competitive fairs Just yet. Instead, in 1982 they attended the Chicago Gift Show.

The attendants of the show were gift shop owners or wholesalers, where bags were not sold frequently. Although they had an unfavorable place in the show, they managed to change to a more strategic place and made $10,000 revenue, which showed them they could and that they need to grow. Barb and Pat were wise to assess their strengths and weaknesses and act upon them. They decided to focus on their strengths – design and sales. They thought that design was the locomotive of the company. They had built good brand perception and wanted to keep investing in it.

They also wanted to extend their brand image to their business so that their peers recognized them as a good company too. They made business cards, catalogs and standard shipment boxes. They were aggressive in sales, utilizing a push method. They hired their close friends and family to be sales representatives. Acting wisely, they paid the representatives when the customer made the payment, an attempt to minimize working capital. Knowing that they were weak on finance, they hired a professional to overcome it. Also realizing their limited production capability, they outsourced production.

With the right steps the company kept on growing and reached $4,800,000 revenue by 1990. About the Challenge Rapid growth brings several challenges to the company which can be listed as below. The sewing process has so far been outsourced to independent non-professionals. This system is not sustainable as sales are growing. * There is only a single channel through which the products are marketed which inhibits the amount of people that the company can reach. New channels can be utilized. * Working with close friends and family members could potentially raise problems as the company grows.

A more professional recruiting approach is required. * As the company grows, standardized systems could provide efficiencies in operations. The company can start planting the seeds for institutionalizing. Renewing the designs frequently enhances brand image, on the other hand brings operational inefficiencies like taking the risk of building high inventories of expired products. Operations should be planned based on a decision of how to manage this trade-off. * Vera Bradley core competence is in its unique design and in order to nave such design, Pat needs off-the-shelf fabrics.

These fabrics are only offered by wholesalers, which require a minimum batch quantity that Vera Bradley cannot guarantee Just yet. Apart from enabling better design, working with wholesalers is a requirement also in terms of decreasing unit raw material costs. Vera Bradley needs to increase its volume so that it can work with wholesalers. This paper focuses on the last challenge in the list. Options to Overcome the Challenge Although Barb & Pat tested the product on college girls and received positive feedback, their sales were still focused on middle aged women between 30-60 years.

I think Vera Bradley should enlarge its target audience by focusing on the younger segment. This should be carried out carefully so to avoid any loss in its current customer base. Vera Bradley should first renew its market research. They can work with professional firms to carry out surveys to see what kind of functions they need, what colors they like etc. This is a requirement as trends in young societies are prone to change. They can also make informal research with their college student children and their friends.

Understanding their needs is the key to the strategy. Once this is done, Vera Bradley can make new designs to address the audience’s needs. I think new products should be differentiated from the regular Vera Bradley line so that college girls do not associate the brand with the middle-aged audience. * A operate line: Vera Bradley has already established brand awareness in the market and it is highly probable that young girls perceive the brand as a middle-aged one. Being able to change this perception is vital.

So the new products should be introduced as a separate line like “Bradley Young” * A separate brand message: The line should have a different brand message and should promise something that college girls aspire for. This can be interpreted from the market research studies. Assuming that market research is successful enough to relay the aspiration motivations of the audience and assuming “freedom” comes up to be one of them, he company can build a positioning statement upon delivering a subliminal message that “Bradley Young bags provide freedom” and/or “Free college girls use Vera Young bags”.

An example for a brand message could be “Break Free with Bradley’ * A separate logo: A different logo can be designed, one to be merged with the standard one. * Different distribution channels: This is key, given the company wants to differentiate the two lines. Bradley Young should be sold in places where the target audience likes to shop, which is something to be revealed yet again in the market research. Among these could be college stores, big discount stores and online stores for sure.

It would be almost impossible to sell these products in gift shops as they should be extremely rarely visited by target audience. * Different Advertising: It is expected that word of mouth be stronger in the younger segment as it is highly probable that they value trends more and want to have the same bag of their peers. Advertising campaign for the new line should be differentiated from the regular line. Also as young people are more prone to online shopping, online advertisement can be used.

Different Pricing: Given that it is in line with the current pricing strategy of the company, a different pricing is required for the new line as the purchasing power and perceived benefit of the product is highly different between the two segments . Recommendation I believe that increasing volume is vital for Vera Bradley. This will enable them to increase their core competence of design and also help them reduce input costs. I think expanding customer base is a wise way to increase revenues. In order to achieve this, they can start with focusing on college-girls segment.

They should first induct a thorough market research and understand the needs of their audience. I think they key point is to differentiate the new line from their regular line and market it separately in all terms. If this turns out to be a success, the company can consider expanding its base to other segments too; young business woman or even men’s bags; as long as they are assured that such expanding would not have a negative effect on their overall brand image and the current customer base. I believe that this can be pursued as a long term strategy to enable sustainable growth opportunities for Vera Bradley also in the future.

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