Patricia Blanco AMFI, Fashion Management

Transcription

Patricia Blanco AMFI, Fashion Management Spring/Summer 2008
1
Foreword
After carrying out my internship at Sixty B.V in Amsterdam, I got employed as
Retail & Trade Marketing coordinator and responsible for marketing of four
brands; Miss Sixty, Energie, Killah and Refrigiwear. In order to maximize the
my personal benefit of this thesis and my great opportunity at Sixty B.V I
decided to create a strategy for myself and my department to take in order to
promote the brand within given limitations.
I would like to take the opportunity to foremost thank my closest manager and
CEO, Frenzy Berg; for giving me countless and unimaginable opportunities in
my work, believing and motivating me in the best way possible, at every single
occasion.
I would also like to thank Sixty for enabling me to write this paper, in
consideration to time flexibility, access of information and helpful colleagues. I
would like to thank Roos Groenewoud, Judith Deighton, and Gianni Heuvel,
for answering all my eager questions, Zografia Tsopela and Caroline Pohl for
kindness to help with text editing.
Last but not least I would also like to thank my coach Michiel Thissen for
guiding me in the process of structure, research and writing my thesis.
2
Executive Summary
“Living the brand just became branding the life”
Killah is an Italian brand belonging to the portfolio of Sixty B.V (Miss Sixty,
Energie, Killah, Sixty, Murphy & Nye and Refrigiwear). It is fast growing and
relatively fresh on the Dutch market. However, in 2008, the marketing budget
is limited, excluding advertising and therefore, alternative and financially
efficient promotion tools need to be utilized. Thus, the research question is
formulated as following;
“What promotional measures, alternative to national advertising and with
financial limitations, can I create, to reach the target group in a creative and
effective way?”
To answer the research question accurately, we must answer a number of
important questions (sub-questions) about the brand and current activities,
market opportunities, and most importantly; know our target group.
Killah is a young brand with a target group of girls 16-24. At this moment,
Killah has about 75 customers in the Netherlands, including a franchise in
Leeuwarden and retail in Amsterdam. Playing with brands like Fornarina,
G-star and Diesel, Killah is an urban denim brand and carries diverse lines,
which suits a carefree girl in all her moods.
In the Netherlands, the “stretched” target group consists of about 960.000
individuals; with generally clothing topping the list of planned purchases. This
group has a significant economy and high influence on household spending.
In turn magazines, and not TV, like the previous generation, mainly influence
the group itself.
In order to meet “the fans who do not yet know their idol” we must
compensate loss of advertising with remaining promotion tools; “Word of
Mouth”, “Public Relations” and “Point of Sale”. Word of Mouth is effectively
created in the environment of customers and end-consumers, thus selling
points and its personnel is a contributing factor. Public Relations build on a
strong and mutually favouring relation to press and media tools. The quality of
Point of Sale material rely on the producer, with smart measures and eminent
observation of the target group’s interests, it can be the strongest medium.
Finally, I would like to tie these promotion tools together into a pitch of “Brand
a Life” project.
The thesis is divided into three parts; Internal Audit, External Audit and
Strategic Advice followed by the conclusion and advice on further research.
3
1.1
Problem definition.................................................................................................... 6
1.2 Research question .......................................................................................................... 7
Sub questions/objectives .................................................................................................................. 7
1.2
Objectives ................................................................................................................... 7
1.3 Limitation ........................................................................................................................... 8
1.5 Methodology ..................................................................................................................... 8
1.6 Chapter division............................................................................................................... 8
Part 1; Internal Audit ..................................................................................... 10
2.1Sixtygroup the company behind Killah ................................................................... 10
Corporate ........................................................................................................................................... 10
Global Distribution and Business Strategy .................................................................................. 10
Brand portfolio ................................................................................................................................... 11
3.1 Killah’s Identity - The Vision ...................................................................................... 11
Brand Mission.................................................................................................................................... 11
The Killah Brand vision.................................................................................................................... 12
Target group ...................................................................................................................................... 12
Target group definition....................................................................................................... 12
A Killah girl loves…............................................................................................................. 12
Brand Values ......................................................................................................................... 12
Consumer ............................................................................................................................... 12
Internal placement of Killah among competitors....................................................... 13
USP- Killah is Unique! ........................................................................................................ 13
4.1 Marketing Mix ................................................................................................................. 14
Quality and Production .................................................................................................................... 14
Price strategy..................................................................................................................................... 14
Killah Top 5 ........................................................................................................................................ 15
The BCG growth-share matrix ......................................................................................... 16
Place; Killah retail boutique in Amsterdam ................................................................. 16
Personnel................................................................................................................................ 17
Promotion ........................................................................................................................................... 17
Conclusion Internal Audit.................................................................................................. 22
Part 2 External Audit ..................................................................................... 23
Chapter 6 The Dutch retail environment........................................................ 23
Economy overview ........................................................................................................................... 23
6.1 Market profile.................................................................................................................. 23
Retail Landscape .............................................................................................................................. 24
Market segmentation ....................................................................................................................... 24
6.2 Apparel retail – A competitive landscape .............................................................. 25
6.3 International chains change Dutch retail environment ..................................... 25
6.4 Increased consumer confidence helps recovery ................................................ 26
Chapter 7; Consumer Market; -The Target group ......................................... 29
7.1 How big is the Target group in The Netherlands? .............................................. 29
4
7.2 How much money to spend?..................................................................................... 29
7.3 Social effects, Group Characteristics and Lifestyle........................................... 29
Lifestyle, Attitudes, Behaviors........................................................................................................ 30
Mobile phones and Interactivity ..................................................................................................... 31
Education ........................................................................................................................................... 31
Unemployment among young Dutch people............................................................................... 31
7.4 Media influence the target group ............................................................................. 32
Magazines.......................................................................................................................................... 32
7.5 The consumer’s behaviour (4 Basic questions).................................................. 32
How people buy? .............................................................................................................................. 32
What do teenagers buy? ................................................................................................................. 33
When people buy? ........................................................................................................................... 33
Why people buy? .............................................................................................................................. 34
Conclusion Consumer Market; -The Target group .................................................... 37
Chapter 8. Competitors and perceptual mapping.......................................... 38
8.1 Perceptional mapping results and competitor analyze..................................... 38
Figure 4.................................................................................................................................... 39
Part 3 ........................................................................................................................................ 41
Chapter 9; Strategic advice............................................................................................... 41
9.1 Place Location Leidsestraat....................................................................................... 42
Scenario 1; reason for Killah retail boutique to stay at Leidsestraat ...................................... 42
Scenario 2; reason to leave Leidsestraat .................................................................................... 42
9.2 Personnel......................................................................................................................... 42
10.1 Promotion...................................................................................................................... 43
Public Relations ................................................................................................................................ 43
Promotional Products ...................................................................................................................... 44
Point of Sale ...................................................................................................................................... 44
Website............................................................................................................................................... 45
News letters ....................................................................................................................................... 45
Brand a Life project -Expose your talent! Win a sponsorship and become the new
Killahgirl! ............................................................................................................................................. 46
11.1 Conclusions and recommendations ..................................................................... 47
Scenarios ........................................................................................................................................... 48
11.2 Advice for further research...................................................................................... 49
References ............................................................................................................................. 50
Internal Audit ......................................................................................................................... 50
External audit; ....................................................................................................................... 50
Chapter 8 Competitors and perceptual mapping....................................................... 51
References strategic advice ............................................................................................. 51
Terminology .................................................................................................. 51
Appendix 3 Survey assemble for perceptual mapping
Appendix 1 Full Chapters 5 and 8
Appendix 2 External Audit
5
Chapter 1; Introduction
My interest for marketing and promotion grew explosively when I started my
internship at Sixty B.V, the branch office of the Italian Sixty Group, in
September 2008. Since I finished my internship in early March, I am
employed as Retail and Trade Marketing Coordinator, and responsible for all
the marketing activities of four out of five brands that constitute Sixty B.V’s
portfolio.
I chose to write my thesis on Killah, as the potential of the brand on the Dutch
market interests me. Furthermore, for my current position I also wanted to
take the opportunity to dig deeper into the brand, to fully understand the
market, the company behind it, and the opportunities that await a successful
marketing.
Killah is a brand that fills a hole in the market and is ready to break loose from
the role of being the little sister of Miss Sixty. However, even if Killah currently
has loyal fans, I believe there are many fans on the market that do not know
of its idol yet. These “fans” can only be moved and gained if recognizing
Killah’s presence. As a marketer, I believe that advertising and promotional
tools are the most effective (and only) way!
In 2008, the Sixty Group will go through a thorough analyze of its procedures,
bringing in an external consultancy bureau to increase the efficiency of all its
activities and departments. Sixty Group’s turnover grew from EUR 0 to 700
million in only 20 years, and is now in need of reorganization of the whole
company before it continues growing. This measurement affects the current
activities in terms of budget cutting, which for marketing activities in the
Netherlands mean that we adopt a marketing strategy focused on retail
marketing and alternative promotion tools rather than national advertising1.
Killah was taken on by the former Global Marketing Manager and current
CEO of Sixty B.V, Frenzy v/d Berg. Killah is a successful brand in its home
country. Today, Sixty has one Killah retail boutique in the Netherlands. The
boutique is located in the centre of Amsterdam, and is visually a magnificent
example of Killah’s concept and identity.
My objective for Killah is; with “smart” marketing activities, in terms of finance,
create as much possible stimulating activities that benefit retail, franchise and
wholesale customers. Through reaching end-consumer and stimulating
attention for long term relationships.
1.1 Problem definition
How can we create increased brand awareness amongst Killah’s target
group? Naturally, you could as a company advertise in every single magazine
that reaches the specific target group. If, however, you do not access an
advertising budget, how can you then best reach your target group?
1
Frenzy Berg, managing director Sixty Netherlands
6
During my internship at Sixty B.V, I observed obstacles in finding and keeping
the “right” personnel for our retail boutique. The problems included finding
personnel that could represent the brand rightfully, and a high circulation of
personnel on the shop floor.
1.2 Research question
The central research question is formulated as;
“What promotional measures, alternative to national advertising and with
financial limitations, can I create, to reach the target group in a creative and
effective way? ”.
Sub questions/objectives
In order to answer the main research question, the following subsidiary
questions need to be answered;
Internal Audit
•
•
•
•
What does the company behind Killah; Sixty Group, look like?
Who is Killah; Identification of the brand?
What does the marketing mix look like?
What are the current promotional activities, structure and setup, of
Sixty B.V, and what is missing?
External Audit
•
What does the market environment look like, from a macroeconomic
perspective?
What does the target group look like;
• How does the target group behave as consumers?
• What media influences the target group?
• What are the attitudes and lifestyle characteristics of the target group?
1.2 Objectives
The primary objective of my thesis is to create a marketing strategy of which
direction to take, with a limited budget, in order to support Killah’s continuous
growth into a successful brand in the Netherlands, in terms of increased
turnover and brand awareness. With successful implementation and results, I
can hopefully look forward to access a greater budget in the future.
The objective of the advised promotion tools/activities found in the strategic
part is primary to reach out to brand prospects on all levels, for short -and
long term relations.
The intention with my thesis is to use it as a manual of activity for myself and
the marketing department at Sixty B.V, for ongoing and future promotional
activities and marketing implementations. Therefore my research has included
7
broader fields then just promotion, however, advice for further research will be
given in the end of my thesis.
1.3 Limitation
My limitations for this thesis is in consideration to the marketing budget. Other
restrictions have been access of further financial information and in respect to
that, Chapter 5 will be found in the appendix, and taken out of the official
exposure of this thesis.
1.5 Methodology
The research methods that I have used to collect information include desk
and field research. Desk research includes all relevant information regarding
Internal and External factors and support of Strategic Advice, studying
relevant literature, articles and documents. Field research is made on external
and internal attitudes towards the Killah and its competitors.
1.6 Chapter division
The whole thesis is divided into three parts; Part 1; The Internal Audit, Part 2;
The External Audit and Part 3; The Strategic Advice. Each presenting a partconclusion reflecting the included chapters. The Internal Audit includes
Strength and weaknesses of the company, while the External Audit presents
opportunities and threats on the market. Together, they lay the base for the
Strategic Advice. Furthermore Part 1, 2 and 3 are divided into chapters, all
presenting information or advice on divided themes;
Part 1; The Internal Audit;
Chapter 1 Introduces the topic of this thesis, its research questions and
objectives. In addition it describes background to the current situation of the
company and why the topic is chosen. It explains research methods and
limitations.
Chapter 2 Introduces the company behind Killah and describe the current
situation and objectives for the future on a global scale. The chapter includes
Business strategy, Distribution, and Brand-Portfolio.
Chapter 3 Describes the identity of the brand Killah. It includes; Vision and
Mission, Brand values, Target group and other internal information about the
brand.
Chapter 4 Consists of the Marketing Mix; Product, Price, Place, Personnel
and Promotion. Place and Personnel describes the situation at the local retail
boutique, while the other Product, Price, and Promotion describes reflects on
global level.
Chapter 5 This chapter is not meant as official information and should
therefore be taken out after examination. The Sales chapter can be found
8
in its entirety in the Appendix. The chapter includes Global and local sales
results, Killah retail results and NOOS management.
Part 2; The External Audit;
Chapter 6 deals with the External market on a macroeconomic level. Only the
main findings is presented in the thesis, the rest of the chapter can be found
in the appendix.
Chapter 7 Describes the Consumer Market and answers questions about
Behaviour, Interests and Attitudes of the target group. This chapter is after the
Strategic Advice, the most important chapter in my thesis.
Chapter 8 pays attention to competitors and presents a perceptual mapping
built on the results of the field research.
Part 3; The Strategic Advice;
Chapter 9 Consist presents the perspective on two different scenarios of the
location. It also suggests advice on personnel measurements.
Chapter 10 Is the most essential part of my thesis, this part presents my
suggested ideas that are developed for promotion activities and inspired by
the opportunities found and presented in the other chapters.
Chapter 11 Presents the final conclusion of my thesis, and suggests advice
on further research.
9
Part 1; Internal Audit
2.1Sixtygroup the company behind Killah
Corporate
Sixty Group was founded in 1989 by the current head designer and owner,
Wichy Hassan, together with CEO and co-founder, Renato Rossi. This
included the creation of the Energie brand and Sixty SRL was established.2
The same year Miss Sixty was born as the first denim brand exclusively for
women. Killah was included in the portfolio in 1998. Today Sixty Group
employs ca 3000 people worldwide. 3
Sixty Group is structured in four different parts; The headquarters “Sixty SPA”
is located in Chiete, Italy, “Sixty design” (design, style and research), located
in Rome, “Sixty Factory” for product and production, and Sixty international
which consists of 20 branches around Europe, North America, South America,
Asia, and the Far East, amongst them Sixty B.V B.V. In addition, Sixty has
about 25 agents and a number of distribution points operating in additional
countries. Sixty Group cooperates with several licensees for lingerie,
4
beachwear, jewellery, accessories, bags and cosmetics.
Global Distribution and Business Strategy
In total the Sixty group’s brands are available at about 7000 selling points
(retail, franchise, wholesale, corners) in more then 100 countries. Of these,
5
Sixty Group holds 480 multi -and mono brand stores .
While consolidating its core market in Europe, the company continues its
expansion in the USA and in Eastern Europe, which is now one of its main
business targets. The Asian market has also been under strategic focus with
the creation of several branches on the continent, and first time presence on
6
the Indian market. For the year of 2008 Sixty Group plans to expand with 30
retail stores worldwide, with a distribution of 20% retail and 80% wholesale.
The total retail investment for planned expansion worldwide is EUR 14
7
million .
Other focus points of Sixty Group are to build each brand’s equity and
differentiate them in the marketplace; “each brand is unique and deserves
8
special attention” .
2
www.sixtygroup.com
Business Facts & Figures 2008, Internal information.
4
www.sixtygroup.com
5
6
www.sixtygroup.com
7
8
3
10
Turnover Goals9
•
•
•
•
•
Sixty Group 2007 turnover = EUR 700 Million (a 9% increase from
2006, 35% of the turnover generated by Miss Sixty)
Sixty Group 2008 turnover = EUR 740 Million (estimate)
85% of the total turnover is currently and forecasted to be generated by
apparel, 15% by accessories
Brand portfolio
Sixty’s brands are divided into two segments: “The fashion world” and “The
authentic world” (see Fig.1). “The fashion world” represents the innovative,
experimental and trendsetting brands, whereas “The authentic world defines
the traditional brands with an adding value of historical heritage, technology
and high quality. Killah belongs to “The fashion world”.
Sixty B.V’ portfolio includes Miss Sixty, Energie, Refrigiwear, Murphy & NYE,
Killah and Sixty. Children’s wear shoes, jewellery, watches, eyewear,
cosmetics, accessories, underwear, leg wears and swimwear is licensed
products by external partners. These products are present at the Dutch
market, but distributed through agents.
Fig. 1 Brand segmentation
3.1 Killah’s Identity - The Vision
Brand Mission10
“The brand mission of Killah is to create a female denim-fashion lifestyle
brand with a fresh, ironic and identifiable range of unique themes, cool basics,
9
Internal presentation Spring summer 2007, Chieti
10
11
and a wide range of pants in denim and non-denim that appeal to brand
conscious young female customers”.
The Killah Brand vision11
•
is unique and as such the product needs to naturally exude the “Killahfeeling”.
•
is fashionable but not extreme, ironic and fresh, sexy but not vulgar,
glamourous and cool.
•
represents the many likeable aspects of a young female adult who is
spensierata (carefree), powerful and cute at the same time.
Target group12
Target group definition
•
•
•
•
•
•
•
•
•
Girls
Target customer 16-24
“Spensierata”
Youthful
Feminine but cool
Sexy but not vulgar
International/Global
Fashion Forward/Trendsetter
Loves Glamour but on a pure way.
A Killah girl loves….
•
•
•
•
•
•
•
•
•
Friends (Friendship)
Boys (to go out with and have fun, their first
love)
Hair, looks, styles, changes in cuts, pins
Clothes, sneakers, hot shoes, high heals,
ballerina’s
Mobile telephones with glitter/I pods and
music
SMS and Chatting
Mobile gadgets
Taking pictures and making movies
Dancing
Brand Values
•
•
•
•
•
•
•
•
11
12
Real Italian Heritage
With a Japanese flavour
“Spensierata” (Carefree)
Ironic
Youthful
Innovative
Fashionable
Glamour
Consumer
•
•
•
•
•
Passionate about brands
Interested in an international lifestyle, the
Italian look with a Japanese flavour
Innovative, loves unique items and is a
trendsetter.
Fashion conscious and enjoys looking up-todate.
Age is less important than lifestyle.
12
Internal placement of Killah among competitors
“Killah’s clothes are tougher than Miss Sixty, with a sexy note that is never
vulgar or trashy. Killah is very outspoken, and its unique combinations of
Italian and Japanese influence is easily recognizable. Killah is price-wise
lower then that of competing brands such as Diesel and Miss Sixty”13.
Fig. 2
The Sixty Group has
internally identified a
number of competitors
that are illustrated in the
figure on the right. In
the external part a
selection of these
competitors are being
analyzed and rated with
the tool of a
perceptional mapping14.
USP- Killah is Unique!15
•
•
•
•
•
•
Big gap in the market for this target group
Killah is the only denim brand with focus on this youthful target group,
for girls only, not for boys and parents!
Independent denim stores with fashion approach
New kind of boutiques for the young adult
Own retailstores and franchise: 100% Killah only
Corner concept for department stores
13
Frenzy Berg, CEO Sixty Netherlands
15
14
13
4.1 Marketing Mix
The Product16
Killah carries four lines17; fashion, denim, accessories and shoes. The
products are presented in four collections per year; two main collections
“Spring/Summer” and “Fall/Winter”, and two in-between collections or “Flash”
collections. The Flash collections fresh up the store in-between the main
collections and are important for customers’ need to have a rapid turnover
speed. The Flash collection consists out of bestsellers from previous season
in “new wrappings” mixed with the newest trends, always with a new and
fresh theme.
The main collection consists of about 350 pieces including the fashion
collection with about 20 pieces. The core product of the brand is still denim,
with a division of more or less 20% denim and 80% collection. The remaining
parts are then divided into three themes, new every year.
The themes are all diverse, appealing to the mood swings of a young teenage
girl. Some themes are “younger” then others, some are more fine fashion, but
together the fit to different occasions and in combination the themes complete
each other.
.
Quality and Production
All Sixty group’s products are designed and
produced in Italy, which adds value as Italy is a
strong brand itself. Killah’s balance of
value=benefits/price is currently not even, and
has room for quality improvements.
The complaints of the products that are returned
by customers are dominated by buttons that fall
off, fragile wovens that are damaged, straps that
snap, prints that fade.
Price strategy18
Killah keeps a price strategy that is lower than
that of its competitors and is segmented into three groups; Entry price, Key
price and Image price (see table below). Entry prices are a strategic lower
price level that fills up the collection and that keep the new interested
prospects “Killah starters”, tempted to purchase.
Key prices are the group consisting of the average priced products; it includes
less basics and more image. These two groups generate the most income as
most customers stay within these price groups.
16
Roos Groenewoud, Sales Representative, Sixty B.V
18
17
14
Image prices are for the image products, which naturally have finer textiles
and more details then the products in the other groups. In this segment, you
can find leather jackets, the fashion collection and pieces from the catwalk
shows.
Price division19
Product
Category
Entry Prices
Key Prices
Image prices
Pants
Pants
Dress
Skirt
Sweater
Jackets
Denim
Non denim
69/79€
59€
49€
39€
54€
79€
89/99€
69/79/89€
64/79/89€
49/59/69€
59/64/74€
89/99€
109/119/129€
99/109/119€
99/109€
79/89€
79/89€
129/139/159€
199/224/259€
149/159/179€
89/99/109€
89/99/119€
59/69/79€
Denim
Leather
Outwear
79€
89/99/129/139€
Skirt
59€
64/69/79€
Knits
49/59€
64/69/79€
T-shirt
19/24/29€
34/39/44/49€
*Note that given prices are retail price towards end-consumer.
Killah Top 5
In figure 3., the countries with the top 5 sales are presented, with Italy, not
surprisingly, in the lead. Denmark, however is in the lead of the top growth
rate rank, with an impressive 178%, followed by Germany with 96% for
spring/summer 07 VS 06. (Figure 4.) These figures are a good sign for the
Dutch expectations as the markets of both Germany and Denmark are very
similar to that of the Dutch20.
Top 5 Killah countries
Country
Quantity SS07
Top 5 Growth countries
Country
SS07 VS SS06
Italy
220.379
Denmark
178%
Germany
113.390
Germany
96%
Spain
58.295
Greece
46%
East. Europe
40.086
Austria
44%
Greece
39.872
Portugal
43%
Fig.3
19
20
Fig. 4
Michel Thissen
15
The BCG growth-share matrix
This matrix is included to show relative to the other brands, where Killah
stands today in the Netherlands. The placements are based on perception
and sales figures. Killah is placed as a Star in the Matrix below as it has high
growth but still requires strong investments and support to stimulate further
growth. Hopefully, the brand will eventually turn a cash cow and take place
next to Miss Sixty and produce enough turnover to support other brands in our
portfolio.
Place; Killah retail boutique in Amsterdam
I will use the example of the retail boutique as an indirect promotion tool to
expose Killah on the market. The boutique is playing an important part in
building an image around the brand and stimulating brand awareness at a
strategic location.
Sixty B.V’ Killah retail boutique opened its doors at Leidsestraat 19 in July
2008. Together with the franchise in Leeuwarden, they are the only mono
brand boutiques in The Netherlands. Leidsestraat is a strategic location since
it is in the hart of Amsterdam, with thousands of tourists and shoppers
passing by daily.
The street is also known as “the shoe street” as it is jam-packed with shoe
stores; middle segment stores like “Sacha” and “Invito” competing with more
up-scale boutiques such as Shoebaloo and Paul Warmer. Other upscale
shopping points such as Karen Millen, Filippa K and Maison de Bonneterie
are also located at Leidsestraat, which are beneficial and attractive segments
to surround Killah. However, souvenir shops, night shops and cheap snack
bars are also populating the street, which are less attractive surroundings.
16
Personnel
Currently Killah has a problem with personnel. The short history of the
boutique did not generate long-term commitments. The first few months,
personnel was an emergency issue as the present personnel neither
represented the image of the brand, nor was motivated to stay on a long term
basis.
One major problem concerning commitment at the Killah boutique is the lack
of perceived connection towards the branch office, as the office and the store
share mutual feelings of “we” and “them”.
Promotion
Each branch office manages promotion and advertising, following the
guidelines of Sixty SPA in Italy. Local activities are then reported back to the
global PR and Marketing Managers, who monitor the outcome.
Promotion is communicated through channels such as POS materials that
are delivered to the selling points together with the new collection each
season. The material includes catalogues and displays. Franchise and retail
receive window kits with new themes every month.
Irritation occurs with the arrival of POS kits, as the catalogues are produced
after the selling season. Wholesale/retail/franchise will never be sure that the
purchased items influenced by the sales representatives’ advice are exposed
in the catalogue.
This problem mainly reflects on wholesale customers as they only buy a
selection of the total collection. It makes little sense to promote a brand in
your shop with a campaign image, if you do not have the exposed product for
sale.
The Killah catalogue’s layout is in the format of a magazine, inside out.
There is always a storyline in the catalogue with the introduction, the body,
and an ending. Every image plays its own part in the storyline, -a very smart
set-up that plays on the interests of a typical girl in the target group. Look- and
content wise, the catalogue is attractive and appealing to the target group.
(Since part of my job at Sixty is to distribute POS materials, I am well aware of
the consumption of the these catalogues).
17
Currently the website is based on the catalogue. You click on the bottom of
the virtual page, and the page turns to the next. You can also reach the
themes of the clothing lines immediately by clicking on icons next to the
“catalogue”. It is simple and fun. What I personally miss out on the website is
history, values and background of the brand. Killah is a relatively new brand,
but still there are no answers to why it exists, external recognitions of the
brand or additional information other then the images of the “catalogue”.
Currently you can only reach the website trough killah.it and killah.com.
Free publicity is a part of Public Relations, which is in my opinion the most
important activity of a company, and therefore requires a full time employee,
which Sixty B.V lacks.
18
On top of the Killah boutique, at Leidsestraat 19, there is a PR room where
clothes are lent to
press and artists. It is
easily accessible for
stylists to “pop” in for a
coffee and borrow
clothes.
Communication
between Sales
representative, Italy
and PR coordinator
make sure that certain
items are given “extra
attention”.
Due to internal reasons, promotional products or giveaways and treats are not
utilized. This is unfortunate as this tool is cheap in relation to the effect. I will
go further into this in the strategic part of this thesis.
19
Chapter 5; Sales See Appendix; This chapter is not meant as
official information and should therefore be taken out after examination.
20
S.W.O.T
STRENGHTS
•
Killah belongs to a greater international
WEAKNESSES
•
organization with a strong portfolio of
brands
Branch not centralized position (from
local perspective)
•
Communication problems with head
•
Full Support head/branch office (retail)
•
Italian in heritage (Italy as brand)
•
Italian production (Italy as brand)
with budget cutting and restructuring of
•
Killah fills a hole in the market as the
company, contradiction internal
only denim brand for this target group
communication
•
•
office
•
Expansion world wide simultaneously
Unique retail/franchise concept
•
Poor Price – quality relationship
(boutique for young adult)
•
Poor information available to end
Diverse lines that appeals to diverse
consumer about the brand, website
personalities.
address, brand values
•
Three price levels
•
Unreliable personnel, lack of personnel
•
Star with potential to become a cash
•
Catalogue items communicated after
cow in the future
selling season
•
Location of Killah retail
•
Strong catalogue
•
Limited marketing budget
•
PR-office location highly accessible for
•
Poor support from head office to
press.
implement promotion activities with
budget and give-aways
21
Conclusion Internal Audit
Killah is a young brand with high potential to become equal to, and share the
strong position of Miss Sixty in the company. Almost all the ingredients of a
successful brand are already there; support of a strong company, the
successful designs, the brand values, several strong USP and most of all;
Killah fills a hole in the market as the only denim brand for this particular
target group. Its pure Italian heritage and production are added value factors
not to be ignored, as Italy is a strong “brand” itself.
The mono brand store with its successful designs has a concept that many
customers wave their hat for. I will further go into the topic of our own retail in
the strategic part, as I find it an important communication tool both towards
(potential) wholesale/franchise and end customers. Advice will be given on
how to improve the personnel situation in the store.
The POS material is another successful ingredient, but can still be improved.
With attention to creative measures, the catalogue can become more
attractive and “self spread” to an even greater extent.
The fact that the catalogue and advertising items are communicated after the
selling season could easily be revised with some serious planning.
To some extent, external communication towards end-consumers could be
positively improved. The catalogue and the website could provide more
information about the history and the heritage of the brand. There is little or no
communication of brand values, how can a girl identify herself with a brand,
which does not communicate what it stands for? Promotional products should
be taken advantage of, as they are very effective for promotion, cheap and
popular. -If used, so to speak.
However, my conclusion of strengths and weaknesses within the company is
that they reflect the top-management of the company. Sixty is lead and owned
by a designer; THE designer. If you look closely, you can easily recognize that
the majority of the design aspects are more or less excellent, but focus on
improvements should lay within implementation; the internal communication,
the budget support, and the quality of the products.
22
Part 2 External Audit
Chapter 6 The Dutch retail environment
This chapter is intended to provide an analyze of Sixty’s/Killah’s external
environment in the Dutch Apparel Market, the Dutch retail landscape and the
developments on the Dutch Apparel Retail in the past 5 years, and how the
brand can take advantage of the current opportunities.
Economy overview
The Netherlands has a wealthy and open economy, which depends heavily on
foreign trade. The economy is stabile by industrial relations, moderate
unemployment and inflation, and an important role as a European
transportation hub. The country continues to be one of the leading European
nations for attracting foreign direct investment and is one of the five largest
investors in the US. The economy experienced a slowdown in 2005 but in
2006 recovered to the fastest pace in six years on the back of increased
exports and strong investment. The speed of job growth reached 10-year
highs in 2007.21
6.1 Market profile
The Dutch retail market is well developed with an estimated 80% of retail
sales generated by multiple and chain-store business. The Netherlands has a
shopping centre retail space of 250sq metres per 1000 inhabitants, which is
the highest in the EU (average 140sq/pp).
The Dutch clothing market is highly fragmented and import-oriented, with
imports accounting for 80% of the products on the market and expected to
increase further as m any local companies contract production to cheap-labor
countries elsewhere in Europe and Asia. 22 The clothing market is highly
fragmented with more than 700 companies of which 70% have fewer then five
employees. Foreign manufacturers like Sixty Group who either have sales
offices in the Netherlands or are represented by independent brand importers,
largely dominate the market. 23
21
https://www.cia.gov/library/publications/the-world-factbook/geos/nl.html#Issues
Netherlands forecast.pdf (Library archive)
23
Netherlands market profile.pdf (Library archive)
* Calculated on currency conversions at
constant 2006 annual average exchange rates.
22
23
Retail Landscape
In the Netherlands, there are currently about 11,000 outlets in the clothing
sector, of which 62% are specialized in clothing and do not sell any other
products.24
Market segmentation
Dutch apparel retailing industry is
segmented into three sectors;
Women’s wear, Men’s wear and
infant wear 0-2 years old. 2006
the whole industry generated total
revenues (calculated at retail
selling price (RSP), including
taxes) of $15,9 billion* of which
women’s wear generated 54,4%
of the industry’s overall value.
Market shares in the clothing sector, % of value25
The total revenues of the Dutch apparel industry is forecasted to rise with
14.8% to $18,2 billion* by the end of 2011). The Netherlands accounted for
6.1% of the European apparel retail industry's value by 2007. 26
1
Apparel retail in the Netherlands, Industry profile; Datamonitor August 2007
24 Apparel retail in the Netherlands, Industry profile; Datamonitor August 2007
25
The Dutch Market. Economy and competitiveness. Ecorys research and
consulting/LIDA
26
24
6.2 Apparel retail – A competitive landscape
A way for retailers and wholesale to differentiate themselves on this
competitive market is through the selection of clothing they offer. Although
there are other possible sources of apparel, such as home-made clothing, the
selectiveness of products presented in the retail space is highly important to
consumers.
However, where brand loyalty exists, it is more likely to be towards the
designer than to the retailer. Private Labels is currently a dominating issue in
Europe. In april 2008 approximately 22%27 (vs23% Europe28) of all sold
products, throughout all industries, were Private label products. Neither the
apparel Industry nor the Dutch market can ignore this major trend. Many of
today’s Private label products are as attractive or even of greater interest than
branded products, as of the lower price (average 26% in The Netherlands29).
A wholesaler with an attractive image can be valuable as a brand itself.
Approximately half of all specialized Dutch retailers are affiliated to a buying
group to strengthening their hand against suppliers.30 This means that a few
large corporations account for the major share of the total market revenues.
The scale of such buying groups brings the ability to introduce and build
brands in multiple retail outlets simultaneously. This set-up favors greater
buying- and price negotiation when dealing with suppliers.
As the apparel retail industry in the Netherlands shrunk in value previous
years, it became uninviting to new entrants. However, barriers to enter the
market are not high: capital requirements are low enough for individuals to
start new enterprises.31
6.3 International chains change Dutch retail environment
The last few years changes in the Dutch retail environment for clothing has
had a major influence on the overall development of this sector. The arrival of
Zara and H&M brought a big chock on the Dutch apparel market. The concept
of “value for money prices” for fashionable clothing and footwear became a
big hit. Traditional clothing retailers such as C&A suffered as these “new
generation chain stores” and took a large share of the Dutch market and
challenged to counter-response.
H&M and Zara’s high frequency of collection changes forces Dutch retailers to
increase the turnover speed as the consumers wants and expects to be
27
http://www.plmainternational.com/en/private_label_en2.htm
The relentless advance of Private Label; strategies to compete, By The
Boston consulting group
28
29 The Power of Private Label 2005, AReview of Growth Trends Around the World By ACNielsen
30 The Duch Market. Economy and competitiveness. Ecorys research and consulting/LIDA
31 Apparel retail in the Netherlands, Industry profile; Datamonitor August 2007
25
excited and surprised by the supply of clothes each time they shop.32
Another factor that influenced the development in Dutch retail are cheap
imports from countries such as China and the increased popularity of internet
shopping. Substitutes for apparel retail include buying direct from
manufacturers, which is facilitated by the growth of online sales. Home-made
and custom-made (haute couture) clothing are also alternatives to retail of
ready-made clothes. 33
This increased number of new market participants and low consumer
confidence (see below) in the early 2000 resulted in a constantly shrinking
market volume that tightened the competition and created a serious
price-drop on the Dutch apparel market.
6.4 Increased consumer confidence helps recovery
As I mentioned above, the value of clothing went under considerable pressure
in 2003; The low consumer confidence, (result of balance between positive
and negative consumer opinions about a country’s economic climate and
willingness to buy)34 a declining economy and high price sensitivity were
major factors that contributed to the price war in retail. This further
strengthened the position of players like H&M and Zara. The apparel sector
spiraled out of control as the unit price of apparel nosedived. Thus, the
turnaround in consumer confidence 2006 brought some relief for fashion
retail.
The latest figures however, tells that since June 2007, Dutch Consumer
Confidence Index is dropping again. Compared to the European audit,
consumer confidence is dropping faster then average, with only Estonia
declining more.
(Despite this decline, the Netherlands is still holding the fourth place in the
European consumer confidence ranking.) This “mood decline” is mainly
caused by consumers’ negative opinions about the economic situation in
general for the twelve months to come (March 2008). Another contributing
reason is that the Netherlands is going trough a serious decline of
employment compared to the rest of the EU.35
In the Netherlands measurements to labor market reforms are being
undertaken since 2006. Through corporate tax reduction during 2006/2007
business confidence and profitability was stimulated which in turn led to
32
Report Clothing And Footwear in the Netherlands
Published: 2007/09
33
34 Neth. Consumer confidence 2 market Europe, volume 18 nr. 11 November 2007.
35 www.cbs.nl; Dutch consumer confidence index drops faster than European average 08 April 2008
26
investment capitals and employment as companies expanded. Both
employment and wages grew in 2007, and continues throughout 2008, which
in its turn of course stimulate to consumption.36
S.W.O.T
Opportunities
Threats
•
Stabile economy
•
Significant revenue growth
cost of mass produced product
expectations Dutch apparel market
prices
•
•
Challenging market forces wholesale
•
•
Customer expect A-brands for the
Fasr turnover speed from “giants”
to differentiate themselves by adding
cause customer to expect to be
new upcoming brands in the portfolio
surprised at every visit.
Half of wholesalers affiliated to
•
Growing domination of Private labels
buying groups
•
Low barriers and costs to start new
enterprise
Conclusion
There is a positive outlook for the Dutch economy which is an important factor
for recovery of the apparel sector. Continued economic growth is one of the
major drive behind the rise in sales and will offer more opportunities to
manufacturers of products aimed at the higher and middle segment of the
market. Not to forget, the Dutch market is welcoming for new-comers as they
meet low barriers and costs when staring an enterprise. Therefore, Sixty
should be open and encourage customers possibilities to expand, a little
customer might grow into a multi-store client in a relatively short time.
Economic growth will however do little to limit the harsh retail environment.
The major retailers are expected to compete insensitively to retain or expand
their share of the market in the coming years. Dutch consumers have high
expectations on service, quality and design; -and it all should rather come in
combination and with a cheap price. They expect A-brands to the price
suitable for the mass-market product, a result of the previous year’s pricewars. From my perspective, this is also a contributing reason to why privatelabels has become such a popular phenomena for retailer and consumer. In
36
Netherlands country monitor .pdf (Library archive)
27
order to counterbalance that, Killah should be promoted well and focus on its
brand USP’s values such as Italian in heritage.
A way to survive could be through being creative with differentiation in the
brand portfolio. This should be taken in as an opportunity for Killah since it is
young and fresh, and easily could surf on the wave of other, older, internal
and competing brands.
On today’s market you do not want to terminate your competitor, thus, you
want to cooperate with them! Nearly half of Dutch retailers belong to so called
buying groups, which is another great opportunity for a brand like Killah; If you
can catch one retailer within this “community”, there is a big chance that you
will gain more customers solely by “word of mouth”.
Dutch consumer confidence index is constructed by consumer’s opinion and
as one of the five largest investors in the US, one can not ignore that the
turbulence on the international financial markets caused by the US mortgage
crisis, has a high influence on customers economical planning.
28
Chapter 7; Consumer Market; -The Target group
The content of this chapter is restricted to the target group and to some extent
its younger peer, yet to become a part of the core target group, in the most
possible way. Some parts of buyer behaviour, “Why people buy” and “When
people buy” is however, based on a general perspective of human behaviour
as a whole, and is not necessarily limited to the target group.
7.1 How big is the Target group in The Netherlands?
2003, there were 32.5 million
teenagers in Europe (12-19 year
olds)37.
According to CBS, (See figure 1 in
appendix) about 760.000 females
between 16-24 live in the
Netherlands. However, Killah
states “Lifestyle is more important
than age” (see target group
definition, Internal Audit), so we
could easily stretch the perceived
group to ages 14- 25. This means
that there are about 960.000
young prospects for the brand.
7.2 How much money to
spend?
On average, European teenagers
(12-19) had a total income of 40.9
bn EUR by 200838. The main
source of income for European
teenagers is pocket money (average 60% in Europe vs. 25% in the US). The
other main source of income is “earned’ in exchange for cleaning, tidying and
helping with dinner, rather then just receiving pocket money39. Another
important source of money that applies to older teenagers, overlapping that of
earnings from the household, is employment. Governmental study finance is
also a contributing factor to the spending.
Besides their own significant income, teenagers also have an increasing
influence on household purchases. For example, in 2003, nearly half (47%) of
9- to 17-year-olds were asked by their parents to go online to find out about
products or services compared to 37% in 200140.
7.3 Social effects, Group Characteristics and Lifestyle
The current Teen market differs from previous generations in several ways.
While today’s Teenagers demonstrate a strong need for individuality in their
37
Tween & Teen Trends, Datamonitor, 2005
39
TNS Youth Mobility Report, 2004
40
Teen Market profile, MPA, 2004
38
29
self-expression. In addition, they commit an interest in fashions and fads of
the moment with a sincere desire to purchase products from companies that
have a social conscience41.
Lifestyle, Attitudes, Behaviors42
Today’s Teenagers live in a time of extensive technological advances, relative
affluence, and stagnating divorce rates. Consequently, this group possesses
characters of attitudes and cultural awareness distinguishing them from
previous generations;
•
•
•
•
They are realistic and optimistic with a strong sense of individualism,
but not with the fierce independence of the previous generation
Like to be in control and are “hip to hype”, but not to the point of
cynicism
Want and expect to have control over their media experiences
Have access to evolving and new technologies.
About themselves
• 86% People should be free to look,
dress and live the way they want
whether others like it or not
• 80% I have a very clear idea of my
Perception of adult success and
accomplishment
• 82% Being really good at your job
• 78% Having a really good relationship
with your kids
• 78% Being in control of your life
objectives and goals in life
• 75% I trust my own judgment a lot
• 70% On things very important to me, I
always tell the truth
• 68% I often buy a different brand just to
see what it is like
• 67% Most grownups are really stressed
out
• 62% I’m smarter than most kids my age
According to surveys carried out by Teenage Research Unlimited (TRU),
many teenagers feel that “most grownups are really stressed out”, and do not
want to follow this example. “Being really good at your job” and having
“control in your life” are important components of a teenager’s definition of
success. This group also expressively values relationships to a higher extent
then previous generations, family is important to them and a good marriage is
a sign of success. Today’s teenagers have a growing control over their
savings and spending as they live with short-term change and instability on a
day to day basis.
41
42
30
Teens have a strong sense of empowerment and believe that they can
conquer any challenge, as they are actively seeking out causes to support.
They are self- assured, with three-quarters or more of them agreeing with the
statements “I trust my own judgment a lot” and “I have a very clear idea of my
objectives and goals in life.” 43. Still, teenagers are driven by the desire for
acceptance by their peers, their search for independence and individuality.44.
Mobile phones and Interactivity45
Over 90% of the teenagers in The Netherlands have a mobile phone, for
interactive purposes, the girls;
•
•
•
•
10% call/text TV shows or competing media
15% use the camera
27% download ring tones from e.g. TV commercials
7% use internet
Education
The current and awaiting teenagers are likely to end up being the most
educated generation so far. Almost nine out of ten 17 year olds plan to attend
a higher education; younger teenagers have an even higher rate. This can be
compared to 26% of today’s 75 year olds and older and 59% of the 25-to 35
year olds. Generally, the pattern has stayed the same; younger generations
attend higher education at higher rate than previous generations46.
Unemployment among young Dutch people
In 2007, unemployment amongst citizens aged 15-24, who did not attend any
form of education was 9%. That is very much below the 15% in the similar
situation in 2005. When the economy goes into recession, young people are
often the first to become unemployed. On the other hand, as soon as the
economy starts turning into the “right’ direction, young people are often the
first to benefit as they can be placed more flexibly and are cheaper then older
workers47. Thus, young people are more exposed to economic developments
and are likely to change jobs often.
43
45
46
47
www.cbs.nl
44
31
7.4 Media influence the target group
Magazines
Source; Neopets youth study 2004
Eight out of ten
teenagers read
magazines, that means
that in the Netherlands,
1.6 million readers daily
influence fashion and
purchasing trends for
the rest of the society.
Additionally, this group
trusts advertising in
magazines more then
advertising in any other
traditional medium.
Magazine reading
teenagers are also
more brand-loyal and
more involved in family
purchases. According to
Neopets Youth Study,
the top 25 magazines
outperform the top 25 prime-time TV programs in reaching teenagers which
again proves that the new generation of teenagers differ from the previous
generation whom was much more TV-oriented. Seeing advertising in a
magazine has directly influenced 30% of teenagers’ clothing purchases48.
7.5 The consumer’s behaviour (4 Basic questions)
Consumer behavior is the study of how people buy, what they buy, when
they buy and why they buy49. I will try to answer those questions in this sub
headline. Most of the facts presented in this chapter are based on general
studies of teenagers in Europe and the USA, seen as homogenous groups.
However, some facts are also presented as local comparisons.
How people buy?
A study made by Teen Market profile, MPA, in 2004, showed that shopping
malls top the list of venues where American teenagers shop. The so called
“mall rats” also, however, shop in numerous other venues, including discount
stores, convenience stores, grocery stores, and so forth. As the age goes up,
so does the percentage of teenagers who shop in all the measured locations.
After shopping malls, apparel and discount stores are girls’ most frequently
48
49
See appendix Fig 2
http://en.wikipedia.org/wiki/Consumer_behavior
32
visited venues.
⇒ 75% of teenagers look for the lowest prices and 73% go for sales,
reflecting that teenagers are very cost conscious.
⇒ Teenagers spend on average $46.80 per mall visit (spending increases
with age). They visit malls more frequently than any other age group
averaging once a week, and spend the most time per visit.
⇒ Dutch teenagers have the most spending power for clothes compared
to the rest of Europe and the USA, 88% are able to choose their own
clothes.50
What do teenagers buy?
Teenagers spend their money in a wide variety of categories, from durable
products such as clothing, CDs, video games, and jewellery, to nondurables,
such as food, soda, snacks, and ice cream. Some specific observations about
teenagers’ behaviour and purchase intentions include;51
•
•
•
•
Clothing top the list of both what teens planned to buy and what they
actually purchased.
Food, candy, and soda were the most frequent items bought.
Magazines were on teenagers’ top 10 lists for both items they plan to
buy and what they actually purchased.
“Teen males and females” have significantly varied ways of buying
(see appendix, figure 3).
When people buy?
Opening times
Traditionally in the Netherlands shops and markets are closed all day Sunday
and on Monday mornings. Normal shopping hours are 09.00 or 10.00 to
18.00, (17.00 on Sundays) however in Amsterdam some shops are open until
19.00 since April 2008. One day a week late night shopping is taking place,
usually on Thursdays or Fridays, and then shops are open until 21.00. Most
people within the target group of Killah move around on weekends and on the
shopping evenings52.
Psychological state of mind
Since people like to feel good about themselves they often buy when feeling
depressed or lonely, as if money could buy friendship. Often it is even the
social contact of a “hello and good bye” that triggers people in this state of
mind to make a purchase53. Usually, sales go down in the Netherlands around
October and November every year, as to lower consumer confidence.54
50
Successful business planning in 30 days, 3rd edition, by Peter J Patsula
52
The internet guide to Amsterdam
53
Successful business planning in 30 days, 3rd edition, by Peter J Patsula,
54
www.cbs.nl
51
33
Why people buy?
“Why do people buy? People can be interested and not buy, they can want
something and not buy. But if people believe in something then the only thing
that keeps them from buying is the opportunity to buy, or – a fistful of cash”55
In our developed, affluent world, a large percentage of purchase decisions are
made to reinforce or express a sense of meaning. We actively seek out
experiences that give our lives meaning or coherence. Meaning is what
humans create to construct a sense of reality and by forming a picture about
reality; in that way, we make sense of our lives.
Different target groups have different values. Customers do not really like to
buy things as much as they like buying what the product and services stand
for56. Therefore, customers will consistently pay more for a brand that
embraces, in this case, her values. A brand that wants to create values for its
customers has to design products, services, pricing and promotion in a way
that it fulfils a meaning for the customer57.
Maslow’s Motivation theory
I chose to integrate Maslow’s Motivation theory under this headline as he in
my opinion presents a clear and sensible theory of the human behaviour.
Abraham Maslow stated that
people are animals that
continually want. No matter
how many needs they have
satisfied they constantly
struggle upwards to reach
higher levels. He classified
these needs in five levels
referred to as “the hierarchy
of human needs”.
The hierarchy of human
needs58
From this information, one
can derive that no matter
how much people have, they
will always want more;
consumers never stop to consume. However, according to Maslow, lower
levels always take priority over higher levels. You should never attempt to sell
products that meet peoples’ higher levelled needs, if their lower level needs
are not presently being met. With other words, do not try to sell shoes to
someone who has not eaten in a week. This is, however, a rule of thumb, and
not necessarily a model to follow literally. In today’s affluent society, some
needs might be more important and desirable than others. Lots of people buy
55
57
www.businessweek.com, 2005
58
http://en.wikipedia.org
56
34
expensive products that they cannot really afford. As said by Supertip; People
buy with their heart, no matter how much their brain will tell them otherwise”59
Reasons to buy
“The philosophy behind much advertising is based on the old observation that
every man is really two men, -the man he is and the man he wants to be.”
William Feather
A consumer’s “state of mind” at the moment of purchase has a major
influence on his decision. The decision making process can therefore be
influenced by the environment of the shopping location.
In short terms people buy because they;
•
•
•
•
•
•
•
•
•
Want affection, amusement and beauty
Want to accomplish, achieve and acquire possessions
Want to be accepted, appreciated and attractive to the opposite sex
Want to avoid change, confusion and criticism
Are fearful to advertisers’ painted “fear situations”
Are greedy, greed overpowers reason to the extent that the belief in a
product is so strong that he/she becomes self –persuasive
Identify with the products in order to feel good about buying them
Have been promised to gain something people buy what they are
missing in their lives
Want the best value for their money Value= Benefits/price
When it comes to clothes, consumers want you to sell them a “ a sharp
appearance, style and attractiveness.60
59
60
35
S.W.O.T
Opportunities
Threats
•
Have significant income
•
Teens have more choices than ever
•
Spend family money as well as
•
Raised in the age of information and
influence parents’ spending in both
large and small household
uncertainty, Teens can be skeptical
•
purchases
•
Clothing top list of planned
purchases
•
High spending power
•
Brand values more important than
High sensitivity to economical
changes
•
Price level still high for the younger
part of the target group
product itself
•
Actively seek out causes to support
and purchase from companies with
conscience
•
Strongly influenced by buying
environment
•
Heavy magazine readers
•
Highly influenced by magazines
•
Are interactive
36
Conclusion Consumer Market; -The Target group
Killah’s targeted market is almost 1million in the Netherlands, (we then
exclude the tourist factoring this figure). They are cost conscious, and
research before they purchase new products and brands. They are brand
loyal, and actively seek out causes to support, and therefore naturally choose
for products that stand for associated values.
Purchasing decisions are based on behaviour patterns. In turn, most of the
behaviour patterns reflect on one’s belief. Beliefs are combinations of spiritual,
physical, intellectual and emotional aspects, all interacting together to create
motivation and actions.
As consumers, the target group is strongly influenced by the environment of
the shopping location. The group is hard to catch as they have an overflow of
choices in general, but try new brands out of curiosity just to see what it is
like.
Dutch girls have the highest spending power compared to other similar
markets of the same age group, and more over, they have a strong influence
on the spending of the family household. Overall, their attention could be
caught with the suitable medium; magazines.
With eight out of ten teens reading magazines, it is a medium that out-scores
the importance of others, it accounts for the main source of teenagers’
information. Teenagers also trust advertisements in magazines more then that
of other mediums, so, for Killah it is clear that this communication tool should
be utilized. However, due to budget limitations, we should concentrate on the
opportunities of our own catalogue/magazine, and add value to the brand by
just, like our target group, actively seek out causes to support and make sure
to communicate that.
37
Chapter 8. Competitors and perceptual mapping
In this chapter, I will present the competitors of Killah on the Dutch market. I
have made a selection of a few brands from Sixty’s internal competitors that I
will present. Competition is the common battle for customers between several
parties. In the “war” of competition, one party usually wins on the cost of
another. However, personally I believe that killing your competitor is an old
fashioned vision, better live alongside and benefit from each other’s presence.
For my thesis, I am concentrating on internal measures of promotional tools
towards the market, therefore, this particular chapter is less extensive in
favour to other chapters.
For survey and research, I have chosen to select a few brands and limit my
self to them. The selection is based on a personal selection of brands that
represents classic, relevance and less relevant competitors in the
Netherlands, commonly that the are the most well known.
The selection includes;
•
•
•
Italian brands;
American brands;
Other;
Diesel, Fornarina, D&G and Miss Sixty
Levi’s, Lee
G-Star
8.1 Perceptional mapping results and competitor analyze
In order to get an overview of internal and external opinions about Killah and
its competitors, a survey has been carried out and assembled in the
perceptual mappings below. Internal parties such as shop and office staff has
been participating as well as external parties with imitation to the target group.
The survey results (find in appendix 6) are based on variables that are put in a
scale of seven, for example Cheap – Expensive.
The first one, Figure 4 represents internal perception versus external.
38
Figure 461
Figure 5 shows the result of common opinions, externally and internally on
Killah and its competitors.
Figure 562
61
62
Survey results see Appendix
Survey results see Appendix
39
S.W.O.T
•
STRENGHTS
Perceived as a lower priced then its
•
competitors even though…
•
Rated on the higher side of being
as hip, extrovert and attractive
WEAKNESS
Quality perceived as low, both
internally and externally
•
Perceived internally and externally
as an unknown brand
Conclusion
From the results shown in the perceptional mapping one can draw the
conclusion that Killah, which is lower in price then its competitors, also is
perceived as such. This is a good sign as it shows that the message of
Killah’s price strategy is communicated. However, it also tells that low quality
is an issue that also is observed by consumers. It is as hip, extrovert and
attractive as its competitors, but still perceived as an unknown brand. One can
draw the conclusion that quality is an issue that Killah should emphasise on
improving, as well as brand awareness among consumers.
That D&G is a real competitor was doubtful already before the survey was
carried out, and not surprisingly one can clearly see that the perception of
Killah is not similar to that of D&G, and maybe Sixty should even consider
taking it out of the internal placement of Killah.
40
Part 3
Chapter 9; Strategic advice
We have now reached the core of my thesis, where I would like to present my
strategic advice on measures and tools to use for “solving” my “problem”:
“What promotional measures, alternative to national advertising and
with financial limitations, can I create, to reach the target group in a
creative and effective way?”
My advice is focused only on alternative promotional measures, which is my
main tool to communicate with the market, as once again, my marketing
budget excludes the use of any kind of advertising activities. The Killah retail
boutique at Leidsestraat in Amsterdam will also be included in this chapter,
even though it is not a direct promotion tool. This is because, in my
perspective, this boutique should be more then just a business. “Word of
mouth” is partially created here and should therefore represent the values and
objectives of the brand, on every level as it is the brand’s face outwards. The
personnel should represent the role-models of the target group, and simply
breath, exude and live the brand. Therefore, location planning and personnel
commitments will be a subject of advice alongside strategic promotion
actions. The topics of the strategic advice below is based in the findings of the
questions; How can we use each strength? How can we stop each
weakness? How can we exploit each opportunity? How can we defend
against each threat? Focus lays on opportunities and weaknesses as I
personally find them most interesting to play with. Also the advice on further
research topics, is based on the findings of the SWOT.
41
9.1 Place Location Leidsestraat
The decision making process can be harshly influenced by the environment of
the shopping location, and put the customer in a “buying state of mind” You
can manipulate consumers by creating pleasurable environments around the
product itself.63 Killah has a strong visual merchandising concept with
beautiful interior that compliments the brand. However, there are more
influencing factors on the consumers then a beautiful concept. It is also about
communication on a personal and physical level. Therefore, the strategic
advice on shop level will lay within location and personnel issues.
Scenario 1; reason for Killah retail boutique to stay at Leidsestraat
The government introduced strict building regulations in 1998 that limited the
number of new shops. This together with a shortage of available land has
resulted in increased competition for retail space. Companies tend to renovate
existing locations rather than building new ones.64
As a result of this tendency, owners of the properties on Leidsestraat benefits
from the rising rentals and either sell their property, or rent it out to more
upscale companies that afford the location. A similar situation to what
occurred at P.C. Hoofdstraat over the past 10 years. This scenario would
benefit the Killah boutique, as it would attract a more shopping targeted crowd
then just by-passers that aim for Leidseplein. It is healthy for the brand-image
to be physically surrounded by more upscale selling points then today.
Scenario 2; reason to leave Leidsestraat
An attractive step for Miss Sixty, which is now located at the Kalverstraat,
surrounded by fashion shops like Didi, Bershka, Zara, and River Island, would
be to step up to another segment by relocating to P.C. Hoofdstraat.
Kalverstraat is an attractive location in terms of traffic, however it would be a
stronger statement for the image of Miss Sixty to place itself physically in the
segment of its internally considered competitors. In this case, it would be a
golden opportunity to move Killah from Leidsestraat to the current location of
Miss Sixty. Kalverstraat has a young crowd that attracts the target group of
Killah’s. Also, the traffic is more intense on Kalverstraat then on Leidsestraat.
9.2 Personnel
Referring to chapter seven about Consumer behaviour “People buy with their
hart, no matter how much their brains tell them otherwise”65. Brand-loyal,
affiliated and satisfied personnel is essential; Retail personnel is the brand’s
representative face towards the market and a promotional tool for word of
mouth.
Affiliation -the feeling of belonging to an admirable organization that
shares your values. To improve the disorderly situation at our Killah
boutique, a useful measurement could be to stress affiliation to the company
63
Successful business planning in 30 days, third edition, by Peter J Patsula
Netherlands market profile.pdf (Library).
65
64
42
as a whole. According to Sibson’s “Reward of Work Study”, affiliation to
institution is rated as the highest motivation for an employee. It is even
stronger then rewarding systems, including pay, beneficial programs, title and
so forth. However, affiliation and rewarding systems of different kinds, go
somewhat hand in hand. In the Killah boutique case for example, rewarding
systems could be used as a tool for creating a stronger bond and encourage
affiliation. By simple measures such as better communication between office
members and shop personnel and, by setting up rewarding systems for
achieved goals, you show recognition and appreciation, and thereby you
strengthen the feeling of affiliation to the company as a whole.
Communication between office and shop personnel could be improved by
giving the shop manager more responsibilities and flexibility in her job, which
also would ease the job of the financial administration at the Dutch office. By
this implementation; the shop managers will get more control over their work
which will increase their affiliation. A motivated and satisfied shop manager
will also influence and motivate his/her staff in a positive way.
The possibility to order discounted clothes, dinners, and “after work drinks” to
show recognition when turnover goals are reached are not only “relatively
cheap” but also priceless in return of stronger relation between colleagues.
This type of encouragement, to use the clothes, also creates loyalty towards
the brand itself. In this way you can reach both affiliations toward the
company through recognition, closer relation and teamwork both between
colleagues and management.
10.1 Promotion
Promotion represents all of the communications that may be used in the
marketplace. Promotion has four distinct elements - Advertising, Public
Relations, Word of Mouth and Point of Sale66. Since Sixty B.V currently
cannot use advertising as a promotion tool for Killah, the other three
remaining elements have to counterbalance the lack of budget. These
promotional tools should be used with the primary objective to reach out to
brand prospects on all levels, short -and long term, and therefore increase
sales on a longer term.
Public Relations
PR is communication that is not directly paid for and includes press releases,
sponsorship deals, exhibitions, conferences, seminars or trade fairs and
events. Public Relations include free publicity which with a clothing brand very
much depends on the (good) relation with magazines and freelancing stylists.
The objective for Killah should, in my opinion, be visible in every single issue,
of every “right” magazine in the Netherlands, facing the same target group.
Magazines like Cosmogirl, Elle girl, and Celebrity are important magazines
that belong to greater organizations, which in Sixty’s case is an advantage as
we hold a broad portfolio of brands. The advantage is naturally, that Killah has
support from the entire organization and therefore possesses a greater
playground for negotiations. Such negotiations can include editorials or
66
www.wikipedia.com
43
advertorials which are often more valuable to a brand then an actual add; it
looks and often is, independently selected fashion items for artistic shoots.
However, with good connections these important tools can be exercised cost
free or indirectly so. If you are generous to people, people will also be
generous to you. To keep the fire burning, so to speak, it would be beneficial
to give away promotional products.
Promotional Products
One of the most notable means of promotion today is the “Promotional
Product” or “giveaways”, as in useful items distributed to targeted audiences
with no obligation attached. It is the only form of advertising that targets all
five senses and has the recipient thanking the giver. Everybody likes free
stuff, no matter if you are old or young, man or woman, even rich or poor.
Promotional products can be smart products with a benefit of being relatively
costless in return of great exposure. These products can also be spread as
merchandise in the retail/franchise/wholesale to customers that for a cheap
price can get a cool, useful, branded item. In the end, the promotional product
pays itself, in one way or another. A strong recommendation to the Sixty
group is to produce a book with a range of promotional products, that can be
used globally, both internally at Sixty for PR, retail and partners, or externally
for wholesale customers.
This tool also contributes to another element of promotion; word of month.
Word of mouth is informal communication about the product by ordinary
individuals, satisfied customers or relations that engage to create word of
mouth momentum. Referring to the previous topic of personnel; besides
public relations, sales staff often plays an important role in word of mouth.
Point of Sale
After considering the findings of the market research. It is clear that Killah
strategically would benefit the opportunity to pay extra attention to its
strongest Point of Sale material; the catalogue.
Killah Magazine – a Glossy
The Killah catalogue is a strong tool but can still be improved; based on the
findings on the market research in the External Part it would be effective to
move closer to the content and layout of a gossip magazine. Through
effective implementation, the catalogue could increase the spread further and
even attain the value of a promotional product. The means of the measures
would be to include communication such as press images and interviews of
famous local and global personalities using the brand. Exposure with such
“idealistic” personalities could be beneficial in regards to the target group’s
search for identity and tie them even closer to the brand. The age aspect and
definition of the target group, with key words like “Spensierata” or “carefree”,
does not necessarily mean that these girls are self-secure and have found
44
their own identity. In general, identity is “created” between the age of 20-24,67
therefore it is an opportunity to bond with the target group by exposing and
demonstrating appealing brand values.
This could be implemented with internal materials as well as external.
Columns for local celebrities, designers of the brand and consumer’s
opinions. Even other companies with a similar target group could be
approached to place commercials such as sweets, mobile phones and
Vespa’s, delightedly with an Italian touch. Contests could be set up to
stimulate interaction and get more connected to target group; make Killah a
“friend”.
The catalogue could be used as a tool to spread information about coming
promotional activities, fashion fairs and store openings, showing that the
brand is active and attractive. The implementation should be on a global scale
and give “Killahgirls” in Japan a face to “Killahgirls” in Rome an vice verse.
The objective would be to follow up/catch up on globalisation and make the
target group feel connected trough the brands instead of subculture-like tools
like Facebook. Instead of being a lifestyle brand, brand a lifestyle.
The end-result would be a catalogue featuring an authentic glossy magazine,
following a storyline. With external parties advertising, it would also generate
a partial cover of the costs.
Website68
There is little or no communication of brand values, how can a girl identify
herself with a brand which does not communicate what it stands for? Promote
topics that young people engage to; charity, interaction, innovation. Sixty
defines its target group with words like Ironic, Innovative and Interactive. So
why not let the target group interact with a blog? In this way you could get
direct feedback from your customers and target group and compliment the
effect of the Killah Magazine. If your target group is defined as fashion
conscious and enjoys looking up-to-date, you have to show them that that is
what you are too. Other measures that are important is to register new
domians for the webiste address, so that it can be reached locally with .nl.
News letters
During the promotional activities that we held for our franchise in Leeuwarden
and for our own retail at Killah Leidsestraat in the fall 2007, we collected
contact details from potential customers. With this, a monthly newsletter can
be sent out to keep in contact with the prospect group. This tool can also be
used to give exclusive information about sales e.g. “bring a print of this email
and get an exclusive preview on sales”, or “a special treatment” giving a
discount and so forth. If it is implemented in a way where customers have to
interact to win a contest or get a discount, you can measure the results for
follow up.
67
Amfi lecture 1st year fashion management, presentation by M. Thissen
68
www.killah.it
45
Brand a Life project
-Expose your talent! Win a sponsorship and become the new Killahgirl!
Last but not least, the final ingredient of the promotional measures would be
to combine the above standing promotional strategic measures into one big
action with the objective; Living the brand just became branding the life.
Including, of course, attaining great media exposure from independent parties
and gain attention from the target group.
The concept
The tool of media can be utilized to attract and find new young talents, being
and representing the target group, being and representing Killah. The reward
for the attendees, is the opportunity to become “a new hot talent” and gain
media exposure.
A talent scout contest is set up where young girls have the chance to perform
and expose themselves and their talent. The winner of the contest receives a
one year sponsorship by Killah, and gets to be on the cover of the new
catalouge in the Netherlands. The sponsorship from Killah’s side, would be
similar to the regular procedure for artists; you borrow the clothes, use them,
return or exchange them during one year.
The setup
All girls that fit into the profie of Killah’s target group can participate, which
also is the only limitation. You participate by signing up for an audition that is
arranged by Killah/Ellegirl, with the right to show all material on Elllegirl’s
website. During a few weeks a selection of girls will get the opportunity to
perform and compete against each other, and pass on to the next rounds by
being rated on the website. The profiles and stories will be followed up and
publiched in the magazine Ellegirl. The finals are held at a venue where the
winner will be announced open to the public.
The whole action would be based on a cooperation with Elle girl and its two
strong media tools; the magazine and the website. The event would be
announced on the website in connection to Ellegirls’ jeans edition that comes
out every August. In connection to the competition, an interview with Sixty
B.V’s CEO, Frenzy v/d Berg about the brand, in order to achieve a more
powerful coverage and exposure. With some creative negotiation skills, the
whole promotion cost does not have to exceed that of a regular advertorial
(excl. set up).
46
11.1 Conclusions and recommendations
The intention of this thesis has been to create a marketing strategy for Killah,
considering the current situation of the company that has lead to a limited
marketing budget 2008. The objective is to create promotional activities to
reach the target group in a creative and (cost) effective way, thus;
“What promotional measures, alternative to national advertising and
with financial limitations, can I create, to reach the target group in a
creative and effective way?”
With limitations however, you need to be, and still have room for, being
creative. The direction to which I would like to take the marketing strategy of
Killah, builds on counterbalancing the loss of advertising activities with the
remaining three elements; Word of month, Point of Sale and Public Relations.
Recommendations regarding the Killah Boutique on Leidsestraat in
Amsterdam;
•
•
Stay at Leidsestraat to differentiate Killah from retail points with similar
target groups. Even though Kalverstraat has a more intense traffic, one
should also consider the retail as the face of the brand, and not
underestimate its value as a promotional tool itself. The image of the
brand can benefit from the future results of the perceived
developments on Leidsestraat.
Stimulate the retail personnel to feel affiliation towards Sixty and
towards the brand itself; Improve communications between branch
office and retail and let the shop manager take over responsibilities that
now lay within the financial administration. Reward with control and
abilities to be flexible, -keep her motivated, and she will motivate her
staff. Everybody wins!
Recommendations regarding Public relation
•
•
•
Stimulate Public Relations to the use of Killah’s products in every issue
of every “right” magazine that reaches the target group.
Stimulate Public Relations to use Killah’s products for editorials,
consider advertorials as supplement for advertising.
Spread promotion, and encourage relations through the use of
Promotional Products. Produce a “book” with all the available products
for retail, customers, and PR, to make a simple system and encourage
all internal parties to utilize this tool.
Recommendations regarding Point of Sale material
•
Utilize and maximize the opportunities for Killah’s strongest POS
material; turn the catalogue into a Glossy magazine, and increase the
spread and recognition of the brand.
47
Recommendations regarding additional promotional activities
• Use the website to communicate with the target group. Expand its flow
of information and stimulate interactivity for feedback and relation
enhancement to the group.
• Use newsletters to communicate to the group, and give the group the
feeling of a membership where you as consumer gain benefits.
• Set up a big venue, an activity with the objective to last on a long-term,
for instance; Brand a Life Project; Living the brand just became
branding the life.
These tools should be used to create brand awareness on a large scale, and
on all levels of prospects resulting in higher turnover of the brand, on a longterm basis. With successful implementation and results, I could then hopefully
look forward to access a greater marketing budget for the future.
Scenarios
1. Positive; Results of the promotion activities generate more turnover and
therefore growth of the marketing budget over the next years. Short-term
promotion, contributes to long-term relations.
2.Negative; Results of promotion to slow, no budget change. Next years
focus only on long-term promotion tools and results.
Both scenarios result in the continuous need to produce creative projects, or
maintain current activities, with a difference in scale, related to the future
budget.
This thesis will be used as a manual of activity for myself and the marketing
department at Sixty B.V, for ongoing and future promotional activities and
marketing implementations.
48
11.2 Advice for further research
During the process of research and analyze I recognized many points in the
SWOTs, that could be a target of improvement and further research. As I am
limited to the subject of my problem definition, further developments of these
points is not in place within this thesis. However, it could be useful for other
student’s thesis’s or papers. The recommendations and suggestion of
continuations research include;
•
How to become part of a subculture within the target group?
•
To what extent does charity activities give added value to a brand?
•
How can a brand take advantage of the fact that teenagers actively
seek out causes to support?
•
Why does Killah have uneven growth results in the past, and how it be
avoided in the future?
•
How can a brand change the perception of providing low quality?
•
How can Killah best balance the formula value=benefit/price (more
benefits such as quality or image versus higher/lower price?
•
How big of a treat are private labels, and how can a brand (Killah)
respond or benefit to the trend in the best way)?
•
Are there effective systems for Noos management or how can you
improve current systems?
49
References
Internal Audit
Competitors and placement of Killah; Internal presentation Spring summer 2007, Chieti
www.sixtygroup.com
Michel Thissen
Internal Monthly Sales Comparison from Finance and Administration at Sixty B.V
Sales numbers after sales presentation 25 March 2008
Presentation of Noos results 25 of February 2008, one month before ending season.
th
December 2005 IntroductionCollection F/W 2006Chieti 15 December 2005
Growth plan: Prices, planning and budgets Riccione, June 19th 2006
Interviews;
Frenzy Berg, CEO, Sixty B.V
Judith Deighton, Noos and after sales, Sixty B.V
Gianni Heuvel, Logistics, Sixty B.V.
External audit;
Chapter 6 The Dutch retail environment
Articles Library Koningsplein;
Netherlands Consumer confidence 2 market Europe, volume 18 nr. 11 November 2007.
Netherlands market profile.pdf
Netherlands forecast.pdf (Library archive)
Netherlands country monitor .pdf (Library archive)
Apparel retail in the Netherlands, Industry profile, Datamonitor (www.datamonitor.com)
Reference Code: 0176-2005 Publication date: August 2007
Fashion retailers rolling out across multi-cultural Europe www.emeraldinsight.com/(Library
archive)
The Duch Market. Economy and competitiveness. Ecorys research and consulting/LIDA;
www.liaa.gov.lv/uploaded_files/Niderlande_apgerbs.pdf
Clothing and footwear in the Netherlands
www.the-infoshop.com/study/ eo56740-clothing-footwear.html
Dutch consumer confidence index drops faster than European average
http://www.cbs.nl/enGB/menu/themas/dossiers/conjunctuur/publicaties/artikelen/archief/2008/2008-2432-wm.htm
http://www.plmainternational.com/en/private_label_en2.htm
The relentless advance of Private Label; strategies to compete, By The Boston consulting
group
http://www.bcg.com/publications/files/TheRelentlessAdvanceofPrivateLabelStrategiestoComp
eteApr07.pdf
The Power of Private Label 2005, AReview of Growth Trends Around the World By
ACNielsen; http://www2.acnielsen.com/reports/documents/2005_privatelabel.pdf
Chapter 7; Consumer Market, -The Target group
http://www.marketresearch.com/map/prod/1094144.html
50
http://www.magazine.org/content/files/teenprofile04.pdf
PPT file Google search
BUSINESSWEEK ARTICLE;
http://www.businessweek.com/innovate/content/aug2005/id20050809_077337.htm, 2005
http://www.smbtn.com/books/gb46.pdf
THE INTERNET GUIDE TO AMSTERDAM;
http://homepages.cwi.nl/~steven/amsterdam.html#shopping
Neopets youth study 2004
http://www.magazine.org/content/Files/Retailwire.pdf
http://en.wikipedia.org/wiki/Consumer_behavior
www.wikipedia.com
Chapter 8 Competitors and perceptual mapping
www.eu.levi.com
www.lee.com
Lee sales representative at Solo ing Gothenburg, Sweden
http://www.fornarina.com/enterfornarina.aspx
www.g-star.com
www.diesel.com
www.sixtygroup.com
http://eng.dolcegabbana.it/corporate.asp?page=GroupProfile
Survey Internal external See Appendix
1
Roos Groenewoud (Former intern at Diesel)
References strategic advice
http://www.sibson.com/publications/surveysandstudies/2006ROWno4.pdf
Terminology
Sixty B.V is referring to the Dutch branch office located on;
Singporestraat 86-90
1175 RA Lijnden
51

Patricia Blanco AMFI, Fashion Management

Transcription

Similar documents

to our marketing flyer

Change is good, exchange is better

the brandbank service makes it quick, easy and cost

Company profile Dutch fashion house Oilily has been a hallmark of

#MoreBusiness - phoebe chongchua

9.15.14 Footwearnews.com

Vlisco - design management europe award

DREAM BIG! - We Are Photogirls

BBVA, Experiencia3c2

Aeropostale - Super Brands