Ck Marketing Research

Marketing Plan

CALVIN KLEIN

Name

Tony Lin Lung Lung and ernie ong

Lecturer

Frank Gonzales

Date

24/09/2009

Word count

8400

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Abstract

Calvin Klein is a respected and well-known brand that have flagship all around the world

with a huge customer base. Calvin Klein is a brand name that being categorize as a mid-

range product that target mid-range income customers. They have a reputation that they

spent years building it up which reach the successful current stage of their company.

Calvin Klein is most famous for their minimalism design and clean cut look of monochrome

color scheme that suits all ages of customers. They are also one of the brand that push

creative advertising ideas into the market which using iconic faces that later successfully

help the models to become famous actors themselves.

Calvin Klein are able to reach its current state of success is no meant of luck. They have full

analysis of the market and strategically layout a plan for their company journey to date.

They emphasize most on advertising to push their products but they also identify their

market potential and market environment from their original store to the economic

potential of other countries CK flagship stores.

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TABLE OF CONTENT

Abstract -------------------------------2Table of Content -------------------------------3List of Illustrations -------------------------------41.0 Introduction -------------------------------52.0 Methodology -------------------------------53.0 Background of Calvin Klein -------------------------------6

3.1 Location -------------------------------73.2 S.W.O.T of Calvin Klein -------------------------------83.3 Marketing Strategy Applied in Calvin Klein -------------------------------123.3.1 Relationship between Target Markets, -------------------------------12

Marketing Mix and It Environment 4.0 Introduction to Marketing Environment of Calvin Klein -------------------------------15

4.1 Environmental Scanning -------------------------------165.0 Microenvironment -------------------------------17

5.1 Suppliers -------------------------------175.2 Marketing Intermediaries Competitors -------------------------------185.3 COMPETITORS -------------------------------195.4 Employees -------------------------------215.5 Customers -------------------------------215.6 Public -------------------------------22

6.0 Macroenvironment -------------------------------236.1 Political – Legal Environment -------------------------------236.2 Economic Environement -------------------------------246.2.1 Business Cycle -------------------------------256.2.2 Inflation -------------------------------266.2.3 Unemployment and Income -------------------------------276.2.4 Resources Availability -------------------------------286.3 Technological Environment -------------------------------306.4 Social Cultural Environment -------------------------------31

7.0 NEW PORPOSAL IDEAS -------------------------------337.1 Calvin Klein Vibrant (cK Vibrant) -------------------------------337.2 Green Products -------------------------------347.3 Online Market -------------------------------367.4 Partnership -------------------------------367.5 Campaigns -------------------------------367.6 Fashion show -------------------------------377.7 New Series (Calvin Klein – the classic) -------------------------------397.8 Privilege Card -------------------------------407.9 Interior Design -------------------------------41

8.0 Conclusion -------------------------------449.0 List of References -------------------------------45

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LIST OF ILLUSTRATIONS

Figure 1. Retrieved on 20 October 2009 By Author

Figure 2. Retrieved on 20 November 2009 from http://en.wikipedia.org/wiki/Calvin_Klein




Figure 6. Retrieved on 20 November 2009 from http://www.marketingteacher.com



Figure 9. Retrieved on 20 November 2009 from http://en.wikipedia.org/


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1.0 INTRODUCTION

In order to build up a well-known fashion brand one must understand the market potential

and the economic potential in that location. Which in turn this research adopt a famous

brand Calvin Klein to investigate how the company built up from scratch and what kind of

marketing strategy they use to reach their current status.

A brief history background of Calvin Klein in its most respective areas were shown with an

elaborate explanation of different kind strategy marketing that are adopt and used by Calvin

Klein with examples, S.W.O.T of CK and also some visual proposal of improvements.

2.0 METHODOLOGY

The background and profile of Calvin Klein has been researched through internet resources

while Calvin Klein ION Orchard on site analysis was conducted through interview with the

actual designer of that space. While business plans research were conducted through a

series of reading from books, elaborating information and apply on the basic use of a

fashion retail shop.

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3.0 BACKGROUND OF CALVIN KLEIN

Calvin Klein Ltd. Was a coat shop in York Hotel,

New York City in 1968 founded by Calvin Klein

himself. Currently it is owned by Phillips-Van

Heusen. Mr. Klein himself was described as “the

supreme master of minimalism”. Current date of

Calvin Klein have developed a series line of

products such as, Calvin Klein collection, ck Calvin

Klein, Calvin Klein, Calvin Klein Sport, Calvin Klein

Jeans, Calvin Klein Home, Calvin Klein Golf, Calvin Klein Underwear, sleepwear, watches,

fragrance, eyewear and other home line collections too.

Calvin Klein brand has always been about sex.

Their mission statement : to use sex as a weapon.

Calvin Klein’s products are usually portrayed by a

series of sophisticated models with confidence,

masculine or famine sides and a minimalist

photography. Which in turn reflect utmost

through their company logo.

Calvin Klein logo has a grey background with black color wording. The logo itself is in its

most minimalist form that shows complete integrity, confidence and expertise to their

brand, a clear cut symbol of their name that is easily recognize across the room, provoke

deep emotion to customers. Their logo is also a direct reflect of their product color scheme

and minimalism design to it.

Calvin Klein himself once said “I’ve always had a clear design philosophy and point of view

about being modern, sophisticated, sexy, clean and minimal. They all apply to my design

esthetic.” Calvin Klein’s unwavering vision of minimal designs and wearable urban styles are

part of what make him an icon: his widely recognized marketing genius is also part of the

package.

3.1 LOCATION

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Figure 1. Calvin Klein, Ion, Singapore

Figure 2. Calvin Klein Logo

Figure 3. Street Map of Ion Location

Calvin Klein has just recently open their biggest flagship store in Ion, Singapore. It is located

at level 3 lot 09 and has an area of 390 sqm.

Ion Orchard towering 218 meters over Singapore’s premium shopping precinct and it is the

most striking landmark to pierce the orchard skyline. The attraction lies in more than its

stunning visual appeal.

Ion also houses six global fashion brands like the Cartier, Christian Dior, Dolce & Gabbana,

Giorgio Armani, Louis Vuitton and Prada and other more tenants.

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Figure 4. Calvin Klein Shop Location at Level 3 of Ion

3.2 S.W.O.T OF CALVIN KLEIN

STRENGTHS

Calvin Klein being able to sustain a long period in fashion retail market is not due to luck.

They have their strengths that bring them to their success now.

1. Cater a Wide Variety of Products

Through the years, Calvin Klein have produce a wide variety of sub-lines brand

that cater the needs of different age people and also a wide variety of different

products for different customers such as, bags, watches, glasses, jeans, suits,

men’s wear, women’s wear, bed sheets, sports wear, etc.

2. Strong Company Philosophy and Statement

Statement built by the founder himself, Calvin Klein to use sex as the weapon

and a clear design philosophy and point of view about being modern,

sophisticated, sexy, clean and minimal has been pass down through thick and

thin. This built a strong foundation of the company’s journey for all employee

that is clear cut without any misunderstandings.

3. Strong Advertising

They have always use sex as the weapon so does this apply to their advertising

strategy. As they adopt beautiful and sophisticated well built men and women

for their advertisement that makes every design of theirs to have a strong

beautiful outcome after using it encourages consumers to purchase.

4. Huge Loyal Customer Base

For a season brand, they have a huge customer base, potential customer and

loyal customers in their pockets. As long as they are able to maintain the

connection with them, their market will never go down.

5. Good Services

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Their employees in every branch are well trained to serve all walk-in customers

and they even provide alteration if the customer needs it.

6. Strategic Locations

For store locations, Calvin Klein has always target well-known shopping complex

with units that are easily access and seen by public.

7. Online Store

Calvin Klein do provide online catalogue, online purchasing and online shipment

to customer door step.

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WEAKNESS

Weakness of a brand is usually being compare to other similar brand meaning their

respective competitors.

1. Plain Interior Design

For preserving their all time color scheme and minimalist design, interior design of

CK shops have always remain plain and simple without any stunning interior design.

Enhancing the interior design of their flagship shop can often bring surprises

attention.

2. Price Range for Variety Products

Being able to produce a lower price range products may extent their customers base

horizon.

3. Conservative Design

Calvin Klein fashion designs are sort of conservative in a sense which they trying to

preserve their original style. At times going for an out of the box design may refresh

customer expectation and bring in new style and attract new customer base while

maintaining the old.

4. Membership Card

Providing membership card can make sure CK keep track of customers information

for survey and maintain a close relationship with them. Allowing discounts and

update letters or emails to inform them of new arrival makes them feel valuable.

5. Sustainable Goods

According to current serious global warming issue, we starting to be aware and alert

of the condition of the earth suffering which will in return destroy mankind. So most

companies starts to invest in sustainable goods which also bring good faith to

mankind which gain the support of public. CK can do the same for their product this

can gain support and good faith from their customers.

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OBJECTIVE

Calvin Klein objective is very simple, to create a brand name that sell itself. Which means

they spent effort into advertising and using sex as the weapon to promote fashion sense

that are produce by CK to makes consumer looks extremely good while wearing it.

It is a brand of sophistication and appealing to both sexes. A leading brand that provides

variety of products to different ages of consumers and variety of usage products.

THREATS

Base on flagship of Calvin Klein located in Ion Singapore. There are a few threats that can be

an obstacle to them.

1. Other Branded Fashion Retail Shops

There are other well-known retail shops located around CK which gives the

consumers chances and choices to wonder into other shops before going in or more

opportunities for consumers to select and compare prices which result in purchasing

from other shops.

2. Same Concept Retails Shops with Cheaper Price Range

This means same level of retail brand such as Ralph Lauren and Armani Exchange

may have similar design or known as alternative goods that are at lower price.

3. Current Economic Crisis

The economic of a country will bring a huge effect to the sales of products in retail

shops. Which means currently the down cycle of asia economic has create an impact

to the sales of CK. How do they bounce back up their sales target.

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3.3 MARKETING STRATEGY APPLIED IN CALVIN KLEIN

Philosophy of Marketing

Marketing is the process of planning and executing the conception, pricing,

promotion, and distribution of ideas, goods, services, organizations and events to create and

maintain relationship that will satisfy individuals and organizational objectives. According to

the Chartered Institution of Marketing (CIM) in United Kingdom, marketing is a process of

anticipating, identifying, and satisfying customer requirements profitably. In other words,

marketing enable the company like Calvin Klein to sell it product according to the

consumer’s demand which involved process of market research, new product development,

product life cycle management and pricing channel.

3.3.1 RELATIONSHIP BETWEEN TARGET MARKET, MARKETING MIX AND IT ENVIROMENT

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Target Market

Price Promotion

DistributionProduct

Economic Technological

Social

Cultural

Competitive

Political

Legal

Figure 5. Elements of Marketing Strategy and Its Environmental Framework

From figure 5, we can see that the target market, the group of people that Calvin

Klein selected as to market their products, services or ideas will direct the company

activities and affect the marketing decision making of the company is in the center of the

circle. The marketing strategies that we focus on are product, promotion, place and price

which also recognized as Marketing Mix, the blending of the four elements to match with

the needs and preferences of a specific target market will affect the target market

immediately. These decisions will affect by the environment factors which are in the outer

level of the circle. These are the factors that cannot control by a marketer but still have to

be in consideration as it gives a big impact on the success or failure of the product. The

external factors included the competitive environment, political-legal environment,

economics environment, technological environment, and the social-cultural environment. It

will eventually affect the marketing management’s ability to develop and maintain

successful transactions with it target market.

By studying each and every environment carefully, it can assist the marketer to come

out with a set of strategy that complies with the needs and want of the target market and

subsequently gaining profit for the company because of the successful of the product.

Product is the goods, services and ideas that the company going to market it for the target

market. Here, the target market maybe is the end user, the intermediaries or other

businesses that need it for further production and government market. The product must

be match with the taste and preference of the purchaser, and most important, the

fundamental needs and wants of the consumer. The second marketing strategy, promotion

is how the seller wants to promote his product. It required communication between the

seller and buyer, it maybe directly market to the buyer like direst selling or indirectly

promote their products by using means likes advertising, sales promotion through some

media or channel.

Following by the third element, place, and the right quantities of goods must be sell

in the right time at a right place to boost sales. It included all the modes of transportation of

air, ground and sea, warehousing of goods, inventory control, order processing, and

selection of market channel, wholesale or retail selling. The final and the most critical

elements, price, will determine the purchase decision of the buyer. It must be reasonable to

the customer yet it profitable to the seller. The space in justification of price usually will

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leads to the competition of sellers, some they may compete by offering lower price than it

competitors but some will prefer maintain a constant level of pricing as to maintain it

product quality and the brand name of the product. These circumstances can be easily

observed between luxury goods and daily product. Luxury goods like Louis Vuitton or Calvin

Klein handbag will only remain it price or increase the pricing although it may hold back new

customer from buying their product, but the brand still have a group of loyalty customer

which will keep on using it product as it may reflect that they are in the higher class and

they are well-off enough to use the product.

In today world, marketer will more emphasis on relationship marketing which give

the company opportunity to gain competitive advantage against it competitors as in

maintain good relationship with all it stakeholders who are customer, employees, suppliers,

and the shareholders. It will subsequently establish and maintain mutually beneficial

relationships with all the contributing parties. New product can be developed and the

existing products can be improved to meet the changing consumer’s demand, therefore

new customer will become a frequent user of the product and finally he or she will become

the supporter of the product and will recommend the product to his or her friends. It rely

heavily on Information technology as a large amount of information is required to analysis

the customer’s taste, preferences, price sensitivity, lifestyle and campaign response.

The products sold by Calvin Klein will be exist in the retail and fashion market. We

are going to apply all these marketing concepts in the marketing of the retail and fashion

market; hence, we are going to analyze the environment where the product stands.

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4.0 INTRODUCTION TO MARKETING ENVIRONMENT AROUND CALVIN KLEIN

The environment of marketing consists of internal environment, micro environment

and macro environment which contain the forces and actors that affect the marketing

decision making of Calvin Klein, which related to the management ability to develop and

maintain successful transactions with it target market by offering both opportunities and

threats.

The internal level environment included forces like men, money, machinery,

materials and minutes (length of time) exist within the organization and are under the

estimation and control of the management. The micro environment will directly influence

the organization, the company, suppliers, marketing intermediaries, competitors, and

customers are located within this environment. It is the level which also creates a

competitive environment between firms. The outer level of the marketing environment is

macro environment, it included factors that the organization cannot control and not easy to

predict. Political, social cultural, economical and technological factors will continuously

change and the company must be flexible enough to adapt on it in order to survive in the

industry. Hence, globalization means that there is always the threat of substitute products

and new entrants into the market, international trade very much depends on all these

factors.

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Figure 6. The Marketing Environement

4.1 ENVIRONMENTAL SCANNING

Environmental scanning is the acquisition and search of information about events,

trends, and relationships in an organization’s external environment, the knowledge of which

would assist the management in planning the organization’s future course of actions.

(Aguilar, 1967) It is a process where the firm collect information from the external

environment to identify and interpret the marketing environment that they in. By analyze

the information in hand, they are able to interpret the potential trends of market and

therefore prudence decision can be made on oversee the opportunities and threats of the

company.

In the case of the retail and fashion marketer, the marketer has to collect various

information from all the potential sources like the political background, social cultural

background, technological background and economic background of the target market.

Besides that, the marketer also have to access to the background of the potential

competitors within the market. It is to identify the opportunity that the said retail and

fashion market products survives and succeed in the market and what kind of competition

and threat that the product will face with.

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5.0 MICROENVIRONMENT

In microenvironment, the factors that will affect the success of the products are

suppliers, marketing intermediaries, competitors, employees, customers and the public.

5.1 SUPPLIERS

In order to provide goods or services, the company has to obtain raw materials from

the suppliers. Today, increasing in price of raw materials will have a knock effect on the

marketing mix strategy of the organization and price may be forced up as a result. To

ensuring the competitiveness of products, it is very important for the firm to achieve cost

effectiveness by maintaining closer supplier relationships.

This is because the supplier bargaining power is likely to be high when there is a

concentration of supply and the switching costs; the costs that incur while switching from

one supplier to another are high. Perhaps it is because of a manufacturer’s processes are

depend on the specialist products of a supplier. For an example, production of a machine

required a specific semiconductor that comes from a single supplier. Intangible services like

management consultancy, corporate tax advisors may also be the supplier of the company.

In order to maintain it cost effectiveness, the production of the clothing wear and

accessories should acquire the ingredients from different supplier and not stick on one.

Buying from different suppliers can ensure the cost of production maintain at a lower level

as you can get discount or offer from the different suppliers. If we stick on one, the supplier

may charge you with a higher price and you cannot compare the other supplier’s price. By

comparing the price from all the suppliers and the market price, it will be easier for the

company to get a good deal yet maintain the quality of the product.

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5.2 MARKETING INTERMEDIARIES

Marketing intermediaries is the firms that help the company to promote it product

by selling and distributing the goods to the final buyers, the end users. They are the

middleman of the business, the resellers, the transportation system, the marketing, the

services agencies and the financial intermediaries.

The company is to do a survey on the product before the launching of it. It may be

done by using the company own marketing department to do the survey or hire the

marketing company to work on it. The results will influence the marketing strategy as in it

pricing, the place to sell, the kind of promotion it should do.

Since the target market of the product Is Singapore, the main transportation system

that the company can use is highway to distribute the product within the country. Usually,

the resell of the product will be in shopping complex.

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5.3 COMPETITORS

The competitive environment in marketing is a situation whereby the organizations vie with

one another to satisfy the customer’s needs and wants. In order to be the winner in the

competition, the decision maker must be continuously monitor the competitor’s marketing

activities and understand the competitor’s strategies. The organization has to be concerned

with the extent of direct rivalry between themselves and the competitors.

As shows in Figure 7, there are three types of competition which is direct competition on

whereby the firms compete on similar products like Motorola and Samsung compete on flip

phone, indirect competition where the competitors produce substitute products against the

organization, the example here is the competition between Pizza Hut and Domino’s Pizza.

For the third type of competition, the firms compete for the consumer’s purchase since they

have limited purchasing power. The competition became more obvious when it goes to the

middle class and working class target market, since their discretionary buying power force

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Indirect Competition

Direct CompetitionCompete for

Consumer Purchase

Type

of C

ompe

tition

Type

of C

usto

mer

M

arke

ts

Calvin Klein

Consumer Markets

Business Markets

Reseller Markets

Government Markets

International Markets

Figure 7. The Type of Competition and The Type of Customer Markets a Firm Face

them to make a choice among products. For an example, by using the same amount of

money, will the consumer choose to buy a Volkswagen Cars or a vocation to Japan?

And also, in Figure 7 we can see the different kinds of competition market due to the

difference in target market that the marketers are required to do more than simply adapt to

the needs but to gain strategic advantage by positioning their offers strongly. Since there is

no a single marketing strategy that is the best of all, each firm have to consider on the

available resources, the company’s size and their capacity while formulating relevant

strategies.

Time based competition emerges as another key factor that influences the success or

failure of the product. Globalization and information technology reduce the trade barriers

and increase the efficiency in conduct businesses, the firm have to develop a strategy that

can distribute their goods and services more quickly than the competitors. It enable the firm

to improve it product quality, reduce costs and expand the range of product that it offer in a

flexible and high responsiveness way.

The recent trend of the competition is more and more company are now focus on

the global market and the existence or development of the global customers will increase

the competition among the competitors, it is due to the globalization which leads to the

increase in international trade and internet based business. Company can now sell their

product online, our product here, the clothing and accessories line can also be market to the

overseas as to expand it market and gain more market share.

Some analysis should be done to identify the rivals of the product. In Singapore, the

direct competitor of the product is Armani Exchange and Ralph Lauren which is the same

range fashion product. There is only a slight different on the product price and quality, if the

retail and fashion market product is to enter the market, the very first analysis it should be

focus on these two brand in order to gain competitive advantage over them.

Indirectly, other brand like Ted&Baker, Dunhill, Gucci, LV, Prada, etc, will also affect

the sale of the product. Although the target market of the indirect competitors maybe

different, but all these brand got a wider and different target range of market as it is

categorize at different class and higher purchasing power customers.

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The company should develop a series of marketing strategies. It started by asking the

question should we compete? To answer this question, the company has to access it own

profile, it financial ability, resources, objectives, and it expected profit essence. Secondly, if

the company decided to compete, which market should it enter? It required the firm to look

for greater opportunity by using the limited resources that the company own, it rely heavily

in the sales personnel, advertising budget and the product development capability of the

firm. Finally, the firm should answer the question how. How should it compete? By analyze

and gone through the marketing mix decisions in order to gain competitive advantage,

product differentiation is a critical point here. It can be fulfilled by providing good quality

product, reasonable pricing and good customer services.

5.4 EMPLOYEES

Relationship marketing emerged as the latest trend of marketing. It not only

included external marketing which focus on customers and marketing intermediaries but

also internal marketing which aim to satisfy the employees of the organization.

The company has to satisfy the employees first before the external customers

because they are the one who deliver satisfaction to the external customers. It helps to

create an organization culture whereby the employees will become more customers-

oriented; they can maintain good relationship with the customer and provide good service

to them. Positive attitudes towards their job and good comments on the organization will

indirectly influence the customer to believe in the company’s products and therefore create

loyalty to the company.

5.5 CUSTOMERS

It is clear that the organization survive on the basis of meeting the needs and wants

of the customers by providing the right product in a right time and right place. Failure to do

so will result in a fail of strategy. There are five types of customer market that the company

needs to put in consideration.

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Consumer market consists of personal consumer, household that buy the product for

personal consumption and not for business use, business market which usually buy for

further processing, reseller market like warehouse which will resell the rejected product or

past seasons products and gain profit, government market which focus on public services

like military and infrastructure, and international market where international trade takes

place.

Different customer has different wants and needs; their demand on goods will be

different according to their personal income, background and their own desire. So, it is not

easy for the company to satisfy all the customer wants and needs, what a firm can do is to

satisfy the majority. Products that produce have to meet most of the taste and preference

of the customer in order to get higher sales volume.

5.6 PUBLIC

Publics are the group of people that have actual or potential impact on the ability of

an organization to achieve it objectives and goals. There are financial publics where the

company’s fund s come from, the media publics which assist the company in the promotion

of the product like newspaper, television program and radio. Besides that, the government

publics that the management must also taken in account in subject matters like government

development, marketers must always consult the company’s lawyer on some issue like

product safety, truth in advertising and some latest rules and regulations in business.

The citizen action publics like consumer group, environmental group and minority

group have a huge impact on marketing decision too as it is one of the immediate way for

the company to keep in touch with the is customer and citizen groups. The attitudes of local

publics and general publics which included neighborhood residents and community

organizations will also have a big impact on the products and the organization. So, it is

common that the company appoint a general relations officer to deal with this group of

people to maintain a good image for them.

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6.0 MACROENVIRONMENT

6.1 POLITICAL – LEGAL ENVIRONMENT

In political-legal environment, it consists of laws and interpretation of law which

required the firm to operate under the competitive conditions and aiming to protect

consumer’s right. Laws, government agencies, pressure groups that influence and limit

various organization and individual in a given society will be the factors that affect the sales

of the product. The government also plays an important role in marketing as the

government developments and plantation project will affect the demand in some raw

material and there will be opportunities for firm to increase their sales

To launch the product into a new market place, we must consider the political

climate of the market place, the amount of government activities and the stability of the

political environment. The political arena has a huge influence upon the regulation of

businesses, and the spending power of consumers and other businesses. The

businesspeople need to consider on how stable is he political environment, will government

policy influence laws that regulate or tax your business, what is the government’s position

on marketing ethics, what is the government’s policy on economy,

All the regulations and policies that the government required will eventually affect

the decision of the marketer on the design of the product, the labeling, packaging,

distributing, advertising and the way to promote the product.

The recent trend of the political legal environment is the increasing in legislation

which will encourage competition among business and ensure a fair market for goods and

services. Issues like product safety, fair trade practices, environmental protection was

actively establish lately, it very much affect the product standard, product liability,

commercial transaction and competitive behavior of firms.

These rules may require the company to make costly design changes, to retool

substantially, and to add new quality control system. For an example, a season of clothing

design or accessories products must gain special approval before launching of brands that

duplicate those already existing on the market, such as additional clothing sub line, or new

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watches product line from Calvin Klein. Since all these regulations are always change, the

marketers must work hard to keep with changes in order to gain more market share.

Another recent trend is that the enforcement of government agency is changing.

Agencies like Federal Trade Commission, Consumer Safety Product Commission have some

discretion in enforcing the law; they can have major impact on a company’s marketing

performance. Beside that, government deregulation on international trade,

telecommunication and banking area bring some new opportunities for the marketer. It is

because of them aware that overregulation protects inefficiencies, restricts new entrant,

and create inflationary pressures. Countries in Europe and Asia being liberated since the

trade barriers are crumbling due to political unrest and technology innovation.

The increase of the important in legislation, government agency enforcement and

the emphasis on ethic and socially responsible actions with the growth of public interest

forcing the business to comply with the policies as to protect the consumer right. The

product must be label with it material made and manufacture location from where. Besides,

proper way of cleaning and washing of the product must also be show.

6.2 ECONOMIC ENVIRONMENT

The economic environment consists of forces that influence consumer buying power

and marketing strategies. They include the stage of business cycle, inflation, unemployment,

resources availability, and income. Marketers need to consider the state of a trading

economy in the short and long run. This is especially true when planning for international

marketing. Their spending pattern very much depends on their level and the distribution of

household and discretionary income.

The economic performance of a country is usually measures by it Gross Domestic

Product (GDP), usually on a per capita basis after accounting for inflation.

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6.2.1 BUSINESS CYCLE

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Business Cycle

Resources Availability

Income

Inflation Unemployment

Economic Environment

Figure 8. Forces in Economic Environment

Figure 9. Business Cycle

The stages in business cycle are prosperity, recession, depression and recovery.

Prosperity period is the time where consumers are able to spend more and can afford luxury

goods; they are willing to spend more for premium versions of well known brand like

Toyota’s Lexus, LV’s handbag and Tiffany’s diamond ring. During this period, the marketer

can try to increase the price to widen the profit margin, expand their product line by

increase the promotion effort. The distribution of product can be increase by expand it

market line through export. During the recession period, the marketer will turns to market

their product in a lower price. It is due to the customer in this period are tend to purchase

product which is more basis and functional, they are most cost consciousness in this time.

What a marketer can do in this period is to lower the product pricing and eliminate marginal

production. At the same time improve it customer services and increase it promotion to

stimulate customer’s demand on the product.

The creepy stage in the business cycle is the depression period where the consumer

reluctant to spend as their income is low and the economic of the country is in it lowest

level. Here, the consumer rather save their money in bank than taking it out for spending,

they will only spend on the necessities like foods and clothes. Recovery stage in the business

cycle starting to strengthen the country’s economic level and increase the consumer’s

purchasing power and their ability to buy, they willing to spend more and can afford more

indulgent product.

6.2.2 INFLATION

Inflation devalues money by reducing the products that the consumer can buy by using the

same amount of money. For an example, 5 years ago we can buy two bottle of coke with

SGD$ 1.50, but now we can only get a bottle of coke by using the same amount of money.

Inflation rate alone will not affect the society much as if it increases at the pace that

anticipated and the household income also increases in that pace. But if the inflation rate is

out of the prediction of the economic and it faster than the increase in income, the goods

and services will become less affordable for the consumers especially the one with fixed

income.

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Besides that, it also increase the marketer’s cost, the wages and the cost of raw

materials will gradually increase and leads to the increase in price. The outcome of this

circumstance is the consumer will be more aware and conscious about the price of the

product by giving three different kind of response, the may buy immediately as they scared

of the increase of price, they may postpone the purchase or they may look for the substitute

of the product.

The annual rate of inflation in Singapore rose 3.7 % in Q1 2006 from Q4 3.4% last year,

largely duel to the 18% increase in retail fuel prices in February. The increase in inflation

associated by increase in income does not affect much of the consumer purchasing power

and their purchasing pattern. Some more the retail brand is not consider a luxury product

but merely a brand that most of the consumer can afford, so the slight increase in inflation

rate would not give a big impact on the sales of the product.

6.2.3 UNEMPLOYMENT AND INCOME

Unemployment is a situation where the proportions of people who quote under the

work force do not have job but actively seeking for it. It is very obvious that when the nation

is in it recession period, the unemployment rate will increase but when during the period of

prosperity and recovery, the unemployment rate will gradually increase and may reach a

level that all resources are fully employed.

The unemployment rate affect the market by modify the consumer purchasing

behavior as they may spend less because of the relatively small portion of income and they

tends to save their money rather than spending it. Although some nations may given out

money for them, but that portion of money can only enable them to spend on some

necessities like food and clothes.

Income influences consumer buying power in a way that when income increase but

the inflation rate remain the same or only increase a bit, the consumers are willing to spend

more than before. By studying the income statistic and trend with the nation’s inflation rate

and other economic factors, the marketer can estimate the market potential and specify the

target market, develop plan for targeting specific market segment.

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The unemployment rate in Singapore is relatively low and the household income is

increasing. It indicates that Singapore has a mature and stable market that the business can

invest in new product with ease. The consumer in this market has the purchasing power to

consume more goods and services and they are willing to try on new products. So,

Singapore is considering a piece of cake for most of the local and global company due to it

increasing economic activities and market potential. It will be less difficulty for the retail

brand to launch into Singapore market as most of the consumer is able to afford and willing

to purchase on this type of product.

6.2.4 RESOURCES AVAILABILITY

The natural environment involves all the resources that are needed as inputs by marketers or

that are affected by marketing activities. Beyond the depletion of many earth’s valuable

product, the overall health is declining and the natural environment are now being the

major worldwide issues that the many of the business and public is facing. Today, forest is

shrinking, lakes are dying, the quality and quantity of water also declining and the

temperature is rising due to the depletion of ozone layer.

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Shortage of raw materials

Emergence of Eco-friendly

group

Increased Pollution

Increased government intervention

Natural Resources

Figure 10. Trends in Natural Environment

The very immediate trend that we can see from the natural environment is the shortage of

raw materials, although air and water may be infinite, but the increasing level of air

pollution and water pollution chokes many of the world’s large cities activities. The world

population is expected to double to 11 billions by 2020, but currently the renewable

resources like forest and food already showing a shortage associate with the explosive

population and strong economic growth in the developing country. Moreover, some

nonrenewable resources like petroleum, oil, coal and various minerals is already an

immediate issue to the nations.

The second trend in the natural environment is the increased pollution, which

damage the quality of the environment leads to the rising temperature which causes the

melting of polar ice, flooding of coastal plains, and also the infection of nontropical

populations with diseases like malaria, hepatitis, yellow fever, cholera and meningitis. The

disposal of chemical wastes, the dangerous level of mercury in ocean, the littering of

nonbiodegradable resources like plastic and polystyrene will also increase the chemical

pollutant in the ocean.

These factors, leads to the increased intervention of government into the natural

resources management and those rules and regulations that the government set up in order

to protect the environment have to be concerned seriously by the marketers. Beside that,

emergence of some environment protection group also giving pressure to the businesses.

The responding of all these factors, consumers are now more demanding on ecologically

safer products, recyclable or biodegradable packaging, better pollution control and ore

energy efficient products. Here is a very example from McDonald’s. The McDonald’s has

eliminated it polystyrene cartons and now using smaller and recyclable paper wrappings and

napkins. Companies nowadays have aware of the link between a healthy economy and

healthy ecology to create environmental sustainable strategies.

The clothes and products purchased can be bag in the kind of materials that are

recyclable and not disposal materials like paperbag rather than plastic bag. Hence, the

product will be more welcome by the government and the public as it is part of the effort to

rescue our earth. Since the environmental protection group and the public giving good

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comment on the product, the sales of the product will increased and it also help the product

to gain a competitive advantage against it competitors.

6.3 TECHNOLOGICAL ENVIRONMENT

Technology is a vital for competitive advantage, and is a major driver of

globalization. It is the most dramatic force now to shape our world as it able to create new

technology, create new products and create new opportunities for the company. The

technology environment changes rapidly, thirty years ago, while people are still using letter

for long distance communication, no one can imagine we are now using electronic mail and

Skype to communicate and interact.

Infocommunication industry is changing the scope of the telecommunications

industry by merging the telecommunications, computing, and audiovisual sector. Nowadays,

the businesses operation is also under revolution by changing the way how goods, services

and ideas are exchanged, and how individuals learn and earn as well as interact with one

another. Hence, the technology development affects the marketing activities by the creation

of new media or new selling tools, new channels of distribution or modifying of existing

channel, use of new materials, and monitoring marketing research by means of scanners. An

example here is in the agriculture sector, more and more farmers are now beginning to

plant commercial crops of genetically engineered corn, cotton, soybeans and potatoes. This

disease-resistant livestock and plants is a mean to crop losses from salty soil and it enable

the farmers to earn more revenue.

Many firms are now more focus on it research and development activities to search

for a wide range of promising new products and services, ranging from solar energy, electric

cars and cancer cures. The R&D teams in the company are meant to develop a stronger

marketing orientation in the company. The challenge of the teams is to make practical,

affordable products to the consumers.

The marketer has to conduct a series of tests with the R&D team in the company to

come out with a successful adult soft drink in the market. By gathering information from

various means and conducts survey on the product before the launching. Besides that, the

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marketer can use some new channel like internet to promote it product and monitor the

sales more efficiently. The marketer should aware that new technologies create new

opportunities, in the mean time, it also replace old technology.

6.4 SOCIAL CULTURAL ENVIRONEMNT

In the social cultural environment define the relationship between marketing and its culture

within the society. Hence, the marketers should cultivate sensitivity to the changing society

and the shift of demographic as population growth and age distribution changes. The

cultural environment made up of institution and other forces that affect a society’s basic

values, perception, preference, and behaviors. People grow up on a particular society that

shapes their basic beliefs and values. They absorb a world view that defines their

relationship with others. The social and cultural influences on business vary form country to

country. It is very important that such effects are considers, the marketer have to be very

sensitive in cages in the society in order to sustain in the market place.

The age, the gender, geographical distribution and the lifestyle of the population

have to be taken into account when the marketer wants to market a new product into the

market. Beside, the demographic factor also play an important role to make sure an existing

product is capable to sustain in a market.

The changing family structure from traditional male-dominated and close-structures

family to more and more single individuals, adults of the same sex or both sexes live

together, unmarried adults and single parents family have also changed their lifestyle.

Double income family are increasing and this made more goods and services affordable to

the family since they are now having more income for spending. On the other hand, the

aging of population changing the wants and needs for the whole population, demand on

health care product increase as a result of aging population and demand on baby products

also increase as a result of increase in birthrate.

More and more people shift from the rural area to large metropolitan area to search

for job opportunity causing the different in geographic distribution and lifestyle. Although

their living cost and expenses will be increase much in big city compare with in the rural

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area, most of them still wanted to shift in as gain a better living there. People are now

demand for more luxury life style and starting to enjoy their life by joining club or

association. They are now more concern on self-actualization and self-esteem. They seek for

products, brands, and services as a mean of self expression. They will now go for happy

hours and enjoy themselves in the evening after work, for them, it is one of the ways they

can release stress and interact with others in order to get more friends. And yet, consider

the impact of popular music groups, movie personalities, and others celebrities on people’s

hairstyle, clothing, and sexual norms, it proved that a marketer who can predict the future

shift and trends have more opportunities to success and sustain in the market.

Today people focus on physical fitness and love to have outdoor activities; food

producers have found growing market for natural products like natural cereal, natural ice

cream, and health food. People tend to purchase those products which labeled with low fat,

low calories or low cholesterol. Marketing communications are using appealing natural

background in advertising their products, some may also use some sport stars to be their

ambassador to show that it is a healthy product.

Diversity in cultural also have a huge impact on marketing. There are different ethnic

groups in the market; they are different in belief, cultural background, unique characteristics,

religion, taste and preference. A good example here is the different between the three

ethnic groups in Malaysia, Chinese, Malay and Indian, they are practicing different kind of

life style and belief in different religion. Here, the marketer should be aware that Malay is

not allows to take alcohol, it is forbidden by their religion. Hence, the market of adult soft

drink that contains alcohol will loss a market of Malay which consider a big group in

Malaysia.

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7.0 NEW PORPOSAL IDEAS

Giving Calvin Klein fresh ideas to generate larger income and new customer base, we

propose a few ideas that will help the company to achieve that.

7.1 Calvin Klein Vibrant (cK Vibrant)

This is a new brand I propose for CK to embark the journey on. It is known as

Calvin Klein Vibrant (cK Vibrant). Which is a totally new sub-line that

penetrates CK new market as a fresh look to the company products. It sway

away from the traditional Calvin Klein concept design for their products

which is very conservative and minimalism, instead cK Vibrant promote wild

and colorful vibrant clothing to the market that is why it is call cK Vibrant.

So we will use this new sub-line to launch a new face for Calvin Klein which

creates new season of clothing line, new look of bags, new accessories, new

advertisement and new poster advertising. With some example shown

below. Other than that we created a mission statement for this sub-line: “Be

at ur limit”.

Women’s Wear Wild and Vibrant Color Clothing Line

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Men’s Wear Wild and Vibrant Color Clothing Line

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7.2 Green Products

This project is to let Calvin Klein develop a image of producing green products

to gain public support and also help save the world. For example, using

recyclable paper bag or clothing bag for every purchase to the customer. Also

Calvin Klein can produce their product using recyclable textile materials such

as recyclable wool, linen, silk, cotton, hemp, etc. Indeed, this product can

actually launch itself an independent sub-line also. Below are some visual

examples of sustainable bags.

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7.3 Online Market

Calvin Klein views internet sales as a prime source of future growth. We

purpose to create online website buying for customer which can let

consumer browse CK items at home and order online. Which will then later

be deliver to their door step. This will generate a new target customer base

also which is internet base consumers.

7.4 Partnership

Wholesale could be the development of private labels with department

stores, for example cK Vibrant launched a partnership with Ecko. As a part of

cK Vibrant expansion plans, CK can partner with Ecko and debut in their

stores with plans to expand to all Ecko flag-ship stores. The brand potentially

allows cK Vibrant to target large demographic seeking high quality

merchandise at lower prices. The private label partnership represents a

significant opportunity for growth in the Wholesale segment for CK, as the

company could enter more partnerships with new brands with Ecko or other

department stores.

7.5 Campaigns

Armani Exchange can also try support Cancer campaigns and eco friendly

campaign to promote a good image for the product and gain support from

the public. However, there is opportunity to develop these campaigns.

7.6 New Series (Calvin Klein – the classic)

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Calvin Klein – the classic is a series for those fans of CK who simply love the brand CK. It

designs in such a way that is simple yet brings out the style of Calvin Klein.

Meaning this series of CK, they do not have to use money to advertise on. People would

just buy it without a 2nd thinking.

Calvin Klein – the classic basically is a must buy for CK fans and who is new in CK.

Picture shown is 2 examples for CK-classic.

A unisex T-shirt and Man bag.

7.7 Privilege Card

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We notice that Ck doesn’t have a discount card or any privilege card. Make this one as

one of an idea to increase sale is good, even this is such a common marketing plan in the

market yet is still useful.

To bring up to the next level, to be different with others, this can be not only a privilege

card; can be a master card, visa card. Apply it with different bank. As what I design, I

used AMERICAN EXPRESS for example.

7.8 Interior Design

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This is the original Floor Plan.

As you can see everything is boring, like a normal high class retail, of course to be understanding up this period, CK is a very successful company, people doesn’t go to the shop for anything but their item.

One point is important in CK shop is they are always use the same material and lighting for all the CK shop. (As shown below)

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We could not say it is not one of the points to let them successful. The material and lighting which is always metal and cold blue lighting brings out the style of CK. So we decide to change the lighting to green. Let they have a new fresh look.

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Display island.

From floor to ceiling height.

Create a modern style for the retail shop.

Shocking effect.

Material used: CK metal and light green lighting.

8.0 CONCLUSION

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All the above factors will affect the marketing of Calvin Klein, the marketing

strategies that the marketer formulate should be suitable to apply in the market. The

product, the place, the promotion and the price of the product should be set in a reasonable

and profitable range. Also in order to break through the conservative way of doing things in

Calvin Klein, one must first understand the different technique to successfully influence the

market of a product hence generate creative and new ideas to be imply a new marketing

strategy way that no one has yet in the market.

Calvin Klein brand name already stands for itself in the heart of many consumers, to

be able to generate and attract new potential customers, we have to think out of the box.

We have to try new ways to promote the brand or new product lines that slightly move out

of the conservation sophisticated and minimal design. This department can be a sub-line

created to stand-alone to test out the potential market.

Pushing lower price range items and higher price range items can also widen the

customer base but it has its own advantages and disadvantages for consideration. A choice

of maintaining the target consumer price, but creating a side-line of new and fresh design

lines is a good option too to broaden the customer base.

To promote the product, the company can choose an ambassador that gives a

healthy and sustainable impression to the pubic in order to attract them to buy the product.

Besides that, the company can also advertise it product through the internet and others

tradition means of advertising like newspapers, magazines, television and radio. Promotion

and membership cards are a good way to make the customer feel treasured and connected

which they will return for more especially giving out discount coupons from time to time for

members.

Generating more sponsorships for events and fashion shows are a great way to

promote the brand name. Calvin Klein still have room for expanding their business to reach

a higher height given time.

9.0 LIST OF REFERENCES

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http://en.wikipedia.org/wiki/Calvin_Klein

http://www.marketingteacher.com

http://apriorism.wordpress.com/2008/05/21/a-unique-marketing-strategy/

http://www.janhoo.com/skole/university/ckone.html

http://marketing-case-studies.blogspot.com/2008/04/ck-be-campaign.html

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Ck Marketing Research

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