Introducing Lilly Pulitzer to Japan
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Transcript of Introducing Lilly Pulitzer to Japan
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Part One:Country Marketing Environment Report
“Live every hour like it’s happy hour!” –Lilly Pulitzer
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+ Defining Historical Events 660 B.C. According to legend, Emperor Jimmu
became the first emperor of Japan He was the descendent of of sun goddess Amaterasu,
and was said to live 126 years
1635 The Japanese break ties with all foreign countries for 200 years under a policy that was meant to protect the culture from European influence and war
1914-1918 Japan declared war on Germany
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+Historical Events Continued…
1940 Japan entered WWII where they occupied North French Indochina
1945 Bombings of Hiroshima (15,000 deaths) and Nagasaki 75,000 deaths by the U.S.
**Those numbers are considered conservative**
1995 Japan becomes apart of the World Trade Oranization (WTO)
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+International Trade History Edo Period 1603-1868 developed transportation
routes by road and water
Meji Period 1868-1912 Japan emerged as most developed country in Asia
After WWII overall economic growth from the ‘60s to the ‘80s due to worker productivity, government, and technology
After WWII international trade relations were driven by lack of domestic raw materials, and desire to catch up to the West.
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+International Trade History The Lost Decade collapse of
the property bubble in 1989 causing economic stagnation, deflation, and high unemployment
They have struggled with recession on and off since 1989 until 2011
As of 2012, Japan is the 3rd largest national economy in the world (after U.S.A. and China) in terms of nominal GDP
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+HumorThere is no word in Japanese for “sense of humor.”
Historically, jokes were centered around making fun of China
Their jokes are very pun based
For laughs, they enjoy scaring people. There have even been TV shows centered around it
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+Literature Early literature was influenced by Chinese and Indian
literature
“Classical” Literature/The Heian Period (794-1185) Referred to as the golden era of art and literature Genji Monotgatari Kokin Wakashu Sei Shonagon
Konjaku Monogatarishu (circa 12th Century)
The Tale of the Heike (13th Century)
The Complete Haiku (17th Century)
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+Works of Art The Great Wave—Katsushika Hokusai
Sansui Chokan—Long Scroll of Landscapes—Sesshu Toyo
Painting of a Cypress—Kano Eitoku
Abe-No-Nakamaro—Tomioka Tessai
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+Cultural Plays Kabuki is the most type of
theatre Shunkan Kanadabon Chusingura Migawari Zanzen
Noh has been performed since before the 14th century Kyogen is a type of Noh that
is shorter humorous pieces
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+Cultural Songs 2nd largest music market in the world
Traditional Japanese music has three main types: Instrumental Court Theatrical
Kabuki Gidayubushi (Joruri—narrative music) Shimoza Ongaku Noh
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+National Heroes
Mineko Iwasaki—Infamous Geisha
Hirohito—Longest reigning Emperor
Masako—Crown Princess of Japan
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+Heroes Continued…
Oda Nobunaga—Samuria Daimyo
Miyamoto Musashi—Warrior
Yoko Ono—Peace Activist
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+National Sports Sumo Wrestling
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+Traditional Dress:
Kimono
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+Ethnic Groups, Sub-Groups, Language
98.5% Japanese, .5% Koreans, Chinese .4%, other .6% Ministry of Justice in Japan has no official breakdown of
ethnic groups in Japan
Japanese-Filipinos
The Ainu aboriginal tribe
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+Three Most Important Holidays
Shogastsu New Year
Setsubin—The bean Throwing Festival
Hanami Cherry Blossom Festival
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+Cultural TraditionsGeishas
Karaoke
Japanese Bath House
Tea Ceremony
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+Ethics and Morality
Keiei= business in JapanStands for “making effort to develop
societies harmoniously and raise the well-being of the people”
It is always first discipline, then economic practices
Inseki Jinin (take responsibility and resign)
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+Demographics and Geo-Demographics
Population: 127.6 million
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+Family, Values, Issues Extended Family: several
generations living and working together on the land
Nuclear Family: father works, mother at home, and approximately 2 children for middle/upper class Lower class accepts that women
work
Multiple Family Patterns: no one model to follow in society to gain acceptance EX: divorced, re-married, married
w/o kids, gay/lesbian, etc.
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+Educational System 6 years of public elementary school
3 years of junior high school
3 years of high school
2-4 years of university
Education is highly valued by the Japanese, with an average of 15 years of education per capita and a literacy rate of 99%
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+Religious Systems Japanese enjoy full religious freedom
Shinto and Japanese Buddhism are not separate religions, but rather a complex religious system
One will fine Christianity, Islam, Hinduism, and Sikhism in Japan
They are not so much religious, but spiritual
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+Political Structure
Prime Minister Naoto Kan
Emperor Akihito and Empress Michiko
multi-party parliamentary representative democratic Constitutional Monarchy where the Emperor acts effectively as the symbolic Head of state, and the Prime Minister acts as theHead of government and the head of Cabinet which directs the executive branch.
Japanese Political System, the House of Councillors is the upper house of the Japanese Diet, and is composed of 242 members. The term of office for the elected members of the upper house is six years. The House of Representatives is the lower house, with 480 members.
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+Legal/Financial Environment
1 Japanese Yen = 0.0086 US Dollar
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+Financial/Banking System
traditional banking system was segmented into clearly defined components in the late 1980s: commercial banks (13 major and 64 smaller regional), long-term credit banks (7), trust banks (7), mutual loan and savings banks (69), and various specialized financial institutions
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+Economy Strengths
• High quality and good designs of modern industrial products
• Japan has a leading advance in technology• The strength of Japanese companies consists in the
strong ties of trust within their organizations Weaknesses
• Japan is lagging behind China, South Korea, Taiwan, and advanced western countries in regards to expansion overseas
• They have become less competitive in the world in economic development
• Their population is aging which is impacting their effectiveness, productivity, and performance
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+Economy Major Industries: manufacturing,
construction, distribution, real estate, services, and communication
Agricultural: only 2% of GNP, rice, sugar beets, vegetables; pork, poultry, dairy products, eggs, fish
Standard of living, income levels and distribution: Population below poverty line:
16% Distribution of family income:
37.6% Household income: lowest is
1.9%, highest is 27.5%
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+Economy Unemployment Rate: 4.1%
GDP Purchasing Power Parity: $4.729 trillion
GDP Official Exchange rate: $5.007 trillion
GDP Per Capita: $37,100
1 Yen is equal to 0.0085 U.S. Dollars
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+
Part Two:Country Marketing Plan
“I didn’t set out to be unusual or different. I just wanted to do things my way”- Lilly Pulitzer
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+History In 1959, Lilly opened her first
boutique in the Vias off of Worth Avenue in Palm Beach, Florida inspired by Palm Beach and resort wear.
She meant for the stores to be silly, bright, and reflect her carefree lifestyle.
Previously, she had sold oranges and juice but later went into sundresses and spill-proof shift dresses.
The idea was to create dresses that represented fun and partying- hence the crazy prints (from elephants to monkeys drinking mimosas) but also represent high prep fashion and class.
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+History Continued… Lilly Pulitzer’s strategy for generating sustained profitable
growth is that it is a lifestyle brand and a company that evokes a strong emotional response from consumers.
The 2013 market was slow-moving due to the fact that consumers were becoming more cautious in their retail purchases.
However, Lilly Pulitzer and the other companies underneath the umbrella of Oxford (Tommy Bahama, Lanier Clothes, Ben Sherman, and Oxford Golf) were able to achieve a net sales growth of 7% and adjusted operating income growth of 8%.
Lilly Pulitzer itself grew with a 13% net sales growth. It had almost doubled in size from 72 million of sales in 2010 to 138 million of sales in 2013.
Lilly has moved from Palm Beach to completely dominating the East Coast and middle of the USA with some stores in the West.
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+Lilly Pulitzer’s domination of the East
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+History Continued….again!
Lilly Pulitzer’s core business competencies are its unique store designs (3D crabs and oranges on the wall, hand-painted prints, etc.) and emotional appeal through Lilly’s life story and her values.
Lilly Pulitzer primarily markets itself towards young women and girls with some products geared towards men.
It is competitively distinct in just that- the fact that it has multigenerational appeal. This is something we would like to carry over to Japan as well, hoping that the brand peaks interest in both younger and older woman alike.
Although Lilly has no global market positioning to date, we are hoping to begin in Japan as there are many patterns that would flatter and excite the Japanese market as well as tap into family values/tradition and the quick-moving Japanese economy.
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+Mission and Vision
Lilly Pulitzer does not appear to have a mission statement although it appears that their vision is to bring together multiple generations of “preppy” women through their use of aesthetics, fun, and values in their stores and dress.
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+Goals Domestic Goal: Maintain an average of
opening 5-6 stores every year and slowly spread across the West while exceeding 200 million in Retail Sales Value come the end of year 2015.
International Goal: Successfully introduce Lilly Pulitzer to Asian woman by emphasizing mother/daughter clothing, going in with a high price to emphasize class, and strengthening family values.
Goal for Japan: Introduce Lilly Pulitzer to Tokyo, Yokohama, and Osaka and expect a 5 million Retail Sales Value for all three stores in year 2015.
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+Goods to be marketed and why
The three Lilly Pulitzer stores will begin in the Spring of 2015, around late March/Early April around the exact time the cherry blossoms bloom.
The stores will be hand-crafted as they always are, with added tastes from local artists. All merchandise will be shown (Shift dresses, sun dresses, tops and bottoms, bathing suits, stationary, and bed spreads).
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+Marketed goods continued… There will be emphasis on the “Cherry Blossom
Print” which will be the highlight of the opening and reflect itself in mostly the stationary, shift dresses, and bed spreads.
The five different prints will be shown: 1. Bright Navy Cherry Mine 2. Hotty Pink A Thing Called Love 3. Bright Navy Cherry Picker 4. Bright Navy Cherry Wine 5. Resort White Flowers and the Trees *All are variations on the cherry blossom print
These prints will be shown in the advertisements at the end.
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+Market Analysis
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+Transportation
Transportation in Japan is modern and highly developed
175 airports: there are three main international airports in Tokyo, Osaka and Nagoya.
27,182 km of railways: railways are a major means of passenger transportation
1,210,251 km of roadways; there are 45 million cars in Japan, for a ratio of 350 cars per 1000 people
22 major sea ports
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+Communication Phones: excellent domestic
service (high level of modern technology) and excellent international service (numerous submarine cables)
TV & radio: 6 national terrestrial TV networks including 1 public broadcaster; the large number of radio and TV stations available provide a wide range of choices; satellite and cable services provide access to international channels.
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+Domestic competition There isn’t any other company in Japan that focuses on
dresses like Lilly Pulitzer makes.
The trend in Japan in Kawaii clothes, and some Japanese online stores such as MinkyShop or Syndrome Store sell dresses that might resemble, but they don’t pose a threat because they aren’t big companies.
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+International competitors Virtually no competition.
Lilly has a unique product offering because the brands are so special.
We are differentiated from the competition and uniquely positioned in the market.
We sell more than just a dress, we sell our brand, this is what differentiates us from competition.
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+Market Potential
26.3 million people
Lilly Pulitzer’s operating results are impacted by seasonality and the sales depend on the time of year. The following table presents the repartition in % of net sales and operating income for Lilly Pulitzer by quarter
for 2012:
Current net sales (in thousands):In 2012: $122,592 In 2011: $ 94,495
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+Sales ForecastWe expect sales to rise 30% the first year, then an additional 15% the third year and 15% the fifth year:
Net sales forecast (in thousands):
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+Market Potential: Prospective Buyers Given the market size of 26 million
girls and women ages 5-49, prospective buyers would be teens and women buying for themselves and their young daughters
The market size for people in their 20s is the largest. This is because most of them still live with their parents and don’t need to pay living expenses. The largest market for most countries is in the 40–year old age group.
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+Consumption Characteristics
The Japanese are very loyal to foreign prestigious fashion brands such as Louis Vuitton and Gucci. The sales of these companies have been growing steadily with support from young consumers.
Most influenced by fashion magazines and retail-oriented sources of collecting fashion information such as store displays and sales people
23% of consumers in Japan shop for most of their clothing at specialty stores, followed by off-price stores (22%), department stores (17%), and chain stores (15%)
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+Market Trends 2012 market grew 2.3% for Japanese apparel retailing
There were many examples of success, particularly among the top 100, including overseas brands such as H&M
Sales are being boosted by consumers buying before the increase in consumption tax to 10 percent in April 2015.
Prices are rising due to low yen, higher raw material and labor costs.
Japan remains a huge fashion market that is profitable, stable, with high levels of trust, and plenty of unmet demand and new markets to provide growth for years to come.
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+Product plan
We won’t be making any product changes, however we will have a lot of emphasis being placed on certain patterns- such as the cherry blossom patterns.
The Lilly Pulitzer brand has a distinct, unique & iconic style, which is why we won’t be making any modifications to our products or to its label.
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+Market penetration strategy
Our future goal is to be a global company, as we want to be present in many countries. We market our products through the use of the same coordinated image and brand in all markets.
Right now our company is an international company, we have no investment outside of the US so our strategy will be exporting for now. We are also counting a lot on online sales.
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+Promotion plan We will promote our brand in magazines so
that we can reach most of our potential market.
Metropolis Aera (Japan’s #1 English magazine) (major Japanese magazine)
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+Promotion plan We will also have TV and radio commercials on all
major networks.
We will put ads on the internet and social networks to reach girls and young women.
An ROP (Run of Paper) Advertisement will looks as follows…
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+“We love it!”
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+Potential Commercial/ Spring Collection*Zero to brief dialogue is used is usually used in Japan
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+Distribution Plan
Retailers......
The way goods are sold…
Location………
Role of wholesalers……
Transaction relation……
Nationwide chain stores
Specialized (or standardized)
Suburban shopping centers, roadside, railway station building
Minor
Simple market transaction
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+Distribution Cont’d…
Central warehouse in Tokyo
Railways will be main mode of transportation to central warehouse
Trucks will distribute inventory to other major cities
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+Pricing Plan
We will use the skimming method to price our products- Launch products at premium pricing for the market segment
Lilly Pulitzer’s closest competitor, Uniqlo, is set to raise prices 5% before Fall/Winter line debut this year. Biggest clothing provider, though casual wear
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+Calendar/Timeline
Nov 20th, 2014- Apply for Licensing in Japan
December 30th, 2014- Receive approval from Japanese government
January 1st, 2015- Launch Advertisements to be run for one year.
February 3rd,2015- Start store construction in Tokyo, Yokohama, and Osaka
March 15th, 2015- All sales associates/managers hired and trained
March 30th, 2015- All stores built and ready for grand opening
March 31st, 2015- Lilly Pulitzer opens with Cherry Blossom line just in time for their cherry blossom trees to bloom!
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+Sources: http://www.nber.org/chapters/c8664.pdf
http://www.businessoffashion.com/2013/12/japans-apparel-market-is-finally-growing-again.html
http://www.japantimes.co.jp/news/2014/06/10/business/corporate-business/uniqlo-set-raise-prices-summer/#.VG2mzfnF_O4
https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html
http://afe.easia.columbia.edu/japan/japanworkbook/economics/factshe.htm
http://www.globalsherpa.org/japan
http://www.oecdbetterlifeindex.org/countries/japan/
http://www.japan-guide.com/e/e644.html
http://www.japantimes.co.jp/opinion/2013/05/17/commentary/japan-commentary/enhancing-japans-strengths-remedying-its-weaknesses/#.VGz2nvmG_9U
http://investor.oxfordinc.com/releasedetail.cfm?releaseid=753852
http://files.shareholder.com/downloads/AMDA-EGPX7/0x0x665078/DABDB367-1E10-4720-A7A5-45895D65B537/2012OxfordAnnualReport.pdf
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+Sources Continued: http://www9.ocn.ne.jp/~aosima/english-yuisyo.html
http://intranet.ames.cam.ac.uk/jbib/
http://www.datesandevents.org/places-timelines/29-timeline-of-ancient-japan.htm
http://www.aasc.ucla.edu/cab/200708230009.html
http://www.lillypulitzer.com/content.jsp?pageName=lillyattitude
http://files.shareholder.com/downloads/AMDA-EGPX7/0x0x768823/0F5C66E8-6F2A-4451-800F-34BB5F9EC75D/2013OxfordAnnualReport.pdf