Show your career with Reiss
description
Transcript of Show your career with Reiss
SHOW YOUR CARREER WITH REISS
Young Business Consultants – Marketing Plan Beijing
It is recommended to watch presentation full screen
Executive summary
A 3.6 million investment is needed to adapt the UK
experience stores the culture and build up the network to franchise. The joint venture will earn 6 million in revenue
with the campaign “Show your Career with Reiss.”
The joint venture will create the entry with a long term strategy of a franchise. This is targeted on the blue ocean middle class
with quality UK products.
How to create a global brand while
penetrating the Beijing market with a
joint venture? The Reiss brand will reach 3% of the
urban core with the marketing campaign “Show your career
with Reiss” in combination with a
total of 9 experience stores.
Reiss: From 1970 until now Reiss is
known as a individual, sexy and
stylish brand.
Reiss the brand Offers individual and
aspirational look at affordable prices, successfully combining
good design, quality and value.
Key values underpinning the brand’s image
creative, contemporary, essential, comfortable, affordable, directional
Established a reputation for good quality, fashion
forward, price competitive offerings
Time line
Concept has proven itself, time to expand abroad.
Aspirations The aspirations of this plan are
becoming a well known quality brand within the Chinese market of Beijing
The vision of Reiss
The mission With the local Chinese
partner Booshing will the UK concept stores of Reiss
adapt to the Chinese culture, a joint venture
with Booshing will create the start for a larger
franchise in Beijing China to penetrate this market.
Strategic intent Financial performance to
ensure a long term growth of the Reiss brand.
Overall objectives Create a global brand name
Reiss.25% increase of international sales and 8% internal rate of
return.
The vision for the organization
Establishing and developing the brand name Reiss
internationally.
Chinese objectives- Open 3 stores with the joint venture and have these running at 100% after
4 years.Adapt the UK concept .
- Open 6 franchise stores and have these up and running at 100% after 4
years.- Apply the marketing campaign “show your career” for 3 years.
- Create top-of-mind awareness with 3% of the urban core (550.000
people).
Review of what has been going wellThe middle class is growing but also the
spending power is growing. So people have more money to spend. But is it’s
important to know, are they able to pay Reiss’ product for more than one time? Not only the extreme rich have money to buy clothes that provide more than
just the basic need, warmth. The middle class are able to afford Reiss clothes and
this group will expand. Reiss has the possibility, knowledge and the resources
to take its share of this new and growing market
Market overview and situational analysis
Where are we currently?Reiss is Currently still in the UK. There the
concept has proven to be successful in both the men's wear as the women's wear.
One of the possibilities to grow is to expand to Beijing. Beijing will be a raising
city with raising economy in the future. There are many long term possibilities abroad. This will be an opportunity for
Reiss to meet its objectives.
Factors that have contributed to this
Branding – Introduce the brand in China, having a good name
Marketing – With the right marketing plans
achieve the objective
The experience store - the stores in Beijng
What has been going badly, in need of attention?
The fast growing market of Beijing should stay under constant
survaillants. The economy is growing really quick.
The corrupted government , the culture and the currency should all be under
constant research. Reiss needs a local partner to enter a new market. It is necessary to have the right network
with the right partners.
BEIJING AS THE NEW MARKETWith the strategy joint venture > Franchise
Internal analysis and measures
of capability++• Good quality products/services•Permanent and seasonal renewing•Development brand life cycle (not established for now)•Introduction product life cycle (Chinese already know about high quality •and fashion brand)•- Large target --•High prices•Web site• No, distributor takes the risk, Reiss has no influence on the distributor
Product and brand lifecycle positions
Resource analysisMen: Manager/Staff/Security
Money: 3,6 million pounds for 3 stores in the first 3 years
Minutes: Objectives 3years (2013/14) Opening 3 stores in 20111,5 year building brand1,5 expand the name by franchising
Reality checkNeeds and wants of
middle class are changing. Reiss can fill
this gap.
Reiss is capable to achieve this with the
right resources.With this, Reiss outforms
his competitors.
Portfolio analysis
Preliminary assessment: strengths/weaknesses
• Renewing and seasonal collection: never borded to see the same
clothes• Good quality: it explains the price !
• Start life cycleThese strengths apply to the middle class in Beijing.
How to improve the weaknesses? Website : can help to see what do the
shop propose The brand: not known in China, internet
can help High prices : the middle class is growing
and their spending power too.
China’s huge consumer market continues to become a magnet
for luxury European brands
Established brands in Beijing Swarowsky
Tiffany & Co Levi’s
Louis Vuitton Zara
External analysis++• Beijing = touristic city• growing power spending/middle class• enough partners to work with• expatriate people• cheap labour--• Imitation/fake• Us market• corruption• competitiveness of industry •Culture = different consumer habits• customers has not perception of Reiss
Preliminary assessment: opportunities/threats
- Enough partners to work with- Growing of the spending power and the
middle class- Enough space in China.
- Permanent renew of collection- Good known brand
- Quality of its products Critical Success Factors
BrandingChange/save the value proposition?
How to reach the Objectives
There are many opportunities with
the right resources, threats have to be secured by research
- US market is very important- Be careful about imitation and fake
- Adapt to the culture, size, and colours- Us market important
- High prices- Middle class is fragile since the social
security system is far from perfect.
Critical issues analysis and positioningSTRENGTHS WEAKNESSES
- Targeted Marketing and Personalization (+)- Rapid access and compare product catalogue (no need to move, customer can check the new arrival on the website) (+)
-Few selling area in the world and no in China (-)- Products targeted to professional and High level (-)
OPPORTUNITIES THREATS
-The Internet is a great opportunity in developing a marketing specialist, providing ways to see the clothes in a user and obtaining customer loyalty. (++)- government will be stable(+)- urbanization of farmers to cities (+)
- REISS can be associated to other name(-)- important US market (-)- amount of corruption will not grow, but is still there. (-+)-Middle class is fragilesocial security system not perfect
Entry strategy for the next 3 years•Joint Venture •Franchise•Promotional activities •Adapting the stores •Improving skills of management•Hiring staff
Bring the message: “Show your career with
Reiss”
Reiss’ products are higher than the average of market and it has a medium target,
but we can conclude that Reiss is the best on its segment (Street fashion and Exclusively fashion)
Probable customers moves:
Follow the early adopters
Growing middle classFashion victims
Starting business people
competitor moves and
developmentsCompetitors will react by new offers, special
sales and price changes.
Quick market adaption and new
advertisements on short term strategy
Principal assumptions underpinning the plan
CSF’s Marketing
Get in touch with market
BrandingValue proposition
Life Cycle projections• Sales: Keeps on increasing. By decreasing, start new seasonal
collection • Previous successful product is decreasing
constant renewal of product life cycle • Profit/ Unit: If brand is more known, profit will increase. The
more sold, the higher the profit.
What should Reiss do in order to kill
competitor?
High investments in the brand to create customer loyalty
Big idea: “show your carreer with
Reiss”
The target market and its characteristics
Women (age) Men (age)
15-24
25-34
35-44
TOTAL
15-24
25-34
35-44 TOTAL
Casual (%) 0 28 27 55% 0 25 20 45%
Formal (%) 0 25 25 50% 0 25 25 50%
Fashion (%) 35 30 0 65% 35 0 0 35%
Shoes (%) 20 40 0 60% 15 25 0 40%
Accessories (%) 10 40 20 70% 0 30 0 30%
Bags (%) 0 40 20 60% 15 25 0 40%
Jewellery (%) 0 90 0 90% 0 3 7 10%
- Urban core population of 18.54 million- Objectives: 3 joint venture stores+ 6 franchise stores/ 3% urban core / within 3 years -Young people are very influenced by fashion (15/24y)- Young active person (25/34y)-Women buy more than men - Reiss fit more to women needs than men needs- Targeting customers and consumers
Target segmentation ( 3%)
Market segmentation
of the urban core,divided in
segmentations
Preliminary market objectives
Existing products New products
Market UK
Market penetration The Reiss stores in the UK
Product development
Develop new fashion adapted to the citizen
of Beijing fitting, color and model)
Market
China
Market development: Middle class is an upcoming market.- Providing existing products adapted to people of Beijing.
Introduce the brand into the new market in China by having a strong marketing.
Diversification
Providing on the new market. introducing the brand Reiss developing a new market
Competitive stance and competitive advantage
The current market is people who are not aware of the brand Reiss. Reiss has to excel out of the others. By introducing the brand, it will attract the early adapters.
The competitive advantage is being an exclusive brand from the UK, unique brand because it is the first Reiss store
in Beijing. This is attractive for early adapters.
Profits forecast and sensitivity analysis
The Chinese market is evolving
faster than the UK market.
The positioning statement: Focus on target market
Reiss’ fashion is for young active, middle aged in China, focused in
Beijing. This target group wants/needs to
spend more time, money on their appearance, the middle class is
growing, so there is more money to spend.
The clothing piece (fashion) is a luxury good, a must have for every
young professional.That provides individual, stylish
and sexy properties and shows your career success.
The possible competitors for Reiss are: Levi’s, Louis Vuitton, Zara, Calvin
Klein, Polo Ralph Lauren
Product by Kotler
Marketing and competitive strategy and the competitive stance
Type of strategyFirst 18 months: Start 3 joint venture stores
with a local partner. Adapt the experience shop to the market of China
Next 18 months: go on with 6 franchising stores, sell the concept of the adapted experience shops
to franchisees. The big idea:Show that you are successful
by fashionable and luxury clothes
Marketing actions:Chinese Celebrity as the new face. Fashion showsBig store opening
Issues of differentiation/ competitive stance:
Competitive targets and prioritiesexcel in all the other competitors. Being unique.
PAY OFF/ SLOGAN: SHOW YOUR CARREER
3 things that would make a difference:#1: Work together with Booshing#2: Strategy: Start an experience shop to develop new target group#3:Collaboration with a Chinese celebrity for campaign on long term to stay in the market Gong Li, worlds famous Chinese movie star (crouching Tiger, Hidden Dragon)
Breakpoint thinking Inventing a new market: dress for the moment – for every occasion a new Reiss piece
Implementation Product Price
range ¥
place people promotion
Physical
evidence
Processmanageme
nt
- casual cloth
- formal cloth
- fashion cloth
- accessories
- bags
- shoes
- Jewellery
- ¥600 / 3.000
- 500/ 2.000
- 500/ 2.000
- 90/ 600
- 355/ 2.100
- 500 / 1.700
- 250 / 900
1 GBP = 10,1210
CN¥
1 CN¥= 0,0988041 GBP
In Beijing in a bigmall like
“LandgentCenter Mall 乐中心 “ or in a
famousStreetlike “WangfujingStreet “ .
- Manager:1 Chinese
and 1English
- Staff:Profession
alstaff,with skills
inHigh
fashion to
provideExperienceShopping
(menand
women)
-Newspaper ( free)
- Radio
- Television
- flyers
-Participateto FashionEventprepare afree fashionshow toIntroducethe brand.
Acustomise
dshop with
amixture ofChine andUK style.
A lot oflight to
seethe cloth,coloursand
people
as well aspossible.
The process willbe that the
customerwill look the cloth
es alone,somebodyfrom the staffhas to look athim/her all thetime and whenthe customeris hesitating, thestaff have to goand offer somehelp. The shopWill have toprovide a lot of fitting room sothere will be noline. And always1 cashieravailable.- Provide the best service
- Reiss is a good and trustable brand- Change clothes 15 days after buying it without washing it and show the bill. -Special customer phone line
Development of the brand in Beijng
Market mapping:Possible places for development of the brand: Shopping malls, shopping street. In total there will be 3 stores in the centre of Beijing. Competitor advantageFills the gap for the middle class
Selling propositionSelling individual, stylish and sexy clothes.
For every occasion, dress for the moment!The bases for differentiation and competitive advantages:strong branding, being unique
Leveraging assets and strategy
The delivery of greater value: when the brand is familiar with the market group, China can expand to more stores.
Show your career by
wearing Reiss
Competitive advantage, selling proposition and brand values
Budgets The share of the joint venture 52% to the
Chinese partner and for 48% for Reiss. 25% increase of sales means £ 5.220.750. UK stores make £ 20.000.000 in sales with 25
stores. This is £ 800.000 per store. The assumption is that the joint venture and franchise stores will run up to 20% in the first year, 50% in de second, 90% in the third and 100% after this period.
Joint venture opens 3 stores in the first year. The franchise opens 6 stores after 18 months.
One store year 1 £160.000 (20% of 800.000)
Year 2 £400.000(50% of 800.000)
Year 3 £720.000 (90% of 800.000)
3 stores and 3 years £ 3.840.000 in revenues
Investment•An investment of £ 2.5 million is needed per store. •A combined £ 7.5 million investment.•£ 7.5 mil/100% X 48% = 3.6 million
for 3 stores in Beijing.•This investment covers promotional activities, store costs, store development, franchise developments and overhead.
Franchise contractThe franchise will be a hard franchise to keep control over the brand. This means that:
The initial fee of £ 50.000Royalties of 5% of the gross revenue Marketing fee of 10% of the gross revenue.
•90% of assortment is controlled by Reiss
90% of the shop is designed by Reiss
90% of the price is maintained by Reiss
Down mark after season is possible
Risk management•The Chinese Yuan will rise in comparison to the UK Pound because of the growing economy of China and that the Chinese government has kept the Yuan low. •This trend will be combined with 50% hedging of the money earned in China. Funds will be transferred to the UK when the currency is high for the Yuan so Reiss gets more Pounds. To apply risk management, the other 50% will be transferred every quarter. •More risk management contains factoring by an UK bank from the franchise companies. This is done because Reiss gets the receivables right away and is able to reinvest and focus on their core competence, fashion. An irrevocable letter of credit will be used for transactions. The Chinese partner will make sure all the paperwork is correct with the bank.
Review
Are the objectives reachable?25% increase of international sales, £ 5.220.750
The franchise will generate £ 6 million in sales revenues the first three years. This is reachable because Reiss will not enter a red ocean with killing competition but a blue ocean where market share is available with the growing middle class.
Have al stores up and running in four years.The marketing idea of showing your career will make sure that Reiss sticks out in the market overflowing with people how have more money than ever before. The farmers have found a better paying job and have the culture of showing your money.3% of the urban core (550.000 people)
This culture of showing what you have is an important assumption for Reiss. This is the basis of the marketing plan and essential for the success of the 9 stores. The cultures needs to be open for the UK clothes and Reiss needs to be open to adapt the clothes to the culture. The profit will be generated by meeting in the middle.
Action Plan
STEPS TARGET - Present the product - Show that the product is accessible to all - Quality product - Positioning on the Chinese clothing market - Reach the 25% and 8% within 3 years- Open franchise shops
- Young workers - Person paying attention to their image - Customer of elegant, fashion and formal
clothes
Internet like social and specialized website
(Part 25%)
Television during
entertaining show
(Part 15%)
Print campaign(Part 35%)
Sponsoring :fashion show
or special event(8%) Shop promotion
(7 %)
Implementation and control•The three concept stores will be managed by a UK manager and
a Chinese manager to convert the UK style to a more local concept. Adapting the UK experience store concept to the
Chinese shopping culture.
• A local partner will do market research to provide valuable information for the adaption process. Which clothing lines work
and which not?
• Actively creating a Chinese business network for potential franchise partners and to avoid problems with corrupt
authorities. Increase market coverage by using the established network to franchise.
• Creating strong guidelines for franchise shops to market the brand name Reiss. Reiss will control 90% of the stores products price
and design.
• To increase efficiency, standardization of the concept will be used for the franchisers.
All these things combined give Reiss high control.
Contingency thinkingThe competitors of Reiss all
deliver the same core product (clothes), but in a different
package. Because Reiss has many years of experience in a
competitor market in the UK, the company will be able to survive sudden changes in the market. The designing of the clothing is already adapted to a changing
fashion world.
Potential problems with the Chinese market will
be resolved by the Chinese partner and the
established network.
A threat that every company has is if the product would not catch
on in the Chinese market. The customer does not want to
buy the value that Reiss delivers. To avoid this the joint venture will invest money and time in market research to develop the brand. A long term campaign instead of
short term.
A total different potential threat that could be fatal to the success is the
cooperation with the Chinese partner. The different culture could clash in
ways of management and approaching the customer. Time and resources will be invested in creating a strong long term relationship with this partner. A characteristic of Chinese is that they value relations. Once the cooperation
is working, the locale partner will value Reiss. A worst case scenario could be: the Chinese partner buys out Reiss or
Reiss would buy out the partner.