Strategic Marketing Plan For The French Fashion House Marketing Essay

Strategic Marketing Plan For The French Fashion House Marketing EssayIn the ninetys the brand took a sensitive direction diversification and internationalization. From now, the companion offered a wide range of product so women can dress from head to ft in Caroll. Also, the French company aimed bigger shops, affiliations, and franchises locations in department stores appe atomic number 18d worldwide.Thanks to its strong devil figures growth for the past few coarse time, mainland china became the favorite impertinently destination for companies. Shalendra Sharma, associate professor of political science, University of San Francisco says that with an estimated 300 million butcherse consumers with much disposable income, it is an opportunity that should not be missed2, regular(a) if the flow economic environment requires caution. According to the CCI and Cotton Incorporated Global Lifestyle Monitor Survey, apparel tops the list of items Chinese consumers prefer to shop for (31 %), grade that women are outsizely much interested than men (39% versus 22%).Figure 1 Lifestyle Monitor SurveyDefinitely, chinaware represents a great opportunity for robes retailer. The coun move made its name and growth by assuring the role of world supplier, curiously for c big moneyhes. Since the thriftiness became better, Chinese want to enjoy more Hesperian lifestyle. That is why Caroll explicateed a growing interest for Chinese grocery. until now, Chinese are specific needs, expectations and behavior that Caroll must witnesss and faces. The aim of the following synopsis is to try to define how Caroll could tackle into the middle market in chinaware, victimisation internal and external analysis, outlining step ups and opportunities for the brand.Situation AnalysisAn academic report written by several(prenominal) professors, Heiko Gebauer, Thomas Fischer and Elgar Fleisch, name Entering the Chinese mid-market segment key to long-term success? flecked out major mistakes when entering the Chinese marketMisunderstood of the Chinese consumers, their needs and expectations.Companies overestimate their view value.Managers miss opportunities in focus on few cities only such as Beijing or ShanghaiIn order to deal those issues for Caroll, I ordain design a strategic trade plan consisting in an analysis to match market opportunities to the resources and capabilities of the company. In this case, I will follow different steps to establish a SMP for CarollEnvironmental Analysis (PESTEL)Identifying CustomersCompetitorThe company in its environment (Porters Five Forces and SWOT analysis)The companyMarketing Mix The 4 Ps and 3 Vs repute Creation ( prise Chain, Boston buffet and Ansoff matrices)The analysis is ground on information found on Internet and on my personal experiences as women clothes consumer and Asiatic person and knowledge since I studied how to do melodic line in chinaware during cinque month at the SEM Tongji University in Shan ghai in 2011.PESTEL analysis focuses in following area political organisation and stability, economic stability, socio-cultural practices, technological advancements, environmental efforts and profound and judicial systems. It gives a global view, the big picture, of the environment in which the brand is interested to. It provides a strong framework of opportunities and risks.P for policy-makingPolitical advantagesPolitical disadvantagesNot RelevantGovernment stabilityLabor natural lawPolitical stabilityRegulation/DeregulationSocial/Employment LegislationTariffsTax polityTrade RestrictionsBureaucracyCorruptionFreedom of the pressEnvironmental lawGovernment typeChina is based on communism political system with on unique caller, the Chinese Communist Party. Because of the unique party China is not seen as a real democratic inelegant by externalers. however the country enjoys political and government stability thanks to strong control and obedience. Indeed, no substantial polit ical opposition groups exist (Central Intelligence Agency, 2012). So, even if slightly issues exist like ethnic unrest in Tibet, they do not represent threats to its political stability.Since Mao Zedong, former president of China, the country uses neatist economic system in order to make China the first economic power. The path is still followed and the government decisions are design to ensure continuous economic growth. The country shows goodwill, regulations, tariff and tax policies are favorable to business and especially for foreign companies reduction in taxation to foreign companies, creating designated free trade zones such as Shanghai and Shenzhen, investing in public amenities and facilities to draw out foreign investors, and continuously liberalizing their trade regulations to create attractive and impactful investment centre.Nevertheless, decadence is strongly insert in China government. It is called the East Asian paradox countries displaying exceptional growth re cords scorn having thriving corruption cultures (China economic review, 2012).E for stintingEconomic advantagesEconomic disadvantagesNot relevantConsumers Disposable IncomeEconomic GrowthGDP/GNP growthGlobalizationLabor equal and supplyExchange rate stakes ratesInflation rateBusiness Cycle StageLikely Economic ChangeUnemployment RateAs I said earlier, China select for open market concept. Chinas continuous and gradual reforms started with phasing out agriculture activity followed by liberalization of prices, fiscal decentralization, open banking and financial system, creation of share market, large amount of private sector investment, and large foreign direct investment (Central Intelligence Agency, 2012). Thanks to its efforts, in 2010, China became the number two world economy in term of size. China benefits from a solid two figures growth even with the crisis.However, the country faces inflation and increasing local government debt which could represent a threat regarding gove rnment gifts for company and reduce the buying power of consumers. One of the main China economic challenges is to encourage local demand that is why the governments twelfth Five-Year Plan, adopted in March 2011, focuses on the need to affix domestic consumption in order to make the economy less dependent on exports in the future (Central Intelligence Agency, 2012).S for Socio-CulturalSocial advantagesSocial disadvantagesNot relevantAge distributionCareer attitudeEducational structure status to workSocial mobilityCultural taboosHealth ConsciousnessPopulation Growth RatePerception of safetyEmployment patternsChina has 1,344,130,000 people and reached a 7.298 meg USD GDP in 2011 (World Bank, 2011). In 2012 73,5% of the people is aged from 15 to 64 years old, 51,4% male and 48,6% female and the median age is about 36 years old (Central Intelligence Agency, 2012). In 2010, 47% of the population lives in urban areas and China courses to become more and more urban. Indeed, people move t o cities expression for business and life improvement.Official language is mandarin however, there are more than 100 dialects in China. Students and executive employees are encouraged to learn English. When I was in China, I notice that the language was really important for Chinese. For example, you will get a different price when negotiating if you speak English, Chinese or the local language.The Chinese culture is influenced by Confucianism, Buddhism and Taoism. I think the about notable Chinese word is Guan Xi, meaning relationship business practices in China focuses on construction relationship. Also, as for many Asian cultures, the image is very important in China. They prevail a strong sense of shame and pride.Related to the importance of the image, Chinese, especially the upper and middle class society, have developed a sense of materialism where owning ( extravagance) goods and designer items give them status in the society. Deng Xiaoping, one of the important figures i n the opening of the marketsaid to get rich is glorious. Contrary to western people, Chinese freely discuss about money, how much they earn, what they have T for TechnologyTechnology advantagesTechnology disadvantagesNot relevantImpact of Internet (reduce communication costs)Rate of technological changesRD activitiesTechnology incentivesTechnology transferDegree of mechanisationEmerging technologiesTo be honest, technological advancement is lower than in developed country. However, China does not ignore the importance of technology and has invested and still invests a lot in engineering, telecommunications, and manufacturing and information systems. China took advantage that many high school end technology companies as Apple or Huawai are established in China to acquire new technologies. Indeed, when a company wants to settle in China, the law requires that half of the managers must be Chinese and part of employees too. Moreover, the government is trying to attract brains in China in order to not only copy others technologies but to develop their own. As for many areas, China wants to be the first and the best.E for EnvironmentalEnvironmental advantagesEnvironmental disadvantagesNot relevantEnvironmental consciousnessWeatherClimate changesThere is more than one documentary on contaminant in China the country suffers from its rapid growth and the activities linked. Even if the Chinese government thinks that environment is a serious issue that must be handling. However corruption and wish of using made environmental control difficult. It could either be on opportunity (cost) and a threat (image).L for juristic.Legal advantagesLegal disadvantagesNot relevantEmployment lawAntitrust lawConsumer lawGeneral frameworkHealth and Safety lawsDiscrimination lawChinas legislature is generally derived from the soviet and continental civil code of principles. China has set up international trade and economic arbitration in order to attract foreign company and develop i nternational business. However, Chinese prefers the use of arbitrator it represents a saving time (Central Intelligence Agency, 2012).According to me, the legal point represents the biggest threat for doing business in China. When I study in Shanghai, I had the chance to have a class about Chinese laws and I can affirm that the law and its application are designed to advantage Chinese part, always. For example, only a Chinese lawyer that is to say a lawyer who was graduated in a Chinese Law School is competent. Also, several cases show that it is usual that foreign court decisions are not en vehemence by Chinese courts.The PESTEL analysis of China point out that it represents a great opportunity for Caroll to tap into the Chinese market huge potential, increasing buying power and middle class, sense of materialism, development of infrastructures, goodwill of the government Several other fashion clothes brands already entered the Chinese market and has registered high sales and prof itability.Nevertheless, threats are as big as opportunities. As I just said, it is not good to have issues in China. I remember a story that my Chinese friend told me in China, cars have the priority over pedestrians. He told me to be careful, because in the case a car hit me, even if the driver past the red light, as I am a foreigner I am wrong and all Chinese will defend the driver (strong collectivism value). I think that this point all told highlights that the Chinese culture is way different from the French culture and this represents the second threat Caroll does not know the market and consumers.Exhibit 2 outgrowth mid-market households in China in millions. Boston Consulting GroupThe exhibit above shows that middle class are emerging, the study conducted by the Boston Consulting Group (2010) estimates that in 2020 about 69 million people will be considered as middle class, more than the French population Furthermore, it has been forecasted that by 2025, this segment will i ncrease to 590 million with a whopping US$ 1.3 trillion haping power.Helen Wang, author of The Chinese Dream The Rise of the Worlds Largest Middle Class and What It Means to You said that to be middle-class in China the person would earn among $10,000 and $60,000 a year. Considering the cost of Chinese life and living standards, much lower than in western countries, a middle class can afford pretty huge apartment, longer and better education and spends in entertainments and apparels. These citizens are aroundly urban, engaged in attend tos and have a modern world view this new middle class represents China as a consumer society. As we saw earlier, the image is an important value for Chinese that is why they spend in good grapheme products or non-essential consumption in order to show their success (status). Families tend to buy more discretionary and small luxury items and the share of the household budget that goes food, clothes and other necessities shrinks (The McKinsey Quar terly, 2006). Mostly, middle class consumers are looking for famous product which showed they are part of the community and meanwhile tailored product they need to keep their personality. With increasing product knowledge and surging purchasing power, mainland consumers in China are developing higher demands for quality and comfort in clothing. They usually prefer apparel made of natural fabrics (International Trade Centre, p.50, 2011). According to the China Textile Development Report in 2010, Chinese consumers ranked comfort at the top priority.Even if they are able to afford more noble-minded product, middle class consumers still but cheap product. They consider cheap and expansive products strongly different and pay attention to details (distribution channel, store, services). It will be a huge mistake to think that they are not price consciousness.J. Roy says3, Most people only buy clothes online when they are looking for something cheap, not when they are looking for style. I t would be a mistake for an American retailer like J. Crew or Gap to emphasize e-commerce over their in-store shop experience, customer experience is highly appreciate by Asian consumers. According to the Global Monitor, web sites are used to read customer reviews and compare prices (59%) and swan the latest styles (58%), followed by buy clothes (55%).Also, customers tend to be more loyal to a brand. It is important for Caroll to create a good relation with consumers even if the maximal potential is not reached yet, Guan Xi. Chinese consumers develop a strong environment conscience, an important constituent to consider if Caroll want to create a long term relationship.Understanding and adaptation are key words, for example Levis had launch a specific line designed specifically for Asian physiques and tastes, with different cuts and tighter fits. It plebeian knowledge than Asian people are smaller but it another thing to redesign clothes to fit to their size. I think that is diffi cult to understand the Chinese middle class needs and expectation only based on studies. I had the chance to study with Chinese student in marketing that help me to better answer to this part but the analysis is not enough deep.Y. Chen4says that given the competitiveness of the market, it is only advisable (for retailers) to enter China if they are serious about it and also put required investments behind it.The domestic clothing market in China is dominated by brands of European origin and other imported products, such as Giorgio Armani, Cerruti 1881, Hugo Boss, Dunhill, Chanel, Dior, Ermenegildo Zegna and Salvatore Ferragamo. The middle and low end of the market has a product mix of foreign and domestic brands, with most of the goods being manufactured in China and least developed countries (Bangladesh, Egypt, Morocco, Portugal, Spain, Turkey, and Viet Nam) such as Nike, Adidas, Tommy Hilfiger, Zara, CA and HM. However, we can notice a growing competition from Chinese brand as Bos ideng, White Collar, Kaiser, Lily, Girdear, JNBY, Peacebird, Sierli and Gloria (International Trade Centre, p.35, 2011).In 2001, the China accessed to the World Trade Organization and after a short period, foreign brands started to target Chine 2007 for HM, 2008 for Zara and Marks and Spencer, 2009 for Tommy Hilfiger Competitors to Caroll are already established in the Chinese market and so get a great advantage since Chinese consumers are more loyal and focus on long term relationship.Figure 3 Main foreign Apparel brands in the Chinese market (source ITC, 2011)Figure 4 Main domestic Apparel brands in the Chinese market (source ITC, 2011)SWOT MatrixStrengthsWeaknessesInternational experience, in particular in Japan, first contact with Asian cultureTrendy clothesWorks with world famous fashion clothes designersComfortable productsGood quality productPrices policy, price of Caroll clothes are a little bit too high for middle class but far too low to be consider as luxury clothesMany unhappy opinion on the quality of service (customer reception, information )Fails to create a sense of belonging to a community despite different attemptsOpportunitiesThreatsIncrease of the middle class, the targetIncrease of purchasing power impression labor and estate costGrowing interest for clothes obtainOpen market, government policies to attract foreigner (taxation, tariff )Strong established competitionOpen market = upcoming competitionLegal system and corruptionInflation = raise of costUnknown in ChinaI will not spend more time on opportunities and threats since we already spend times on it with the environment and competitors analysis I will only repeat that opportunities are as great as threats are big. The SWOT analysis tends to demonstrate that Caroll has several strengths in order to fit with the Chinese demand. However, the company has to work hard on consumer experience and price that represent key drivers for change. at once again, adaptation is a key solution. In another field, we can take the example of Best Buy, an electronic retailer pretty successful who failed to tap into the Chinese market. Indeed, bargaining is a strong value of Chinese culture and the company didnt give the possibility to bargain in Best Buy Store. Within two years, the brand closed all its stores in China since it was unable to satisfy Chinese consumers.Porters five forces prototypeThreat of new entrants risque threat scurvy entry barriers with encouraging government policies, economy of scale and other costs advantages and really attractive market.Switching cost almost inexistent.In balance, significant capital requirement and well established huge players.Sustainable industry growth rate.Supplier bargaining powerModerateHigh supplier concentration (in 2008, China represented half of textile and clothes supplier).Low suppliers differentiation.Low switching cost.In balance, notable threat of buyers integration (growing Chinese competition).Low dependence with buyer s. effort RivalryHighly competitive marketHighly concentrated market with numerous and diversified competitors including some huge in size (like Zara or Mango).High fixed cost (physical store).Almost no switching cost.In balance, high industry growth rate in a product differentiation model with significant customer loyalty.Low exit barriersCustomers bargaining powerModerateConsumers highly sensitive to consumers experiences and differentiation.Demanding market.Low switching cost.In balance, significant customer loyalty.Low buyers volume.High number of buyers relative to sellers.Threat of substitutesLow / Moderate threatEnormous choice of substitute at lower price and quality.Switching cost almost inexistent.In balance, substitutes are considered in a total different way with a total different consumers behavior and habits.The Porters Five Forces analysis totally complies with the environment, competitors, market and consumers analyses. The biggest threats are represented by the high ly competitive market with existing and future competitors. Concerning customers and suppliers buying power, I will say that one word, Guan Xi. Everything is based on relationship understanding and answering. Chinese are more willing to show loyalty than Western people, so the threat can be handle by creating good relationship. And last, the substitute threat is not really significant as customers are able to make a clear distinction between products.The marketing mixProductPriceVariety product several line casual working clothes evening clothesQuality high quality product with noble and still comfortable fabricsDesign use of famous worldwide clothes designer = design + value for customersBrand name Caroll is a well-established French company in Europe and can offer a certain image (elegance, wealthy ) to the customer.Service attempt to reach the most complete and valuable consumers experience.Price right match with the quality of the product and service and the image.Currently, I t hink that for the Chinese market, the price of Caroll is not justified.Promotion key out advertize China is a giant advertising place. Marketing and advertising are everywhere. This is an opportunity for Caroll to build solid brand awareness by using diversify communication event billposting commercial InternetPublic relation be present, involved is really important. Public relation is a key factor for success.Distribution channel as we saw in order to tap into the middle market, Caroll must open physical store better than only online selling. post when I was in Shanghai, I was impressed by the number of mall, there are malls everywhere. Availability and good location will be an help to develop the brand into the Chinese market.The target is the middle Chinese class. The intended position is to represent a high valued brand representing the elegance, offering high quality product at reasonable price.Strategic Segments Align 3 VsValued Customers middle class working women living in urban areaValue Proposition high valued and high quality fashioned clothes and accessoriesValue Network physical store enjoying satisfying customers experience.ValueValueThe Value ChainFirm infrastructure 400 stores, 274 in France, 123 worldwideSupport activitiesHuman resource management About 1200 employeesTechnology development Design procurement Elegant and noble fabricsOperationsSpecific line productOutbound logisticsWarehousingServicesCustomer supportOnline storeMarketing and salesAdvertising and promotion like fashion shows.Inbound logisticsInventory controlStoringChinese and least develop country for supplyPrimary activitiesServiceThe Boston Box matrixThe following Boston Box matrix is based on personal perception of the market since no information was found.Evening clothes (dress for party for example)Casual clothesWorking clothesAccessories shoesAnsoff matrixMarket DevelopmentDiversificationChinese middle class represent a new market for Caroll, new customers needs and expectations so new business model and strategy.Target different geographical markets at home or abroad.There is no need to diversify more the brand. Caroll is already offering a wide range of products (clothes and accessories).Market PenetrationProduct DevelopmentGoing to the Chinese market is one thing but stay strong in the European market is another. Even if the Chinese market offers great opportunities, this is a major issue to reinforce our position in existing market. Caroll has to work harder onIntroduce a loyalty scheme = communityIncrease and improved sales force activities.It is important to design specific line to fit with Chinese demandDesign specific line for Chinese (taste, size )Improve customer service or quality.