Ivcf Fashion Case b4

Marketing Plan for the fashion brands
Lecturer: Ms Isabel Mut & Mr Alberga |Word Count: 10,640| May 7, 2009, Barcelona, Spain
Hiva Ghiri, Fredrik Gunnarsson and Gabriella Norberg
Tom Jonk, Romy Hesp, Rachel Cladder, Ivo Deumens and Harold Reitsma
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market
E XECUTIVE S UMMARY
The Dutch leather and handbag company Ignoor was founded by Noor Wentholt and Mike Alberga. The brand stands for style and comfort, and it targets the less price-sensitive businesswoman. The company has an office in the Red-Light district, Amsterdam, and sells their products to 16 retail-stores in the Netherlands. Ignoors promotion strategy is currently to receive free publicity through various channels. However, they are also open for other suggestions regarding their general marketing strategy. The unique products are differentiated from its competitors, with a price-range from 200 to 600 Euros. The company could increase focus on smaller, less expensive bags and accessories in order to generate a larger customer base and a stronger brand. Furthermore it is recommended to find more distribution channels and retailers within the Netherlands in order to boost sales. Additionally, Ignoor is well set to successfully expand in the European market and should focus on the UK, London. The Spanish brand Caorta designs haute couture clothes for both the Colombian and European market. The company is relatively new and has approximately 30 customers. The designer and founder of the company, Camila Orozco, is Colombian and successfully presented a collection during Bogota fashion week. Caorta has had limited resources, and does not have an organized marketing strategy. The products are sold through direct contact with the customers, as well as through intermediaries. Although Caorta has a solid distribution method, the company needs to improve its general brand awareness. Emphasize should be put on promotion, as Caorta needs to increase the communication channels in order to get valuable information about the customers. Both Amsterdam and Barcelona are well known fashion cities in Europe. Amsterdam is known for the Red Light district and Barcelona for its creative environment. The fashion weeks in both cities are well established, visited by fashion-interested people from all over the world. Together with government-initiatives, Amsterdam and Barcelona are developing as fashion cities in the competitive European market.
T ABLE OF C ONTENTS
1.Terms of Reference........................................................................................................................................... 4 2. Procedures & Methodology.......................................................................................................................... 4 4. Introduction ....................................................................................................................................................... 6 4.1 IGNOOR, Amsterdam ................................................................................................................................ 6 4.2 Caorta, Barcelona....................................................................................................................................... 6 5. IGNOOR, Amsterdam....................................................................................................................................... 9 5.1 STP Stratergy............................................................................................................................................... 9 5.2 Marketing Mix .......................................................................................................................................... 10 5.3 SWOT Analysis of the IGNOOR bags ................................................................................................ 12 5.4 Competitive Analysis of European Cities....................................................................................... 13 5.5 Analysis of Market Competitors........................................................................................................ 17 5.6 Conclusion ................................................................................................................................................. 20 5.7 Recommendations.................................................................................................................................. 21 6. CAORTA, Barcelona ...................................................................................................................................... 28 6.1 STP Stratergy............................................................................................................................................ 28 6.2 Marketing Mix .......................................................................................................................................... 29 6.3 Competitive Analysis of European Cities....................................................................................... 32 6.4 Conclusion ................................................................................................................................................. 32 6.5 Recommendations.................................................................................................................................. 33 7. European Fashion Market Questions - Joint Assignment .............................................................. 37 8. Bibliography .................................................................................................................................................... 53 9. Appendices....................................................................................................................................................... 59
1.T ERMS OF R EFERENCE

The following paper contains two marketing plans for the brands IGNOOR and Caorta, and a written work on the European fashion market. The Marketing Plan for the leather brand IGNOOR was one of the four proposals that will be presented to Ms Noor Wentholt and Mr Mike Alberga and in connection with the IVCF challenge. This part of the report was compiled by Tom Jonk, Romy Hesp, Rachel Cladder, Ivo Deumens and Harold Reitsma. The aim of this report is to analyze the marketing aspect of the leather bag industry in Europe, as well as giving critiques and recommendations to the brand IGNOOR. Following the IGNOOR proposal a Marketing Plan for Caorta, which will be presented to Ms Camilla Orozco and Isabel Mut, in connection with the IVCF challenge. This report was compiled by Hiva Ghiri, Fredrik Gunnarsson and Gabriella Norberg. The aim of this report is to analyze the marketing aspect of the haute couture industry in Europe, as well as giving critiques and recommendations to the brand Caorta. The written work on the European fashion market is a joint project produced by the Amsterdam and Barcelona consultancy teams.
2. P ROCEDURES & M ETHODOLOGY

This report is based on both primary and secondary research, such as questionnaires, web based research and academic books covering various aspects of Marketing. However, due to the duality of the sector the external analysis does not only refer to clothing segment, but also other types of textiles and products such as bed linen.
Please refer to the attached bibliography for further information. 4
3. O VERVIEW OF THE S ECTOR

The Textile and Clothing industry in Europe distinguish itself by being labor intensive; in 2007 the total employment level was almost 2.5 million in 175000 organizations. Please refer to Appendix 9.2.1 (TEXTILES and CLOTHING, 2008). The sector is of importance to the European Union, particularly for Eastern Europe and countries in the Mediterranean zone. The majority of the sector consists of small enterprises employing between 1 to 9 workers, representing 80 percent of the manufacturers, whilst only 7 percent of the companies employ a workforce of 250 or more. The average workforce consists of low educated workers; primarily women (Trends and drivers of change, 2008). They also represents 8 percent of the total manufacturing workforce, however they only signify 3.5 percent of value added to total assets created. It could therefore be considered a competitive advantage to produce goods in Asia, where the labor costs are significantly lower. The primary supplier of clothing goods to the EU is China, which has increased its supply with 90 percent since 2004, and represents about 25 percent of the total import to the EU. Please refer to Appendix 9.2.2 (External Trade, EU). The largest market for clothing from the EU is Switzerland, closely followed by Russia. Please refer to Appendix 9.2.3 (European Foundation for the, 2009). The major distributors in the industry primarily base their production operations in Asia, and distribute their products from central warehouses in Europe due to geographical advantages. The heute couture products represent another segment of the T/C industry, where clients are willing to pay a premium for quality control, skilled workforce and brand. These garments are produced in various European locations, where costs of production are higher. Trade patterns play an important role in the sector, however they are diminishing over time as methods of production are becoming increasing homogeneous (Trend and drivers of change, p.22, 2008). Brand loyalty and trademarks, such as Made in Italy, are famous around the world. European products often represent quality and imply endurance. A recent trend among young people is
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market significant increase in purchasing power, which may have in some cases had a negative impact on the exclusivity of the brand e.g. Mulberry (Trend and drivers of change, p.16, 2008). Governments have imposed various agreements and barriers to trade, limiting the amount of clothes and textiles imported from competitive countries outside EU. Protection schemes such as the Multi-Fiber Arrangement (MFA), which also is known as the Agreement on Textile and Clothing (ATC), regulated the trade of textiles in the European Union between 1974 and 2004 (Phase-out of the Multi, 2003). The EU China textile agreement, which preceded the ATC was negotiated to manage the escalation of imports from China until 2008 by imposing restrictions on annual growth rates. However should these safeguard measures be removed the industry might face increased competition from low wage countries (EU China textile agreement, 2005)
4. I NTRODUCTION
4.1 IGNOOR, A MSTERDAM
The Dutch brand and leather company IGNOOR, which designs handbags and accessories was founded by Noor Wentholt and Mike Alberga. The design and label stands for style and comfort, where the bags are specially shaped to the sophisticated woman body. Ignoor loves to work with leather and make things fit for custom use. Your body is unique, an Ignoor bag is original, and the combination is exceptional. These are the key functions of the company and therefore their future elements. The brand IGNOOR has a its own philosophy and history; Movement through form and comfortable fit. Each Ignoor bag is ergonomically designed towards the body, respecting the classical bag shape. The female curves are an endless inspiration for the strong, feminine and serene Ignoor line. Dutch designer Noor Wentholt continues a legacy of leather design and craftsmanship descending from the Wentholt family, 6
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market producing durable leather goods since 1766.Linked by the sign of infinity, Ignoor joins heritage quality values with contemporary leather design (IGNOOR, 2009). Ms Wentholt is in charge of the design and creation process, while Mr Alberga handles the sales and marketing for the company. The two work closely together in the realization of the products. The sales and marketing that comes with Mr Alberga depending on Ms Wentholt who has the responsibility of the product. On the other hand the marketing and sales give the company much information about the market and demands that come within. So Ms Wentholt has to adapt to these demands to make the whole thing work. The two things cant depend on their own. Its a two way working system that has to be combined. Due to the red light districts reputation, the government has recently implemented a scheme where they have made it possible for fashion companies to locate and run their business in the area. IGNOOR has its own building there, where the office and gallery is positioned. The combination of these two give a sense of the business, as the cultural difference between an office and a (art) gallery crosses each other. Strategy: The leather gives the bag a tough image but the shape makes it more elegant. Two characteristics that have been compared with a business woman between 30 and 50 years old. Ignoor is willing to adapt to market segments, so its not only bags that they are willing to make. Profit is something that give them opportunities for the future and more important its necessary to exist in the future. Marketing: As earlier mentioned Mike is leading the marketing interests. One of his main functions is visiting potential retailers. These retailers are existing shops were leather baggs may fit in 7
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market the collection. For example clouting, lifestyle and off course bag stores. Ignoor dont have an own store so they depend on the other stores who are willing to sell their product and even as much as important, their brand. We are now going to take a closer look at the marketing mix.
4.2 C AO RTA , B ARCELONA

The clothing brand Caorta was launched in Milan two years ago by Ms Camila Orozco, as part of her graduation collection from the Marangoni Institute. After graduation Ms Orozco returned to Colombia, where she successfully participated in a fashion contest in Bogota. Through the competition she established a customer base in Colombia, since then she has further expanded her customer base to the European market through a trade fair in Barcelona. The companys customer base is small, and tailors to 20 individuals in Colombia and 10 in Europe. Today the company employs two assistants in Colombia, who supports the production of the clothing items (Orozco, Camila, 2009). The company has two production lines; commercial clothing products and photography. The clothing line consists of products such as blouses, coats, dresses, leggings, jackets and skirts, and is viewed as the primary line. Every piece is unique and is produced in a limited quantity of two to three items per city, however the majority of the production consists of dresses; 40 percent. The exclusivity is accentuated by the quality fabrics from France and Italy, as well as the manufacturing process where each piece is carefully handmade. The fabrics used are priced at 9 35 per m2, and each garment is priced at production cost with a 30% mark up. The sizes and quantities are always decided in advance for each collection, the capacity is 15 orders per week and the time of delivery is approximately one month. Caorta only produces one collection every year; however there is capacity for tailor made pieces. The photography line is seen as a complement to the clothing segment of the business (Orozco, C, 2009).
5. IGNOOR, A MSTERDAM
5.1 STP S TRATEGY
The segment in which IGNOOR is positioned in, targets sophisticated businesswoman, who prefer quality and luxury goods. This is one point were Ignoor is focusing on. Ignoor is willing to adapt to market segments, so its not only bags that they are willing to make. Profit is something that gives them opportunities for the future and more important itsnecessary to exist in the future. Segments Demographics Age Income Occupation Social class Family status Psychographics Personality Interest Lifestyle Values Buying Behavior Location Frequently Loyalty IGNOOR 30-50 Middle, high Lawyer, Bank employee, Business people Middle, high Single, married Elegant, sophisticated Fitness, Cooking, Running, Shopping, Tennis Business woman Liberal, independent Bijenkorf, non specific stores Average Not loyal to the brand
5.2 M ARKETING M I X
PR OD UCT Ignoors collection consists of nine different commercial products, e.g. shoulder bags and lipstick cases. The products have common features and are all made of high quality leather. These features are important characteristics of the product and philosophy of IGNOOR;
1. Craftsmanship 2. Relationship to the female body 3. Quality & Luxury 4. Feminine, strong and serene 5. Dutch design.
Ignoor has one accessory, a lipstick case, which is less expensive and it sometimes comes along with the bag as a gift. This is one of the best selling products if we look at volume. It is an important fact that this accessory attracts attention.
BCG-Matrix Ignoor
High
Star Carme
Question Mark
Market Grow Rate Low
Cash cow Lipstick case High Relative Market Share
Dog
Low
10
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market IGNOORs cash cow is the lipstick cases, this because they have a high market share in a slow growing industry. The lipstick cases generate cash in excess of the amount of cash needed to maintain the business. The productions costs are not very high and the profit on the cases is very high. They need to be "milked" continuously with as little investment as possible. The star of Ignoor is the Carme, it is a bag with a high market share in a fast-growing industry. Our hope is that the clutch Carme will become the next cash cow. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit (Carme) to remain a leader. When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from brief stardom to dogdom.
PLACE IGNOOR has an office in Amsterdam from where it operates, as well as 16 different retailers through out the Netherlands. At this point IGNOOR is approaching the retailers to attract their attention and have more awareness. IGNOOR selects the shops they want to sell in, but they are not in the financial position to refuse any offers from retailers who want to sell their bag. Because of this situation IGNOOR cannot be very precise in their image positioning on this point (Wentholt, N, Alberga, M, 2009).
P R OM O T I ON Ignoors budget for promotion is small due to the companys limited resources. There is therefore no large promotion campaigns used at this stage. Mr. Alberga does the promotion by demonstrating and informing about the products to potential retailers. Their vision how they want to represent their product is clear but they are open for 11
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market new market opportunities and willing to change, if this is more profitable for their label. So what image do they want to promote? All the facets that have a link with the bag or company but above all the unique selling point. That would be the body shape of the bag. Ms Wentholt has to be creative when it comes to promotion due to her weaknesses and threats, and take advantage of her strengths and opportunities, these will appear later on.
P R IC E The price of the product is a very important factor in their selling proposition. IGNOOR products have a price-range from 200 to 600 euros. Premium pricing is used and based on various factors, such as product, customer and place (IGNOOR, 2009). One might consider the price to be too high, however an IGNOOR bag is much more than just a functional bag. An IGNOOR bag is made of luxury leather and quality materials that can justify the price tag. Price is very important in combination with other marketing strategies.
5.3 SWOT A N ALYSIS

OF THE
IGNOOR
BAGS
Strengths The ergonomic concept of the bag The material, good quality leather Luxurious appearance Opportunities Extending the brand Adding other products with ergonomic influences More high educated women
Weakness Price Availability Low financial position Little brand awareness Threats Financial crisis Saturated market Much competitors
12
5.4 C OMPETITIVE A NALYSIS
OF
E UROPEAN C ITIES
One of the goals of Ignoor is to be an international Haute Couture brand. Beside the Netherlands and Spain, Ignoor also wants to export to a third country. In order to select the right country a County Selection Model has been used.
C O U N T RY S E LE C T I ON Because of the organizational structure of Ignoor we only make an analysis of the European countries. The information of the following countries is seen in the figure below.
Germany Denmark Lithuania France Ireland Azerbaijan United Kingdom Finland Latvia Italy Portugal Cyprus Spain Romania Bulgaria
Estonia Russia Czech Republic Iceland Netherlands Ukraine Bosnia and Herzegovina Turkey Hungary Albania Sweden Slovakia Georgia Belgium Greece
Croatia Armenia Switzerland Luxembourg Macedonia Poland Slovenia Malta Norway Belarus Moldova Austria Serbia Montenegro
1) Pre-Filter Cross Domestic Product Population Density 13
Remaining countries:
Germany Denmark Sweden France Ireland Belgium United Kingdom Finland Switzerland Italy Portugal Montenegro Spain Cyprus Norway Iceland Czech Republic Austria Netherlands Luxembourg Greece Turkey Slovenia
2) First-Filter Economic growth National income Purchasing Power Remaining countries

Germany Luxembourg France Norway United Kingdom Sweden Italy Belgium Spain Switzerland Denmark Austria
3) Final-filter Expenditures in clothing and leather industry Clothing prices Number of highly educated women Vision Ignoor 14
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market Remaining countries: United Kingdom, Italy, Austria and Belgium
Based on the Vendor rating analysis, the country Austria is the most suitable option for an expansion. However if we consider the location of Ignoor, the name, the philosophy of the brand and its products, Austria is not the best option. This because Austria is not been recognized as a real fashion country, and is not ready for a new label like Ignoor. We recommend the UK instead of Austria because London is one of the largest fashion cities in the world, and it is known for its many innovators and trendsetters. Ignoors unique selling point is the products innovative designs and shapes, which could appeal to the consumers in London. That is why this is a perfect combination.
15
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market DESTEP
OF THE
D UT C H F AS H I ON M A R KE T
Ecologically An upcoming trend in Haute Couture branch is making products from ecological materials. Economically In November 2008 the turnover of the leather industry of the Netherlands was decreased with twenty percent. The prices of the raw materials of the leather industry were increased with 2 percent in comparison with November 2007. Because of these developments the prices of the products were also increased with two percent. From calculations of the NIBUD it is showing that in 2009 de prices will hardly increase and that the net income will rise. Also everybodys purchasing power will increase with 1 to 4 percent.
Demographically The number of visitors to the expensive shopping street the Pc Hoofdstraat is decreased with 32 percent. Technology The Internet selling of clothing, shoes and accessories are increasing rapidly.
Socially Trend- and fashion sensibility is growing, fashion cycles are getting shorter and the share of fast fashion is growing. The consumer is getting more brand and quality sensitive.
(NIBUD, 2009; Clean Chic, 2006; CBS, 2009; Rabobank, 2009.) DESTEP
OF THE
S P AN IS H F A S H I O N M A R K ET
Socially Barcelona has every season one of the most famous fashion trade fairs, Bread and Butter. Spanish people are very sensitive for the style of famous people Economically Spanish leather goods have an international reputation for quality raw materials and excellent finish. The Spanish industry comprises some 1,752 companies, many of which are tiny craft businesses. More than 83% have fewer than 10 employees and generate direct jobs for 15,929 people. In 2008, production rose to 1,883 bn, up almost 3.9% on the previous year. Production distribution by region confirms Andalusias leadership in terms of numbers of businesses in this field, with a share of 29%. These are concentrated in locations like Ubrique in Cdiz. It is followed by the Valencian Community with 26.7%, Catalonia with 18% and finally Madrid, with 13.2%.
Demographically There are more women than men in Spain at the moment, which is an interesting aspect for the fashion trade industry Men 7.144.406 Women: 7.787.800
Ecologically Technologically Most of the Spain has a large number of Spanish companies companies operating in the leather are not yet familiar goods sector who are using different with ecologically kinds of technology. Many have made friendly materials. a firm commitment to international markets, including Lupo, Puntotres, Fun & Basic, Myriam Gallego, Olimpo and El Caballo, not forgetting the luxury Loewe brand, which is also of Spanish origin. All using the most innovative technology, made their name through first-rate quality and design.
16
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market DESTEP
OF THE
U N IT E D K IN G D OM F A S H IO N M A R KE T
Economically The expenditure on clothing was in 2005 5.3 % over the total expenditures. Net income of the residents of the UK where the highest of Europe Technologically Also in the UK the selling of clothing and accessories with the Internet is growing Socially The capital of England is London and this is one of fashion cities of the world. A lot of different fashion communities. Many open-minded consumers Many innovators and trendsetter. London fashion Week
Demographically In 2006 57% of al the students in England where woman.
Ecologically More and more designers are using ecological material in their products.
5.5 A NALYSI S
OF
M ARKET C O MPETITORS
The group has analyzed the competitors of the potential markets to give a better view on the activities in the market.
N E T HE RL A N D S Ignoor makes body shaped bags. According to Ms Wentholt there are o competitors at this point. They are very unique in their concept. If we look to other Dutch designer who makes qualitative good, leather bags then there are a few competitors. Two of them are Zomoy and Philine. Zomoy is started to make bags that actually wear our selves. The bag has to have it all; space for daily necessaries including PDAs and laptops in various sizes, held safely in a very stylish disguise. Based in Amsterdam, Zomoy stands for fair trade and does not deal with any vendors practicing child labor or any other kind of (human) exploitation. The animals that gave us their beautiful skin are raised to provide the people of their country with 17
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market food and not solely for leather purposes. Each Zomoy is made with care, passion and high quality leather and fabrics (Zomoy, 2009). Zomoy sells their products in the Netherlands, Germany, United Kingdom and Belgium. The products are workbags especially laptop bags. The prices of the laptop bags vary from 120 till 330. The PDA bag is 49. Strengths: Bags that have it all; for daily use including PDAs and laptops They stand for fair trade Zomoy is based in four different countries Weakness: They are very unknown by the larger public Zomoy has style that not everybody likes
Philine is a Dutch designer. She makes innovative designs and creative quality for those with individual taste. Philine is inspired by the natural world and driven to create a style, which defines love of personal expression. Philine designs for those that shine by what sets them apart from others. Smart, fun cool, theyre the ones with a defined sense of style and ultimately those who find joy in things unique and have passion for their own individuality. Philine translates her fascination with that what isnt into tangible objects: fashion statement meets object dart. Philine makes handbags en clutches. Philine is located in seven different shops in the Netherlands and three shops in France. She was also a participant of the trade exhibition de Modefabriek in Amsterdam (Philine Online, 2009). Strengths: Focus at customers with their own individuality Attention from press Weakness: Site is not that impressive
18
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market S PA IN Pepe Alba European Design, Inc. is a premium leather design company based in Spain. They have been creating high quality purses, wallets, handbags, and other accessories for over 5 years. They take pride in their workmanship and it is important to them that their products are top of the line! The philosophy from Pepe Alba is: The single most important idea, which we embrace, is "QUALITY and PRIDE in one's work!" This means that we stand behind all of our purses and products 100%, because we know that they are made with premium materials by some of the most talented and experienced hands in all of Europe. (Pepe Alba, 2009) Strengths: Online shopping opportunities Different products like; wallets, belts, purses, handbags
Lupo is a brand that exists of leather bags. To maintain their high quality standards, every stage of the manufacturing process employs state-of-the-art technology and undergoes exhaustive controls. Lupo use genuine leather therefore the texture of the pieces that make up your article may vary slightly. This characteristic feature makes your Lupo item unique and unrepeatable. They not only make handbags they also make belts and key chains of leather. Lupo has several shops in Spain. Lupo is located in cities like Granada, Madrid, Barcelona and Valencia. Lupo has also shop-in-shop in Spain, Belgium and Portugal. Lupo has also one shop in Tokyo. (Lupo, 2009) Strengths: - Located in many shops in Spain 19
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market U N IT E D K I N G D O M Alison van der Lande appreciates colors and luxurious leathers and combines this passion to produce beautifully crafted bags for all occasions including clutches, handbags, weekend bags and hand luggage, tennis bags and so much more. The leather is Italian and all the bags are handcrafted in Italy. Alison van der Lande was a member of the London Fashion Week. The collection from Alison van der Lande is located in London, New York, Denmark and Egypt. Alison van der Lande was also a member of the trade show in London and the Natural History Museum. Because Alison van der Lande has also a tennis bag and a golf bag. You can see on these two items that the target group of Alison van der Lande is similar as Ignoor. Because the women who buy Ignoor are higher educated and will also play tennis or golf (Alison van der Lande, 2009).
5.6 C ONCLUSION
The smaller bag designers have their own philosophy and their unique selling point. Those smaller designers are closely related with their brand, just as Ignoor. It is very clear that there is a heavy competition between the small designers. Ignoor has to stand out from the small designers. Therefore Ignoor has to work on their collection, promotion and selling points.
20
5.7 R ECOMMENDATIONS
After all of our research we now will give recommendations to Ignoor, how they can gain more brand awareness in the future. We will make the recommendations through a desired marketing mix for Ignoor. The marketing mix is based on the information Ms. Wentholt and Mr. Alberga gave us during the meeting at their office. We also can make a few conclusions from our field research. We made a survey with the most important issues and contacted Mr. Alberga if it was possible to use a bag for our survey, so we could give a better image to the people we questioned. Mr. Alberga agreed and gave us the Cleone and Carme bag to promote. Now we will show the most important results.
PR OD UCT We can conclude from our field research that the bag Iris is the most popular one. On the second place the Doris and the third place the Danae. The Luna and the Freyja were the most unpopular bags through our rating. The main argument of the people we questioned was that a bag has to be practical. If we look at our top three of the bags, we see that they are easy to carry because they all have a long handle that you can use as a shoulder bag. This is an aspect where Ignoor should focus on with her future bags. An other conclusion from the survey, was that the people liked the Carme bag very much because of the size of the bag. That is why we also suggest to Ignoor to make more smaller items, because they are less expensive then a bag and popular within the target group. This will be also with less risk for the retailers who want to sell Ignoor products. We also asked the respondents what kind of other leather items they would like to see next to a bag. We advice Ignoor to add the following accessories: an agenda, belt and a purse. An other advice to Ignoor concerning the product is to stick with the concept of the body shaped bag. Because the shape of the bags was a popular
21
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market concept for a lot of the respondents.
NEW
B RA ND
After the interview with Ms. Wentholt and Mr. Alberga they told that they were thinking of starting a new brand. We advice Ignoor not to launch a second brand because we think that they should focus on the existing brand first. Ignoor has a good quality product and they have to enter the market with the collection they already have. If Ignoor is doing well with its first collection they can consider starting a second brand. With the launch of a new brand there are various risks associated. Such as: o Developing an understanding of the market the new product is intended to address. With questions like: Who will buy the product, what is the profile of these people, what appeals to this people, etc. Answering these questions will take a lot of time and money. o Extensions can weaken a brand and it can make confusions about what the brand means. o Extra costs, which Ignoor can not miss at the moment. o The more things you try to become and the more you lose focus, the more difficult it is to differentiate your product. o The current brand Ignoor will not help the possible new product.
22
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market P R IC E The people that we interviewed found it difficult to see the difference between an Ignoor bag (Cleone) and a regular leather bag from a less expensive brand such as Mexx or Esprit. Due to this, the people estimate the value much lower. The people want to spend between 50 and 200 for a bag. The brand Ignoor is not well known among the people so even if they want to spend 400 they wouldnt spend it on an Ignoor bag. This is due to the brand awareness; there is no reference, feeling or experience with Ignoor.
Our conclusion is that Ignoor has to sell smaller items for a lower price. The consumer buys these items easier. The more accessories Ignoor sells, they get a better brand awareness. Because of these items the consumers will experience the brand, the quality and the exclusivity. Finally the consumer is convinced to pay the price for an Ignoor bag.
PLACE We believe that the Ignoor collection will sell better if the collection is presented in a well-known department store like the Bijenkorf. Its very difficult to get in the collection of the department stores. But we hope after the implementation of the above the demand will grow and the position is stronger so they have a better chance. This should be one of the sales targets. The website of Ignoor is still in development, they are adding a web shop so consumers can buy the bags online. We advice Ignoor to show their collection in 3D, so you can see the curves of the bags much better and you will understand their concept.
23
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market At this point the Ignoor collection is presented in 16 stores in the Netherlands. It is necessary to increase the number of stores. We think this is made possible by the expansion of the collection
P R OM O T I ON Because the budget for promotion is very low we want to promote the collection by free publicity. We have found five solutions to enlarge the brand awareness.
RTL Boulevard RTL Boulevard is a Dutch tv program about lifestyle, fashion, daily news about everything whats going on in Holland. One of the members of the tv show is Fiona Hering, she is a famous fashion journalist. We want to give her a bag so she can talk about it in de show. She can also tell the philosophy of the bags from Ignoor. Daily the show is watched by 700.000 people. To realize this, Ms Wenholt must get in contact with the editors of RTL Boulevard. She can send an email to
rtlboulevard@rtl.nl or she must contact Jaap Paulsen because he is the contact person of the show. His telephone number is 035-671 88 79 and his email-address is jaap.paulsen@rtl.nl. Through the completion of this process it is possible for Ignoor to make it on the show, and give more awareness to the brand.
B U DG E T : The cost of the promotion by RTL Boulevard will be the bag that is send as a gift to the show. The price depends on the bag that will be chosen. It will be between the 200 and 400. The bag will be the only cost for Ignoor, its an also an option that Ignoor sends the Carme as a second 24
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market product, because thats a different kind of bag compared to the other models. The costs of the RTL boulevard promotion will eventually not exceed 1000.
Press releases to fashion magazines Ignoor has to be more in the publicity thats why we suggest that Ignoor or the PR agency of Ignoor makes a press release for the fashion magazines and the other magazines that the target group will read, like Linda. In the press releases Ignoor has to make clear what their philosophy is, what so special is about the bags, where they are available and why the customer should buy their bag. B U DG E T : The press releases will be made by the PR-agency from Ignoor. This PRagency is the only cost for this promotion, and will be around 1000.
Bag parties The bag parties has to be given by the target group who are already interested by the Ignoor bag or already have a bag from Ignoor. By this way of promotion the target group should be enthusiastic already so that the word-of-mouth advertising is positive and that the social groups of the target group are be informed.
Flyers If the customer buys an Ignoor bag, there is a bag included to protect the bag. Several promotion cards like a flyer or a company information card, what Ignoor already have in use, will be included with each sell. So the customer can see the rest of the 25
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market collection and get in contact for a bag party. When Ignoor promotes itself to the client if they already bought a bag then they are in a more enthusiastic mood, because they are already familiar with the product. When they are at home, they can see the flyer with the collection and the company information card. In this way there could be a creation of word-of-mouth advertising. The customer will be encouraged to buy a bag again from Ignoor. The flyers will be given to each retailer of Ignoor bags, and with each sell of an Ignoor bag the retailer will put the flyer in the protection bag.
B U DG E T : The costs of bag parties are very low. The only thing that have to be taken into account is the cost of a car, as a transport to the parties. The printing of the flyers and the visit cards are the other cost. 500 company information cards: 500 flyers: 150 500
The total cost for the flyers and the company information cards will be around 650. This amount can vary. It is possible that there will be more or less than 500 flyers and visit cards be ordered. This depends on what Ms. Wentholt and Mr. Alberga wants. The distribution of the flyers to the retailers is also a cost. We think that it is handy that Mr. Alberga drop them by the retailer. At this way he can tell something more about the idea and he maintains the relationship with the retailer. The cost that are involved are the car cost. 26
Famous Dutch person We want to promote the Ignoor bag by given it to a famous Dutch person. Which famous person it will become should be decided together with Ms. Wentholt and Mr. Alberga. T O T AL
B U D GE T :
The total budget for the promotion will be around 2650.
Long term: If the accessories are doing well and the money supply is increasing, Ignoor should be using this money to promote the bag collection.
27
6. CAORTA, B ARCELONA
6.1 STP S TRATEGY
S E GM E NT AT I O N AN D T A R GE T IN G Caortas target market is the fashion, culture -interested segment. Due to the price range Caorta should focus on the consumers who are not very price sensitive (Questionnaire, 2009). Since the targeted group enjoys fashion, they purchase clothing items for a larger sum than the average consumer. The consumers in this segment are not normally interested in buying clothes in major retailers. It is more common for these types of buyers to purchase their clothing items in designer stores, boutiques and haute couture shops (Questionnaire, 2009).
The targeted consumer in this segment could be illustrated by this table:

Segments Demographics Age Income Occupation Social class Family status Psychographics Personality Interest Lifestyle Values Creative, liberal open minded, pro-active, energetic, elegant Art, modern art, culture, food, wine, fashion interested Travelling- culture awareness Liberal, independent 20-40 Middle, high Middle, high paid jobsMiddle class Single, married Caorta
28
Buyer Behavior Location Frequently Loyalty Grcia, - in house (studio, art galleries) Once a month Some sense of brand loyalty, brand loyal
Caorta uses concentrated marketing and it offers one single product line that appeal to a certain target group only. There is a certain amount of risk involved for the company, since it is concentrating on having a strong position in only one segment of the market.
P OS IT I ON I N G Caorta is positioned in the less price sensitive/Exclusive part on the fashion market. This represents designer clothes, haute couture, and high quality designs with premium pricing. Caorta is not trying to attract customers from other parts of the market, such as people from the more price-sensitive segment or those who value functionality rather than image. Caorta does however not position itself next to the highest set of luxury brands, such as Gucci, Prada, Chloe etc.
6.2 M ARKETING M I X
P R O D U CT Caorta sells a specialty product, which is of interest to a narrow segment in the fashion market. The product line is fairly slim, but with a certain depth. Caortas core product satisfies the customer needs of decoration, self-actualization, sensuality, and expression of personal style/personality and of being unique. The needs of protection, ease of care, versatility, are already fulfilled by other brands at a cheaper price.
29
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market The actual products produced are jackets, blouses, leggings, dresses, skirts and coats, which form one product line. All pieces are designed and handmade using high quality fabrics from France and Italy, and there are only 2-3 units of each piece created for each city. As mentioned before one collection is made each year and it reflects the brand and its philosophy. A second product line could be identified as tailor made clothing, which so far consists of one wedding dress. Caorta has to some extent also been able to focus on its augmented product by offering its customers a possibility to directly contact the designer, Camila Orozco, through e.g. telephone contact (Orozco, Camila, 2009).
Branding Caorta as a brand by its own could be considered relatively strong, as its customers have shown a demand for the products by returning to the designer (Orozco, Camila, 2009). However the brand itself at this moment has a limited impact on the buyer behavior, since the customer base and size of the brand is still small (Questionnaire, 2009). Although in the case of tailor made wedding dress, the brand and design was of a high importance. The same brand is used for both the clothing line and also for the complementary photographing.
P L AC E Caorta sells its products directly to its customers, as well as using intermediaries such as Art Galleries. Caorta does not have its own store and is a non-store retailing activity, apart from the exception of the multi brand store (Orozco, Camila, 2009). The direct contact with Caorta has mainly been established through various events and trade fairs, where customers have been able to receive contact information so that they can place an order later on. In Barcelona the products were also exposed and sold in an Art Gallery in Grcia (Orozco, Camila, 2009). 30
P R O M OT I ON Caorta has so far not been emphasizing any particular marketing method/strategy to further reach new customers, and the budged so far has been around 500 Euros. However the designer has as mentioned before been able to successfully use personal selling through different events e.g. the fashion show in Bogota and trade fair in Barcelona, as well as using social forum such as Facebook.
P R I CE Caortas products are in a wide price range, where dresses cost 180 400 Euros, skirts 80 200 Euros, coats 300 - 480 Euros, jackets 250 - 320 Euros, blouses 80 - 120 Euros and leggings 25 - 35 Euros. There is a mark-up charge of 30% to the production cost (Orozco, C, 2009). The following table illustrates the profitability of the business, based on Caortas own estimations on price range and the distribution of the items:
Supplement charge Number of items Item Leggings Skirt Dresses Coats Jackets Blouses Sweaters Total Price range 25-35 80-200 180400 300480 250320 80120 ??? 30% 30 Avg. Price Profit/item 30 7 140 32 290 390 285 100 150 67 90 66 23 35
% of total sales 2% 18% 40% 10% 10% 10% 10%
Pieces 0,6 5,4 12 3 3 3 3
Sales 18 756 348 0 117 0 855 300 450 7029
Profit 4 174 803 270 197 69 104 1622
31
6.3 C OMPETITIVE A NALYSIS
OF
E UROPEAN C ITIES
Barcelona, London, Paris and Amsterdam are all in their way interesting markets for Caorta to enter. The cultural sense and the liberal fashion attitude in these cities represent various segments of the fashion market; Haute couture, ready to wear and Mass market (Types of fashion, 2008). There are also many already established cultural environments such as: museums, modern contemporary art exhibitions, music events, and culinary food in the cities. Indicators such as Gross national product per capita, economic growth, consumer behavior, distribution of income and unemployment could not be valid points to take into consideration in Caortas case because of the relative small difference between the cities. The important aspect for the expansion of Caorta is that the cities provide a forum for artistic performances and thereby interest and demand. However indicators such as Gross national product per capita, economic growth, consumer behavior, distribution of income and unemployment are not valid points to take into consideration in Caortas case, since Caorta is not attracting the mass market. Caorta attracts as mentioned before a narrow and specified segment in the market (please see section Segment, targeting and positioning). Based on this assumption, Caorta should focus on identifying the target groups and forums in the various cities, e.g. art galleries and fashion events.
6.4 C ONCLUSION
The European fashion industry is competitive and many European brands are well known around the world. The fashion market consists mostly of small companies and some larger fashion houses. Caorta and its designer Camila managed to successfully enter the market two years ago. Although Caorta has established a customer base in Europe, it still requires a more distinct marketing strategy. Due to the companys limited resources, aspects such as promotions have partially been left out. There is also still room for improvement on the 32
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market strategies for price and product. However the current distribution approach is sufficient, since it is cost efficient and reaches its customers.
6.5 R ECOMMENDATIONS
P R O D U CT Caorta could focus more on the actual aspects of the product. For the actual part Caorta should offer the clients an improved shopping experience. The experience should revolve around a stronger personal relationship with the products. To reach this objective we suggest a letter, which describes the idea with the collection - the design, fabric, vision etc. The designers philosophy should also come across in the letter, together with information about the brand. Giving each piece a stronger identity will encourage brand loyalty. Another aspect is the packaging, where we suggest a consistent, identifiable and personal style to wrapping of the products. This will also increase the shopping experience for the customers. Caorta has the capacity to add another product, by introducing a tailor made line. This line should however not be compared with the main product line, since that might cause confusion for the customers and decrease brand loyalty. However it is vital that the new line goes under the brand Caorta, as the promotion becomes increasingly cost effective. The benefits of this developed line are less business risk and another source of income.
P R O M OT I ON Due to the lack of monetary resources only 500 Euros have been allocated to the marketing strategies. Caorta is in the introduction phase and needs cost efficient ways to promote the brand. We believe that a blog and website (forum), which represents the brand, should be created, in order to reach and inform existing and potential buyers. An advantage of the 33
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market blog is that it easily reaches its target group and it is a good way of networking with other people in the business. Other ways of communicating with the broader public is through uploading the already existing clip on YouTube. Facebook is a networking tool already used by the company, and we suggest a more interactive networking site; Asmallworld. Asmallworld differs itself from Facebook by facilitating the creation of new contacts with various business people. There is for example a well-established section for only fashion and designers. A critical recommendation to Caorta is to create a CRM system, which makes it easier for the company to keep track of the activity of its customers. This will increase the
relationship with the customers and it will provide Caorta with sufficient information. Thereby Caorta will be able to use more efficient promotion strategies - promoting the right product to the right people at the right place. Caorta needs to know its customers more in detail compared to the current situation.
P R I CE Caorta should further develop a price strategy to increase its revenues, and therefore the following steps are suggested: Caortas current price strategy has its limitations, since the quantity of the produced goods and the profits are biased. The revenues from leggings contribute with only 54 Euro, while the dresses contribute with more than 10.000 Euro. It could be more suitable with a price strategy that relates to the actual demand. We suggest that for example leggings are to be promoted with a specialty-reduced price to lure the customers into buying other products such as dresses. Furthermore we suggest that the dresses could be sold with an increased margin, which also could increase the exclusivity through the premium pricing.
34
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market If Caorta wants to survive on its own finances, with the already implemented strategies the quantity produced must increase from 30 to 300 units. This would raise profits and give Camila an income around the average Spanish salary. At that point it must be decided whether it is reasonable to restrict the production to 2-3 pieces per item for each city. The following table illustrates the profitability of the business, based on adjustments in the quantity produced:
Supplement charge Number of items 60% 300 % of total Profit/item sales 14 2% 65 18% 134 40% 180 10% 132 10% 46 10% 69 10% Sales 222 9305 42831 14400 10523 3692 5538 86511 Profit 83 3489 16062 5400 3946 1385 2077 32442
Price Avg. Item range Price 37 Leggings ? Skirt ? 172 357 Dresses ? Coats ? 480 Jackets ? 351 123 Blouses ? Sweaters ? 185 Total
Pieces 6 54 120 30 30 30 30
Seasonal discount or promotional discount could be used in order to sell out-dated pieces. Due the current financial crises and the change in peoples buying habits Caorta should adapt its prices. However in order to protect the brand, the pricing strategy should not involve discount on up-to-date pieces.
In the long term it will be beneficial for the company to increase its supplement charge to a figure around 60%, resulting in an increased profit and a stronger position for the brand/ image.
35
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market B U D GE TI NG B A S E D O N R E C OM M E N DA T I ON S The mentioned letter that should be given to the customer at every purchase should not cost more than 0.70 /letter (paper and ink included). The packaging should have a price around 1, since the packaging does not have to be expensive, it should only have a personal touch. Furthermore the necessary webpage could cost from 200- 5000
depending on the supplier and the quality of the product. Caorta needs a simple, easy webpage that also includes the various elements and philosophy of the brand. Therefore the price could be around 300-400 for the actual webpage and an added annual expense around 50 . The blog, Facebook and Asmallworld do not have any direct expenses, but Ms Orozco will have to put labor hours in order to maintain the different networks. The CRM system will also demand labor hours, approximately 15 minutes per customer and year.
36
7. E UROPEAN F ASHION M ARKET Q UESTIONS

7.1 W HAT ARE THE MAIN CHARACTERISTICS OF THE MOMEN T ( MARKET DEVELOPMENT AND TRENDS )?
The Global Financial Crisis The financial crisis has negatively affected he fashion industry through the growing concern regarding consumer confidence and spending. Several major retailers have faced severe drops in earnings, and some have been forced to restrict expansion ambitions (Prada lays foundations, 2009). When examining the drop in S&P Retail Index compared to the drop in Dow Jones Industrial average, it can be identified that the retail index did not plunge to the same levels as the industrial average. (Financial crisis could be fashion, 2008). It is likely that a consolidation in an industry that is still fragmented will occur, as a market recovery is doubtful. As changes in consumer buyer behavior has changed, resulting in a fall in demand, the well-established brands are still safe, however the weaker ones may go under if the market pressure continues (Luxury groups eye retail, 2009). Some providers are reducing their work force and fighting to service debt taken on during the years of market expansion (Prada lays foundation, 2009). One of the consequences of the decrease in consumer spending has been that many retailers have put up discount prices in order to increase sales. Many other smaller fashion entrepreneurs have also been affected by the decreased demand, and have therefore not been able to show their collections in different locations (Orozco, C, 2009).
CREATIVE INDU STRY AT THIS
Fair Trade and Organic fabrics Developments such as Organic fabrics and Fair Trade products are currently trends in the fashion industry, as some people are demanding ethically produced garments. The idea of 37
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market Fair Trade goods is to increase exports from developing countries and provide the workers the standards for international labor (reasonable work hours, no child labor, fair living wage etc), environmentalism and social policy in areas related to production of goods. Many designers and retail stores, such as Stella McCartney and ZARA have also increased the usage of Organic fabrics in their lines and collections (A Stella Turnout, 2008). As environmental concerns are increasingly affecting consumer choices, the organic cotton industry is also witnessing an increased demand in Europe (Europe's Fashionistas Go Organic, 2007).
High street retailers collaborating with high-end designer There has been a trend going on for the last couple of years where retails stores such as Mango, Top Shop, H&M have been using high fashion designers such as Stella McCartney, Victor & Rolf, Karl Lagerfeld, and celebrities such as Penelope Cruz and Kate Moss in order to attract more customers (High end designers in low, 2009). The most recent collaboration was the British high fashion designer Matthew Williamson and the Swedish retail store H&M (Matthew Williamson brings, 2009.
38
7.2 W HICH ARE TH E ECONOMIC OPPORTUNITIES A MSTERDAM AND B ARCELONA IN THE NEXT FI VE
FOR THE FASHION INDUSTRY IN YEARS ?
There are many economic opportunities in the two mentioned fashion markets; one way that existing brands can increase awareness is through re-branding their labels, which basically means re-launching an active product. The lingerie brand Hunkemoller is planning to change the name of the brand to Bodique. The idea is to target a wide range of people and to position themselves in the European market by using tactical re-branding. The warehouse V&D re-organized their entire collection, in order to become more competitive in the fashion industry. E-commerce is also becoming more important in the fashion business, since it enables consumers to have easy access to different labels and shops. An example is the website, www.asos.com from the UK, which has been successful in online selling. The extension of the online fashion stores could be an economic opportunity for Amsterdam and Barcelona. Although the increased usage of Internet has influenced the fashion business positively, it has also contributed negatively to many brands. The reason is that many of the brands intangible elements such as the design of their retail stores have diminished.
39
7.3 W HICH CITI ES ARE COMPETITO RS FOR B ARCELONA AN D A MSTERDAM IN THE FASHIO N - INDUSTRY ? H OW STRONG IS THI S COMPETI TION ? W H AT ARE THEIR MAIN STRENG THS AND WEAKN ESSES ?
The Global Language Monitor, who monitors the media for information regarding the fashion industry, annually compiles a list of the top 25 fashion cities in the world. In this ranking New York is ranked as the most prominent city in the fashion world, followed by Rome and Paris. Barcelona is ranked as No. 13, whilst Amsterdam is not included (New York Tops List, 2007). The fashion industry in Paris has a rich history, and is famous for its exclusive fashion market. Some of the worlds renowned silk is produced in France, and is used together with carded wool to create complex designs characterized by clarity of silhouettes (Jones, S. J, p. 35, 2005). France has a well-established fabric industry that works in perfect harmony with its fashion designers (Fashion capitals of the, 2009) As will be mentioned later in this assignment, one of the efficient ways of marketing your city as a fashion capital is by hosting a fashion week. This is an industry event, where designers are able to showcase their collects and for buyers and press to examine the latest trends that wont hit the stores for several months. The most well established fashion weeks are hosted in Milan, Paris, London and New York City. Whilst Milan mainly focuses on the big brands, New York is the stage for labels designed by socialites for socialites, Paris focuses primarily on avant-garde and ladylike chic, and London is the source of new fashion talent (The Big Question, 2007). Isolated from the fashion industry in France during the World Wars, New York had to develop their own identity and products. The new strategy was based on national
resources and fabric development. Previously mainly derived from French fashion, New York was left by its own during the world wars. Rich of homegrown cotton and prominent in fabric development, they pursued their own strategy. The style differs from the exclusive 40
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market European fashion, since New York is mainly famous for its sportswear and denim (Jones, S. J, p. 47, 2005). One of the largest exporters of textiles and clothing in the world is Milan, Italy. Distinguished by excellent craftsmanship, its famous for labels like Armani, Prada and Versace. Apart from the suits, the strengths of Italian fashion industry are in general footwear and knitwear. As Italians in general spend a lot of money on clothing, there exist few street style brands (Jones, S. J, p. 38, 2005). All of the three mentioned cities are heavily backed-up by government councils that contribute with resources in order to hold fashion weeks and promote designers. London does also enjoy government support but not to the same extent, and they do face problems with brain drain to other prominent fashion cities. Another issue is their poor network of craftspeople. There are however, many successful brands such as Burberry, Jaeger, Paul Smith and Stella McCartney representing London fashion. Another style related to London is anarchic and eccentric fashion where many designers can find inspiration (Jones, S. J, p. 40, 2005).
41
7.4 W HICH MUNI CIPAL AN D PRIVATE SECTOR COLLECTIVE INITIATIVES EXIST IN A MSTERDAM AND B ARCELONA TO STIMULATE THE FASHION INDUSTRY ? W H AT ARE THE MAIN CHARACTERISTICS , STREN GTH S AND WEAKNESSES OF THESE INITI ATI VES ?
Red Light Fashion, Amsterdam High-level fashion design located in the Red Light district of Amsterdam gives the top Dutch fashion talent the opportunity to display their work at a location that attracts international attention for its provocative business. From Australia to the United States and Japan, articles appeared all over the world about this intriguing mix in the historic area of Amsterdam; one is able to admire Dutch couture next to the well-known girls of pleasure. The list of high-level fashion designers varies from couture talent Jan Taminiau, shoedesigner Roswitha van Rijn to underground street wear designer Bas Kosters. Red Light Fashion Amsterdam embroiders on Turning Talent Into Business, in which 16 Dutch fashion talents spend two years being mentored towards professional entrepreneurship. The designers get business advice and take part in workshops together covering aspects such as production, marketing, financial and juridical management. By working, living, exposing and inspiring each other the designers contribute towards putting Amsterdam on the international fashion map. IGNOOR is also a part of this project and it helped IGNOOR in the early stages to create more brand awareness.
Strengths: The Red Light district has become an international hotspot for design tourists. Red Light Fashion Amsterdam gives an impression of the diversity and the strength of the Dutch fashion identity.
Weakness: The Red Light district will become a temporary fashion hotspot. The temporary aspect of this project makes it less desirable to participate as a designer. 42
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market World Fashion Centre, Amsterdam The meeting point of fashion: The World Fashion Center in Amsterdam is the largest fashion trade centre in the world, with more than 400 showrooms and many national and international brands. The World Fashion Center has its own internal management
organization, which is responsible for the overall management of the center (D ontmoetingsplaats voor, 2009). It is possible to rent a showroom, tailored to your needs and budget, which is why the showrooms are a great opportunity for young entrepreneurs to show their collections and to raise brand awareness. Strengths: The WFC gives Amsterdam and fashion a lot of attention and awareness, what is very optimistic for the future of both. The WFC supports young entrepreneurs in the early stages of the development of their brand/label.
Weakness: A lot of competition for a starting company and high costs when you are not supported by the WFC.
Amsterdam Fashion Week Established in 2004 as an initiative to put Amsterdam on the map as an international destination for Fashion. Twice a year, Fashion Week forms the centre-point of the Dutch fashion world, with a full schedule of catwalk shows, trade fairs, presentations, lectures and parties (About, 2009). The show is held at the former Gas Factories in Amsterdams Westergas area, and caters to both you and established designers. With the growing 43
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market interest in Dutch Design', Amsterdam International Fashion Week attracts a growing audience of directional international brands, buyers and press. Answering to immense popular demand, Fashion Week DOWNTOWN consists of numerous public catwalk shows, parties, shop launches, lectures and expositions, all organized in collaboration with local museums, galleries, clubs and shops. Focusing on Amsterdam's reputation as an inspiring city, the AIFW program combines commerce with creativity. Amsterdam has a lot to offer: a growing pool of talent, an inspiring place to visit and a vibrant place to do business.
Strength: The Fashion Week raises international awareness of Amsterdam as a fashion hotspot.
Weakness: The fashion week does not have the international recognition, such as the fashion weeks of Paris, Milan and NYC.
Catalan Fashion Action Plan, Barcelona The government may also take part in increasing the exposure of the fashion market by providing financial support to the development of the industry, such as Catalua has made possible through the Catalan Fashion Action Plan. This is a government incentive, which is to stimulate the market during the years 2007 2010. It is a collaboration between the Government of Catalua and Barcelona City, and intended to revive the textile sector of Barcelona. As a major element of the Catalan Fashion Action Plan, there will be hosted a fashion show called 080 Barcelona Fashion that aims to increase the awareness of Barcelona as an international fashion capital. According to the official website of 080 44
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market Barcelona Fashion, the main lines of action are as follows; internationalization, linking creativity and industry, financial support, support to emerging talent and the organization of a fashion event in the city of Barcelona intended to launch the Catalan capital onto the international stage in the field of design and cutting-edge fashion. (080 Barcelona Fashion, 2009).
Strengths: The fashion action plan implies a relationship between the Spanish Council, the strength is the government support
Weakness: The mentioned plan is only lasting until 2010, which indicates a tight time frame. It is however likely that once the plan is fished another government-supported scheme will begin.
Bread & Butter, Barcelona As a tradeshow for selected brands, BREAD & BUTTER provided Barcelona with a concept of an innovative trade fair event for the progressive, and contemporary clothing culture. As an international specialist trade fair for Street and Urban Wear, BREAD & BUTTER represented a marketing and communication platform for brands, labels and designers from the areas of Denim, Sportswear, Street Fashion, Function Wear and Casual Dressed Up, as well as for suppliers from the preliminary stage of the textile industry (Bread and Butter, 2009)
45
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market Strengths: With unique brand portfolio, BREAD & BUTTER confirms its position as the leading international trade fair and trademark it is the meeting point for buyers, traders and representatives from the textile industry press. The tradeshow for selected brands brings together both inspiration and business according to the basic principle of Fun & Profit. Its early date makes BREAD & BUTTER the kick-off event within the industry.
Weakness: Highly competitive and costly to organize such an event.
46
7.5 W HAT W H AT
KIND OF ( INFRASTRUCTU RAL ) SUPPORT DO YOUNG BEGINN ING
ENTREPRENEURS NEED TO BECOME SUCCESSFUL IN TH E FASHION INDUSTRY ? COU LD BE HELPFUL FOR THEIR CHANCES OF SUCCESS THAT COULD BE PROVIDED BY ORGANIZATIONS LIKE TRADE - INDUSTRY , CITY COUNCI L , CHAMBER OF COMMERCE , ETC ?
For the introduction of a collection is it required to have a good alignment of all the goods. It is important to understand the supply chain and the various processes involved. An entrepreneur should also be aware of the duration of the production process, so one knows when the products can be expected in the store. An entrepreneur aims should to be as close as possible to the consumer, in this way the company will get the right information to meet the consumer requirements. To understand these issues it is important to look at the turnovers and different styles in order to create a database, which can track all the purchases. In this way it is able to see what the key products are. This so-called database development is used as the basis for an ERP system. In this way, the management can make the important decisions regarding the businesses. A just-in-time strategy is good way to start for a young beginning entrepreneur, you have small inventories and you can keep all the expenditures at a low point. Another option, which can make a difference, is to have a good relationship with a supplier. In Amsterdam you can make use of the TNT Fashion Group. Transport TNT Fashion Group is a leading provider of integrated supply chain solutions for the fashion and lifestyle industry. They work with track & trace system, so you can see at which point the products are located at any moment, in this way both parties know when the goods are received. These networks are supported by advanced technologies that TNT Fashion Group enables to establish a reliable service to ensure real-time online information about the status of the shipments. It is therefore important for a beginning entrepreneur to know all the involving processes of a just-in-time strategy, if you want to have a decent infrastructural basis. 47
7.6 I DENTIFY THE KEY SU CCESS FACTORS FOR SMALL START - UP FASH ION COMPANIES . W H AT ROLE , IF ANY , CAN OR SHOU LD , THE CITY COUN CIL PLAY THIS MATTER .
IN
According to Robert G. Cooper, one of the worlds foremost experts in product development, the primary key success factor is a unique and superior product (The first and most, 2004). It is a general concept, however it could also be applied to start-up fashion companies. Such a product should meet the customers needs better than the competition, at the same time be innovative and have a high product qualityamong other characteristics (Top ten factors, 2002). Another important key success factor is a sharp and consistent product definition, which should be in agreement with a strong market orientation (Jerry & Lind, p. 40, 2007). In order to achieve a successful product the supplier of the product needs a well-documented marketing plan, which clearly defines the needs of the consumers, as well as having control over the brand. Government supplied support schemes such as consulting and entrepreneurial aid are vital to increase the probability of success for new ventures. Many entrepreneurs may lack basic knowledge in various administrative areas of business, such as accounting and financing. Aid, such as insightful management support and coaching, is useful to prepare and develop the companys strategy (Top ten factors, 2002).
48
7.7 H OW
COU LD TH E CITY PROMOTE ITSELF BETTER AS A HOT SPOT FOR FASH ION
DESIGNERS AND ENTREPREN EURS ? FORUMS ARE KEY IN THIS
W HAT BUSINESS ?
CHAN NELS SHOULD BE USED , WH ICH
There are various methods that may be used to efficiently promote and thereby raise the awareness of the fashion market in a city, however one of the key forums is events. Barcelona has several programs in place to promote themselves as one of the fashion capitals of Europe, some of them are: One of the prominent ways of exposing a city to the fashion industry is by hosting a fashion week or similar events, which enables designers to showcase their collections. BREAD & BUTTER has for the last four years hosted the semi-annual Barcelona Fashion Week, which has served as a international platform for promoting the brands and designers from the Denim, Sportswear, Street Fashion, Function Wear and Casual Dressed Up segments of the market. The summer 2009 exhibition has been cancelled, and returned to Berlin where it originated (BREAD & BUTTER, 2009). In 2008 BREAD & BUTTER Barcelona was visited by more than 90 000 people from over 100 countries, which is an increase of 50% from the previous show (Canut, C, p.18-19, 2009). Another way of increasing the awareness of a city as a fashion capital could be by linking the city with a brand, as the Barcelona managed when they signed a branding agreement with MANGO - the international clothing retailer. This agreement comes as a part of the Catalan Fashion Action Plan, in an attempt to grow the fashion retail market in the region. Through this agreement Barcelona seeks to raise awareness of Barcelona as a fashion centre in Europe by including their brand on some of the clothing items (Mango and the Barcelona, 2008). One issue facing Amsterdam and Barcelona compared to the key fashion cities in the world is money. The fashion shows in NYC, Paris, Milan and London are larger in scale than the
49
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market shows in Amsterdam and Barcelona. Big sponsors are providing the money needed to organize a great event. Other solutions are necessary to get a unique position in the world of fashion. Using a different kind of strategy would help these cities:
Focus on Niche markets. The Dutch culture is very casual. The Denim market is very big and they could differentiate themselves by focus their strategy on this niche market. The Spanish fashion market is very focused on upcoming designers. Although London has a position in the market by supporting upcoming designers, Barcelona could maybe do that for the Mediterranean designers
50
7.8 W HAT
COULD
A MSTERDAM
AN D
B ARCE LONA
LEARN FROM EACH OTHER ?
There are two major differences between Barcelona and Amsterdam support in Fashion. As mentioned before, Amsterdam has the biggest trade centre in the world and Barcelona has a leading international trade fair. Both companies/events are unique and could provide very interesting knowledge for each party. The WFC supports fashion designers in a different way than a trade fair and the other way around. This information is very useful for both parties to maybe apply in future projects.
When working in a global commercial environment, knowledge of the impact of cultural differences is one of the keys to international business success. Improving levels of cultural awareness can help companies build international competencies and enable individuals to become more globally sensitive (World Business Culture, 2009).
Each city has their own values and traditions. There are also significant variations in the way societies organize themselves, in their shared conception of morality and in the ways they interact with their environment. That is an interesting point when you want to make your company international successful.
51
7.9 G IVE 2
CONCRETE PRACTICAL AND PROFI TABLE IDEAS HOW EACH CI TY COULD
IMPROVE THEIR POSITION AS A H OT SPOT IN THE FASHION INDUSTRY .
In the fashion area of the city, an idea could be to put up high-resolution cameras n order to capture the real fashion on the streets. The cameras should automatically take pictures of individuals every minute. The taken photos could later be used and shown on a big screen at an appropriate location. During special occasions or day, one could hire a fashion expert or/and a visual artist to compose the screen. To make the whole thing a bit more profitable you can implement some advertising in the fashion pictures, e.g. were to buy particular items. A second proposal could be to arrange a catwalk in centre of the city, with local brands and designers who expose their collections together with other artists. This arrangement could result in increased goodwill, which in the long term can give the city a better reputation as a fashion city.
52
8. B IBLIOGRAPHY
8.1 A MSTERDAM
Alison van der Lande, 2009 Available URL: http://www.alisonvanderlande.co.uk/index2.html Date Viewed: April 12th 2009
Clean Chic, 2006 Available URL: http://www.peopleplanetprofit.be/beelden/riannedewitte.pdf Date Viewed: April 28h 2009
CBS, 2009 Available URL: www.cbs.nl Date Viewed: April 19th 2009
Lupo, 2009 Available URL: http://www.lupo.es/lupoeng.htm Date Viewed: April 15th 2009
NIBUD, 2009 Available URL: www.NIBUD.nl Date Viewed: April 22th 2009
Pepe Alba, 2009 Available URL: http://pepe-alba.com/about.htm Date Viewed: April 10th 2009 53
PhilineOnline, 2009 Available URL: http://www.philineonline.com/index.html Date Viewed: April 17th 2009
Rabobank, 2009 Available URL: www.rabobank.nl Date Viewed: April 20th 2009
Zamoy, 2009 Available URL: http://www.zomoy.com/zomoy.php?id=zomoy Date viewed: April 12th 2009
8.2 B ARCELONA
EU China textile agreement10 June 2005; Memo, 2005 Available URL: http://www.epp-ed.eu/wto/docs/eu-china-textile-en.pdf s Date viewed: April 12th 2009
European Foundation for the Improvement of Living and Working Conditions, 2008 Available URL: www.eurofound.europa.eu Date viewed: April 12th 2009
Orozco, C. (2009, April 17). About Caorta. (H. Ghiri, Interviewer) 54
Phase-out of the Multi Fiber Arrangement (MFA) and its Implications for Workers Available URL: http://www.iccr.org/issues/css/mfa_factsheet.htm Date viewed: April 17th 2009
Textiles, 2009 Available URL:http://www.wto.org/english/tratop_e/texti_e/texti_e.htm Date viewed: April 12th 2009
TEXTILES and CLOTHING, 2008 Available URL: http://ec.europa.eu/enterprise/textile/statistics.htm Date viewed: April 12th 2009
Trends and drivers of change in the European textiles and clothing sector: Mapping report, 2008 Available URL: http://www.eurofound.europa.eu/pubdocs/2008/46/en/1/ef0846en.pdf Date viewed: April 14th 2009 Types of fashion, 2008 Available URL: http://www.designedesp4u.com/types_fation.php Date viewed: April 22nd 2009
8.3 E UROPEAN F ASHI ON M ARKET

080 Barcelona Fashion Available URL: www.080barcelonafashion.com Last Viewed: 28 April 2009 55
About, Amsterdam International Fashion Week, 2009 Available URL: http://www.amsterdamfashionweek.com/aifw/about-aifw Last Viewed: 26 April 2009
A Stella Turnout, Vogue, 2008 Available URL: http://www.vogue.co.uk/news/daily/080704-stella-mccartneylaunches-organic-c.aspx Last Viewed: 28 April 2009
BREAD & BUTTER, 2009 Available URL: www.breadandbutter.com Last Viewed: 29 April 2009
Canut, Camilla. Barcelona Style 2009. p.18-19.
Christina. (2009, March 23). Fashion capitals of the world, Christina, 2009 Available URL: http://www.fashion4ward.net/fashion-capitals-of-the-world/ Last Viewed: 29 April 2009
D ontmoetingsplaats voor de mode, 2009 Available URL: http://www.worldfashioncentre.nl/index.php?documentID=59 Last Viewed: 26 April 2009
Europe's Fashionistas Go Organic, DEUTSCHE WELLE, 2007 Available URL: http://www.dw-world.de/dw/article/0,2144,2737180,00.html Last Viewed: 29 April 2009 56
Financial Crisis Could Be Fashion Hazard, 2008 Available URL: http://www.wwd.com/business-news/financial-crisis-could-befashion-hazard-1782336 Last Viewed: 29 April 2009
High End Designers in Low Prices, 2009 Available URL: http://www.ermou.gr/blog/en/2009/04/designers-prices/ Last Viewed: 28 April 2009
Jerry, K., & Lind, S. (2007, June 21). Key success factors p.40. Retrieved April 30, 2009, from Hgskoloan i Jnkping: Available URL: http://hj.diva-portal.org/smash/get/diva2:3553/FULLTEXT01 Last Viewed: 29 April 2009
Jones, S. J. (2005). Global context. In Fashion Design (pp. 35-47). Laurence King Publishing.
Luxury groups eye retail therapy, 2009 Available URL: http://www.ft.com/cms/s/0/d68da47a-35b7-11de-a99700144feabdc0,dwp_uuid=9ecd64fe-3300-11dd-8a25-0000779fd2ac.html Last Viewed: 29 April 2009
Mango and the Barcelona City Council, 2008 Available URL: http://news.mango.com/?p=811&lang=en Last Viewed: 26 April 2009
57
Marketing Plan for Caorta and IGNOOR, and the European Fashion Market New York tops list of worlds fashion cities, Reuters, 2007 Available URL: http://www.reuters.com/article/lifestyleMolt/idUSN1724237520070718?sp=true Last Viewed: 29 April 2009
Prada lays foundations for future growth, 2009 Available URL: http://www.ft.com/cms/s/0/4242ff68-3413-11de-9eea00144feabdc0.html?nclick_check=1 Last Viewed: 29 April 2009
The Big Question: What is the point of London Fashion Week, and does it matter? Available URL: http://www.independent.co.uk/news/uk/this-britain/the-bigquestion-what-is-the-point-of-london-fashion-week-and-does-it-matter-402780.html Last Viewed: 30 April 2009
The first and most important P, Vaughan. 2004. Available URL: http://www.jvmarketing.co.nz/perspective/ the+first+and+most+important+P!.html Last Viewed: 29 April 2009
Top ten factors, Squires, T, 2002. Available URL: http://www.ascent-grp.com/publish/pdf/NProdSuccLess.pdf Last Viewed: 30 April 2009
World Business Culture, 2009 Available URL: http://www.worldbusinessculture.com/ Last Viewed: 26 April 2009
58
9. Appendices
9.1 IGNOOR A PPENDICES
59
60
61
62
63
64
65
9.2 C AO RTA A PPENDICES 9.2.1 I NDUSTRY O VE RVIEW

Textile & Clothing, EU 2007 % growth 2006/2007 -6.4%
Total employment Total number of firms
2.474.932 175.830
Source: Textile and Clothing
9.2.2 - E XTERNAL T RADE , EU

External trade, EU (million ) 2004 Textile & Clothing Import 62 662 31 905 67 379 32 594 75 358 34 580 78 934 36 005 26,0% 2005 2006 2007 % growth 2004/2007
Export Clothing Import
12,9%
45 052 13 368
49 305 14 112
55 491 1536 2
58 079 16 625
28,9%
Export
24,4%
Source: Textile and Clothing 66
9.2.3 - T O P 10 EU M ARKETS
IN
C LOTHING
% Growth 2004/2007 24,4% 13,2% 114,4% -8,7% -9,1% 46,2% 7,9% 109% 44% 50,1% 40,1%
Top 10 EU Markets in Clothing (million ) 2004 World 13 368 2 499 1 297 2 192 1 249 500 659 252 323 294 268 2005 14 112 2 579 1 677 2 110 1 251 559 688 303 330 272 301 2006 15 362 2 690 2 214 2 056 1 226 619 674 405 407 354 345 2007 16 625 2 830 2 779 2 002 1 136 731 711 527 465 442 375
Switzerland Russia USA Japan Hong Kong Norway Ukrainia Turkey UAE South Korea
Source: Trends and drivers of change in the European textiles and clothing sector
67
9.2.4 Q UESTIONN AIRE

General Information Sex
FORM U SED I N INTERVI EWS
Options: Male Female
Answers: 0 150
Age
-20 20-30 30-40 40-60 60+
4 33 48 63 2
Income
under avrage(0-16500) above avrage(16500-30000) high(30000 +)
16 78 56
Where do you live in Barcelona?
Central North South West East Outside
35 10 4 74 25 2
Buyer Behaviour
68
Are you interested in fashion? Yes No 85 65
What does clothing items signalise to you?
Necessity Interest Pleasure Art
50 80 15 5
What do you think about the idea of buying clothes in an art gallery?
not interesting Somewhat interesting very interesting
0 95 55
How many times do you visit art galleries annualy?
0 1-3 3-6 6+
5 100 25 20
How brand loyal are you?
Very Somewhat Not at all I dont care
5 40 35 70
69
How frequently do you purchase clothing items per month?
0 1-4 5 - 10 10 +
0 108 30 12
How much do you spend on clothing items per month?
0 - 100 100 - 250 250 - 500 500 - 1000 1000+
60 55 35 0
Where do you purchase your clothing items?
Major retailers High street Boutiques Designer Heute Couture
91 30 25 2 2
Have you heard about the brand Caorta?
Yes No
0 150
70
Price Sensitivty How much would you spend on the following items; - Dress
0 - 100 100 - 250 250 - 500 500 - 1000 1000+
- Pants
0 - 100 100 - 250 250 - 500 500 - 1000 1000+
- Jacket
0 - 100 100 - 250 250 - 500 500 - 1000 1000+
- Shirt
0 - 100 100 - 250 250 - 500 500 - 1000 1000+
71
Financial Crisis Has the financial crisis impacted you buyer behaviour?
Yes
139
No Don't Know
11 0
If yes, to what extent?
Very negative Negative Positive
4 135 0
72

Ivcf Fashion Case b4

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ivcf Fashion Case b4

Uploaded by

Copyright:

Available Formats

Marketing Plan for the fashion brands

Hiva Ghiri, Fredrik Gunnarsson and Gabriella Norberg

1.T ERMS OF R EFERENCE

2. P ROCEDURES & M ETHODOLOGY

Please refer to the attached bibliography for further information. 4

3. O VERVIEW OF THE S ECTOR

4.2 C AO RTA , B ARCELONA

Market Grow Rate Low

Cash cow Lipstick case High Relative Market Share

5.3 SWOT A N ALYSIS

5.4 C OMPETITIVE A NALYSIS

1) Pre-Filter Cross Domestic Product Population Density 13

2) First-Filter Economic growth National income Purchasing Power Remaining countries

Demographically In 2006 57% of al the students in England where woman.

The total budget for the promotion will be around 2650.

The targeted consumer in this segment could be illustrated by this table:

% of total sales 2% 18% 40% 10% 10% 10% 10%

Pieces 0,6 5,4 12 3 3 3 3

Sales 18 756 348 0 117 0 855 300 450 7029

Profit 4 174 803 270 197 69 104 1622

6.3 C OMPETITIVE A NALYSIS

7. E UROPEAN F ASHION M ARKET Q UESTIONS

FOR THE FASHION INDUSTRY IN YEARS ?

Weakness: Highly competitive and costly to organize such an event.

KIND OF ( INFRASTRUCTU RAL ) SUPPORT DO YOUNG BEGINN ING

DESIGNERS AND ENTREPREN EURS ? FORUMS ARE KEY IN THIS

CHAN NELS SHOULD BE USED , WH ICH

LEARN FROM EACH OTHER ?

CONCRETE PRACTICAL AND PROFI TABLE IDEAS HOW EACH CI TY COULD

IMPROVE THEIR POSITION AS A H OT SPOT IN THE FASHION INDUSTRY .

Orozco, C. (2009, April 17). About Caorta. (H. Ghiri, Interviewer) 54

Textiles, 2009 Available URL:http://www.wto.org/english/tratop_e/texti_e/texti_e.htm Date viewed: April 12th 2009

8.3 E UROPEAN F ASHI ON M ARKET

Canut, Camilla. Barcelona Style 2009. p.18-19.

9.2 C AO RTA A PPENDICES 9.2.1 I NDUSTRY O VE RVIEW

Total employment Total number of firms

Source: Textile and Clothing

9.2.2 - E XTERNAL T RADE , EU

Export Clothing Import

Source: Textile and Clothing 66

9.2.4 Q UESTIONN AIRE

FORM U SED I N INTERVI EWS

Options: Male Female

-20 20-30 30-40 40-60 60+

under avrage(0-16500) above avrage(16500-30000) high(30000 +)

Where do you live in Barcelona?

Central North South West East Outside

What does clothing items signalise to you?

Necessity Interest Pleasure Art

not interesting Somewhat interesting very interesting

How many times do you visit art galleries annualy?

How brand loyal are you?

Very Somewhat Not at all I dont care

How frequently do you purchase clothing items per month?

How much do you spend on clothing items per month?

0 - 100 100 - 250 250 - 500 500 - 1000 1000+

Where do you purchase your clothing items?

Major retailers High street Boutiques Designer Heute Couture

Have you heard about the brand Caorta?

0 - 100 100 - 250 250 - 500 500 - 1000 1000+

0 - 100 100 - 250 250 - 500 500 - 1000 1000+

0 - 100 100 - 250 250 - 500 500 - 1000 1000+

0 - 100 100 - 250 250 - 500 500 - 1000 1000+

If yes, to what extent?