BACKGROUND OF TRENDY STYLE

Trendy style is a well known fashion retail chain in Sri Lanka .It has solid foundation as well. Later it was named Fashion Place At that time it was a place where people could buy good clothing at a very reasonable price. There fore companys customer group was the people who are getting an average income. Within a very short time period company achieved a mammoth success so that outlets were expanded out of the Colombo city area and they shifted from the position that they held as fashion for a reasonable price to the exclusive fashion. Company was able to increase their prices with uplifted image. In order to support their high image the brand name was changed to Trendy Style. Presently company provides range of branded clothing (LeBond, Lee, Arrow, Envoy) foot wear (Adidas, Nike) and accessories in there outlets. They set their vision as, To be the best quality fashion retailer offering a range of exclusive fashions And the mission as, To be the closest fashion retailer to the people in Sri Lanka by making higher value and customer care in a socially responsible manner However company is presently struggling against the countrys economic instability. Because of economic crises customers have lost their purchasing power and as a result companys sales volume is decreasing. The company management has identified that it is no more profitable for them to import branded products. So that they are trying to produce clothing and foot wear in Sri Lanka under Trendy Style name. Specifically they are going to produce T-Shirts and Ladies casual wear, shoes in 3 difference styles. They hope to carry these new brands along with the previously held brands in their out lets.

TASK 1- BRANDING STRATEGY FOR CLOTHING AND FOOT WEAR.

1.1 INTRODUCTION Company is preparing to limit imports and start own labeled productions. Previously company imported branded products such as Nike, Victoria Secret, Adidas, Raymond, Lee, and LeBond. S the companys customer group was the people who use branded quality products. They are not much bother about prices. But because of the inflation and other economical collapsed, considerable amount of customer share is gradually decreasing so that now the company is going to start productions under their brand name. Because of this locally made production company can address to a new consumer group also. Some price sensitive customers may attract towards the company. Where as the management must keep their mind that there is a loyal customer group for the company who are highly brand sensitive. There fore company must fulfill their requirements also. If not company may lose them. 1.2 BRAND DECISION MAKING. Brand Decision Brand Sponsor Brand name Brand Strategy Brand reposition * Line Extension * Brand Extension * Multi Brand * New Brand

* Brand

* Manufacture

* Individual * Blanket Family * Company

* Re Position * Not Reposition

* Distributor * No Brand * Franchisor

In line with the above brand decision making model following things can be determined. Brand decision :Here the company hopes to sell the production directly under its own brand name (Trendy Style) while they are selling imports under own brand names such as Nike, Signature, Lee and Raymond

Brand Sponsorship :(a) Manufacture:This is brand created by the company for its products. Company uses its name for

In this case 2 types of sponsorships are clearly seen.

Company made products. (Textiles and foot wear) (b) Franchisor / Licensing. This is used in imports. Company acts as a franchisor for high branded garments such as Lee, Raymond, Puma in Sri Lanka. It is admirable to carry that sponsorship further because company should maintain its high quality and image. Some times economical disaster may be short run. Brand Name selection.According to the given details company is attempting to use blanket family brand name strategy for their products. But it is recommended to use entire company name only for textiles. If there a slight difference between each product line it is easy to position product with its own image. Though one product line was failed it is not harmful to others. Following are the suggestions. Trendy Style for Textiles such as ladies and gents casuals. Trendy Wear for foot wears. Although the name Trendy Wear is separate from the company name there is a belongings with the company that any one can easily identify. Thus foot wears are enriched by the companys credibility. Like this two products are easily positioned in consumers minds. Brand Strategy:Product Category Existing Existing Brand Name New Line Extension Multi Brands New Brand Extension New brands Brand development strategies are as follow.

Source: Principles of Marketing, Philip Kotler & Gary Armstrong. Before finding a suitable branding strategy following questions should be considered. @ How Trendy Style name has been positioned in customers mind? It is positioned as an exclusive fashion retail company. Not as fashionable clothes or foot wears @ What is the main business of Trendy Style? Imports high branded products and re sell them. In this scenario company has to follow Brand Extension Strategy. Justifications are as follow.

* Brand Extension Strategy:This involves the use of a successful brand name to launch new or modified product in a new category.

* Product Category of Trendy Style:Large fashion retail chain.

* Although the surface looking is same here the company is going to start a new business.
Former Trendy Style wasnt a manufacturing company. It merely imported garments.

* The company has positioned in customers mind as a fashion retail company. Not as
Fashionable clothes or accessories.

* Before the company havent sold any garment or accessories under its own label. All the
products which were sold in the company carried their own brand names. That means companys product was Re selling exclusive garments.

* But now company has started to sell products under 2 names.

Trendy Style Trendy Wear

* So this is a new product to the entire company. There fore company has to follow Brand
Extension strategy as their branding strategy. Brand Repositioning:Brand re positioning is recognized as Successfully registering in customers minds the category in which the branders resided and associating it with a unique functional advantage.

Trendy Style registered as an exclusive fashion place in customers mind. Not as fashionable clothings or accessories. But here after company launches fashionable textiles and accessories so that it has to be re positioned in customers minds that Trendy Style is not only a fashion place, but it is also referred as fashionable garments and foot wears Brand extension gives instant recognition for company made products and faster acceptance among customers. As well as management can serve high advertising cost usually require to build new brand names. Because the name has already been well established in customers mind. 1.3 NEW PRODUCTS IN THE BRAND PYRAMID * This enables the brands distinctiveness to be presented. * It has constructed that summarizes key traits of the brand under a number of different headings defines how a brand is represented and how this translated in to value for the consumers.

Personal qualities (Cognitive) Values (Power / High class)

Emotional (Stylish / Perfect)

Benefits (Fashionable / Comfortable) Attributes (High quality / Logo / Design)

Source: Synthesizing the nature of the brand, tutorial 09, Brand Management.

1.4 BRAND ESSENCE FOR TRENDY STYLE. To appreciate what the brand stands for, the components of the pyramid need synthesizing into a short statement. That is called brand essence. Brand essence is the quick access to the brand. In this scenario company tries to depict their brand in customers mind as, selecting Trendy style is a correct decision. So the brand essence would be, Your Wise Decision 1.5 TRENDY STYLE IN KAPFERERS BRAND IDENTITY PRISM.

Stylish Fashions Trendy Physique Personality

Perfect / Posh

Young Generation Relationship Culture

Freedom

Wisdom

Reflection Top class 6

Self image

1.6 TYPOLOGY OF CONSUMER DECISION MAKING PROCESS FOR TRENDY STYLES NEW PRODUCTS. Henry Assael classified 4 different buying behaviors based on the degree of the buyer involvement and the degree of difference among the brands.

Complex
High

Variety Seeking

Difference
High Low Need Recognition

Low

Dissonance Reducing

Habitual

Involvement

Brand beliefs formed by passive learning from ads

Purchase made

No loyalty

Consumers undertake variety seeking buying behavior in situations characterized by low consumer involvement but significant perceived brand different in such instance consumers tend to switch brands . Brand switching occurs for the variety rather than dissatisfaction. (Source: How consumers choose brands, Tutorial 02, Brand Management.) Trendy Style is a fashion retail company. Fashionable garments and wears are not so much expensive like Vehicles, T.V and etc. As well as now the company trying to shift from locally made productions. These reasons make difficulties to gain a loyalty from consumers. There fore the management must consider about following steps in order to gain loyalty. Provide quality garments and foot wears. Display local products with imports. Introduce a loyalty card system. (e.g.:- No Limit, Hameedia) Upgrade physical evidence factor. (Parking, Security, interior facilities) 7

Well trained and quality customer service.

TASK 2- STRATEGIC MARKETING PLAN FOR THE YEAR 2008 & 2009 FOR TRENDY STYLE.
2.1 PEST ANALYSIS. This is an analysis of macro economic environment elements. Every character stands for an element of macro environment. PEST leads to opportunities and threats of SWOT analysis. P: - Political Environment, Political environment has a significant impact on the overall activities of the country and trading system. e.g.: Security situation:If there any threat for security condition insurance premium could be raised. Government trading policy :Import barriers or free trades policy. International pressure groups :These groups can limit or enhance imports Regulatory bodies and processes:Local government authorities can impose taxes on production. E: - Economics Environment, This directly influences to the living style of people. Some of the major elements of economics environment as follow. Income distribution :Companys target market is basically based on income of the people. Level of inflation :High rate of inflation will be caused to decrees the purchasing power. There fore company has to shift towards producing clothing and other products in Sri Lanka. Tax policy :Company is a tax payable entity to the government. Interest and exchanging rates :This involves when importing goods & taking bank loans.

Over seas economies and trends :Directly affect to import products.

S: - Social and Cultural Environment, This element is a real challenge to the organization. This deals with the values and attitude of people. Demographics :Age, sex, family life cycle, family size Changes in values :Some people like to purchase imported branded products on the other hand some people prefer buying Sri Lankan products. Lifestyle trends:Buying habit depends on life style. Media views :Media can directly influence to selections of a person. T: - Technological Environment, This is another important element which affects to current business scenario. Manufacturing maturity and capacity :This is another useful element which leads to regular supply. Replacement technology / solutions :As a manufacturing and selling entity now the company should pay attention more on this field. Information and communications :Communication with customers as well as production department and import unit should be in a satisfied condition. Competitors technology :Company must consider on competitors technology when carrying on production.

2.2 SWOT ANALYSIS (S) Strengths * Well established brand name. * Product diversification. * Outlets network * Not relies on imports * Companys good will * Skilled labor (W) Weaknesses * Brand image is towards exclusive fashions. * Hasnt spread island wide. * Customers are not aware of own labeled products. * Low media spend * Low display facility for Trendy Style products.(only in the outlets)

( O) Opportunities * High market potential. * Customer loyalty. * Cost effective. * Further enhance web sites. * Online retailing. * Online tailoring(like HameediaAnnexure) * Can supply other products in the outlets (e.g.:- Odel- Annexure)

(T) Threats * High inflation rate decreases purchasing power) * Customer awareness always tends to change. * High competition for publicity. * Competitors have already launched this.(No Limit symbol) * Competition form imports. * High interest rate. under NLM

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2.3 OBJECTIVES These are the desired goals to be achieved by SMART. Following are the objectives. SMART Specific Measurable Achievable Realistic Time frame

Following are the objectives of Trendy Style. After starting the production inside the company management can serve cost of sales up to 35%-40% . Company can put down prices of their productions up to 35% in relation to imported brands. Company hopes to launch promotional campaigns near their out lets and deliver piggy backs. It is not expected to spend lot of money on T.V commercials. Hence the management can reduce advertising cost from 40% Company is going to diversify its productions. This will lead to increase the customer share of Trendy Style.

2.4 STRATEGIES (USING ANSOFF MODEL) Every company wants to grow. This may be in terms of sales and profitability. We can use Ansoff Matrix to explain this. Product Current Market Current New Market Penetration Market Extension New Product Development Diversification

In this case company sells mainly 2 products. (a) Imported branded products. (b) Company made products.

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Separate marketing strategies should be applied for each product. (a) Imported products. This is a situation where company supplies current products to current market. So that Market Penetration strategy is applicable for imported brands. Following methods can increase companys level of penetration in the given market. Offer incentives for customers to purchase by offering price incentives , promotions, gifts etc. e.g.:- gifts for high volume purchasing. Attack competitors customers by offering superior products. e.g.:- Company can import quality products relatively low price. Company can offer bundled products at relatively low price. e.g.:- Clothes, foot wear, tie, brief case, wrist watch under one bundle Company can introduce loyalty card system. Here customer can earn marks according to the value of transaction. e.g.:-No Limit, Hameedia. (Please refer annexure) (b) Company made products. Here the company supplies new products mainly to the current market. For that company management has to apply Product Development strategy in this scenario. Following steps can be used for company made products. Introduce new products under Trendy Style name. Here the company can use the good will which they already have for the introducing products. Use Market penetration pricing strategy for garments and odd prizing strategy for foot wear. Increase the product quality .If not it will dilute the image of the company. Product bundling. Online tailoring. e.g.:- Hameedia (Please refer annexure)

It is recommended to apply both strategies separately for each product. Like wise company can increase the sales volume and the turn over.

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2.5 USERSHIP AND USAGE CHART

Mkt share

Trendy Style, 15% Sundary shops, 48% Main comperitor, 12% Leading competitors, 25%

This is total market of apparel industry where the companys out lets are operating. Trendy Style presently provides exclusive fashions In this case its market share is some what narrow. But in future, the company hopes to follow Brand Extension strategy. Company will produce their own productions at an affordable price to even general public. There fore the management can address many people and expand their market share up to 20%-23% by the end of 2008.

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2.6 TARGET CONSUMER PROFILE Trendy Style is a place for exclusive fashions. Company has been charging high price for imported brands based on its uplifted image. So the consumer group is not so much price sensitive. But todays economic disaster is a problem to every one. On the other hand branded garments have an elastic demand. Who ever it is tends to go for affordable prices. Following groups are the target customers of the company and following measures can be taken to retain them. * Main target Customers go for exclusive fashions at relatively affordable price are the main target. Following steps can be taken to retain them. Pricing company made product at an affordable price. Use some sales promotions such as competitions; gifts .Thus the company can increase sales in this period because economic disaster can be recover after few months or years. Include fashionable items for garments such as badges, good packages. Further develop companys web site and start online purchasing and online tailoring. Start a quota system for selected customer such as government employees. Here company provides credit purchasing system to customers in seasonal periods. e.g. - C.I.B fashion centre. * Secondary targets. Customers who are so much brand sensitive From the beginning of Trendy Style, this group was with the company. Though the company tries to shift from high branded products it is not appropriate to ignore this group. There fore we suggest, Import limited amount of high branded products like Nike, Victoria Secrets, Adidas, Blue Jeans, Old Navy and etc. Introduce gift voucher system for imported brands.

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Innovators and early adaptors Here the company is going to introduce new products to the market. So the managers should try to attract innovators and early adopters towards the company. Following measures can be taken to grasp their attention towards the company. Advertising. Bill boards. Piggy back. Press ad and other printed media. T.V and Radio ads. (Small informative). Arrange highly sophisticated and well equipped environment. Start promotions in seasonal times.

2.7 MARKETING ACTION PLAN. This is the time table of firms marketing activities. This indicates how the marketing mix strategies would be done. Here after companys main income comes from company made products so that the pricing policy should be a tactical one because company shouldnt be a lost making entity. Company hopes to serve cost up to 40%-50% from their own products relative to the imports. Previously company sold imported products keeping 20% profit margin. But now company hopes to keep 30%-35% profit margin from selling its own products. Though the company follows that type of a policy still the products are cheaper than imports because the production cost is minimum value. e.g.:Imported T-Shirt Companys production Cost 1000 500 Profit margin 20% 30% Final price 1200 650

With relation to the cost the profit margin is some what high. Yet company has to maintain that price because very low price dilutes the brand image.

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Higher margin leads to higher profits. Only thing is company has to increase its turn over. Half has already been done due to low price. Other part can be fulfilled using sales promotions and advertising. Companys sales are some what depends on the time. In the seasonal periods sales volume is higher than other periods. In the seasonal periods, sales volume per day exceeds 7 million. (0.6-0.7 million from each 10 outlets).But out of seasons the sales volume is about 3 million. So the average turn over of a year is about 10 billion.

MARKETING ACTION PLAN FOR 2008-2009 Mkt activity Product Related Act: N.P.D Packaging Improve brands Price Related Activities Discounts Product Bundling Place Related Activities Transports Ware Housing Insurance Online tailoring Promotional Activities Sales promotions Advertising Public Relation Web site development Budget Jun F (000) 50000 5000 8000 7000 2000 4000 3000 2000 500 3500 5500 1000 100 Ma A My June Jul Ag S O N D

2.8 EVALUATION OF STRTEGIC MARKETING PLAN. * PEST analysis indicates the impact from the elements of macro environment towards the company. * SWOT analysis implies strengths, weakness, opportunities and threats which has to be faced for. 16

* Next is setting objectives. It is helpful to understand about the things we are going to achieve. * Ansoff Model reveals the companys situation in 2 ways. Market penetration for imports. Product development for company made products. * User ship and usage chart indicate the behavior of the current market scenario. Company can get an idea about the familiarity of the company. * Target consumer profile is the current market segment. Company has to satisfy their requirements. * According to the financial reports companys budgeted gross profit is 440 million. Out of that amount salary expense takes the biggest portion which is about 180 million. (750 employees are working).This year 91.6 million has allocated for marketing division for executing the marketing action plan. Marketing department has prepared above plan to show how they allocate funds among each activities.

TASK 03- INTERGREATED MARKETING COMMUNICATION PLAN FOR TRENDY STYLE.

3.1 INTRODUCTION The primary goal of marketing communication is to build awareness of a business, its products and its position through customer facing materials such as broaches, press releases,

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web sites and trade show presentations. A marketing plan requires marketers to do substantial research. Marketers need to have an in-depth understanding of their target audiences and involve in buying, selling and communicating. As a fashion retail company, Trendy Style also requires to consider about marketing communication because as long as producing quality products company has to identify its stake holders and make a good communication with them. SWOT Analysis Weaknesses * Less skilled promotional staff. * Low display facilities. * Low media spend. * Company hasnt experience in production. * Company has speeded with in limited cities. Threats. * Customer awareness is always tend to be changed. * High competition * People dont keep all the media massages in their minds. * Threat from imports.

Strengths * High brand image. * High consumer awareness. * Good heritage. * Publishing. * Internet base. * Customer loyalty. Opportunities * Online retailing. * Online tailoring. * Further enhance web site. * Increase the market share though awareness

SWOT Analysis of marketing communication plan is as above. Weaknesses should be converted to strengths and Threats should be converted to opportunities. Following methods could be applied * Weakness in to Strengths. Arrange training session for sales staff. 18

 Increase display facilities. Spend enough amounts for promotional purpose. (Piggy back, bill boards, news paper ads and electronic media ads on seasonal time. Get the service from resource personals and institutes. Expand outlets. * Threats in to Opportunities. Launch unmatched promotional campaigns especially in seasonal periods. Make creative advertisements which emphasis the mission of the company. Then the management can use these opportunities to get the maximum out come and also convert them in to companys strengths.

3.2 COMMUNICATION GOALS. Following are the communication goals of the company. These are the dreams of the company which they want to achieve. To be the most desired family fashion retail Company in Sri Lanka. Get the maximum favorability and familiarity in the industry. Increase the market share by getting customers awareness.

3.3 OBJECTIVES. Following are the objectives company hopes to achieve through the marketing communication plan. These should be in line with overall objectives.

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 After starting productions, company provides locally made products at an affordable price. Hence marketers can emphasis about low prices of garments. Due to that publicity expectable market share is not less than 20%. Thus it can be the textile retail company which has the biggest market share in the areas where it is operating. Profit margin of locally made products is higher than imports. After launching local products to the market even though the turn over is same company can earn additional 10%-15% profit. Company hopes to launch promotional campaigns using piggy backs, creative bill boards, press media and in the seasonal time little on electronic media. It is not expected to spend lot of money on T.V commercials through out the year. Hence the management can reduce advertising cost from 40%.

3.4 POSITIONING STATEMENT FOR TRENDY STYLE. Marketers have to position the company, products, brand image and all its strengths using positioning statement. Your modern fashion house is suggested for positioning statement. This indicates some of the unique features of company. They are, Familiarity Quality products High customer service. New fashions Affordable prices Variety

3.5 KEY MESSAGE. Quality and valuable products at an affordable price

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Companys key message to customers as above. It clearly emphasizes that the company provides both quality goods and related services at an affordable price to the customers. That gives a life time value for the customers. 3.6 KEY AUDIENCE. Following are the key audience company has to target. Internal: Company Staff. Company has a big labour force. It is more than 750. Thats mean more than 750 families. Company can give special discounts for them. Because of this employees will motivate to purchase company products and they will admire the company. As well as company can induce them to dress company name printed garments. It is a good method for promoting the company. External: Professionals. These group always tends to dress smart casuals in there casual lives. Mainly for parties. And also day to day life. Like that company should fulfill their requirements. Teens. Teens are variety seekers. They rarely make loyalty for specific brand. But if the company can provide valuable garment at an affordable price, they will make loyalty with the company. Company can reach them via public media. Other employees. (Government offices / Companies) Especial in seasonal times, these groups are haunting quality garments at affordable prices. Company can introduce a credit system for them. Here company can introduces 5000/- or 10000/- credit limit and sell products on credit basis. In this way people will be motivated to purchase products although it is not so much necessary. On the other hand company will be appreciated among people. It is the best publicity.

People who maintain higher living style.

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Before launching new products the customer group of Trendy Style was the people who need exclusive fashions. They are always brand seekers. Because of them company was able to get a high brand image. Although company shifted from main business these gropes should not be left. So then company should import some marketable brands. 3.7 COMMUNICATION STRTEGIES. Following strategies can be applied for Trendy Style in order to get the optimum results from the business. * Pull Strategy.This is situation where the company directs marketing activities towards the end user. Following promotional activities can be launched. o Piggy backs Company can deliver information of new business to customers who live near out lets. o Bill boards This is another successful method of getting the attraction of target audience. o Press advertisements. This can be used in seasonal periods. o Radio and T.V advertisements. Like press Ads Company can use them in seasonal time. But it is not necessary to spend huge amount on T.V commercials. They must be creative and informative. * Profile Strategy. Here the company must try to decrease negative attitudes towards the company and enhance corporate image.

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