Strategic Marketing Plan For The French Fashion House Marketing Essay

In the ninety's the brand needed a new way: diversification and internationalization. From now, the business offered a wide range of product so women can dress from head to foot in Caroll. Also, the French company aimed bigger: shops, affiliations, and franchises locations in department stores made an appearance worldwide.

Thanks to its strong two results growth for recent years, China became the favorite new vacation spot for companies. Shalendra Sharma, associate professor of political science, University of SAN FRANCISCO BAY AREA says that "with an estimated 300 million Chinese consumers with much disposable income, it can be an opportunity that should not be missed", even if the current economic environment requires caution. Based on the CCI and Natural cotton Incorporated Global Lifestyle Monitor Survey, attire tops the set of items Chinese language consumers prefer to shop for (31%), Notice that women are typically more interested than men (39% versus 22%).

Figure 1: Lifestyle Keep an eye on SurveyDefinitely, China presents a great chance of clothes retailer. The united states made its name and development by guaranteeing the role of world supplier, especially for clothes. Because the current economic climate became better, Chinese language want to enjoy more american lifestyle. That's the reason Caroll developed an evergrowing interest for Chinese market. However, Chinese language are specific needs, objectives and tendencies that Caroll must understands and faces. The purpose of the following evaluation is to attempt to determine how Caroll could deal with in to the middle market in China, using interior and external research, outlining issues and opportunities for the brand.

Situation Analysis

An academic statement written by several professors, Heiko Gebauer, Thomas Fischer and Elgar Fleisch, name "Entering the Chinese mid-market segment: key to long-term success?" described major errors when going into the Chinese language market

Misunderstood of the Chinese consumers, their needs and goals.

Companies overestimate their image value.

Managers miss opportunities in concentrate on few towns only such as Beijing or Shanghai

In order to take care of those issues for Caroll, I am going to design a strategic marketing plan consisting within an analysis to match market opportunities to the resources and capabilities of the business. In cases like this, I am going to follow different steps to establish a SMP for Caroll

Environmental Examination (PESTEL)

Identifying Customers

Competitor

The company in its environment (Porter's Five Forces and SWOT analysis)

The company

Marketing Blend: The 4 P's and 3 V's

Value Creation (Value String, Boston Field and Ansoff matrices)

The analysis is dependant on information found on Internet and on my personal activities as women clothes consumer and Asian person and knowledge since I examined how to conduct business in China during five month at the SEM Tongji College or university in Shanghai in 2011.

PESTEL analysis concentrates in pursuing area; politics system and stability, economic steadiness, socio-cultural practices, scientific advancements, environmental work and legal and judicial systems. It gives a worldwide view, the "big picture", of the environment where the brand is interested to. It offers a strong platform of opportunities and hazards.

P for Political

Political advantages

Political disadvantages

Not Relevant

Government stability

Labor law

Political stability

Regulation/Deregulation

Social/Work Legislation

Tariffs

Tax Policy

Trade Restrictions

Bureaucracy

Corruption

Freedom of the press

Environmental law

Government type

China is dependant on communism politics system with on unique get together, the Chinese Communist Party. Due to the unique get together China is not regarded as a real democratic country by foreigners. Nevertheless the country enjoys political and government stability because of strong control and obedience. Indeed, no substantive political opposition groups exist (Central Intelligence Firm, 2012). So, even if some issues are present like ethnic unrest in Tibet, they do not represent threats to its political stability.

Since Mao Zedong, previous leader of China, the united states uses capitalist economy in order to make China the first monetary power. The road is still implemented and the government decisions are design to ensure constant economic growth. The country shows goodwill, restrictions, tariff and tax policies are favorable to business and specifically for foreign companies; decrease in taxation to international companies, creating specified free trade zones such as Shanghai and Shenzhen, investing in general public amenities and facilities to draw in foreign traders, and continually liberalizing their trade rules to create attractive and impactful investment centre.

Nevertheless, corruption is strongly inserted in China federal. It really is called the "East Asian paradox": countries displaying exceptional growth details despite having thriving problem cultures (China monetary review, 2012).

E for Economic

Economic advantages

Economic disadvantages

Not relevant

Consumers' Throw-away Income

Economic Growth

GDP/GNP growth

Globalization

Labor cost and supply

Exchange rate

Interest rates

Inflation rate

Business Cycle Stage

Likely Economic Change

Unemployment Rate

As I said previously, China used for open up market concept. China's continuous and progressive reforms started with phasing out agriculture activity; followed by liberalization of prices, fiscal decentralization, open up banking and financial system, creation of share market, large amount of private sector investment, and large international direct investment (Central Brains Agency, 2012). Thanks to its efforts, in 2010 2010, China became the quantity two world market in term of size. China advantages from a good two figures progress even with the crisis.

However, the country faces inflation and increasing municipality debt that could represent a menace regarding "government items" for company and reduce the buying power of consumers. One of the key China economic issues is to encourage local demand that is why the government's 12th Five-Year Plan, implemented in March 2011, focuses on the necessity to increase domestic consumption to make the market less dependent on exports in the foreseeable future (Central Intelligence Organization, 2012).

S for Socio-Cultural

Social advantages

Social disadvantages

Not relevant

Age distribution

Career attitude

Educational structure

Attitude to work

Social mobility

Cultural taboos

Health Consciousness

Population Growth Rate

Perception of safety

Employment patterns

China has 1, 344, 130, 000 people and reached a 7. 298 trillion USD GDP in 2011 (World Standard bank, 2011). In 2012 73, 5% of people is aged from 15 to 64 years old, 51, 4% male and 48, 6% female and the median age is approximately 36 yrs. old (Central Intelligence Agency, 2012). In 2010 2010, 47% of the population lives in cities and China will become more and more metropolitan. Indeed, people proceed to metropolitan areas looking for job and life improvement.

Official dialect is mandarin; however, there tend to be more than 100 dialects in China. Students and executive employees should learn English. AFTER I was at China, I notice that the language really was important for Chinese language. For example, you'll get another price when negotiating if you speak English, Chinese or the local language.

The Chinese culture is influenced by Confucianism, Buddhism and Taoism. I believe the most well-known Chinese expression is Guan Xi, meaning relationship; business routines in China focuses on building marriage. Also, for many Asian ethnicities, the image is vital in China. They have got a strong sense of pity and delight.

Related to the value of the image, Chinese, especially the top and middle class society, are suffering from a feeling of materialism where using (luxury) goods and creator items give them position in the world. Deng Xiaoping, one of the top statistics in the opening of the market said to get wealthy is glorious ». Unlike western people, China widely discuss about money, how much they earn, what they have

T for Technology

Technology advantages

Technology disadvantages

Not relevant

Impact of Internet (reduce communication costs)

Rate of technical changes

R&D activities

Technology incentives

Technology transfer

Degree of automation

Emerging technologies

To be genuine, technological advancement is leaner than in developed country. However, China does not ignore the value of technology and has spent and still invests a whole lot in anatomist, telecommunications, and processing and information systems. China took advantage that many high end technology companies as Apple or Huawai are established in China to obtain new solutions. Indeed, whenever a company wants to settle in China, the law requires that 1 / 2 of the professionals must be Chinese and part of employees too. Additionally, the government is wanting to get "brains" in China in order never to only copy others' technology but to develop their own. For many areas, China wants to be the first and the best.

E for Environmental

Environmental advantages

Environmental disadvantages

Not relevant

Environmental consciousness

Weather

Climate changes

There is several documentary on pollution in China; the country suffers from its rapid progress and the activities associated. Even if the Chinese language government feels that environment is a serious issue that must be handling. However corruption and wish of development made environmental control difficult. It could either be on opportunity (cost) and a hazard (image).

L for Legal.

Legal advantages

Legal disadvantages

Not relevant

Employment law

Antitrust law

Consumer law

General framework

Health and Security laws

Discrimination law

China's legislature is mainly produced from the soviet and continental civil code of ideas. China has setup international trade and economic arbitration to be able to attract foreign company and develop international business. However, Chinese prefers the use of arbitrator; it symbolizes a keeping time (Central Cleverness Agency, 2012).

According to me, the legal point symbolizes the biggest hazard for conducting business in China. When I research in Shanghai, I put the opportunity to have a class about Chinese laws and I could affirm that the law and its software are made to advantage Chinese language part, always. For example, only a Chinese language lawyer in other words a lawyer who was simply graduated in a Chinese language Law University is proficient. Also, several conditions show that it's usual that foreign court decisions are not enforce by Chinese courts.

The PESTEL analysis of China point out that it symbolizes a great chance of Caroll to utilize the Chinese language market; huge potential, increasing buying ability and middle income, sense of materialism, development of infrastructures, goodwill of the government. . . Other fashion clothes brands already inserted the Chinese language market and has recorded high sales and profitability.

Nevertheless, hazards are as big as opportunities. As I simply said, it isn't good to own issues in China. I recall a story that my Chinese friend told me; in China, vehicles have the main concern over pedestrians. He explained to be cautious, because in the event a car strike me, even if the drivers at night red light, when i am a foreigner I am incorrect and all Chinese language will protect the driver (strong collectivism value). I feel that this aspect totally highlights that the Chinese culture is way not the same as the French culture which represents the second threat: Caroll will not know the marketplace and consumers.

Exhibit 2: Growing mid-market households in China in a huge number. Boston Consulting Group

The show above implies that middle income are emerging, the analysis conducted by the Boston Consulting Group (2010) estimates that in 2020 about 69 million people will be considered as middle class, more than the French population! Furthermore, it's been forecasted that by 2025, this segment increase to 590 million with an impressive US$ 1. 3 trillion spending electric power.

Helen Wang, writer of The Chinese Dream: The Surge of the World's Largest Middle Class and What THIS MEANS for you said that to be middle-class in China the individual would earn between $10, 000 and $60, 000 each year. Considering the cost of Chinese life and living benchmarks, lower than in traditional western countries, a middle class can afford very huge apartment, much longer and better education and spends in entertainments and apparels. These residents are mostly metropolitan, employed in services and have today's world view; this new middle income presents China as a consumer culture. As we found earlier, the image can be an important value for Chinese language that is why they spend in good quality products or non-essential use in order showing their success (position). Families tend to buy more discretionary and small luxury items and the show of the household budget that runs food, clothes and other essentials shrinks (The McKinsey Quarterly, 2006). Largely, middle class consumers are looking for famous product which demonstrated they are area of the community and in the meantime tailored product; they need to keep their personality. With increasing product knowledge and surging purchasing power, mainland consumers in China are expanding higher needs for quality and comfort in clothing. They often prefer apparel manufactured from natural fabrics (International Trade Centre, p. 50, 2011). According to the China Textile Development Article in 2010 2010, Chinese consumers rated comfort at the very top priority.

Even if they are able to find the money for more expansive product, middle class consumers still but cheap product. They consider cheap and expansive products strongly different and focus on details (circulation route, store, services). It will be a huge mistake to think that they aren't price consciousness.

J. Roy says, "A lot of people only buy clothes online when they want for something cheap, not when they want for style. It might be a blunder for an American shop like J. Staff or Difference to point out e-commerce over their in-store shopping experience", customer experience is highly appreciate by Asian consumers. Based on the Global Monitor, sites are used to learn customer reviews and compare prices (59%) and browse the latest styles (58%), followed by buy clothes (55%).

Also, customers tend to be loyal to a brand. It's important for Caroll to make a good relation with consumers even if the maximal potential is not reached yet, Guan Xi. Chinese language consumers develop a strong environment conscience, a key point to consider if Caroll want to make a long term relationship.

Understanding and adaptation are fundamental words, for example Levi's got launch a particular line designed specifically for Asian physiques and tastes, with different slices and tighter meets. It common knowledge than Asian people are smaller but it another thing to redesign clothes to match to their size. I think that is difficult to understand the Chinese middle class needs and expectation only predicated on studies. I had developed the opportunity to study with Chinese language student in marketing that help me to raised answer to this part however the analysis is insufficient deep.

Y. Chen says that "given the competitiveness of the market, it is only advisable (for stores) to enter into China if they're serious about it and also put required assets behind it".

The home clothing market in China is dominated by brands of Western origins and other brought in products, such as Giorgio Armani, Cerruti 1881, Hugo Employer, Dunhill, Chanel, Dior, Ermenegildo Zegna and Salvatore Ferragamo. The center and low end of the market has a product mix of international and local brands, with most of the products being manufactured in China and least developed countries (Bangladesh, Egypt, Morocco, Portugal, Spain, Turkey, and Viet Nam) such as Nike, Adidas, Tommy Hilfiger, Zara, C&A and H&M. However, we can notice a growing competition from Chinese language brand as Bosideng, White Collar, Kaiser, Lily, Girdear, JNBY, Peacebird, Sierli and Gloria (International Trade Centre, p. 35, 2011).

In 2001, the China seen to the World Trade Business and after a brief period, foreign brands started to aim for Chine; 2007 for H&M, 2008 for Zara and Markings and Spencer, 2009 for Tommy Hilfiger Competition to Caroll already are set up in the Chinese language market and so get a great benefits since Chinese individuals are more dedicated and give attention to long term romance.

Figure 3: Main foreign Attire brands in the Chinese language market (source ITC, 2011)

Figure 4: Main domestic Attire brands in the Chinese market (source ITC, 2011)

SWOT Matrix

Strengths

Weaknesses

International experience, in particular in Japan, first contact with Asian culture

Trendy clothes

Works with world famous fashion clothes designers

Comfortable products

Good quality product

Prices insurance policy, price of Caroll clothes are a little bit too high for middle class but far too low to be consider as luxury clothes

Many unhappy judgment on the quality of service (customer reception, information. . . )

Fails to create a sense of belonging to a community despite different attempts

Opportunities

Threats

Increase of the middle school, the target

Increase of buying power

Low labor and house cost

Growing interest for clothes shopping

Open market, administration policies to get foreigner (taxation, tariff )

Strong proven competition

Open market = upcoming competition

Legal system and corruption

Inflation = raise of cost

Unknown in China

I will not spend more time on opportunities and risks since we already spend times on it with the environment and competition' analysis; I will only replicate that opportunities are as great as dangers are big. The SWOT examination tends to illustrate that Caroll has several advantages in order to fit with the Chinese language demand. However, the business must work hard on consumer experience and price that symbolize key drivers for change. Once again, adaptation is a key solution. In another field, we may take the exemplory case of Best Buy, an electronic retailer really successful who didn't tap into the Chinese language market. Indeed, bargaining is a solid value of Chinese language culture and the company didn't supply the possibility to great deal in Best Buy Store. Within two years, the brand sealed all its stores in China since it was unable to satisfy Chinese language consumers.

Porter's five makes model

Threat of new entrants

High threat

Low entry obstacles with encouraging federal government policies, current economic climate of level and other costs advantages and really attractive market.

Switching cost almost inexistent.

In balance, significant capital requirement and more developed huge players.

Sustainable industry development rate.

Supplier bargaining power

Moderate

High supplier attentiveness (in 2008, China displayed half textile and clothes distributor).

Low suppliers' differentiation.

Low moving over cost.

In balance, significant threat of buyers' integration (growing Chinese competition).

Low dependence with purchasers.

Industry Rivalry

Highly competitive market

Highly focused market with numerous and varied competitors including some huge in size (like Zara or Mango).

High predetermined cost (physical store).

Almost no turning cost.

In balance, high industry growth rate in something differentiation model with significant customer commitment.

Low exit barriers

Customers bargaining power

Moderate

Consumers highly delicate to consumers' encounters and differentiation.

Demanding market.

Low switching cost.

In balance, significant customer loyalty.

Low potential buyers' amount.

High volume of buyers relative to sellers.

Threat of substitutes

Low / Medium threat

Enormous selection of substitute at cheap and quality.

Switching cost almost inexistent.

In balance, substitutes are considered in a total different way with a total different consumers' behavior and patterns.

The Porter's Five Makes research totally complies with the surroundings, competitors, market and consumers' analyses. The biggest threats are displayed by the highly competitive market with existing and future opponents. Involving customers and suppliers buying electric power, I'll say that one phrase, Guan Xi. Everything is based on marriage; understanding and answering. Chinese language are more ready to show loyalty than Traditional western people, so the menace can be cope with by creating good romantic relationship. And previous, the substitute danger is not actually significant as customers have the ability to make a specific variation between products.

The marketing mix

Product

Price

Variety product: several line

- casual

- working clothes

- night time clothes

Quality: high quality product with noble and still comfortable fabrics

Design: use of famous worldwide clothes creator = design + value for customers

Brand name: Caroll is a well-established French company in European countries and can offer a certain image (elegance, wealthy ) to the customer.

Service: attempt to reach the most satisfactory and valuable consumers' experience.

Price: right match with the grade of the merchandise and service and the image.

Currently, I think that for the Chinese language market, the price of Caroll is not justified.

Promotion

Place

Advertising: China is a giant advertising place. Marketing and advertising are everywhere. That is a chance for Caroll to generate solid brand awareness by using diversify communication

- event

- billposting

- commercial

- Internet

Public connection: be present, involved is absolutely important. Public relation is an integral factor for success.

Distribution channel: as we saw to be able to tap into the middle market, Caroll must open physical store better than only online advertising.

Location: while i was in Shanghai, I got impressed by the amount of shopping center, there are department stores everywhere. Availability and good location will be an help develop the brand into the Chinese market.

The aim for is the center Chinese class. The meant position is to represent a high valued brand representing the style, offering high quality product at reasonable price.

Strategic Sections - Align 3 V's

Valued Customers - middle class working women surviving in urban area

Value Proposition - high respected and high quality created clothes and accessories

Value Network - physical store enjoying gratifying customers' experience.

Value

Value

The Value Chain

Firm infrastructure - 400 stores, 274 in France, 123 worldwide

Support activities

Human tool management - About 1200 employees

Technology development - Design

Procurement - Chic and noble fabrics

Operations

Specific series product

Outbound logistics

Warehousing

Services

Customer support

Online store

Marketing and sales

Advertising and promotion like fashion shows.

Inbound logistics

Inventory control

Storing

Chinese and least develop country for supply

Primary activities

Service

The Boston Package matrix

The following Boston Package matrix is dependant on personal perception of the marketplace since no information was found.

Evening clothes (dress for get together for example)

Casual clothes

Working clothes

Accessories & shoes

Ansoff matrix

Market Development

Diversification

Chinese middle class represent a new market for Caroll, new customers' needs and prospects so new business model and strategy.

Target different physical market segments at home or overseas.

There is no need to diversify more the brand. Caroll has already been offering a variety of products (clothes and accessories).

Market Penetration

Product Development

Going to the Chinese language market is one thing but stay strong in the Western european market is another. Even if the Chinese language market offers great opportunities, this is a major issue to reinforce our position in existing market. Caroll has to work harder on:

Introduce a devotion scheme = community

Increase and improved sales force activities.

It is important to design specific line to match with Chinese language demand

Design specific brand for China (taste, size )

Improve customer support or quality.

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