Market researching product, price and target markets (1)

Poncho trend FASHION MARKETING REPORT

CONTENTS

04

1. Abstract 2. Introduction 3. Methodology

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4. Luxury market level: Burberry 4.1 Product 4.2 Price

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5. Middle market level: H&M 5.1 Product 5.2 Price

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11 4.3 Promotion 4.4 Place

5.3 Promotion 5.4 Place

CONTENTS

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6. Value market level: Primark 6.1 Product 6.2 Price

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25

23

Discussion

6.3 Promotion 6.4 Place

Conclusion and Recommendations

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Reference List Figure List

Abstract

1

This report involves demonstrating the application of the marketing mix strategies in three fashion-related retailers one from each of the three market levels (luxury, middle, value). After carrying out primary and secondary research, I understand why similar garments produced by various retailers could have such differences in terms of the price, product, promotion and place. One of the main reason is due to each retailer’s position in the market and the brand identity that they want to produce. This report allows me to compare and contrast on the marketing mix of different retailers and discuss the distinctions, to create a thorough evaluation.

2

Introduction

In this report, I will provide an overview based on ponchos produced by three different brands represented each market level. Burberry representing luxury market level; H&M representing middle market level and last but not least Primark representing value market level. Since fashion marketers want to understand existing products in fashion market and further create and develop new products, therefore it is important to recognise similar garments offered by other businesses in order to provide suitable strategies. Research will be depend on the marketing mix (Product, Price, Place, Promotion) of the three retailers from each market level.

Product is an item that is produced to satisfy the needs of a certain group of people. They can be intangible or tangible as it can be in the form of services or goods. Price is basically the amount that a customer pays for to enjoy it. Usually determined by the cost, competitor’s price point and the brand position. Place is about positioning and distributing the product in a place that is accessible to potential buyers. Last but not least, Promotion can boost brand recognition and sales. It is comprised of various elements such as public relations, advertising, sales promotion etc.

The poncho trend was started back in 2014 when Burberry launch their Burberry Prorsum 2014 Fall/Winter catwalk show. With successful marketing strategy of, having celebrities wearing personalised ponchos, Burberry’s ponchos become popular, however not every fashion follower could afford such luxury ponchos, therefore many retailers such as H&M AND Primark starting to produce replica.

Methodology

3

Both primary (i.e. visit retailers, questionnaires, face to face interviews) and secondary research (i.e. online materials, books) are used in this report. In order to create a more accurate report, quantitative results are produced to support the statistical area. On the other hand, I used short interviews and questionnaires to produce qualitative data in order to understand the meanings attached to products, brands, attitudes and behaviours. Â I visited many retail stores in Leeds and Manchester in order to research for similar garment from different retailers from the three market levels. Moreover, to ensure the diversity of my research and sufficient supporting materials, interviews are carried out in stores with not only customers but also associates. Apart from primary research, I carried out more in depth research with online resources, for instance, video of a ready-to-wear fashion show, newspapers, journals and blogs.

4. Luxury Market Level Burberry is an iconic luxury brand with their famous British heritage designs. It was found by Thomas Burberry in 1856 and mainly focusing on outerwear.

Christopher Bailey has creatively elevated this traditional British label into a more modern sensible and trendy brand. The Burberry Prorsum 2014 autumn/winter catwalk show has sparkled a heated trend of poncho.

The basic design of Burberry ponchos is fairly simple, however, some of them are more complex than the others because of the use of different materials. There are various middle to high quality fabrics in terms of the fibre content such as: Merino wool Wool Cashmere Cotton Silk Suede Calfskin The use of superior materials and the brand itself making the Burberry’s ponchos incompatible and exclusive. Poncho also commonly be called “blanket coat” due to its simple structure which basically is just a huge piece of “blanket” with more fabric at the front acting as the sleeves and shorter at the back.

Since Burberry is a luxury brand, their target customers will be high income group, therefore they put main focus on their online website, services and exclusivity for each customer. One of the reason Burberry poncho became a heated trend is because of its uniqueness. This allows many celebrities to wear their ponchos and causing the public to follow.

Each Burberry poncho can be personalised by monograming with extra £200. Initials can be added with the unquote Burberry letter embroidered at the bottom right of the poncho (uk.burberry,com).

4.1 Product

4.2 Price The use of exquisite fabrics on Burberry’s outerwear and accessories can be represented by the price range of ponchos from £595 to £2,995 (uk.burberry.com). The price differences are due to the use of different materials and designs. To cite an example, ponchos made with merino wool cost £595 whereas those made with suede or calfskin cost around £2495 to £2995. Moreover, special designs such as tiered film coupé (Figure 3), long hand cut fringing (Figure 4) and jacquard-woven with a check pattern and stitch edges (Figure 5) have added more value into the ponchos, which therefore cost more. In addition, according to their 2014/2015 Strategic Report, the marketing team has always been focusing on product demand, market research and competitor’s prices.

4.3 Promotion Promotion has always been a core part of Burberry’s marketing mix strategies. One of the most obvious and well-known strategies they have been using is having famous celebrities and models in their campaign, as a result these promotions allowed the exposure of brand name to a wider global platform.

In order to keep the exclusivity and brand reputation, luxury companies like Burberry do not use sales to attract customer because price discrimination will always result in damaging its brand image.Â

4.4 Place

Burberry is a famous globalised brand. They have stores located in five hundred locations spread all around the world in fifty countries. Their motto is “One Brand, One Company’. The locations of the stores are very vital and influential and special areas are chosen so that their target market (premium customers) can easily frequent them. Products are also placed at many premium departmental stores and outlets as well as various online organisations (see figure 6). The wide range of distribution channels allow more sales created by customers from different countries or locations.

5. Middle Market Level H&M is a popular Swedish fashion brand creates sustainable fashion for all. They aim to provide latest designer trends at affordable prices. H&M always put focus on sustainable and conscious fashion at best price and quality. Their products include everything from formal, essential basics and functional sportswear to shoes, bags, jewellery and make up, there is also H&M home which provides fashionable interiors for children and adults.

5.1 Product The H&M ponchos are generally thinner compare to Burberry’s.

Most of them featured fringes hem or tassels. Jacquard weave is one of their most common style. H&M provides a large range of different style of ponchos, many of them featured fringing technique, some of them are thicker suitable for winter and some of them are thinner for summer. Comparing H&M and Burberry, ponchos from H&M have more details such as braided ties, hemstitch embroidery and lace trim. There common care instruction is machine wash at 30°.

5.2 Price

The price range of ponchos produced by H&M is ÂŁ14.99 to ÂŁ24.99. They used a variety of different fabrics such as cotton, polyester, viscose,polyamide, elastane, acrylic and wool. Unquestionably, Burberry utilised more luxury, high quality, and scares materials compare to H&M and therefore there is a huge price difference between them. In my opinion, this is an appropriate price point of H&M, because consumers will be willing to pay ÂŁ14.99 for a fashionable jacket-like garment with decent material, and on the other hand, for fashion followers, they might be willing to pay a bit more in order to get better quality in order to complete their outfits.

5.3 Promotion

They put main focus on their online store, for instance, they encourage customer to sign up for lasted updates and give them 25% off one item as a reward. By having more people sign up for there newsletter, regular emails will be sent to subscribers, and the brand H&M will be reminded regularly to customers. In addition, apart from their affordable clothing, they also heavily participate in sustainable fashion. They wanted to make it easier for customers to make an informed and more sustainable choice, therefore, they offer range of products that have been added sustainability value. H&M introduced this concept with a first dedicated Conscious Collection in Spring 2011.Lastly, collaborations with luxury brands such as the Balmain, Alexander Wang, Versace, Karl Lagerfeld etc.

H&M is a big and influential company in the fashion industry, according to their website, there are 3,900 stores located around the world across 61 markets worldwide. The H&M company put main focus on the European market by having the most stores located in the Europe. Comparing the number of stores locate in different areas, Germany has the most H&M stores (449 stores), compare to China with 353 stores, USA with 415 stores, France with 222 stores, and the UK with 264 stores.

5.4 Place

6. Value Market Level

Primark is an Irish clothing retailer operating in Austria, Belgium, France, Germany, Ireland (branded as Penneys in Ireland), Portugal, Spain, Netherlands, the United Kingdom, the United States and Italy. It was founded and headquartered in Dublin, Ireland. Primark offer a diverse range of products, including new born and kids clothing, womenswear, menswear, home ware, accessories, footwear, beauty products and confectionery. Primark is well-known of their extremely low prices, therefore many questioned their supply chain. Despite the brand position at value market, they have their flagship store in Oxford Street which is street that is full of luxury brands and also high street retailers.

6.1 Product The design of the Primark’s poncho is fairly simple compare to the H&Ms. They put focus on their pattern instead of the extra design like fringing and. Despite the fact that primary aim at lower income group, the sign of their ponchos are up-to-trend and easy to style. However, as I have mentioned, their supply chain has been hugely questioned in terms of ethical issues. Some say that they employed child labour, others claim that the material they use have been damaging the environment. Therefore, customers maybe discouraged to buy their products despite the low price and good design.

6.2 Price

‘Primark holds the number one spot in terms of clothing by volume’ (WGSN, 2013). The popularity of Primark is unquestionably, especially the attractiveness of their prices. The price range of Primark poncho is £10 to £18.

Depends same as Burberry and H&M different prices represent different material used for the poncho. One of the Primark poncho with monochrome aztec-print, cost £18, was worn by legendary supermodel Kate Moss while she was at the Isle of Wight festival at the weekend in 2011(MyDaily and Karmali, 2015). As we can see, despite the brand position at value market, the products they offer are actually fashionable.

6.3 Promotion For company like Primark, they are already offering very low prices for their product, therefore sales promotion are not as often as high street brands like H&M or Zara. However they do do sales promotion seasonally and sometimes having a small amount of sales items in sales floor. Primary do not put a lot of money on advertising, but they do make promotion schemes in order to gain more market share. Since they do not have online platform, therefore there are less promotional route for them to advertise their brand.

6.4 Place The UK now has 161 Primark stores in total, you will be able to see Primark stores and outlets located in nearly all major and important high street and big shopping centres. In 1973, first store opens in Derby. Apart from the UK, in Spain, there are 41 stores located, and in Ireland, there are 35, and 20 in Germany. Primary grown rapidly during mid-2000. In 2015, they expanded to the Unites State when they open their first store in Boston and another one in King of Prussia Mall, which is the nation’s second largest mall. Further expansion will be carried out in 2016 where a new store will be opened near Philadelphia, US.

DISCUSSION The purpose of this report was to investigate the marketing mix base on some similar items produced by retailers from different market level. After comparing and contrasting, I Â found that there are big difference between each level. This was mainly due to the various identity and image that each brand wants to perceived, and also largely based on the materials and design they provide. I believe my findings can be apply to describe the marketing mix generally in the fashion industry. However, I have only based my research on threes brands, even though they represent each market levels, each retailer has their own marketing strategies and unique identity. As a result, the relationship of marketing mix and retailers can be established by comparing similar products, but findings can only apply to those retailers.

CONCLUSION AND RECOMMENDATIONS To conclude, the applications of marketing mix between the three retailers is predominantly depends on their market position and target market. Distinction can be found by comparison of their product, price, promotion and place strategies. In this case, while Burberry is representing the luxury market level, they provide high quality product at the same time with a high price point.

Whereas Primark representing lower market level produce product that use relatively lower quality materials and charging them  at a lower price. H&M stands at the middle provide an alternative of Burberry’s poncho for fashion followers with an affordable price. There are many improvements for this research. In order to achieve a more valid and accurate findings, more retailers or a wider range of products can be investigate in this research. With a more in depth research, findings can be more generalised and representative.

Word Count: 2,639

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