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Evaluation Report


nsson in

rlett Joha

Fig1:Sca

Mango U HQ

Fashi o n for Young Urban Woman


I confirm that this work has gained ethical approval and that I have faithfully observed the terms of the approval in the conduct of this project. This submission is the result of my own work. All help and advice other than that received from tutors has been acknowledged and primary and secondary sources of information have been properly attributed. Should this statement prove to be untrue I recognise the right and duty of the board of examiners to recommend what action should be taken in line with the University’s regulations on assessment contained in its handbook.

Katherine Chen 16.Jan.2014 date .......................................................................................................................

signed ....................................................................................................................

Word Count: 2,675

MA International Fashion Business Case Study: Project Brief Course Leader: Alexandra Hanford Student Name: Katherine Chen T2051778


6

8

Executive Summary

Methodology

10

Introduction

12

Business Strategies

Globalization Franchising &

14


16

Marketing Mix Strategy

24

26

&

Logistic Supply Chain Management

MarketPosition

28

Recommendation

30

Conlusion


Fig2:Miranda Kerr’s Fall 2013 Mango Ads


Executive Summary

Mango MNG Holding is Spain based group of companies engaged in design, production and distribution of textiles and fashion accessories across the globe. Company retails through its own outlets and through franchisees ac r os s Spain and abr oad. Impor tant activities such as design and distribution are managed completely by the company, while manufacturing is outsourced. In this case study, the author critically evaluates the business model employed by Mango MNG Holding to design, produce, store and distribute its fashion products. It examines Mango’s key strategies on product development, supply chain management, manufacturing policies, marketing communication, branding and distribution strategies by using PESTEL(Appendix 2), SWOT (Appendix 3) and value chain framework (Appendix 5) and Ansoff’s matrix.(Appendix 6)

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It expanded across the country and opened stores in Valencia as and major cities in subsequent years. By 1988, just seven years old, Mango had opened 100 stores in Spain and realized over 48 million Euros in sales revenue. It first went international in 1992 by opening up stores in Portugal via franchising and own outlets in 1996. The Company has grown to become the second largest textile exporter in Spain with over 2050 outlets in 107 countries. In 2001, Mango MNG recorded a turnover of 1.408 billion Euros and opened 644 new stores.

Fig3: Olivia Palermo for Mango: Feel the Passion?

The two brothers Isak Andic and Nahman Andic found Mango Company in Barcelona, Spain. It started in 1983 commercializing garment product under Mango brand name and opened first store in Boulevard in 1984. (Salerno and Zaragoza, 2011) Five other stores were opened across Barcelona during the same year. Major products include sport jeans, suit and casual wear. Its business model is based on the premise of good clothing designs, strong brands and affordability. (Salerno and Zaragoza, 2011)


Introduction 8

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Methodology

The report uses both quantitative and qualitative research methods to gain insights from the perspective of the customers. Primary research is done by giving out a set of questionnaire to gain insights of consumer’s perspective and views on the company. Secondary research is undertaken to understand all the key subjects of the case including products design, manufacture, logistics, retail, e-tail management and branding. The micro and macro environment is analyzed through a PESTEL analysis. (Appendix 2) Maslow’s hierarchy of needs are applied to explain how the community of Mango customers associated with sales. Hofstede’s cultural dimension theory is also applied in this report so as to clearly understand different culture dimensions in relation to their global expansion strategies. In-store observations are undertaken in London (Appendix 8) according to which the conclusions are made by the authors in relation to Mango’s product, VM, price architecture and fashion ability.


10 Evaluation Report

Fig4: Olivia Palermo, always the fashionista ?


Fig5: The Mango Summer 2011 Ads Once Again Star Scarlett Johasson?


Business Strategies Business strategies in Mango revolve around team work, business concepts and logistical management. These strategies are formulated at three levels namely corporate, business and functional levels. Corporate strategies are for growth, stability and retrenchment or downsizing to address the strategic scope of the company. Business level strategies are formulated to develop and sustain competitive advantages. Functional strategies are used at departmental level of the firm. Mango’s globalization strategies include growth strategies used to enter into world markets. This has enabled the firm to expand in domestic and international markets. Marketing strategies used in Mango include branding, product development, integrated marketing communication, and franchising and distribution strategies. Cost reduction strategies include outsourcing and supply chain management. (ICMR IBS Center for Management Research, 2013) 12

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Globalization &Franchising Mango MNG Holdings had outlets in over 107 countries across the globe as at 2012. Entry mode into international markets has been primarily through franchising. Rapid growth and expansion of Mango in global markets is highly connected to the use of franchising strategy since 1992 (Salerno and Zaragoza, 2011). Franchising is used as an alternative to a costly and risky direct entry mode to new markets using investment of existing firms. Opening wholly owned shops required huge capital investments and were high risk especially in developing and emerging markets. A franchising strategy enables the company to overcome entry barriers exhibited in restrictive markets and leverage competition. Use of franchising enabled Mango to overcome cultural and administration barriers outside EU one and obtain strategic retail locations, Further, the company benefited from reduced cost of distribution, marketing and operation that were executed by the franchisee. Franchisee fee, royalty and other associated levies added to firm’s finances (Laanti, Gabrialsson & Gabrielsson 2007). It also enabled Mango to expand rapidly into international markets using little capital and resources while uniformity in procedures ensures consistency and uniform product quality. For instance, outside sales volume surpassed domestic sales and 65% of stores were franchised by 1997 and by the end 2010, outside stores accounted for over 81% of Mango’s sales revenue.

Although the franchise system allows a company to expand quickly and overcome cultural and administration barriers, there are many factors which may result in the failure of franchise system. First of all, most of the franchisees have to pay an annual or monthly promotion fee. the results of collective promotion marketing will not necessarily became direct effect of individual stores. (Appendix 9) Secondly, lacking of communication between the franchisers and franchisees may lead to poor support from the franchisers and the interaction becomes a burden. The Franchisees’ premises on conditions, for instance the place of the store should be located on the main street or in a shopping center may turn out to be some places which may not match or fit in the operation of the industry. Thirdly, due to the regional differences, the bestseller collections/ products, may not sell in other countries. Franchisers’ requirements, supervision and restrictions may hinder the uniqueness and development of individual business stores. (Appendix 2) Most production lines have been moved outside Spain to cheaper labor countries such as China and Morocco but some production lines are still in Spain.


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Fig6: Scarlett Johansson For Mango Spring Summer 2011


Vertical Infuence Celebrities

Fig7: Collage from Left down to right

Marketing Mix strategies Marketing mix strategies employed by Mango include pricing, product development, branding strategies, and marketing communication and distribution strategies. Under branding, the Company commercializes its products using different brand names derived from the Mango acronym across different countries. (Appendix 3) For instance, original brand name Mango Barcelona is used in China to associate the brand with European origin. In Anglo-Saxon countries, initials are commonly used while product labeling uses MNG brand from both inside and outside the cloths. Mango brand is publicized through appealing stores in new markets across Europe and major cities of the world delivering identical and high level of customer service (Blanchard & Bowles 1993). Brand recognition is used to build and maintain firm’s competitiveness (Kapferer 2012). However, the use of different brand names across countries may be confusing to travelling consumers who could not be able to recognize the firm’s products.


Horizontal Infuence Bloggers

What do you feel about the promotion &advertisements? 28% No

33% No

72% Yes Suf�icient ads

60% No

67% Yes I recognize the models used

40% Yes Info on lastest designs

14% No

52% No

86% Yes

48% Yes

Ads message easy to understand

74% No

26% Yes Ads do not make sense

Fig 8: Mango Questionnaire

Ads make me feel like buying

Product design is an essential element for firms in the fashion industry where customers are demanding. Mango’s business model Will you recommend this brand based on the premise of good clothing designs, strong brands and toisaffordability. your friends?The company has made creative design and product development especially for young urban women using a group of 35%well Yes versed with latest trends in fashion industry. Designers designers gain knowledge through trainings and attending fashion shows and 4% No trade fairs across the globe (Rodriguez 2008). They design simple, 58% Maybe young, 3% dynamic and urban products in line with the brand image of Never Mango, sometimes in cooperation with well-known designer, models and actors, such as Scarlett Johansson, Claudia Schiffer, Naomi Campbell, Kate Moss, Penelope Cruz and currently cooperates with Miranda Kerr and bloggers (Salerno and Zaragoza, 2011) Marketing communication is spearheaded by the use of media and availability of information communication technology in countries of operations. According to Wilkie (1994), promotion should be high during product introduction to build awareness and generate interest from customers. Advertising budget should be reduced in subsequent as public become aware of the brand. (Appendix 1) 16

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‘’We definitely create collections! This is one of our characteristies compared to our competition. We want all clothes to fit with each other. A girl or a woman comes to us and feels that we are like a boutique,’’ Said Enric Casi, General Director of Mango. (Salerno and Zaragoza, 2011)


The mega store means the large store the area of which ranges from 500 square meters to 1,500 square meters . The latest fashion products of Mango are presented in the store. The store provides consumers with one-stop shopping experience. (Fibre2fashion.com, 2014) Within the quick pace of fashion industry, Mango’s major rivals(Fig ) for example Uniqlo, Zara and H&M have already started the mega store concept. (Fig ) Fig 10: Retail Life cycle

Fig13: Zara opens its biggest store in New York

Fig 12: Uniqlo clones China strategy in order to remain cool in Japan

Fig 11: AVENUE K | Kuala Lumpur H&M Store

Fig 9: Fast fashion perceptual map

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Price Comparison

Fig 14: Fast fashion price comparison diagram


ou know the brand go? 100%

How do you know about Mango? 5% Others

13% Words of mouth

8% Social Media

32% Internet Source

YES

Fig 15: Daria Werbowy replaces Miranda Kerr as new face of Mango

do you buy this brand? tipul choice)

37% Lower/ Higher cost

17% Good Design

23% Good brand image

28% Quality of clothing

43% Apparel

4% Others

42% Advertisement

What are your feelings about the prices? 0

10

28% Yes

20

30

40

Overall reasonable prices 0

10

20

30

31% Yes

Price and quality match

0

10

50

20

Price and quality match

40

30

60

50

70

60

40

72% No 80

69% No

70

42% Yes

58% No 50

80

60

Pricing strategies are used to reach out to different market segments, the firm specifically targets young urban woman with fashion in middle class position but slightly above Zara.(Appendix 4&8) Mango uses medium-high quality policy and products are priced medium-high. (Fig ?) There is need for increased use of online advertising particularly social media channels such as Facebook, YouTube, Google, and Twitter to reach targeted market segment (Hennig-Thurau et al 2010). Customer loyalty can be enhanced using loyalty cards and price discounts on for premium customers. (Appendix 1)

Fig 16: Mango Questionnaire

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According to Calder (2002), a firm that use cost leadership strategy gains competitive advantage in the market. It can provide quality products at cheaper price than its competitors to gain market share or make high returns by selling at current price (Porters 2008). This has saved the company significant amount of money while retaining key business activities like design and distribution. However, specific category of garments and accessories are produced by a single manufacturer to ensure uniform quality and standardized products. Technological innovation is used to enhance cost leadership strategies through efficient product design and business communication (Tyran, Dennis, Vogel & Nunamaker 1992; Singer 2008). Computerized information system is used to track inventory, manage supply chain and human resources. Moreover, all processes ranging from loading, storage, invoicing and dispatch are automated thus improving operational efficiency. Mango is differentiated from competitor products on basis of quality, original design, consistent and unified brand image. This is in line with objectives of dressing urban modern women based on her daily needs. This different has been key to Mango’s international prestige and business success (Singer 2008).

Fig 18: Miranda Kerr is the new face of Mango

Fig 17: Miranda Kerr takes on her role as the face of Mango

Cost leadership strategies used in Mango include outsourcing all manufacturing activities but some sourcing is done at Mango while others are outsourced (Perepu 2013).


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Logistics & management Fig 19: The rise of the Spanish high street


Mango has over 145 suppliers spread all over the world while every region specializes in one type of clothing they manufacture at competitive price (Rodriguez 2008). Mango has its own logistics and supply chain management system (SCM). They are used to manage, direct and make decisions in complex process of product design, supply, production and sales in automatic way. This has streamlined product distribution and reduced delivery time through efficient management of order.

It has improved quality control and reduced the cost of infrastructure. All stores of Mango are connected to suppliers and head office enabling the company management to track down sales information, popular designs in any given stores etc in real time. This helps in making appropriate decisions on production and design. However, there is a challenge of consolidating the position in every country of operation. Propriety stock replenishment system is used to match clothing accessories to specific stores hence computerized and timely replenishment of stock. For instance, casual wear and jeans are matched to stores located near universities and certain garments are matched to specific countries and seasons. However, all stores whether franchised or not are treated similarly in terms of systems, material and operational management. This is dangerous to parent Company because confidential information accessed by franchisee that may be used to against the Company. (Appendix 3)

Value chain analysis can be used to evaluate different categories that work together to create the final product and service in Mango. These activities include logistics, operations, marketing and sales activities. Others activities are technology, infrastructure, human capital and procurement system. Analysis of value chain helps managers to view the firms as sets of activities from which it derive its competitiveness (Jay 1991). ICT system and distribution chain in Mango is rated as high on VRIN Framework (Appendix 5).

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Market Position

Fig 20: MANGO blog


Do you know the brand Mango?

Gender

Fig 22: Mango Questionnaire

100%

Mango is strongly positioned in Spain and global fashion markets. (Appendix 1) Its original market is Spain but has since managed to expand into Europe and other parts of the world. Major leading market is Europe where the firm is traditionally strong. Mango’s brand and products are also popular in several European 43% countries.57% Beside Europe, Mango has expanded to China, Korea, Australia and Philippines as its new YES markets. North America and particularly U.S are very 5% Others crucial markets for the Company. Mango products are positioned as simple designer, young, dynamic and urban products in line with the brand image of Mango. This has created an identity in the minds of consumers. They are uniquely designed and differentiated to offer a 42% Advertisement verifiable value. Periodic market research is required so as to hedge off competition (Benfari 1999). There is need to review product performance time and again to keep pace with the current market trends and provides 37% Lower/ Higher cost benefits to customers. 17% Good Design

M F

the brand 100%

buy this brand?

How do you know about Mango? 13% Words of mouth

8% Social Media

32% Internet Source

In terms of rating this brand, how would you rate its poularity?

Fig 21: Mango Questionnaire

What are your feelings about

22% Among top 3 brands of the category 33% Among bottom three brands

45% Somewhere in the middle

Why do you buy this brand? (Multipul choice) 23% Good brand image

28% Quality of clothing 43% Apparel 4% Others

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Fig 23: Mango store collage London

Recommendation

Future sustained growth is recommendable. The firms should expand into new markets while maintaining the existing markets. Its products should be presented in all cities of the world. The firm’s main markets are mainly concentrated in Europe, America and Asia. There is a need to accelerate expansion into the unexploited global markets. This shall improve the firm’s profitability, return on this investment and finally realize its financial goals. The firm should further diversify its target market by including adult men and women as part of its expansion strategy so as to improve market position and penetrate into new markets. This will help Mango gain larger market share in present countries by offering new and fashionable products while attempting to provide new and existing products in new territories. This will help not only to grow internationally but also to gain large market share in global market with larger number of customers and diverse group of customers. Maslow’s hierarchy of needs theory suggests POS staff use their knowledge of fashion to offer a personalized shopping service to customers in choosing the commodities. This would be in accordance with Mango’s aim as being ‘’Boutique’’. Ansoff (1958) indicates that model is used to guide firm’s growth strategy in market penetration, development, and product development. S-O-R Model can be taken by Mango (Appendix 7) to understand that consumers’ emotional responses to outer environment can mediated its influence on consumers’ behavior. (Mower and Kim et al., 2012. p. 442-453)


Exploring new markets with existing and new products is considered to reduce competition. In order to project a consistent and unified image, Hofstadter’s cultural dimensional theory suggests that Mango should reinforce brand image in existing markets. Mango can develop designer products and instant fashion through reduced lead time with amendment of the proportion with the Mango collection- 80% of the collections were universal, while 20% were adapted to the country/stores. Empowering CRS office could further strengthen brand name of corporations (Breneman & Taylor 1996). Personalizing Mango outlets could strengthen brand name and market position around the world.

Financial planning could reduce business costs by making appropriate cost control. Although investing in new facilities and technologies may increase R&D budget, it actually improves innovation and mitigate competition. The use of online marketing particularly social media marketing could help the firm reach a wide range of young urban women in developing countries. E-business is recommended to enable the buyer a convenient access to the products and they can buy products in online stores. Partnerships with online retail firms such as Amazon, eBay could increase the sales volume of Mango products even in countries where there do not exist physical outlets. The firm could share resources, knowledge and experiences among its various chains. Through this, Mango could be able to deliver products and services of high quality to customers at acceptable prices. Demand based pricing should be considered to further improve financial performance for high prices could be charged in high demand markets (Danziger, 2004).

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Fig 24: SCARLET JOHANSSON FOR MANGO F/W 2010/2011

Conclusion


The success of Mango in fashion industry is mostly attributed to its growth strategy. Expansion into international market was a natural process of market expansion; it has today become typical trend in its strategic development. Currently, Mango has a strong position in fashion industry. Global brand concept has been a critical factor in sustained growth of Mango. The firm expanded rapidly in domestic and global market through franchising. Other strategies contributing to the success of Mango include excellent logistics and supply chain management. Outsourcing manufacturing activities from countries with low labor costs has kept the cost of doing business at low. The company should pursue sustainable growth through expansion into existing and new markets with new and existing product for diversified customer groups. Other recommended strategies are partnership with online retail forms to strengthen E-business, engage in corporate activities and investing in research and development especially in information technology.

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Fig 25: Mango Spring-Summer 2010 Ad Campaign

Bibliography


Introduction (Salerno and Zaragoza, 2011) Business Strategies (ICMR IBS Center for Management Research, 2013) Globalization and Franchising (Salerno and Zaragoza, 2011) (Laanti, Gabrialsson & Gabrielsson 2007)

Citations

Logistics and supply chain management (Rodriguez 2008) (Jay 1991) Market Position (Benfari 1999) Recommendation (Mower and Kim et al., 2012. Pp. 442-453) (Breneman & Taylor 1996) (Danziger 2004)

Marketing Mix strategies (Blanchard & Bowles 1993) (Kapferer 2012) (Rodriguez 2008) (Salerno and Zaragoza, 2011) (Fibre2fashion.com, 2014) (Salerno and Zaragoza, 2011) (Hennig-Thurau et al 2010) (Perepu 2013) (Porters 2008) (Tyran, Dennis, Vogel & Nunamaker 1992; Singer 2008) (Singer 2008)

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List of Illustrations Cover Image: SCARLET JOHANSSON FOR MANGO F/W 2010/2011 [Image Online] Available at: http://www.luxuo.com/fashion/scarlet-johansson-mango-fw-2010.html [Accessed 12 January 2014]. Fig1:Scarlett Johansson in Mango UHQ [Image Online] Available at:http://norandom.com/2012-01-09/scarlett-johansson-in-mango-uhq13070[Accessed 12 January 2014]. Fig2:Miranda Kerr’s Fall 2013 Mango Ads [Image Online] Available at:http://www.fashiongonerogue.com/miranda-kerr-mango-fall-2013-adsinez-vinoodh/ [Accessed 12 January 2014]. Fig3: Olivia Palermo for Mango: Feel the Passion? [Image Online] Available at: http://www.elle.com/news/fashion-style/olivia-palermo-for-mangofeel-the-passion-9078 [Accessed 12 January 2014]. Fig4: Olivia Palermo, always the fashionista ? [Image Online] Available at: http://ladolcemoda7.blogspot.co.uk/2013/06/olivia-palermo-always-fashionista.html [Accessed 12 January 2014]. Fig5: The Mango Summer 2011 Ads Once Again Star Scarlett Johasson? [Image Online] Available at: http://www.trendhunter.com/trends/mangosummer-2011 [Accessed 12 January 2014].

Fig6: Scarlett Johansson For Mango Spring Summer 2011 [Image Online] Available at: http://sidewalkhustle.com/scarlett-johansson-for-mango-springsummer-2011/ [Accessed 12 January 2014]. Fig7: Collage from Left down to right Top Left- Miranda Kerr Fronts Mango Summer 2013 Campaign [Image Online] Available at: http://www.fashiongonerogue.com/miranda-kerrfronts-mango-summer-2013-campaign/ [Accessed 12 January 2014]. - Miranda Kerr Fronts Mango Summer 2013 Campaign [Image Online] Available at: http://www.fashiongonerogue.com/miranda-kerr-fronts-mangosummer-2013-campaign/ [Accessed 12 January 2014]. - Olivia Palermo for Mango: Feel the Passion? [Image Online] Available at: http://www.elle.com/news/fashion-style/olivia-palermo-for-mango-feel-thepassion-9078 [Accessed 12 January 2014]. Top Right- Magdalena Frackowiak for Mango Summer 2012 Collection [Image Online] Available at: http://www.fashiongonerogue.com/magdalenafrackowiak-mango-summer-2012-collection/ [Accessed 12 January 2014].


-Penelope and Monica Cruz Mango Collection S/S 2008 [Image Online] Available at: http://www.marieclaire.co.uk/celebrity/gallery/3273/0/penelope-and-monica-cruz-mango-collection-s-s-2008.html [Accessed 12 January 2014]. -Kate Moss for Mango Winter 2012 [Image Online] Available at: http:// www.marieclaire.co.uk/fashion/ideas/35811/0/kate-moss-for-mango-winter-2012.html#index=2 [Accessed 12 January 2014]. Fig 8: Mango Questionnaire [Own Diagram] Fig 9: Fast fashion perceptual map [Own Diagram] Fig 10: Retail Life cycle [Own Diagram] Fig 11: AVENUE K | Kuala Lumpur H&M Store [Image Online] Available at: http://www.skyscrapercity.com/showthread.php?p=109568476 [Accessed 12 January 2014]. Fig 12: Uniqlo clones China strategy in order to remain cool in Japan [Image Online] Available at: http://www.buybuychina.com/uniqlo-clones-chinastrategy-in-order-to-remain-cool-in-japan/ [Accessed 12 January 2014].

Fig 14: Fast fashion price comparison diagram [Own Diagram] Fig 15: Daria Werbowy replaces Miranda Kerr as new face of Mango [Image Online] Available at: http://www.dailymail.co.uk/femail/article-2509407/ Daria-Werbowy-replaces-Miranda-Kerr-new-face-Mango.html [Accessed 12 January 2014]. Fig 16: Mango Questionnaire [Own Diagram] Fig 17: Miranda Kerr takes on her role as the face of Mango [Image Online] Available at: http://www.dailymail.co.uk/tvshowbiz/article-2385773/MirandaKerr-takes-role-face-Mango-stunning-punk-inspired-fall-ensembles.html [Accessed 12 January 2014]. Fig 18: Miranda Kerr is the new face of Mango [Image Online] Available at: http://fashion.telegraph.co.uk/news-features/TMG9693565/Miranda-Kerr-isthe-new-face-of-Mango.html [Accessed 12 January 2014]. Fig 19: The rise of the Spanish high street [Image Online] Available athttp:// www.globalblue.com/destinations/spain/spanish-high-street/ [Accessed 12 January 2014].

Fig13: Zara opens its biggest store in New York [Image Online] Available at: http://www.inditex.com/en/press/other_news/extend/00000670 [Accessed 12 January 2014]. 34

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Fig 20: MANGO blog [Image Online] Available athttp://keepthebeat.mango. com/ [Accessed 12 January 2014]. Fig 21: Mango Questionnaire [Own Diagram] Fig 22: Mango Questionnaire [Own Diagram] Fig 23: Mango store collage London [Own Photohraph] Fig 24: SCARLET JOHANSSON FOR MANGO F/W 2010/2011 [Image Online] Available at: http://www.luxuo.com/fashion/scarlet-johansson-mango-fw-2010.html [Accessed 12 January 2014]. Fig 25: Mango Spring-Summer 2010 Ad Campaign [Image Online] Available at: http://www.millionlooks.com/outfits/mango-spring-summer-2010-adcampaign/[Accessed 12 January 2014]. Fig 26: ‘Making of Spy Game’ Mango SS12 TV Advertisement with Terry Richardson and Kate Moss [Image Online] Available at: http://www.youtube.com/watch?v=kv-w3xNIFQI[Accessed 12 January 2014].


List of Bibliography Ansoff, H.I 1958, A model for diversification. Management Science, Vol. 4, No. 4, pp. 392-414.

Calder, S 2002, No Frills: The Truth behind the Low Cost Revolution. Touchstone: London

Benfari, R.C 1999, Understanding and changing your management style, Jossey-Bass. San Francisco

Child, J and Faulkner, D 1998, Strategies of Cooperation: Managing Alliances, Networks, and Joint Ventures. Oxford, U.K.: Oxford University Press.

Blanchard, K. & Bowles, S 1993, Raving fans: A revolutionary approach to customer service, Morrow: NY

Chinawto.com. 2013. ChinaWTO - Chinese Index Page. [online] Available at: http://chinawto.com/wto/index-e.asp?sel=info&info=regulation [Accessed: 12 Dec 2013].

BoF - The Business of Fashion. 2013. Mango Mirroring Zara Challenges Europe’s Wealthiest Man - BoF - The Business of Fashion. [online] Available at: http://www.businessoffashion.com/2013/03/mango-mirroring-zarachallenges-europes-wealthiest-man.html [Accessed: 12 Dec 2013]. Bradley, F 2005, International marketing strategy. New York: FT/Prentice Hall. Breneman, D.W., & Taylor, A.L. (eds.) 1996, Strategies for promoting excellence in a time of scarce resources. Jossey-Bass: San Francisco. Calder, S 2002, No Frills: The Truth behind the Low Cost Revolution. Touchstone: London

Danziger, P 2004, Why People Buy Things They Don’t Need. Understanding and Predicting Consumer Behavior. Kaplan AEC Education. Chicago. Dess, G, Lumpkin, G. and Eisner, A 2008, Strategic Management: Creating Competitive Advantages. McGraw Hill, New York. Dlabay, L., Burrow, J.L., & Kleindl, B 2011, Principles of Business. Cengage Learning. Fibre2fashion.com. 2014. Spain : Fashion brand Mango to open 13 new megastores in Europe - Fashion News Spain. [online] Available at: http:// www.fibre2fashion.com/news/company-news/mango/newsdetails.aspx?news_ id=153521 [Accessed: 11 Jan 2014].


Hennig-Thurau, T., Malthouse, E.C., Friege, C., Gensler, S., Lobschat, L., Rangaswamy, A., & Skiera, B 2010, The impact of new media on customer relationships, Journal of Service Research, Vol. 13, No. 3, pp. 311-330. Jay, B 1991, Firm resources and sustained competitive advantage. Journal of Management, Vol. 17, No. 1, pp. 99–120. Kapferer, J.N 2012, The new strategic brand management: Advanced insights and strategic thinking. Kogan Page. Knowledge@Wharton. 2012. Zara: Changes Are in Store, but What Will They Mean for the Retail Chain? - Knowledge@Wharton. [online] Available at: http://knowledge.wharton.upenn.edu/article/zara-changes-are-in-store-butwhat-will-they-mean-for-the-retail-chain/ [Accessed: 12 Dec 2013].

Porter, M.E 2008, The Five Competitive Forces That Shape Strategy. Harvard Business Review. vol. 1, pp. 79–93 Porter, M 1980, Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York, NY: Free Press. Reuters (2013) ‘Has Zara Reached Saturation Point? Far From It, Investors Bet’. The Business of Fashion [Online] Available at < http://www. businessoffashion.com/2013/11/has-zara-reached-saturation-point-far-fromit-investors-bet.html> [Accessed on 12th December, 2013]. Romig, S. 2013. South American Trade Group Raises Import Tariffs. [online] Available at: http://online.wsj.com/news/articles/SB10001424052970204879 004577111560642197558 [Accessed: 12 Dec 2013].

Laanti, R., Gabrielsson, M., & Gabrielsson, P 2007, The globalization strategies of business-to-business born global firms in the wireless technology industry. Industrial Marketing Management, Vol. 36, No. 8, pp. 1104-1117.

Singer, J.G 2008, What Strategy Is Not: Technology- or Platform-Driven Strategy Is a FastTrack to Commoditization. MITSloan Management Review, Vol. 49, No. 2, pp. 96

Mango: Outsourcing of Non-core Activities to Keep up with Fashion. 2013. ICMR IBS Center for Management Research, OPER106.

Tyran, C.K., Dennis, A.R., Vogel, D.R., & Nunamaker, J.F 1992, The application of electronic meeting technology to support strategic management. Management Information Systems Quarterly, Vol 16, pp. 313-318.

Perepu, I 2013, Mango: Outsourcing of Non-core Activities to keep up with Fashion, IBS Center for Management Research, India.

Wilkie, WL 1994, Consumer Behavior, John Wiley and Sons: New York 36

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Appendix


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Fig 26: ‘Making of Spy Game’ Mango SS12 TV Advertisement with Terry Richardson and Kate Moss


Ethics:

Appendix 1

Mango Questionnaire Dear Participants Thank you for deciding to take part in my survey. I am a Master student at Nottingham Trent University and the purpose of the survey is to collect primary research for my report on Evaluation Mango. All the results will be anonymous and will be used for educational purposes. By clicking yes, you are argeeing that I can use the findings in my report.


Do you know the brand Mango?

Gender

100%

M F 43%

How do you know about Mango? 13% Words of mouth

8% Social Media

57%

22% Among top 3 brands of the category 33% Among bottom three brands

45% Somewhere in the middle

Why do you buy this brand? (Multipul choice) 37% Lower/ Higher cost 17% Good Design

23% Good brand image

28% Quality of clothing 43% Apparel 4% Others

42% Advertisement

32% Internet Source

YES

In terms of rating this brand, how would you rate its poularity?

5% Others

What are your feelings about the prices? 0

10

28% Yes

20

30

40

Overall reasonable prices 0

10

20

30

31% Yes

Price and quality match

0

10

50

20

40

30

60

70

50

60

40

72% No 80

69% No

70

42% Yes

Price and quality match

40

80

58% No 50

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What do you feel about the stores? 14% No

What do you feel about the promotion &advertisements? 28% No

86% Yes

Convenient locations

64% No

26% No

Display and layout 36% Yes Staff is courteous

4% No

58% Maybe 3% Never

40% Yes Info on lastest designs

14% No

86% Yes Ads message easy to understand

74% No

74% Yes Store is very crowded

35% Yes

72% Yes Suf�icient ads

60% No 58% 42% Yes No

Will you recommend this brand to your friends?

Ads do not make sense

26% Yes

I recognize the models used

52% No

33% No

67% Yes

48% Yes Ads make me feel like buying


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Appendix 2

External Analysis of Zara PESTEL Analysis


Political and Legal - Use of franchising enabled Mango to overcome cultural and administration barriers outside EU zone and obtain strategic retail locations. - According to a statement from the Brazilian delegation, the new tariffs will be imposed until December 2014.Capital goods textiles and chemical imports are likely target. (Romig, 2013) - WTO rules bar quotas and other quantitative restrictions. (Chinawto.com, 2013)

Social - Mango came up with some common collections for all the countries- 80% of the collections were universal, while 20% were adapted to the country/ stores. Even within a country, the collections at different stores had to be different, depending on the geographical location and temperature. (ICMR IBS Center for Management Research, 2013) - Mango have an Arabic collection for the Middle East, it uses lighter fabrics and different designs. For sizes, Mango have develop smaller sizes for Asia. (ICMR IBS Center for Management Research, 2013)

Economic

- Although consumers continue to experience the fallout of a global recession, experts predict that Zara will not chooses to reduce its prices, but Mango-Zara’s largest rival in Spain- announced that it will lower prices of its goods by 20% in response to the adverse economic environment in the country. (Knowledge@Wharton, 2012) - The brand is often perceived as a manufacturer of trendy clothes that meet the specific needs of the customer but is reasonably priced(Reuters, 2013; Vasudev, 2013). This in turn has helped the organization to remain competitive and expand even during the global financial crisis. On recession, Enric Casi said, ‘’it doesn’t affect us at all. In Spain we have sold 20 percent more this year than last.’’ (BoF - The Business of Fashion, 2013)

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Technology

Enviornmental

- Mango has over 145 suppliers spread all over the world while every region specializes in one type of clothing they manufacture at competitive price (Rodriguez 2008). Mango has its own logistics and supply chain management system (SCM).

- Mango had 162 suppliers, it had in place a ‘’code of conduct’’ to ensure that all the manufacturers followed the labor and social standards that it specified. (ICMR IBS Center for Management Research, 2013)

- After 2000, Mango came out with a concept of logistics based on speed, information, and technology. The aim of Mango’s logistics system, was to ensure that all its stores located around the world had the right kind of stock all the time, in accordance with the rotation of stock and projected sales. ( ICMR IBS Center for Management Research, 2013)


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Evaluation Report


Appendix 3

Internal Analysis of Mango SWOT Analysis


Strengths

Opportunities

- International growth via franchises system - Diversifications into different product, target different consumers - The uniqueness of the product line helps them differentiate from their rivals - Strong brand awareness with internationalization, Mango has outlets in over 107 countries across the globe in 2012.

- To retain consumer loyalty this could be enhanced by using loyalty cards and price discounts on for premium customers, instead of ‘on-sale’ in store. - Increase uses of online advertising particularly social media channels

Weaknesses

Threats

- Inefficient productions, 3-4months - No price advantage compare to its rivals e.g. Zara, H&M and Uniqlo - In China, where the words ‘Mango’ and ‘Mng’ were associated with the Chinese world ‘Ming’, (ICMR IBS Center for Management Research, 2013) the use of different brand names across countries may be confusing to travelling consumers who could not be able to recognize the firm’s products.

- All stores whether franchised or not are treated similarly in terms of systems, material and operational management. This is dangerous to parent Company because confidential information accessed by franchisee that may be used to against the Company. - Strong competitions such as Zara, H&M and Uniqlo.

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Appendix 4 4pâ&#x20AC;&#x2122;s Marketing Mix


Product

Price

Mango has a wide range of products from woman, accessories and men. Recently, Mango have launched sports and intimates line. Item include skirts, pants, tops, denims, jackets, coats and many other items. Mango also sells accessories such as shoes, belts and many other items.

Mango specifically targets young urban women obsessed with fashion in middle class position but slightly above Zara. The organization uses medium-high quality policy and products are prices medium-high.

Place

Promotion

Mangoâ&#x20AC;&#x2122;s flagship store which were large, and also operated other types of stores. These included travel stores for airport locations. From 2009, Mango began selling through multi-brand e-tailers like John Lewis, House of Fraser, Amazon (USA), Taobao China and Asos. In Europe, most of the Mango stores were on street-based locations. In the US and other countries, Mango preferred to have store in malls. And recently they have expand into large mega store concept which providing consumers onestop shopping experience.

Mango international fashion awards- with the aim of discovering and attracting nascent fashion design talent from around the world. Collaborations with designer and celebrites

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Appendix 5 Mangoâ&#x20AC;&#x2122;s VRIN Framework


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Appendix 6 Ansoffâ&#x20AC;&#x2122;s Matrix Market Developement


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Appendix 7 S-O-R Model Stimulus-organism-response (S-O-R) model can be applied to businesses and used to explain the consumersâ&#x20AC;&#x2122; emotional responses to a physical environment mediated the influence of the environment on their behaviors.


Stimulus

Organism

Product Coordination

Emotional State Pleasure Arousal

Personalized shopping service

Response

Purchase Intension

Perceived Amount of Information

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Appendix 8 Mango In-store observation London


Brand: Mango Location: Oxford Street, London Date: 03 December 2013 Price Architecture: Basic T-shirt £19.99 Dress £44.99 Linen blend jacket £79.99 Cashmere jumper £89.99 Demongraphy: Young, Urban Women Store organization: Not very organised Promotions: on-sales item only Store Staff: Mostly busy behind counter and organizing merchandise.

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Evaluation Report


Appendix 9 Mango Franchise conditions


Premises: - Located on the main street or in a shopping centre - Minimum population of the cityâ&#x20AC;&#x2122;s nucleus of 80,000 people. - Interior design exclusively planned by Mango

Financial conditions. Entrance rights include: - Availability of a team in the fields of merchandising, display, ICT, stock organization and staff trainning that will support the opening. - Ongoing presence of a supervisor.

Shop Design: - Interior design layout and materials (approximately 700 Euros per square metre, civil engineering not included). - Advertising and Public relations (Communications): undertaken and planned by Mango, assessed by 4 per cent of total turnover.

Sale-or-return system: - Mango supplies the franchisees with sale-orreturn stock. This means that the franchisee only pays a percentage of the sale price, and the remainder is returned at the end of the season. - Shop on sale-or-return are connected to Mango via a communications system that supplies them with updated information about the stock of each shop. - Mango automatically replaces the sale-or-return stock at the shop each day in line with sales. - Consignments to shops on the sale-or-return basis continually include new articles, allowing for greater product turnover. - Goods are guaranteed via a bank guarantee.

The estimated minimum total investment to open a Mango franchise is around 500,000 Euros.

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Evaluation Report


Mango evaluation report  

MA International fashion business Nottingham Trent University Case study: Mango Evaluation Report

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