INTRODUCTION
With Tommy Hilfiger's plans of expansion or settling grounds in the European Market, how much effort and hoe long will it take for the company to succeed and maintain its brand impact and residency to the new market?
This would help see through the possible causes nor barriers in marketing Tommy Hilfiger in the European Market and would help analyze the possible and alternative solutions to get over with such conflicts.
COMPANY HISTORY / BACKGROUND
Some history and background on Tommy Hilfiger & the Company………..
Hilfiger was born in Elmira
Hilfiger and his partners, Silas Chou, Lawrence Stroll and Joel Horowitz, took the company public in 1992.
Since going public in 1992, Hilfiger have been one of the stand-out stocks in the fashion industry, climbing from $7.50 to a height of $11.00 . Since then, the stock price has dropped. But in this fickle fashion industry where trends go out of style as quickly as they develop - Hilfiger's success is attributed to its diversification beyond men's clothes into women's and children clothes, home furnishings, fragrances, eyewear, athletic shoes and retail stores.
Hilfiger's points of challenge is the figuring out of a way to re-invent one's self and continue to be fresh to the consumer , thus, updating one's products, stores and personnel.
Applying Innovative and Holistic Thinking would mean marketing in non-traditional ways that go beyond print and television ads. And this is where Chris Nakatani – Hilfiger's VP of Licensing comes in. His job is to make sure the distribution is right, the marketing is right and the entire formula is put together.
For instance, Hilfiger started sponsoring rock tours such as those of Lenny Kravitz, the Rolling Stones and Brittany Spears. And also created partnerships with other companies such as Jockey, to generate new lines of products that utilize Hilfiger's designs while capitalizing on the partner's quality track record in a particular line – in Jockey's case- men's underwear.
But not only does Nakatani work with the designers to develop these installations, but then he coordinates the massive production of installing Hilfiger's vision in hundreds of retail stores. It's a Herculean task that requires 70 field coordinators across the country.
(Nakatani 1999) The key to marketing the company is the in-store presentation of Hilfiger's products in major department stores. It is here that contact of the consumer is made and Hilfiger conveys the head-to-toe outfitting the company is selling. The development of these often elaborate productions, the fixtures and imagery of which take their inspiration from Hilfiger's clothing designs.
With Hilfiger's putting efforts in creating clothes that people want but could not find and its combination of the new and old fashion trends in his complete lifestyle collections for men, women and children a re what keeps its customer's loyalty. As they attend or fill in their needs and wants in their style of clothing.
Hilfiger caters to the young heart, but anybody can wear Hilfiger's clothes since it is a lifestyle brand. " A lifestyle of a particular person or group of people is the living conditions, behavior and habits that are typical of them or are chosen by them". This means that for every lifestyle there is a clothing line available- sportswear, casual and business.
As another survival / achievement in Hilfiger's part, because of their success in America in 1985, they decided to further extend their market to Europe . They let the whole American Concept integrate into the European Market but unfortunately did not work out quite well. People in Europe have got other desires and tastes for fashion than Americans which Hilfiger maybe didn't expect and which they should have had intensive research on. And this which contributed to some problems in the start-up in Europe . All over Europe , everybody knew Tommy Hilfiger just by name. So, there has to be some resolving and some other marketing applications or ways.
On the later part, Hilfiger finally came over with the matters and to cite an example is its well-planned market access in Switzerland , Europe in 1997.
The most common method of market entry in Switzerland foreign suppliers on developing a market for their new products. The agents distribute either through their own shops or through department stores, boutiques, special clothing stores and the like. In addition to the agencies that exclusively represent one or a number of suppliers, there are the independent agents who sell their own, individual collections to the retailer. And this was the kind of market access Hilfiger went through. Hilfiger, which , since August 1997 , is represented by the Swiss agent Madison Clothing' in Zurich The selection was based on Madison Clothing's thorough knowledge of marketing strategies for sportswear in Switzerland Amsterdam U.S. , the Swiss agent established it as a lifestyle-brand in Switzerland , using carefully selected retailers (five high-priced shops in various parts of Switzerland Switzerland demand for which is immense already) and women's sportswear were made available in autumn 1998, as the company wants to brought its products into line with European taste, design and quality standards. This measure and the rationed supply of products were supposed to prevent a quick overkill' of the brand. SOME ASPECTS / BARRIERS, HILFIGER SHOULD TAKE INTO CONSIDERATION AND PUT INTO ANALYSIS AND ACTION IN MARKETING AND MAINTAINING ITS BRANDMARKET ACCESSFor an American company interested in entering the Europe market, finding and selecting the right person or firm for representation is important and sometimes difficult. Favorable terms may be required to obtain good representation for a new product or anunknown firm. Market entry programs available through the Commercial Services in Bern , Zurich and Geneva Some of prominent U.S. brands have to cope with grey market imports of their products in parts of Europe . This phenomenon can be put down to the indisputable good and trendy image a number of U.S. Aside from The Appointment of A Local Company, Shop-in-Shop Concept…. Franchising - has also been successfully applied in the distribution and retail business for clothing. All in all, some 200 franchisors in various industry sectors are currently operating in the Europe market, around 20 percent of which are American origin. Esprit, for example, operates 29 Esprit-Stores in Europe , which are partially managed by franchisees. This way of distribution is an almost guaranteed mediator of the philosophy and image the franchisor intends to communicate to the end-user. However, franchise experts advise new-to-market franchisors and masters to adapt the franchise package or business format and message to the cultural traits and customs ofspecific countries. This advice particularly applies to small, multilingual countries , where franchise packages can be tested in different cultural environments (French in Geneva or Lausanne ; German in Zurich , Basel or Bern COMPETITIVE SITUATIONDomestic production, hampered by high labor costs and the tendency to concentrate on high-end niche products, accounts for only about 10 percent of apparel sales in Some parts of Europe. The number of companies and employees in this industry sector has declined by more than half within the last 10 years and imported apparel now covers some 90% of the market. Apparel Industry has been in the throes of a painful resizing process, which can be put down to a number of factors: worldwide overcapacity, growing competition from low wage economies and the discrimination in respect to passive value-added trade. Competiton with other Brands coming from other countries likewise. In the case of Calvin Klein, despite its competitors from its same industry and country origin, has been succesful or is succesful in its expansion in ternationally, because, Calvin Klein marketing-wise produces variety of categories which relates to every range of income. From the customers with expensive clothing budgets who buy the collection clothing down to the college student who buys CK Jeans & Sportwear. And it can apply its design philosphy to Generation X and think about young people and more sophisticated people who want luxury clothes. Its design philosophy can transcend different groups. BRITISH TASTESEuropeans still enjoy a very high standard of living, the recent recession has had an impact on the consumer's buying habits. Lower disposable incomes and a persistent lack of consumer confidence resulting from job insecurity and uncertain future prospects have led to an all-over cut back in consumption, squeezing prices and depressing the sales and earnings expectations of retailers. The European consumer is generally very well informed about the latest trends in fashion and can be considered to be both sophisticated and brand conscious. This particularly holds true for people with higher incomes and a higher standard of living. It is no surprise that well-known, high-end clothing brands are looked upon as status symbols. Decisive and dynamic - this is an apt description of the European woman of today. She is generally sure of her taste and prefers basic garments which can be easily mixed and combined. She sometimes indulges in impulsive buying but generally prefers to invest in high quality basics. The working woman prefers simple and elegant attire of high quality and comfort. The formal office outfit for working women usually consists of a costume or suit with matching blouse or shirt. A silk scarf is often used to complement these elegant outfits. The modern European man has changed his attitude regarding fashion considerably over the past few years. According to retail trade sources, the male customer has "grown up" and knows exactly what he is looking for nowadays: fashionable and comfortable clothing of good quality. The level of sophistication in men's attire is increasing. Well known brand names are quite popular, especially among brand-conscious, affluent young customers. The typical formal office (banks, insurance and other service industries) outfit for men consists of a suit, sometimes with a vest, a long sleeve shirt and matching tie. Buyers aged 25-50 can be considered the most important consumer group for apparel in parts of Europe , as they have the most money to spend. Quality, functionality, price and design, in this order, are the most important buying factors. TRENDS IN THE EUROPEAN MARKETAmerican apparel, sportswear in particular, has a very good, trendy image in parts of Europe . The demand for leisure and Casual wear has increased continuously over the last few years. U.S. suppliers, who really never gained a very strong position in the European market for classic dress- and streetwear lines, have been able to increase sales of sports and leisurewear in Europe . The breakthrough in sales of U.S. products in this sector has been spurred by new and trendy outfits that originated from various U.S. sports activities, for example in-line skating, snowboarding, street ball and the like. Reliable trade sources suggest that casual clothing in the mid-price range represents the most attractive market niche for American companies, as the competition with European brands is not too tight. This particularly holds true for the leisure and sportswear segment. In addition to that, the high-end designer lines (e.g. Donna Karan) can also be quite successful in Switzerland * ECOLOGICAL PRODUCT BRAND - ECOLABEL - This is the European ecological label indicating a product with low environmental impact for its whole life cycle (from its birth to its death) and is valid in all EU countries. CENTRO SERVIZI CALZA offers its support to all companies interested for organisation and assistance up to granting of the brand. The laboratory at CENTRO SERVIZI CALZA is authorised to make the ecological tests and controls necessary for the issue of the ECOLABEL tag.
An important new trend, not to be underestimated, is the increasing demand for natural fabrics. Labels indicating environmentally friendly fabrics and apparel will becomeIncreasingly important and a key purchasing criterion in the future. Today ecologically friendly clothes already have a big competitive advantage in the Swiss apparel market. Most of the big clothing distributors have by now introduced special natural' lines of apparel, which are reported to be very popular with consumers. So far, the Swiss textile industry has not yet established a uniform standard for ecologically friendly clothingitems. The "Oeko Tex Standard 100" however, is being used by the majority of companies. The standard was set by the "International Community for Research and Testing in the field of Textile Ecology and Organization for Consumer and Environmentally Friendly Textiles e.V." and consists of the following fundamentalguidelines: - Requirements apply to the end product only- Exclusion of certain dyes, which can cause cancer or allergic reactions- No flame protection or biocide equipping allowed- Limitation of harmful substances in the end product (pesticides, formaldehyde, heavy metals)- Differentiated limitations according to textile types and target groups The guidelines for the award of the "Oeko Tex Standard 100" label were developed by the above-mentioned organization, also responsible for granting their label. The designation is restricted to one year, after which the product will need to undergo new testing.CHARACTERISTICS OF THE EUROPEAN MARKETMarket experience and tailor-made product lines - these are the key to staying ahead of international competition. In this industry, competition is marked by concepts such as extreme globalization, concentration and a global surplus
Trade fairs offer opportunities to identify trends and to mount an appropriate response. This is also where you meet European representing distribution channels such as specialist retailers, chain stores, manufacturer's sales outlets, department stores, self-service discounters, mail order firms as well as retail cooperatives. The importance of each channel varies within Europe . In Germany
Retail is experiencing a revival with customer satisfaction and loyalty becoming the prime marketing objectives. Companies are trying to improve their service vis-à-vis the customer, adapting them to current and future consumer expectations. This comprises all areas such as collection decisions, marketing, logistics, inventory management, company philosophy, corporate culture, selling methods and all services.
The European market in particular is extremely competitive. There is only one chance to make a good first impression as a supplier. Newcomers to the European market should not expect a resounding success in their first attempt at penetrating the said market. Persistence is necessary to make suppliers visible in the European market.
The European Union(EU), currently comprising 15 member states, with more to follow suit, plays a proactive role in facilitating the manufacture and trade of PPE. EU was formerly known as the European Community, and had, in 1998, a population of 375 million. Of these, 153 million was the estimated active labour force. The EU's average per capita GDP in 1998 amounted to US$ 20,650. EU is a major market for domestic and foreign producers. It also encourages the developing countries aspiring to supply to the EU market. | | ||
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Economic SpotlightOn January 1, 1999, the Euro was introduced as the unifying legal currency of the 11 EU member states - Austria , Belgium , Finland , France , Germany , Italy , Ireland , Luxembourg , Holland , Spain , and Portugal | A look at some key European Economies | ||||||||||||
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MARKETING STRATEGY
A Marketing Strategy is the logic behind achieving objectives for a brand. There should have been or should be a principal objective for Tommy Hilfiger. Like for example: "To be among the top known brands in Europe in 2003".
SOME THEORIES ADAPTABLE TO A MARKETING SYSTEM
Marketing Mix (4P's)
The marketing mix is one of the major concepts ideas of the modern marketing. It is a set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything gather into four groups of variables known as the four P's. Product, Price, Place, Promotion
| Marketing Mix Product |
Variety Advertising List prices Channels
Quality Promotions Discounts Coverage
Design Personal selling Allowances Assortments
Features Publicity Payment period Locations
Warranties
| Target Market |
- Product: means the totality of goods and services that the company the target market.
- Promotion means the activities that communicate the qualities of the product and persuade target consumers to buy it.
- Price is what the customers have to pay to get hold of the product.
- Place includes company activities that make the product available to the target the consumers
We must keep in mind that the four P's only reflects the seller's view to influence the buyers. We must also need to look at the consumer point of view. Every marketing mix must also have a customer benefit.
One marketing expert suggests that companies should view the four P's combined with the customer's four C's (123)
| |
| Product Customer needs and wants |
| Price Cost to the customer |
| Place Convenience |
| Promotion Communication |
It impossible to be a successful company if you are not able to meet the customer's needs economically and conveniently. With communication, the Ps and Cs are all interdependent to each other for example if the product is not what a costumer needs how will it be possible to sell your product? There is another limitation on this theory of the 4Ps. This marketing mix is important for every company
As for Tommy Hilfiger's Case:
Tommy Hilfiger's Marketing Mix (Product) Product is defined as anything offered to a market that might satisfy a need or a want. Tommy Hilfiger consists of a totality of its attributes - everything from the taste of the clothes, through the designs and lifestyle matching. It was found that in the start of expansion in Europe , there was a need for further reseach & development to meet nor suit the real tastes of Europeans in Fashion & Clothing. And there was a need to relaunch itself.
Tommy Hilfiger's Marketing Mix ( Price)
'Price' is what consumers pay to acquire a product. The main factor that would determine the price of Tommy in
Tommy Hilfiger's Marketing Mix ( Place)
'Place' is defined as the way in which a company makes a product or service available to consumers. This includes all aspects of distribution as well as the manner in which items are displayed in shops
'Place' is defined as the way in which a company makes a product or service available to consumers. This includes all aspects of distribution as well as the manner in which items are displayed in shops
Tommy Hilfiger's Marketing Mix ( Promotion)
Among the most innovative aspects of the marketing mix created for the relaunch of Tommy Hilfiger was that of promotion. Promotion includes all activities that communicate information about a product and its latest designs or styles / innovations and merits to a target audience, that would persuade them to buy. The most important consideration for Tommy Hilfiger Brand in this regard was to create an integrated communications strategy across different mediums that would direct a standard message at the target market from across a range of media for the products of the brand to be known and not just the name itself .
Among the most innovative aspects of the marketing mix created for the relaunch of Tommy Hilfiger was that of promotion. Promotion includes all activities that communicate information about a product and its latest designs or styles / innovations and merits to a target audience, that would persuade them to buy. The most important consideration for Tommy Hilfiger Brand in this regard was to create an integrated communications strategy across different mediums that would direct a standard message at the target market from across a range of media for the products of the brand to be known and not just the name itself .
SWOT analysis
A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits into an environmental scan:
In the case of the Tommy Hilfiger company it interesting to produce a swot matrix
The Boston Consulting Group product portfolio matrix.
In order to construct a Boston Matrix we first need to know what a business portofolio is and the way to get all the aspctes to construct such a matrix.If we talk about a company its business portofolio than we refer to the collection of businesses and products that structure the company. I f we are going to analyze the current business portfolio in order to evaluate and identify the various business of the company. We will see that some divisions are more profitable than the others. The company is going to put more resources in its more profitable businesses or divisions and phase down or drop its weaker ones.
In order to produce this matrix the company needs to identify their core divisions. These are called the strategic business units or SBU. A SBU is a unit of the company that has a separate mission and objectives, and which can be planned independently from other company businesses. This can be a a company division, a product line within a division or a single product or brand.(2) the next step will be the allocation of resources for every SBU's. The purpose of strategic planning is to find out in which way the company use their strengths to take advantage of the attractive opportunities in the environment.
One of the best known portfolio planning is the one from the Boston consulting Group. And is called the BCG Growth-Share Matrix.
BCG Growth-Share Matrix
Resources are allocated to business units according to where they are situated on the grid as follows:
· Cash Cow - a business unit that has a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be used to invest in other business units.
· Star - a business unit that has a large market share in a fast growing industry. Stars may generate cash, but because the market is growing rapidly they require investment to maintain their lead. If successful, a star will become a cash cow when its industry matures.
· Question Mark (or Problem Child) - a business unit that has a small market share in a high growth market. These business units require resources to grow market share, but whether they will succeed and become stars is unknown.
· Dog - a business unit that has a small market share in a mature industry. A dog may not require substantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share.
The BCG matrix provides a framework for allocating resources among different business units and allows one to compare many business units at a glance. However, the approach has received some negative criticism for the following reasons:
· The link between market share and profitability is questionable since increasing market share can be very expensive.
· The approach may overemphasize high growth, since it ignores the potential of declining markets.
· The model considers market growth rate to be a given. In practice the firm may be able to grow the market.
His theory will help me to point out the importance of the design for the European market compared with the American market. This matrix will perfectly reflect the differences.
SAMPLE BASIS OF QUESTIONNAIRES (RESEARCH METHODOLOGY)
RECOMMENDATIONS
I Recommend conducting a MARKET RESEARCH which may link the consumers to the company through information and data gathering. And consider having these kind of process:
1. Defining the Research Objectives
Defining the objective is often the most difficult step in the research process. A poorly defined objective can lead to inappropriate research and a waste of valuable time and money. Exploratory or preliminary research is often required to help define the issue to be investigated. In the case of Tommy HIlfiger, sales figures from other markets indicated that their brand didn't have that appeal to the Europeans and they only know Tommy Hilfiger as like a name. Right marketing strategy or messages should be been created. The objective for Tommy is to establish itslef as a distinctive brand to the tastes of the European Market.
2. Developing the Research Plan
2. Developing the Research Plan
Having defined the objective, Tommy then should create a research plan to help gather the information management needed. Market research information comes in the forms of Primary and Secondary Data.
| • | Primary Data is new information collected by a researcher specifically for the project in hand. This data is often very expensive to gather and may vary in terms of quality. |
| • | Secondary Data is information that already exists somewhere else, whether that is inside the company or in an external source e.g. newspapers, magazines, the internet etc. Secondary data is very useful for providing background knowledge to a problem and is used by most companies as a starting point in a research process. |
Innovative Focus Groups:
For the purposes of Tommy , management should decide that the information required about the Europeans could best be gathered by conducting new primary research.
Common Research Methods:
Observational Research – the gathering of data by observing relevant people, actions & situations.
Contact Research - the gathering of data by interacting with people and asking them to complete certain tasks.
Like a Group Discussion - When choosing a research method, Tommy marketing management should be aware that an inappropriate choice of research setting would dissuade people / group from getting involved. The target group might feel intimidated or uncooperative if invited to a formal research setting such as an office or hotel conference room. It shuld be decided to create a new and innovative research environment. The aim is to design an informal atmosphere where members of the group would feel comfortable, speak honestly and have fun. The setting also should enable the researchers to gather all the opinions and data they needed through both observations and contact research throuhg this.
The advantage of this approach is that to allow great flexibility in interviewing technique. It would also allow a very large amount of information to be collected at one go. The main disadvantage is just the cost of hosting of these sessions and the fact that the sample groups have to remain small to be manageable.
The advantage of this approach is that to allow great flexibility in interviewing technique. It would also allow a very large amount of information to be collected at one go. The main disadvantage is just the cost of hosting of these sessions and the fact that the sample groups have to remain small to be manageable.
3. Implementing the Research Plan
Having decided on an approach, the researchers should then invite a number of people to come and talk with them. This sample of people had to be chosen in such a way as to represent the wider population and targetd age or kind of market. In particular, the researchers should be eager to understand the attitude of these people who are regarded as trend setters or who follows the taste of its culture. These individuals are innovators and are among the first to adopt new fashions and styles. As such, it is important that Tommy shuld understand how to target this group.
These people should be ask to bring along some of their personal items, for example, CDs, books or videos, and to talk about them. This shuld encourage them to chat about life in Europe. The purpose of these session is to allow these people to 'get deep' and to reveal the values most important to them. In this way the researchers would attain a very revealing insight into what makes a typical European person is .
4. Reporting on the Results
These people should be ask to bring along some of their personal items, for example, CDs, books or videos, and to talk about them. This shuld encourage them to chat about life in Europe. The purpose of these session is to allow these people to 'get deep' and to reveal the values most important to them. In this way the researchers would attain a very revealing insight into what makes a typical European person is .
4. Reporting on the Results
Reporting is a standard business practice and can cover many areas, for example, financial reporting, health and safety reporting and production reporting. The aim when reporting research results is to identify the most important findings that have arisen. The research conducted may prove extremely important for isolating the attributes and values of the trendsetters or the typical European life..
These results, together with findings from other research, could then be used in the creation of an innovative new marketing strategy for the re-launch of itself.
These results, together with findings from other research, could then be used in the creation of an innovative new marketing strategy for the re-launch of itself.
CONCLUSIONS:
Talking of barriers, Capital Requirements may not be a big reason or hindrance to a company's if it were a really stable one. Logis is before a company decides to expand it has already projections for the plan as well as the budget for the whole process and its goals. Funding or Money Allocation and Time Frames already part of its preparations before its attempt of expansion specially to other countries.
With the Marketing Mix, while each of the 4Ps individually has significant power to influence consumer demand - it is only I think that by creating an effective 'mix' that great marketing campaigns can be create a launch with outstanding results. To add, I think sustituion of product may be a part of a marketing mix. That there should be available alternative selections in some products which consumers don't appreciate and don't have a taste of to still push through with a sale.
Crucial factors are to succes in brand launch: foundation of a market reseach and creative promotional campaigns & flexibility in terms of designs/ styles and pricing factors.
REFERENCES:
1. Marshall Magazine, Winter 1999/ Fashion Sense by David Cogan
2. www. tradeport.org/ts/countries/Switzerland/isa/isar0027.html
4. Robert Lauterborn, New Marketing litany: four Ps passé C-words take it over' Advertising age (1 October 1990
5. (International marketing 3rd edition Stanley J. Paliwoda & Michael j. Thomas 1998 Butterworth-Heinemann)
6. Principles of marketing second European edition P.Kotler, G.Armstrong, J. Saunders and V. Wong. 1999 Prentice Hall inc
7. Franklin R. Root(1994) Entry strategies for international marketing (1st edition) Jossey-Bass, Inc., Publishers.
8. Market segmentation theory Kotler, P., Armstrong, G., Saunders, J. and Wong, V. (1999) Principles of marketing (2nd edn), Upper saddle River, Prentice Hall Inc.
9. Market research report Tommy Hilfiger Company for the European market 1996 confidential
10. Mission statement Tommy Hilfiger Company Europe year 2001-2002 management report confidental.
11. Lockwood, Lisa."Calvin's Credo." Fairchild Publications, Inc. July 22, 1997 http://www.wwd.com/samples/today/Tuesday/034.htm.Steinhauer, Jennifer."Tenacious President Transforms Calvin Klein." New York Times November 7, 1997:D.1-D.3.
13. Market Research: A Guide to Planning, Methodology and Evaluation
by Paul Hague, Peter Jackson 2nd Edition May 1999 kogan page 120 petonville Road
by Paul Hague, Peter Jackson 2nd Edition May 1999 kogan page 120 petonville Road
14.
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