Tommy Hilfiger "an all American company" on "the European" market.
Chapter 1 Research objectives
The first objective of this project is to identify cultural and other barriers that will occur when introducing fashion items to a new market in this case this will be the European market, with particular references to the Tommy Hilfiger Company. This information will be gathered out of secondary research.
The second objective is to identify the way the Tommy Hilfiger Company dealt with these kinds of problems. Can these solutions be exactly linked to the theory or did the management team out of their own experience, visions and knowledge within this particular business give their own twists to the theory. This is the point where the theory is placed in the real world. This information will be a combination of primary research to find out the solutions the management team has come up with and the secondary research is needed to link the solutions to the theory.
The third objective is to get a better look insight the European clothing market by analyzing this market at different points of view:
- European market overview
- Competitors for the Tommy Hilfiger Company
- Characteristics of the European market
- Trends within the European market
This information will be gathered trough secondary research.
Chapter 2 Review of theory
In order to complete this project the use of different theories is necessary.
2.1 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 |
In mine opinion this Mr. Lauterborn is right. It impossible to be a successful company if you are not able to meet the customer needs economically and conveniently. with communication. The Ps and Cs are all dependable on each other for example if the product is not what a costumer needs how on earth will it be possible to sell your product? That will be impossible.
There is another limitation on this theory of the 4Ps. If we for example look at service in my opinion a very important issue but just because it doesn't start with a P it is not included in the 4Ps and there are some more of those situations.
This marketing mix is important for every company so it cannot be missed in this project as well. Like to find out the marketing mix for the Tommy Hilfiger Company.
(Robert Lauterborn, New Marketing litany: four Ps passé C-words take it over' Advertising age (1 October 1990).
2.2 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
2.3 The Boston Consulting Group product portfolio matrix.
(International marketing 3rd edition Stanley J. Paliwoda & Michael j. Thomas 1998 Butterworth-Heinemann)
2 Principels of marketing second European edition P.Kotler, G.Armstrong, J. Saunders and V. Wong. 1999 Prentice Hall inc.
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 busineses. 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 portofolio planning is the one from the Boston
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.
2.4 The cultural and other barriers
(12)Culture may be defined as the unique lifestyle of a given human society: a distinctive way of thinking, perceiving, feeling, believing, and behaving that is passed on from one generation to another. These cultures can be a barrier in doing business outside the country of origin country of the company.
If we look at other types of barriers we can come up with some different types like import barriers tariff barriers. In the case of the barriers within the European market we need to think about different languages and different legal and taxation systems.
We cannot forget the barriers like the capital requirements since a lot of capital is needed before beginning making profit in another country. And the distribution channels can also be a barrier. It could be that the company is not able to find channels or these channels are full or temporarily unavailable.
2.5 Entry strategies for international markets
Entry strategy for international markets is a wide-ranging plan. It sets forth the objectives, goals, resources, and policies that will guide a company's international business operations over a future period long enough to achieve sustainable growth in the world markets. For most companies the entry strategy's time horizon is from three to five years.
Product/market entry strategies require decisions on first the choice of a target product/market, second the objectives and goals in the target market, third the choice of an entry mode to penetrate the target market, four the marketing plan to penetrate the target market, and at last the control system to monitor the performance in the target market.
In this project I will look at the entry strategies the Tommy Hilfiger Company took to enter the European market and how they used the five decisions in constructing the best possible entry strategies for the international markets.
This process is set before the market segmentation theory first the entry strategy should be developed and after that the company should segment the market for the different European countries. So basically these two theories are linked together within this project.
2.6 Market segmentation theory
(1) Market segmentation theory Kotler, P., Armstrong, G., Saunders, J. and Wong, V. (1999) Principles of marketing (2nd edn), Upper saddle River, Prentice Hall Inc.
Market consisits of buyers, and these buyers differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes and buying practices. Through the market segmentation theory (1) companies can divide large, heterogonous markets into smaller segments that can be reached more effectively with products and service that match their unique needs. After the segmentation it is easier to set up a marketing campaign and in the case of clothing items, the whole designing process will be easier since the segmented group has almost the same needs and requirements of a product.
Chapter 3 Research methodology:
In order to complete this project the use primary as well as secondary research is necessary.
3.1 Primary Research:
The primary research is in my case one of the most important parts of the project. As I have the chance to interview some people from the management team who have been with the company since the introduction in Europe in 1997. These people have the practical information books cannot provide you with since theory and practice often not go together. They are able to tell me the way they dealt with the problems that occur when introducing new fashion items in this case the European market, and if they succeeded in doing so. They will be an extension of the theory I am going to use. It is interesting to find out what the Management used of the theory and extended this theory with their visions, knowledge and of course their experience within this kind of business. This is where theory meets the real world.
I will have the chance to interview The President and CEO of Tommy Hilfiger Europe since the establishment in 1997 Mr. F. Gehring and the Senior Vice President-Men's Sportswear since the launch in 1997 Mr. M. Arts.
The advantage of conducting interviews has proven that this will eventually leads to more suitable information, since the respondent is able to give a more detailed and suitable answer to the questions.
I will also use a questionnaire and send this to a group of 25 employees, at different divisions of the company, at the headquarters in Amsterdam
In order to produce a good and clear questionnaire I am using two with guidelines for the best possible questionnaire. (1) (2)
(market research a guide to planning methodology and evaluation Paul Hague Peter Jackson 2nd edition 1999
kogan page 120 petonville road)
(essentials of MKT research tony proctor 2nd edtion Prentience hall 2000
3.2 Secondary Research
We can divide the secondary research into two different types of research the first type will leads to internal data.
(4) Secondary data consists of two different types of data the internal data and the external data. The internal secondary data is produced by an organization in its day to day operations like data on sales, expenditures and so on. The external data refers to data that comes from a wide variety of sources outside an organization like newspapers and information on the Internet.
In my project I am going to use internal and external data. The internal data will be provided by the Tommy Hilfiger company itself. Like annual reports and other financial subjects. For the external data I need to look on the Internet and look in the newspapers and market reports to find suitable information that I can use for the European market analysis and information about the whole topic in general.
Chapter 4: Developed outline of the project
Executive summary
- In which is stated the most important findings of the project.
Chapter 1 Introduction
1.1 Introduction to the topic.
1.2 Aims and objectives
Chapter 2 Company introduction
2.1 Company history
2.2 Corporate structure
2.3 Management and organization
2.4 Company overview within the European market
2.5 Diversified business
2.6 Mission
Chapter 3 Analysis of the European clothing market
3.1 European market overview
3.2 Competitors for the Tommy Hilfiger Company
3.3 Characteristics of the European market
3.4 Trends within the European market
(Use appendix: For the outcomes of the European market overview.)
Chapter 4 Review theory
4.1 Marketing Mix
4.2 Swot-analysis
4.3 Market segmentation theory
4.4 Cultural and other barriers
4.5 Entry strategies for international markets
4.6 The Boston Consulting Group product portfolio matrix
Chapter 5 Methodology and critique chapter
5.1 Primary research
5.2 Outcomes interview and questionnaires
5.3 Critique on the chosen methodologies
(Appendix: questionnaires and interviews )
Chapter 6 Analyzing of findings related to the stated theory
6.1 Relating findings to the theory.
6.2 Combining the outcomes of the interviews and questionnaires and link these to the theory.
(Appendix: questionnaires and interviews )
Chapter 7 Conclusions and recommendations
7.1 Conclusions and recommendations.
Chapter 8 Bibliography and appendices
8.1 Bibliography and appendices
Appendix:
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