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Transcript
Interplanning …we fix your
problems!
Marketing strategies
for fashion and textile
industry
Alessandro Barulli
Training Program for
ICE - Italian Trade Commission & Sistema Moda
Italia
Sozhu, China
March 15-16, 2010
Interplanning …we fix your
problems!
 The following slides support front lessons and
are part of a wider teaching program. Without
teacher explanation, arguments can be partial
and drive to incorrect conclusions.
 For any further needs or clarifications, please
send and email to: [email protected]
[email protected]
-2-
Notes
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problems!
• In the following slides the terms client and
consumer are considered synonymous, even if the
first refers to a B-2-B (Business to Business)
relationship and the second to a B-2-C (Business to
Consumer) one.
• Either terms like product and service can be
considered synonymous.
[email protected]
-3-
Notes
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problems!
• Acronyms:
Foreign Direct Investments: FDI
Human resources: HR
Joint venture: JV
Marketing: mktg
Market: mkt
Multi National Companies: MNCs
Research and development: R&D
Small Medium Enterprises: SMEs
Wholly Foreign Owned Enterprises: WFOE
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-4-
Index
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1. Marketing principles and planning. From the
basics to marketing plan.
2. The product: from conception to launch in the
market.
3. How to calculate the price, considering the
typical elements of fashion and textile industry.
4. Building distribution channels. Differences
between fashion and textile markets.
5. Brand and promotion: the importance of
communication.
6. International strategies and the companies’
expansion to foreign markets.
7. Case history: Ermenegildo Zegna
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-5-
Interplanning …we fix your
problems!
Marketing strategies
for fashion and textile
industry
1. Marketing principles and
planning. From the basics to
marketing plan.
Marketing and strategy
Interplanning …we fix your
problems!
What is your company’s marketing strategy?
Do you have a strategy for pricing and distribution?
Do you plan to reach customers in a foreign
country?
Are you scheduling an advertising campaign for a
soon-to-be-released new product?
These are important questions because every
business needs a marketing strategy
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-7-
Marketing
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problems!
Clients
Markets
Products
Marketing
Place (distribution)
Prices
Promotion (& advertising)
Processes
Human Resources
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-8-
Marketing: definition (American Marketing Association)
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problems!
Marketing is the process of planning
and executing the conception, pricing,
promotion, and distribution of
ideas, goods, and services
to create exchanges that satisfy
individual and organizational
objectives
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-9-
Marketing
Interplanning …we fix your
problems!
Company
Type of
Company
Product Oriented
Sales Oriented
Market Oriented
Mission
Manufacture
Products
Sell
Products
Address products
to the Markets
Type of MKTG
Passive MKTG
Organizational MKTG
Strategic MKTG
Function of MKTG
MKTG exists to sell
what has been
manufactured
MKTG is used to build and
manage efficiently
sales force
MKTG is used to build and
maintain the presence
in the market
Historical period
Post II World War
Sixties
Seventies
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- 10 -
Marketing
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problems!
Strategic MKTG:
Analysis and forecast of
market needs
Operative MKTG:
Ensemble of sale
instruments
 Needs analysis
 Market segmentation and
segment choice
 Attractiveness Analysis
 Competitiveness Analysis
 New products strategy
 New markets access
strategy
 MKTG plans
 MKTG budget
 Plans application &
control
 Sales tools (catalogs,
price lists)
 Web site
 Advertising
 Promotion
 Trade shows
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- 11 -
Company marketing oriented (P. Drucker)
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Main questions






What is our business?
Who is our client?
What is valuable for our client?
How should be our business?
How will be our business in the future?
Who are our competitors?
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- 12 -
Market structure
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Knowledge path
Access path
Distributors
Competitors
CLIENTS
Company
Social and Economical
Environment
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- 13 -
Marketing Information System
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Clients
Company internal environment
- Expectations
- Purchase intentions
- Purchase behaviors
- Behaviors after purchase
- Marketing activity
- Marketing vs. other activities
- Revenues / mark ups
- Market share
Competitors
Information
(M.I.S.)
- Positioning
- Strengths /weaknesses
- Mktg strategies & politics
Market external context
- Social elements
- Technological elements
- Cultural aspects
Demand
- sector/market
- type of client
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- 14 -
Mktg Information System: sources
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• Internal: sales data, accounting data,
experiences, internal resources
• External:
– Clients
– Other manufacturers, either competitors
– Distributors
– “Professional” sources (e.g. consulting
companies)
• Marketing research: targeted information
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- 15 -
Marketing research: why?
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problems!
•
•
•
•
•
•
•
Define the characteristics of a market
Measure the attractiveness of a market
Analyze sector developments
Analyze competitors products/brands
Study the acceptance of new products
Study the price the market wish to pay
Analyze clients/consumers behavior
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- 16 -
Marketing research: types
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define the
problem
problem finding
research
find
alternatives
evaluate
alternative
actions
problem solving
research
decide
actions
control
actions
performance
research
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- 17 -
Customer satisfaction: the road map
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Satisfy the clients when
they have a need, not
before (when they don’t
feel it), nor after (when
the need has been
satisfied by a
competitor).
Timely
Customer
satisfaction
Continuously
Competitively
Knowledge
of the
Market
Customer satisfaction is a
never ending attitude:
Is much better and profitable
maintain a client than get
a new one
Satisfy the clients better
and more than the
competitors
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- 18 -
Competitive advantage (G. Gandellini)
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Capability of the company to satisfy
its customers choice
better and more than competitors
The competitive advantage derives from the
best perception of
Value and Price
made by the customers
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- 19 -
Competitive advantage (M. Porter)
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Value that a company is able
to generate for its clients,
bringing higher results
than the expenses
sustained to create it
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- 20 -
The market
Total market 100%
Potential Mkt 10%
Available Mkt 30%
Potential Mkt 100%
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Target Mkt 10%
Served Mkt 5%
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- 21 -
The market: definitions
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• Total Mkt: composed of all people in a given
geographical area (county, region, country, etc.)
• Potential Mkt: composed of people among the
total population who have some interest in buying
products of the company
• Available Mkt: people who are interested in, can
afford and have access to company’s products
• Target Mkt: portion of Available Mkt the
company address to
• Served Mkt: members of Target Mkt that have
purchased company’s products (or services)
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- 22 -
Market segmentation: bases
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• Geographic criteria
– City, county, region, state
• Demographic criteria
– Age, sex, family size, income, occupation,
nationality
• Psychographic criteria
– Social class, values, personality, lifestile
• Behaviorist criteria
– Occasional, regular, loyal
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- 23 -
Market segmentation: an example
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Variable
Possible segments
Products
Age
Child, adult, senior
Toys, car, medical insurance
Sex
Occupation
Male, female
Managers, clerical,
students, retired,
unemployed
American, British,
Japanese
Sport equipment, cosmetics
Work shoes, personal
computer
Nationality
Ethnic food, movies
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- 24 -
Identifying and defining Mkt segments
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1.
2.
3.
4.
5.
Select product
Select market
Qualify prospective markets
Determine worthwhile target markets
Profile and prioritize segments
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- 25 -
Market segmentation and variables
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Product:
Variables of functions and/or
characteristics of the product
Market:
Demographic variables
(sex, age, expenditure,
occupation, etc.)
and/or clients needs
Technology:
Company’s technical
variables to manufacture
the product
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- 26 -
Market segmentation: transports
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Air
On wheels
Sea
By rail
Land
International
Goods < National
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Local
> People
- 27 -
Segmentation & Mktg strategies (P. Kotler)
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Undifferentiated
Differentiated
MKTG
Mix
Market
MKTG
Mix A
Segment A
MKTG
Mix B
Segment B
Segment C
Concentrated
MKTG
Mix C
Segment A
MKTG
Mix
Segment B
Segment C
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- 28 -
Positioning
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States as the product is positioned in consumers’
mind, with reference to all the different choices they
feel available to satisfy a need.
The company has to offer a product:
– Matching the expectations of the target(s)
– Different from that of competitors
– With a well known and unforgettable brand
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- 29 -
Positioning: benefits to offer
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Target(s)
characteristics
Better benefits than
competitors
Benefits
expected
Benefits
to offer
Different
benefits
Benefits offered
by competitors
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- 30 -
Marketing plan
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problems!
• Is the document containing the company’s
marketing strategy. It is based on a clear
company mission, objectives and goals
other than effective controls.
• The marketing plan has to be coherent
with segmentation, positioning and
marketing mix politics.
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- 31 -
Marketing plan: basic structure
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Company’s Mission
Internal environment
Analysis
External environment
Analysis
Goals
Strategy
Programs & Schedule
Improvements
Controls
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- 32 -
Marketing plan: concepts
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problems!
 Mission
States guidelines for strategic planning
and markets expansion. It lays out the
corporate philosophy, which provides
direction and specifies the nature of the
company’s business.
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- 33 -
Marketing plan: concepts
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problems!
 Environmental analysis (1/3)
The “external” environmental analysis
covers a wide range of macro and micro
data, such as competitive initiatives,
growth rate for selected markets, suppliers
availability, distribution problems, social,
economical and political elements that can
affect the company’s expansion plan
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- 34 -
Marketing plan: concepts
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problems!
 Environmental analysis (2/3)
The “internal” analysis is related to
company’s elements that can be positive
or negative to its development plans.
Includes: marketing mix policy, salesforce
competence, financial strength,
manufacturing expertise and organization.
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- 35 -
Marketing plan: concepts
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problems!
 Environmental analysis (3/3)
SWOT analysis
S
Internal
(the company)
W
Strengths
O
Weaknesses
T
Opportunities
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Threats
External
(the market)
- 36 -
Marketing plan: concepts
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problems!
 Goals
Targets can be various and different; the
most popular are those referring to the
market; they can be as follows:
 Penetration strategy
• Focused on more aggressive mktg of existing products
 Market development strategy
• Focused on attracting members from other segments
 Product development strategy
• Focused on developing new products for members of the
segments actually served
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- 37 -
Marketing plan: concepts
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 Strategy
Determines the ways by which targets can
be reached; for instance establishing or
improving an efficient export strategy,
signing assembling or franchising
contracts or deciding to enter in a foreign
market opening a branch.
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- 38 -
Marketing plan: concepts
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 Programs & schedule
Lists the actions required by strategy to
reach the goals and sets the calendar
planning for each action.
This allows all the actions to be
determined and scheduled before the
marketing plan starts.
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- 39 -
Marketing plan: concepts
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 Improvements
All the plans have to be improved because
of many unforecasted events (economic
changes, distributions changes, market
changes, consumers changes, etc.).
Best of all, every marketing plan should
have an alternative plan, if the former
cannot be reached.
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- 40 -
Marketing plan: concepts
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 Controls
To be efficient - and reach the goals every plan has to be carefully kept under
control constantly, to verify if the coming
results are those foreseen.
On time control allows small real time
changes; no control makes only damages.
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- 41 -
Mktg plan: strategic control matrix
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Strategy
Yes
Strategy
needs
changes?
No
Plans
Yes
Standards of
Performance
for
Plans
require
changes?
No
Review
Standards
Mktg
Production
R&D
Finance
H.R.
Results
Results
match
standards?
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No
- 42 -
Interplanning …we fix your
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Marketing strategies
for fashion and textile
industry
2. The product: from conception
to launch in the market.
Product life cycles (PLC)
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Sales &
Profits
Introduction Growth
Maturity
Decline
Sales
Profits
Product
development
Time
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- 44 -
Threats, opportunities & mktg in PLC
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Introduction
Growth
Maturity
Decline
Maintain
competitive
advantage
(a) Cut back
(b) Revive
(c) Terminate
Mktg objective
Attract innovators Expand
and opinion
distribution and
leaders to a new product line
product
Sales
Increasing
Rapidly increasing Stable
Decreasing
Competitors
None or small
Some
Many
Few
Profits
Negative
Increasing
Decreasing
Decreasing
Mark ups
Low
High
Decreasing
Decreasing
Clients
Innovators
Affluent mass mkt Mass market
Laggards
Product mix
One basic model
Expanding line
Full product line
Best sellers
Distribution
Depends on
product
Expanding
number of outlets
Expanding
number of outlets
Decreasing
number of outlets
Price
Depends on
product
Greater range of
price
Full line of prices
Selected prices
Promotion
Informative
Persuasive
Competitive
Informative
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- 45 -
Product: penetration strategies
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Pull
(attraction)
Using promotion and
advertising campaign
Push
(pressure)
Using sales force and
sales people
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- 46 -
Product: mktg mix comparison
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Fashion clothes
Product
Selling
Textile fabrics
Distribution
Promotion
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Advertising
- 47 -
Product: adoption process model
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The consumers learn
of the new product,
but lack information
about it
Awareness
They consider whether The consumers decide
benefits of the new
to use the new product
product justify trial
regularly
Interest
Potential buyers are
stimulated to seek
information about the
new product
Evaluation
Trial
Adoption
They make trial purchases
to improve their original
estimate of the new product’s
value
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- 48 -
New product: development & process
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A. In-company analysis
F. Performance measurement
- Motivation
- Culture
- Risk
Sales Market share Profitability -
B. Market focus
E. Launch plan
- Customer needs/value
- Competitive offerings
- Environment analysis
Test Announcement Launch -
C. Product strategy development
D. Design of marketing plan
- Identify target customers
- Create value proposition
Product Price Promotion Distribution Service -
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- 49 -
New product: main failure causes
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1. Market/marketing failure
4.
Small size of the potential market
No clear product differentiation
Poor positioning
5.
Misunderstanding of customer
needs
Lack of channel support
6.
Competitive response
Technical failure
Product did not work
Bad design
Organizational failure
Poor fit with the organizational culture
Lack of organizational support
Environmental failure
Government regulations
Macro economic factors
2. Financial failure
Low return on investment
3. Timing failure
Late in the market
“Too” early - market not yet developed
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- 50 -
Product to export: strategies
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Domestic
Market
Foreign
Market #1Mercato
Mercato
Straniero
2
Straniero
3
Same Product
Domestic Product
Adapted Product
Customized Product
Global Product
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- 51 -
Interplanning …we fix your
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Marketing strategies
for fashion and textile
industry
3. How to calculate the price,
considering the typical
elements of fashion and textile
industry.
Pricing: objectives
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 Return on sales (ROS)
 Return on investments (ROI)
 Increase the market share
 Maintain the leadership towards other
manufacturers
 Sell other products of the range
 Survive to possible cash flow crisis
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- 53 -
Pricing: issues
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• To price effectively consider the following
issues:
– Price should reflect
• Strategic objectives
• Customer target
• Product positioning
– Price should take costs into account,
noting that variable cost is the floor and
customer value the ceiling
– Price should take channel considerations
into account
– Price should understand the product life
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cycle
- 54 -
Pricing: strategies
Skimming strategy
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problems!
• The product is launched in the mkt at the
highest price, targeting only those consumers
attracted by the quality and uniqueness of the
offer.
• Then - after sales to this first segment - the
price will be lowered to attract other clients.
• Skimming strategy is appropriate if the
product isn’t attracting excessive competition,
if the high price is support by a superb quality,
if the target market is large enough to get
positive short term returns.
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- 55 -
Pricing: strategies
Penetration strategy
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• This strategy would suggest a low
introductory price to stimulate the growth by
grabbing market share from existing
competitors.
• The market share achieved in this way
usually produces long term benefits that will
easily compensate for short term profit
losses.
• Penetration strategy requires a large,
expandable, price sensitive target market and
the possibility of economies of scale; other
than this the low [email protected]
price should effectively
- 56 discourage competition and not violate
Export pricing: major elements
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Internal to the company:
- Mktg targets
- Mktg strategies
- Costs (fixed, variable,
manufacturing, packaging,
sale, promotion, etc.)
- Company organization and
structure
Price
Decisions
External to the company:
- Market characteristics
(number of clients,
purchasing capacity,
infrastructures, etc.)
- Demand
- Competitors
- Environmental aspects
(custom barriers and duties,
exchange rates, economic
conditions, restrictive rules
and laws, etc.)
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- 57 -
Pricing - Fashion typical costs
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• Advertising
– Newspapers, magazines, billboards
•
•
•
•
•
•
Brand awareness
Channel structure (long)
Promotion (fashion weeks)
Public relations
Product placement
Collections obsolescence
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- 58 -
Pricing - Textile typical costs
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•
•
•
•
Samples
Salesforce
Product research and innovation
Production costs (large quantities required)
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- 59 -
Export price and distribution channels
(example - figures refer to an Italian company)
Interplanning …we fix your
problems!
Direct
Product industrial cost
Importer
Wholesaler
Retailer
50,00
50,00
50,00
50,00
7,50
7,50
7,50
7,50
57,50
57,50
57,50
57,50
40’ container CIF Dubai
1,60
1,60
1,60
1,60
Duties (5%)
2,88
2,88
2,88
2,88
Transport
0,20
0,20
0,20
0,20
Price @ Importer
-
62,18
62,18
62,18
Importer Mkup (50%)
-
31,09
31,09
31,09
Transport
-
0,20
0,20
0,20
Price @ Wholesaler
-
-
93,47
93,47
Wholesaler Mkup (20%)
-
-
18,69
18,69
Transport
-
-
0,20
0,20
Price @ Retailer
-
-
-
112,36
Retailer Mkup (20%)
-
-
-
22,47
62,18
93,47
112,36
134,83
Mkup (15%)
EXW price
Price @ End User
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- 60 -
Selling price: Nike Air Pegasus (D. Cohen)
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Selling price:
70,00 $
• Worker salary: 2,75 $
• Raw materials (leather,
rubber), machines
purchasing, export
costs: 13,75 $
• Promotion and
advertising: 4 $
• Accounting, R.O.I.,
stock cost,
shareholders: 17,75 $
• Clerks payrolls, store
rent, warehousing
costs: 31,75 $
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- 61 -
Interplanning …we fix your
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Marketing strategies
for fashion and textile
industry
4. Building distribution channels.
Differences between fashion
and textile industry.
Distribution: types
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Intensive:
Products are
distributed through
the highest number
of sale points
Selective:
Products are
distributed through
selected sale
points
(for brand, other
products, position
etc.)
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Exclusive:
Products are
distributed only
in selected and
qualified sale
points
- 63 -
Distribution channels
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• Indirect
– Big buyers (supermarkets, chain stores, other
manufacturers). Importers. Wholesalers.
Trading companies (national & foreign).
Commissioned agents (brokers).
Cooperatives.
• Direct
– Salesmen. Sales Reps. Branch. Subsidiary.
Affiliated.
• Integrated
– Franchising. Contractual JVs. Piggyback
(when a company allows another one, which
has its own export distribution, to sell its
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products abroad).
- 64 -
Direct distribution channels
Advantages:
 Direct market control
 Own people more
efficient
 Immediate changes on
mktg mix
 More info from the
market
 Sale actions more
efficient and lasting
 Presence on markets
without intermediaries
 Brand diffusion
 Intermediaries mark ups
retention
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Disadvantages:
 Very expensive initial
investment and high
yearly costs
 Need of highly skilled
H.R.
 Need of a large market
share to absorb
investments and yearly
costs
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- 65 -
Indirect distribution channels
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Advantages:
 No costs and risks
entering the market
 No need to know
market characteristics
 No need to know
customers requirements
and behaviors
Disadvantages:
 No control on the
market
 Lack of direct info from
the market
 No contact with the
endusers
 Risk of substitution from
intermediaries
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- 66 -
Distribution channels: types
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Consumer goods
Manufacturer Import
Wholesaler
Retailer
End user
Long
Manufacturer
Wholesaler
Retailer
End user
Medium
End user
Short
Manufacturer
Industrial goods
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Interplanning …we fix your
problems!
Marketing strategies
for fashion and textile
industry
5. Brand and promotion: the
importance of communication.
Brand & Branding: Definitions
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problems!
Brand:
Name of a product or category of products that
can be identified referring to the first product
introduced in the market
Branding:
Ensemble of activities related to the brand
conception, development and management
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Brand strategies: Objectives
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problems!
 Convince consumers to buy or use
products and/or services offered by the
brand
 Push consumers to buy the emotions
related to the brand
 Create anticipations – meaning explicit or
implicit promises – for the consumers
 Give a meaning to products and their
characteristics
 Convince consumers to prefer the brand
products to those of competitors
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Brand strategies: valuable factors
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problems!
 Type of consumer
(person that use the brand)
 Type of use
(occasion the brand is used in)
 Type of personality the brand reflects
(exciting, emotional, sexy, etc.)
 Type of feeling “brand-client”
 Type of relationship the brand build up
with its consumers
(casual, occasional, everlasting, etc.)
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Brand strategies: measuring criteria
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problems!
 Attribution
Have the target consumers perceived the
brand as source for the benefits they desire?
 Convincement
Do they know the benefit(s) are really
reachable?
 Desire
Is the purchase of the brand products
originating from the perception of the
benefit(s)?
 Difference
Is the brand considered
as the only source for - 72 [email protected]
the benefit(s) by the consumers?
Birth of a brand
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problems!
Is made through:
 Launch of an innovative brand/product
 Promotion of the new category of products
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Birth of a brand
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problems!
Some examples of brands related to products
and
services that originated new categories:
Band Aid: the first medical strip
Kleenex: the first paper tissue
Jacuzzi: the first whirlpool bath
Intel: the first microprocessor
CNN: the first news tv
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Birth of a brand
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problems!
The birth of a brand is made through
promotion
The best way to promote is being the first brand
of
a new category of products.
The Body Shop has been the first line of natural
beauty products, manufactured to respect the
environment and not tested on animals
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Motivational factors: leadership
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problems!
The leadership permits to build up in consumer
minds the convincement the products of the
brand
leader are the best in the market
The leadership is defended by the advertising
that
allows to maintain the positioning reached and
prevent other competitors from attacking the
brand leader market share
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Motivational factors: credentials
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problems!
• The crucial ingredient in the success of any
brand is its claim to authenticity.
• When Coca-Cola launched “The Real Thing”
campaign, customers immediately responded
“yes, it is; everything else is an imitation
The Real Thing
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Motivational factors: quality
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problems!
• Quality, or the perception of quality, resides in
the mind of the buyer; a powerful brand is
built by a powerful perception of the quality in
the minds.
• Building a quality brand usually means to
price products higher than competitors
The Art of Writing
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- 78 -
Identify a brand: how to do
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problems!
Possibly responding in
the same way to the
following questions:
 What’s the brand
name?
 What’s the name
of the product in
the packaging?
Pepsi is
The brand name
The product name
The company name
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- 79 -
Launch of a second brand
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problems!
The launch in the market of a second brand - or a third,
fourth
and so on - is possible only if every brand has its proper
identity,
even if it belongs to the same family of products.
In the example all magazines belong to Time family, but they
aren’t called Time for Fortune, Time for Sport, Time for
Money
and so on; the different brands have an identity completely
separated the one from the others.
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- 80 -
Launch of a second brand: strategy
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problems!
 Concentrate in a common product area
 Select only one element to segment (price,
age, target, etc.)
 Set and maintain a rigid distinction between
brands
 Use different names, not similar
 Launch the new brand to create a new
category, not to fill any lack or compete with
a competitor
 Keep a rigid control on the brand family
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Brand affirmation: strategies
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problems!
 Brand Domain
Domain of a brand in terms of product,
distribution, promotion
 Brand Reputation
Brand characteristics that support its
uniqueness, credibility and reliability towards
competitors
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Brand affirmation: strategies
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problems!
 Brand Affinity
Based on the relational relationship of the
affinities within brand and consumers
 Brand Recognition
Higher perception of the brand towards the
competitors, typical of brands positioned in
market niches
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- 83 -
Decline of a brand: new life or death?
Destiny of a brand is decided by:
• Its awareness within consumers
• What it stands for the consumers
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problems!
A well known brand that don’t have a meaning
for
consumers can disappear.
The brand that has a meaning, even if not much
known, has a value and is worth to be
revitalized
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Brunello Cucinelli
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problems!
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Pinko
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problems!
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Mario Mazzoni
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problems!
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Rubelli
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problems!
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Larioseta
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problems!
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- 89 -
Marina Mansanta
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problems!
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- 90 -
Interplanning …we fix your
problems!
Marketing strategies
for fashion and textile
industry
6. International strategies and the
companies’ expansion to
foreign markets.
Pay attention!!!!
Interplanning …we fix your
problems!
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Internationalization: boosting factors (internal)
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problems!
•
•
•
•
•
•
•
Economic growth
Management skills on international trade
Technological and mktg know-how
Risk diversification
Economy of scale
Domestic market contraction
Change agent subjects
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Internationalization: boosting factors (external)
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problems!
• Foreign countries economic development
• Opportunities and benefits offered to foreign
investors
• Economic integration (Nafta, EU, Mercosur,
ASEAN, etc.)
• Homogeneity of social models
• Supply chain management (cheaper sources)
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- 94 -
Internationalization: SMEs development
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problems!
• Preparing the company to international trade
seeking people speaking foreign languages
and possibly experienced of export sales
• Learning transport and logistic techniques in
relation with distance, infrastructures and
product to ship
• Acquiring info on payment terms used to
settle exchanges and guarantees used to
protect export sales
• Preparing sales dox (e.g. proforma and/or
commercial invoice, packing list, certificate of
origin, export license) and defining sales and
distribution contracts
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- 95 -
Internationalization: SMEs development
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problems!
• Studying the export strategy and analyzing
the most attractive markets
• Studying the product to export, eventually
adapting it to markets needs
• Preparing sales tools (catalogues & price
lists) in foreign language(s) and
measurements
• Training sales reps and seeking locally the
intermediaries according to the company
strategic plan
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- 96 -
Internationalization: SMEs development
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problems!
• Monitoring the market constantly for a real
time control of happenings that could affect
the commercial expansion
• Evaluating partnerships/alliances with local
partners or the opening of a corporate branch
for production and distribution
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- 97 -
Internationalization: success keys (some examples)
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problems!
 Management
oriented towards
foreign markets
 Adequate company
structure (H.R.,
financial resources,
productive
capability)
 Overall costs under
control
 Product innovation
(R&D)
 Flexibility to adapt
products to foreign
market requirements
 Pricing problems
solving
 Control and
management of
distribution channels
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- 98 -
Internationalization: success keys (some examples)
Interplanning …we fix your
problems!
 Selection of
commercial and
distributive partners
 Brand development
and awareness
 International contract
problems solving
 Evolution from light
to deep
internationalization
 Use of ICT
instruments
 Strategic alliances
culture
 Tendency to Foreign
Direct Investments
(FDI)
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- 99 -
The International Manager: useful skills
• Sensibility towards
foreign cultures
• Ready to adapt to
changes
• Open mind
• Strategic vision
• Capability to manage
complex situations
• Be a frequent traveler
• Knowledge of foreign
languages
• Ability in
communication and
negotiation
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problems!
• Leadership &
teamworking
• Target & result
oriented
• Conscious of his skills
and capabilities
• International MKTG
aware
• Use of ICT
• Patient, modest,
tough
• Serious and correct
when approaching the
foreign markets
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- 100 -
Internationalization: role of ICT (in pills…)
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problems!
• Website: your company displayed to the world
• Web positioning: let your prospects find you
easily through your website displayed among the
first sources in search engines
• E-mail: send dox saving money (cheaper than
fax); a useful tool either for incoming papers.
• VOIP (Voice Over Internet Protocol): cut phone
calls costs.
• Intranet: let your company’s departments
communicate together in real time
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Internationalization: role of ICT (in pills…)
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problems!
• Extranet: let your company communicate with
those who are outside of it, including clients for
placing orders
• E-business: sell products directly to clients
bypassing distribution intermediaries
• Videoconference system: see each other
during long distance business negotiations
• CRM (Customer Relationship Management):
keep the relationship with your clients constantly
updated and under control
• SAP (Systems, Applications & Products in
Data Processing): the “engine” of the company
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- 102 -
International trade: risks of business
relationships
• Manufacturing
• Changes in
components
– Type
– Price
• Client mistake
posting the order
• Transport
• Goods uncollected
– From customs
– From manufacturer
warehouse
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problems!
• Claim on goods
shipped
– Different type
– Different size/color
– Damage
• Payment
– Delayed
– Not cashable
– Not executed
• Country
• Exchange rate
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International trade: distance still matters….
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problems!
USA
• NYC–LAX
3.961 km.
• Miami–Chicago 1.909
km.
Europe
• Lisbon–Moscow
3.913 km.
• Milan–Helsinki 1.985
km.
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- 104 -
Intl marketing: entry strategies
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problems!
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Internationalization: activities
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problems!
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Becoming MNCs: strategies
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problems!
NO
Incorporating
a new firm?
YES
With foreign
Partner?
Company JV
YES
NO
With majority
of shares?
Contractual JV
With shares at
50% or less?
Foreign Direct Investments
Branch
Subsidiary
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Affiliated
- 107 -
Becoming MNCs: strategies
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problems!
• FDI: flows of capital aimed to get control over
a certain percentage of shares in a foreign
business and participating in the
management of the company
• Branch: the shares are wholly owned by the
mother company
• Subsidiary: the mother company controls
more than 50% of shares, but one or more
shareholders are present
• Affiliated: the mother company controls up to
50% of shares; in this case the company is
managed by the foreign partner
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Intl marketing: country entry strategy
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problems!
Company
Strategy
Market
characteristics
Company
Size &dimensions
Competitors
Strategies
Market selection
decisions:
Simultaneously or
One-by-One
Concentrate or
Diversify
Competitors
markets selection
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Market 1
Market 2
Market 3
Market 4
Market n
- 109 -
International
marketing: Country Analysis (some
factors)






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problems!
GDP
HDI
Unemployment
Inflation
Economic growth
Economic and
political stability
 Financial rating
 Families and singles
expenditure
 Custom duties
 Government
regulations
 Infrastructure and
transports
 Financial benefits for
foreign investors
 Being part of political
and/or monetary
unions
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International
marketing: Country Analysis (some
factors)
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problems!
 Market size
 Market growth
 Number of potential
customers
(prospects)
 Level of
development
market/sector
 Import volume
market/sector
 Tendence to import
market/sector
 Number of
competitors
 Competitors market
share
 Mark ups
 Structure of
distribution channels
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Country analysis
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problems!
• GDP
Gross Domestic Product. Made of private
expenditure [PE], government investments [I],
government expenditure [G] and balance within
export and import [Exp - Imp]
GDP = PE + I + G + (Exp - Imp)
• HDI
Human Development Index. Composite index
that measures three basic aspects of human
development: longevity, knowledge and life
standard.
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- 112 -
Country analysis: selection methods
•
Former experiences
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The selection of market(s) to enter is made
referring to the previous introduction of products
different from those the company intends to
introduce presently or considering previous
business experiences made by the
management.
•
Competitors imitation
The selection is based on competitors’
strategies and choices.
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Country analysis: selection methods
•
Method of “Development level”
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problems!
Groups countries according to their level of
development, considering their GDP per capita
as unique factor.
•
Method of “Key factors”
Selection is made considering multiple factors,
both quantitative and qualitative (this is the best
method for an accurate country analysis).
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Strategic alliances: motivations (some examples)
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problems!
• Specific weaknesses (e.g. human resources)
solvable from external contribution
• Small company dimensions for international
expansions
• New competitive threats
• Possible synergies with specific partners
• Share of risk
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- 115 -
Strategic alliances: success conditions
• Have the same
mission
• Advantages for both
parts
• Sharable goals
• Mid-long term targets
• Possible synergies
• Fair share of
contributions and
advantages
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problems!
• Entrepreneurs and
management “alliance
- oriented”
• No risks of buy back
• Compatibility within
partners (on company
culture and
management)
• Compatibility within
people that have to
cooperate
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Strategic alliances: risk factors
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problems!
•
•
•
•
•
•
Political instability
Monetary and/or financial instability
Government nationalization politics
Operative limits
Fiscal and/or financial limits
War or terrorism
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problems!
Marketing strategies
for fashion and textile
industry
7. Case history: Ermenegildo
Zegna
Ermenegildo Zegna
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problems!
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Ermenegildo Zegna
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problems!
•
•
•
•
•
•
•
Italian company founded in 1910
Manufacture of men luxury clothes
More than 700 mln. € turnover
More than 6.000 people employed worldwide
85% of business made abroad
Presence in 60 markets
More than 200 stores worldwide
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- 120 -
Ermenegildo Zegna
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problems!
• Market and Business Strategies:
– Since ‘90s company customer oriented
– International businesses adapted to markets:
• Japan since ‘70s with its own trading company
• China since 1991 directly
• Presence with DOS (Directly Operated Stores) and
franchising
– Expansion first in Emerging Markets (Mexico,
Brazil, China, Russia, Turkey, Middle East,
India, South Africa) where margins are higher
than elsewhere
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Ermenegildo Zegna
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problems!
• Market and business strategies:
– Travel retail concept: stores for businessmen
that move across the world and wish to find
the products they like almost everywhere
– Retail school: to teach salespersons on how to
approach and serve the customers
– CRM (Customer Relationship Management):
to know everything about clients and
customers
– IT (Information technology): to link and
manage direct stores and franchising
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- 122 -
Ermenegildo Zegna
Interplanning …we fix your
problems!
• Product and brand strategies:
– Segment extension: from luxury clothes to
upper casual (trend started in USA mid ‘90s
and expanded to Europe and Asia)
– Brand/product extension (through licensing):
• Perfumes
• Glasses
• Underwear
– Products characteristics:
• New fabrics, easy to clean
• High tech clothes, fresh in summer warm in winter
[email protected]
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Interplanning …we fix your
problems!
interplanning s.a.s.
di alessandro barulli & c.
via romita, 9 - 61100 - pesaro - italy
www.interplanning.it
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