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Marketing strategies for fashion and textile industry Alessandro Barulli

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.

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Marketing strategies for fashion and textile industry Alessandro Barulli

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  1. Marketing strategies for fashion and textile industryAlessandro Barulli Training Program for ICE - Italian Trade Commission & Sistema Moda Italia Sozhu, China March 15-16, 2010

  2. 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: mail@interplanning.it mail@interplanning.it

  3. Notes • 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. mail@interplanning.it

  4. Notes • 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 mail@interplanning.it

  5. Index • Marketing principles and planning. From the basics to marketing plan. • The product: from conception to launch in the market. • How to calculate the price, considering the typical elements of fashion and textile industry. • Building distribution channels. Differences between fashion and textile markets. • Brand and promotion: the importance of communication. • International strategies and the companies’ expansion to foreign markets. • Case history: Ermenegildo Zegna mail@interplanning.it

  6. Marketing strategies for fashion and textile industry Marketing principles and planning. From the basics to marketing plan.

  7. Marketing and strategy 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 mail@interplanning.it

  8. Clients Markets Marketing Products Place (distribution) Prices Promotion (& advertising) Processes Human Resources Marketing mail@interplanning.it

  9. Marketing: definition (American Marketing Association) 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 mail@interplanning.it

  10. 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 Marketing mail@interplanning.it

  11. Strategic MKTG: Analysis and forecast of market needs Needs analysis Market segmentation and segment choice Attractiveness Analysis Competitiveness Analysis New products strategy New markets access strategy Operative MKTG: Ensemble of sale instruments MKTG plans MKTG budget Plans application & control Sales tools (catalogs, price lists) Web site Advertising Promotion Trade shows Marketing mail@interplanning.it

  12. Company marketing oriented (P. Drucker) 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? mail@interplanning.it

  13. Knowledge path Access path Distributors Competitors CLIENTS Social and Economical Environment Company Market structure mail@interplanning.it

  14. Clients • - Expectations • Purchase intentions • Purchase behaviors • Behaviors after purchase • Company internal environment • Marketing activity • Marketing vs. other activities • Revenues / mark ups • Market share Information (M.I.S.) • Competitors • Positioning • Strengths /weaknesses • Mktg strategies & politics • Market external context • Social elements • Technological elements • Cultural aspects Demand - sector/market - type of client Marketing Information System mail@interplanning.it

  15. Mktg Information System: sources • 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 mail@interplanning.it

  16. Marketing research: why? • 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 mail@interplanning.it

  17. define the problem problem finding research find alternatives evaluate alternative actions problem solving research decide actions control actions performance research Marketing research: types mail@interplanning.it

  18. 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 Customer satisfaction: the road map mail@interplanning.it

  19. Competitive advantage (G. Gandellini) Capability of the company to satisfy its customers choice better and more than competitors The competitive advantage derives from the best perception of ValueandPrice made by the customers mail@interplanning.it

  20. Competitive advantage (M. Porter) Value that a company is able to generate for its clients, bringing higher results than the expenses sustained to create it mail@interplanning.it

  21. Total market 100% Potential Mkt 100% Potential Mkt 10% Available Mkt 30% Target Mkt 10% Served Mkt 5% The market mail@interplanning.it

  22. The market: definitions • 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) mail@interplanning.it

  23. Market segmentation: bases • 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 mail@interplanning.it

  24. Market segmentation: an example mail@interplanning.it

  25. Identifying and defining Mkt segments • Select product • Select market • Qualify prospective markets • Determine worthwhile target markets • Profile and prioritize segments mail@interplanning.it

  26. 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 Market segmentation and variables mail@interplanning.it

  27. Air On wheels Sea By rail Land International Local > People Goods < National Market segmentation: transports mail@interplanning.it

  28. Undifferentiated Market MKTG Mix Differentiated MKTG Mix A Segment A Segment A MKTG Mix B Segment B Segment B Segment C Segment C Concentrated MKTG Mix C MKTG Mix Segmentation & Mktg strategies (P. Kotler) mail@interplanning.it

  29. Positioning 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 mail@interplanning.it

  30. Target(s) characteristics Better benefits than competitors Benefits expected Benefits to offer Different benefits Benefits offered by competitors Positioning: benefits to offer mail@interplanning.it

  31. Marketing plan • 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. mail@interplanning.it

  32. Company’s Mission Internal environment Analysis External environment Analysis Goals Strategy Programs & Schedule Improvements Controls Marketing plan: basic structure mail@interplanning.it

  33. Marketing plan: concepts • 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. mail@interplanning.it

  34. Marketing plan: concepts • 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 mail@interplanning.it

  35. Marketing plan: concepts • 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. mail@interplanning.it

  36. S Strengths W Weaknesses Internal (the company) O Opportunities T Threats External (the market) Marketing plan: concepts • Environmental analysis (3/3) SWOT analysis mail@interplanning.it

  37. Marketing plan: concepts • 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 mail@interplanning.it

  38. Marketing plan: concepts • 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. mail@interplanning.it

  39. Marketing plan: concepts • 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. mail@interplanning.it

  40. Marketing plan: concepts • 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. mail@interplanning.it

  41. Marketing plan: concepts • 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. mail@interplanning.it

  42. Strategy needs changes? Yes Strategy No Plans require changes? Yes Plans Standards of Performance for Mktg Production R&D Finance H.R. No Review Standards Results Results match standards? No Mktg plan: strategic control matrix mail@interplanning.it

  43. Marketing strategies for fashion and textile industry The product: from conception to launch in the market.

  44. Sales & Profits Introduction Growth Maturity Decline Sales Profits Product development Time Product life cycles (PLC) mail@interplanning.it

  45. Threats, opportunities & mktg in PLC mail@interplanning.it

  46. Pull (attraction) Push (pressure) Using promotion and advertising campaign Using sales force and sales people Product: penetration strategies mail@interplanning.it

  47. Fashion clothes Textile fabrics Product Selling Distribution Promotion Advertising Product: mktg mix comparison mail@interplanning.it

  48. The consumers learn of the new product, but lack information about it They consider whether benefits of the new product justify trial The consumers decide to use the new product regularly Awareness Interest Evaluation Trial Adoption Potential buyers are stimulated to seek information about the new product They make trial purchases to improve their original estimate of the new product’s value Product: adoption process model mail@interplanning.it

  49. A. In-company analysis - Motivation - Culture - Risk F. Performance measurement Sales - Market share - Profitability - B. Market focus - Customer needs/value - Competitive offerings - Environment analysis E. Launch plan Test - Announcement - Launch - C. Product strategy development - Identify target customers - Create value proposition D. Design of marketing plan Product - Price - Promotion - Distribution - Service - New product: development & process mail@interplanning.it

  50. Market/marketing failure • Small size of the potential market • No clear product differentiation • Poor positioning • Misunderstanding of customer • needs • Lack of channel support • 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 • Financial failure • Low return on investment • Timing failure • Late in the market • “Too” early - market not yet developed New product: main failure causes mail@interplanning.it

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