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Positioning of Designer Clothing Brands in UK Market - Assignment Example

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This paper 'Positioning of Designer Clothing Brands in UK Market' tells us that while it is recognized that the total luxury market is growing to US$2 trillion by 2010, the market is still basically controlled by some 35 companies from Europe and the US (60%) led by brands Giorgio Armani, Gucci, Versace etc…
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Positioning of Designer Clothing Brands in UK Market Literature Review Luxury Fashion While it is recognised that the total luxury market is growing to US$2 trillion by 2010, the market is still basically controlled by some 35 companies from Europe and the US (60%) led by brands Giorgio Armani, Gucci, Versace and Christian Dior (Just Style, 2006). Luxury fashion represents about 5 percent of the total luxury market translating to about US$50 billion led by LVMH, Gucci group and Christian Dior Couture (Just Style, 2006). The UK clothing and fashion industry remain as one of the more palatable as the market maintains some 32 billion in 2002 alone. LVMH Moet Hennessy Louis Vuitton posted a 2005 revenue rise to 13.90 or 9.57 billion from the previous year's 12.48. Next, in September 92006) reported as first half pre-tax profits of 1.519 billion, 45 percent coming online. Gucci, under the Paris-based PPR SA that also houses Yves Saint Laurent, Fnac and Surcouf, is included in the report of PPR SA with a 2006 July-September revenue of 4.26 billion or $5.35 billion (AP, 2006). British, UK or London fashion have always been set apart despite the forces of non-UK brands, specifically European or American, and segmentation has actually been categorised as: McFashion, UK or London style, international superbrands, and the micro markets (Priest, 2005). Coined by Lee (2003) after the McDonald marketing phenomenon of uniformity and predictability, McFashion has been classified as disposable, quick fix international fashion, trendy, and affordable by the mass market. Other qualities of McFashion may include star qualities that shine and busts in a short period, or those which fill high street cheap chic stores working to formulas. These had been described as the speedy trickle down version of high couture exemplified by celebrities that are replicated, but not exactly copied to give room for versatility, in a matter of ten minutes (Lee, 2003, and Jackson, 2006). Brands of this nature include items that are found and purchased at Gap, H & M, Zara, Marks and Spencer, Arcadia group, Asda, Tesco, Sainsbury, Primark and New Look (Priest, 2005). International superbrands include designer brands that are familiar in most major cities of the world that include Giorgio Armani, Yves Saint Laurent, Gucci, Guess, Burberry, Louis Vuitton, and Veneta Bottega, Chanel, among others and are at the opposite side of the polarised UK market. As couture is the word, it has been suggested to be incorporated with designer label (Priest, 2005) with the message that the label is critical, super-luxury, rarity and quality. Despite its characteristics, these designer labels remain big business with high stakes as influenced by class, film and music stars, sports personalities and everything glamour. Driven by the media circus, couture and ready-to-wear shows, international houses acknowledge of limited loyal customers, barely 200 with majority of sales as wedding dresses (Priest, 2005). Mintel reported that UK men and women spent 1.4 billion on these items in 2002 yet its value kept rising up to 40 percent with prices at premium. Women accounted for 57 percent of purchase. Interestingly, rarity on designer labels is slowly if not yet phased out as Tim Jackson (2002) from the London College of fashion quoted foremost names in fashion superlabels Tom Ford of PPR acknowledging globalisation as inevitable, John Marc Simon of Comite Colbert and Daniel Triboulliard specify China, Taiwan and Korea as the major destinations of the majority of luxury labels. In these instances, acceleration of new wealth in new markets as well as the global fusion of what people and consumers watch on their movies, television and media emerged as the driving forces as growth is the main target of all major designer houses. Likewise, higher level of taste, education and worldliness as a result of education, travel and growing sophistication are the other forces that define new middle market customers that are ready to pay for premium, well-designed well-engineered and well-crafted good (Silversteine and Fiske, 2003). Nevertheless, in the UK and London scene, fashion is still considered extraordinarily rich: a creative mix distinctively UK since the 1960s called "Swinging London" or "Cool Brittania" and other marketing slogans. UK's design school products annually, acknowledged at around 3000 add up global influence in the fashion sense as most are not exclusive designers but design technologists, fashion buyers and purchasing agents, stylists, fashion journalists, pattern cutters, publicity communications specialists and a broad range of fashion and media-related jobs (Priest, 2005). While others may start out new labels of their own, work on a freelance basis, others have tied up with merchants to go international or promote their own brands such as the case for Stella McCartney, Katharine Hamnett, John Rocha, Betty Jackson, Alexander McQueen, and Paul Smith (Priest, 2005). There are also those that maintained low profile with constant and steady clientele, remained small, and can only be found in creative or trendy areas of cities in the UK rejecting commodisation of fashion. These designers and their outlets remained alternatives if not the constant drivers of style and unique creations as supported by a group of creative friends, journalists and those in-the-know. In fact, although this phenomenon, recognised to be around for forty years now, have shown local presence in most major cities but maybe falsely credited to be of London in origin (Priest 2005) as other cities, mirrored through media, are perceived with their own versions. Priest (2005) further categorised London or UK fashion into another "micro markets' with similarities to UK or London style fashion although placed in a bracket of "hedonistic, self-focused baby boomers, and they have forsaken the trappings of retirement for clubbing, hiking and pleasure seeking." This segment is further described to react against brands and branding although influenced by brand values, preferring to be their own stylists as may be the result of education encouraging personal views and exposure, aim for personal gratification, style recognition, ethics and individuality (Priest, 2005). This group has been recognised as mood consumers heavily influenced by the increased consciousness on health, well-being and spirituality, recognition of quality and craftsmanship, and the so-called "added value" or products that go well-beyond purchase and wearing. Luxury Fashion Trends in the UK With the rise of global marketing pushed harder by the broadband internet connection, mobility and growing economies outside the western sphere (Europe, Canada and the United States), various fashion and clothing trends that have been identified include the threat of low-priced new players against established fashion brands, the diffusion of established western markets, the global expansion of luxury brand consumers from an elite group to mass consumers, and the continued mobility of the fashion trendsetting elite beyond the clout of movie, recording and television celebrities. Being able to identify signature designer details from precious metal on a handbag, lush fabric of a dress, or sole of a shoe without having to flaunt wearing and owning them has become the trend. "Stealth wealth" comes with the premise that if one is "truly among the fashion elite you don't need labels or logos to showcase your style and wealth. The new mantra is: 'If you've got it - don't flaunt it,'" Jackson (2006) reported on luxury fashion trends. Counterfeit version of luxury brands and even the accessibility of these designer logos to the new rich masses, from Korea, China to India, have made religious western fashionistas hide their designer looks from the mainstream who wants to scream about wearing them. Asia has accounted as much as half of the $80 billion global luxe industry and this did not only make designer labels accessible but are easily counterfeited as "genuine fakes" (Chadha and Husband, 2006) decreasing its appeal to trendsetters. Yale University professor Ravi Dhar accounts it as "It's the same thing at play here [] It's showing off by not showing off," (qtd., Jackson, 2006). This trend may have been a take-off from not-readily identifiable uber-premium designers like Bottega Veneta whose styles are not as readily identifiable and easily counterfeited such as Burberry and Louis Vuitton but this understated style becomes detectable only by fellow designer loyalists considered as part of the elite (Jackson, 2006). Burberry's reportedly started downplaying its trademark plaid when British soccer thugs called "the Chavs" started being identified with the brand's signature plaid, making Burberry's high end customers in the UK shun the brand as they did not want to be associated with the subculture society (Jackson, 2006). "Dressing the part" in purse parties no longer set apart a wearer of designer labels that are either easily and constantly counterfeited or easily bought at eBay. Logo-free items with subtle labelling but well-made and classic are preferred as the celebrity-obsessed culture takes cues from awards shows and entertainment rags. Radley Cramer, director of the fashion program at Marist College in New York was quoted saying, "If you go back 200 years in history, the royals would set the fashion standard and it would take about 10 years for the trends to trickle down to the masses [] Today, celebrities are the new royalty and the trends take 10 minutes to trickle down. Therefore, the trendsetters out there are constantly reinventing themselves," (qtd., Jackson, 2006). In a related report, Verdict research (Daily Mail, 2006) indicated that for every 4 spent by British households in 2005, about 1 was for clothing at value retailers of which accounted for the 23.7 percent growth of the clothing sector amounting to 7.8 billion. The report added that the average expenditure per head on clothing in 2005 and 2006 rose to 12 and 11 went to discount retailers with majority or about 90 % spent at Primark, New Look, Tesco and Asda. This growth also indicated positive in the clothing sector as without value retailers, growth in the clothing sector could have turned backwards (Daily Mail, 2006). Prior to 2005, Thomas (2004) already noticed and predicted trands and fads in fashion highlighting the fact that "fashion is moving so fast that we need to decode quickly the distinctive details that create a new key piece. Today designers present a fresh catwalk idea, and within a few weeks they are horrified to find that more than one high street store is already selling the cream of their designer collection ideas." She added that in instances like this, the higher end gets the bulk of the problem as those who desire exclusivity loses the very thing that sets them apart from those who know nothing about fashion. Thomas (2004) emphasised that there exists logo fatigue as also acknowledged elsewhere (Klein, 2000) and that only China and Japan desire for logos in dressing. "Only chavs really wear logos," Thomas added with the vindication that craft should be individual, personalised and customised in order to "empower the consumer with some measure of self-selection and personal designing input" Market Segmentation Market segmentation, positioning and the marketing mix all play pivotal roles in consumer marketing, specially luxury fashion. For enterprises, locating and targeting unique market segments is a necessity in order to become competitive in the marketplace (AMA, 2005). Creative market segmentation strategies allows a business organisation a strategic advantage over its competition as underserved niche are uncovered, and gunning marketing and financial resources into that niche (Neal, 2005). Each segment respond differently from others to the variations of marketing mix. Four basic criteria were set by Green and Tull (1978) as follows: 1. That the segments must exist in the environment and not be a figment of the researcher or management's imagination 2. That the segments are repeatedly and consistently identifiable 3. That the segments must be reasonably stable over time 4. And that one must be able to efficiently reach these segments through specifically targeted distribution and communication initiatives. As such a firm is expected to either adopt the mass-market strategy or a market segmentation strategy and never anything in-between (Neal, 2005). In the process, senior management is involved in the strategic decision in the effective market segmentation where alternative marketing strategies are executed in pricing, promotion, and distribution systems. Likewise, it is not enough that research and development can execute product or service variations. The whole process involves manufacturing to produce the variations, finance to report costs, profits and margins, with the marketing research able in monitoring and measuring customer response (Neal 2006). For most firms, the practice is to develop market segments for each product category, discern current and proposed positions within each of the segments, then select its target market based on the opportunities that exists in each segment (Neal, 2005). It is also necessary that a firm sets initial forecasts of market demand before fine-tuning its marketing mix to achieve optimum results in positioning and penetration. The basis for segmenting a market may include: "Product class behaviours, Product class preferences, Product class-related attitudes, Brand selection behaviour, Brand-related attitudes, Purchasers' attitudes toward themselves and their environment, Demographics, Geographics, and Socioeconomic status," (Neal, 2005). There are two methods for market segmentation: A priori segmentation - this grouping may result from a company tradition, recognised industrial groups or other internal or external criteria where a firm chooses to break customer groups by a generally accepted classification procedure related to variation in customer purchase or use of a product category. Samples include: "Standard Industrial Classification (SIC) groups, Geographic regions or sales territories, Basic demographic groups (e.g., sex, age, household composition), Purchase or usage groups (e.g., heavy users, light users, nonusers), VALS (SRI's Values and Life Styles classification system), and PRIZM, or similar geodemographic classification systems," (Neal, 2006). Post hoc segmentation is based on the results of research study undertaken for the purpose of market segmenting formed by aggregating buyers who respond similarly to a set of basis questions with a selected basis variables that may include: "Product attribute preferences, Values, Product purchase patterns, Product usage patterns, Benefits sought, Brand preferences, Price sensitivity Brand loyalty, Socioeconomic status, Deal proneness, Lifestyles, Self-image, Attitudes and opinions toward one's environment, Dealer loyalty," (Neal, 2005). As market segmentation involves partitioning a large market into smaller groups, firms and business organisations may deal with each segment by specifically providing which is most needed by the customer in a certain segment, allowing price and product changes a reasonable range for the segment to avail. In some instance, the firm may also pursue just one segment or all of the segments with enough profitability. Appropriate segment is evaluated against the organisations own strengths weaknesses and strategic objectives (Dutka, 2006). Two segmentation techniques are as follows: 1. Perceptual Mapping - it is a tool to discover how consumers differentiate products or organisations where relations are portrayed by the relative position of points on a two-dimensional map. Distance between points indicates the degree of relationship between the variables while points that cluster reveal those which are closely related. 2. Decision Tree Analysis - uses cross tabulations to examine results of a particular survey question and can be very complex in determining specific categories as analysis must identify as many practical and potential combinations. Isolation of relationships follow and is tested by a statistical method to ensure that the data conveys real insight (Dutka, 2006). Positioning Burberry back in 1998 had its annual profit drop from 62m to 25m that led to criticisms of Burberry as an outdated business with a zero fashion cachet. But the company made a u-turn with significant improvements in its business performance through re-positioning strategy (Moore and Birtwistle, 2004). Positioning is considered an art of tailoring the image and presentation of a product or service to appeal to a selected or targeted market segment (Dutka, 2006) enabling marketers to draw a direct link between product attributes and specific customer needs instead of crafting a general appeal. Positioning strategies already existed for decades and is closely related to market segmentation as the process involves identification of potential customers. It is used in today's diverse marketplace as an essential marketing tool for success. Coco Chanel was identified to have used product positioning as early as the 1920s with self-styling promotion using neutral tones of beige, sand, cream, navy and black coupled with soft fluid jersey fabrics in simple shapes (Thomas, 2004). Product positioning reduces costs for ineffective marketing and advertising to remain competitive in the increasingly complex business environment. In positioning, association or brand association may matter. Fashion brands gain competitive advantage with the associations they have, from the retail shop to the buyer or wearer, and in a common department store or retailer shop, through design aspects within the concession shop (Gretz, 2000). Design has been used as a key solution in providing differentiation from other concession shop products within the store. Elements include store faade, interior, dcor, lighting, atmosphere, fixtures, and design of hangers. Details become necessary for brands to become highly visible (Gretz, 2000). Concession and host retailer also develops alliance that affect the brand image of luxury fashion. From the start, manufacturers chose the appropriate retailers that must carry their brand names lest a negative association could impact to its existing and prospective consumers. Composite brand alliance was defined as an indirect form of brand extension (Park et al, 1996) while a close relationship between brands combined with the impersonal business relationship shape the interaction between brands and shaping awareness in co-branding (Uggla, 2001). Marketing Mix The marketing mix is an approach in crafting and implementing marketing strategies emphasising the blending of factors to obtain organisational and consumer objectives (Borden, 1964) as inspired in a James Culliton article. The target market is foremost considered in blending the elements by understanding the ants and needs of the market or customer. "When building a marketing program to fit the needs of his firm, the marketing manager has to weigh the behavioural forces and then juggle marketing elements in his mix with a keen eye on the resources with which he has to work," (Borden, N. 1964 pg 365). Certain marketing mix is usually prepared for every product offering or each market segment which is also dependent on the organisation. McCarthy (1960) suggested the following as the most common variables in the marketing mix: Product is the luxury fashion brand Price is usually exorbitant for the masses Place or distribution is through retail shops that is frequented by trendsetters and the fashion elite Promotion is the communication between the organisation's product to its target consumers using marketing strategies and advertisements. Marketing Luxury Fashion There are a variety of ways to build a luxury fashion brand but the consumer play a major role in its success or failure. McRobbie (1998) delineated two pillars of the British fashion as the art school establishments and fashion media represented by women's fashion magazines. So that the thousands of fashion design graduates of London have two ways to go: build their own names or tie-up with established fashion houses. In this instance, the consumer was not included in the picture as she noted how many have gone bust after a year or two. But trends identified as the British or UK fashion which may be categorised in this instance as "independent" by this researcher taking from the so-called "indie" label of the recording industry, as well as the micro market (Priest, 2005) created a niche for small and struggling designers with the value only superbrands could muster and equal. Luxury fashion has always been identified with established brands, as most talented names also start out with established brands prior to branching out on their own, or until a designer name that is about to make it are bought by established fashion houses. But brands notwithstanding, certain qualities are always associated with luxury brands: craftsmanship, comfort, durability, and style. Other qualities may depend on place or country of origin, material, and subliminal messages that are part of the branding as Kotler (1994) defined: Attributes - such as expensive, exclusive, well-made, modern, classic, durable or comfortable Benefits - which include functional as the garments may be worn for years, and styled to last for several seasons, as well as emotional benefits of the feeling of wealth and security, affluence, importance and admiration, pleasure and high self-esteem Values - such as classic, quality, artistic or traditional Culture - as that of English tradition, the monarchy, class system and pride in history and craftsmanship, or the Italian style and originality of design. Personality - of which a brand projects age, maturity, occupation, wealth, social status, or aristocracy Use - conveys profession, age, career or position, social status, and even personal or professional achievement. This illustrates that luxury fashion brand is more than a name, and has achieved the status of an identifier where individuals wearing or preferring certain brands or style develop a bond which may not be achieved in any other way. As clothes were acknowledged as a form of non-verbal communication since it has become so visible component of the individual's daily device, Kaiser (1990) suggested that it helps individuals organise and make sense of his or her social experiences. In establishing luxury brands especially for new players, repurchase intention marks an apparent motivational state of consumers to repeat a buying behaviour and that there is a designated consequence of perceived value (Chang and Wildt, 1994). This led to brand marketing and communication efforts to enhance perceptions of brand purchase value to elicit favourable repurchase behaviour (Munger and Grewal, 2001). While it was postulated that the economic value of functionality and substitutability was once considered as the prime model for trade-off purchase (Dodds, Monroe and Grewal, 1991), other marketing researchers (Fournier, 1991, Belk, 1995) argued that contemporary consumer behaviour should be closely associated with post-modernism as a socio-cultural phenomenon, or individuals consuming is not for basic needs but in pursuit of self identity, social groups and culture or even subculture. Further, it links consumer purchase behaviour to symbolic meanings of products in relation to the self, social and cultural context where individual consumers exist. Nevertheless, emotion is still considered as a factor in the stream of consumer behaviour (Elliott, 1997 and Shawarz, 2000) putting emotion or affect ahead of cognition as a main factor in consumer behaviour. That consumers have a general propensity to seek out affective situations, enjoy emotional stimuli, and exhibit a preference to use emotion in interacting. A holistic approach was also proposed for the investigation of brand purchase value (Mano and Oliver, 1993 and Schmitt, 1999) while others link it to a multi-dimensional construct affected by symbolic, emotional and cognitive factors ( Sweney, Sotar and Lester, 1996). Figure 1 Symbolic/Affective/ Trade-off Brand Purchase value Concept Source: Sai, 2005. Sai (2005) suggested the above structure to validate consumer purchase behaviour. Conclusion: It is not exactly true that the phenomenon of the micro market and the independent labels is recent or that it is concentrated or unique in the United Kingdom as elsewhere, the "indie" trend had been most notable even during the early stages of global consumerism which has become prevalent prior to the first world war due to the necessity of exchanges of commodities. Unique individual personalities wants and needs and the access to perceived desirable or new objects has been debated elsewhere in this research as contributing factor to the purchase of goods, specifically, luxury or designer fashion. Likewise, the drive of designers and merchants to be known, established and earn profits have also been indicative of individual wants and needs as driving forces beneath luxury labels. The organisations or enterprises' structure further contributed to the alignment of luxury fashion to where it is now today but market consumers, so much like the individuals behind organisations, continue evolving and wanting new forms and styles that they can seek within the established luxury fashion houses, and elsewhere as presented by independent designers. The traditional marketing factors and methods will always work and evolve to fit to the catered market segment, but old and new players will come and go, even as some brands seem to have been immortalised in books, but not always can be said on high street fashion and the consumers. Reference: American Marketing Association (AMA). (2005). Segmentation. 2005. Accessed from marketingpower.com Associated press (AP). (2006)."PPR quarterly revenue rises 5.8 percent." Businessweek, October 26. Belk, RW. (1995) "A hyperreality and globalisation: Culture in the Age of Ronald McDonald." Journal of International Consumer Marketing 8 (3/4) pp 23-37. Borde, N. (1964). "The concept of the marketing mix." Journal of Advertising Research 4, June, 1964 pp 2-7. Chadha, Radha and Paul husband. (2006). Cult of the luxury Brand: Inside Asia's love Affair with Luxury. Nicholas Brealey Publishing. Chang, TZ and Wildt, AR. (1994). "Price, product information and purchase intention: An empirical study." Journal of the Academy of Marketing Science, 22 (1) pp 16-27. Childres, Terry and Akshay Rao. (1999). "The Influence of Familial and Peer-based Reference Groups on Consumer Decisions." Journal of consumer Research 19 (2) pp 198-211. Daily Mail. "1 in every 4 is now spent on 'cheap' chic from Primark." 30 October 2006. Dodds, WB, Monroe, KB and Grewal, D. (1991). "Effects of Price, brand and store information on buyers' product evaluation." Journal of Marketing research 28, pp 307-319. Dutka, Allan. "Product Positioning Overview." American Marketing Association. Accessed October 2006 from http://www.marketingpower.com/content1482 Elliot, R. (1997). "Existential Consumption and irrational desire." European Journal of Marketing, 31 (3-4) pp 256-289. Fournier, S. (1991). Meaning-based framework for the study of consumer/object relations." Advances in Consumer Research, 18, pp 736-742. Jackson, Kate. (2006). "The case of the missing logo; Forget labels. The fashion elite turn to 'stealth wealth.'" The Boston Globe, October 12, 2006. Just Style. (2006). "Luxury shoppers lured by innovation." September 4. Accessed October 2006 from just-style.com Kaiser, S. (1990). The Social Psychology of Clothing: Symbolic Appearances in Context, 2nd ed. New York: McMillan Kotler, P. (1994). Marketing management Analysis, Planning, implementation and Control. 8th ed. London: Prentice Hall Lee, Michelle. (2003). Fashion Victim: Our Love-Hate Relationship with Dressing, Shopping, and the Cost of Style, Lee Broadway Books, New York, NY Mano, H and Oliver, R. (1993). "Assessing the dimensionality and structure of the consumption experience: Evaluation, feeling and satisfaction." Journal of Consumer Research, 20, pp 451-466 McCarthy, J. (1960 1st ed.). Basic Marketing: A managerial approach. 13the ed, Irwin, Homewood II, 2001. McRobbie, Angela. (1998). British fashion Design: Rag trade or Image Industry Routledge: London Munger and Grewall. (2001). "The effects of alternative price promotional methods on consumers' product evaluations and purchase intentions." Journal or Product and Brand Management, 10 (3) pp 185-198 Neal, William. (2005). "Principles of Market Segmentation." American Marketing Associations Publications, "AMA Core Marketing Knowledge: Segmentation." 2005 Moore, Christopher and Grete Birtwistle. "The Burberry business model: creating an international luxury fashion brand. InternationalJournal of retail & Distribution Management 32 (8) pp 412-422. Priest, Ann. (2005). "Uniformity and differentiation in fashion." International journal of Clothing Science and technology 17 (3/4). Pp 253-263. Sai, Shu-pei. (2005). "Utility, cultural symbolism and emotion: A comprehensive model of brand purchase value." International Journal of Research in Marketing 22, pp 277-291. Shawarz, N. (2000). "Social judgments and attitudes: Warmer, more social, and less conscious." European Journal of Social Psychology, 45 513-523 Sweney, J., Sotar, G. and Lester, J. (1996). "An investigation of a theoretical model of consumer perceptions of value. ANZMEC Conference in Melbourne. Thomas, Pauline Weston. (2004). "Flapper fashion 1920s C20th Fashion History." Fashion Era. Accessed October 2006 from fashion-era.com Read More
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