Retail Marketing: Expansion Strategy of Dorothy Perkins into Bangladesh - Case Study Example

Retail Marketing: Expansion strategy of Dorothy Perkins into Bangladesh

Executive Summary

Dorothy Perkins is a UK based firm, which has many branches across the world. Known for its range of women’s apparels and accessories, Dorothy Perkins is one of the biggest names across the globe. Planning to expand its business in the international market, the company has decided on reaching out to the developing countries. In this regard, Dorothy Perkins has yet to tap the Bangladesh market. The economic growth in Bangladesh has been stable for the past few years. The competition in the market is comparatively low with the presence of only a few multinational and domestic designer brands. This can prove to be a good opportunity for Dorothy Perkins to enter the market. Garment industry of Bangladesh is one of the most productive and cost effective in the world. The company can also benefit from this efficient production system, if the plan of entering the country is executed. Due to low entry barriers, relatively low investment will be required for the company to start its operation there. The growing appreciation of people, especially women, for modern fashion and the increasing level of acceptance of the for western culture, provides Dorothy Perkins with a suitable breeding ground in Bangladesh, which the company can utilise to expand its business.

A proper market analysis to understand the taste and preferences of the customers, an efficient brand awareness program, a good strategy to tap the market, an effective implementation of the marketing strategy and proper monitoring of the marketing plan implementation will help in determining the future of Dorothy Perkins in the Bangladesh market.

Table of Contents

1.Introduction4

2.Situational Analysis5

3.Marketing Objectives6

4.Segmentation Targeting and Positioning6

5.Market Entry8

6.Marketing Programmes to reach the target market10

8.Integrated Marketing Communication11

9.Branding11

10.Budget12

11.Monitoring and Control13

12.Contingency Plan15

13.Recommendation15

14.Conclusion16

15.Reference List17

16.Appendices19

• Introduction

Dorothy Perkins is a UK based women’s apparel brand that caters to the age group of 25 to 35 years old. Founded in the year 1909, today the brand runs as much as 600 stores in UK and more than 120 retails globally (Dorothy Perkins, 2016). The company was owned by the Farmer family, in the 1960s. Later in 1979, the Arcadia Group acquired the brand.

The company started as ‘Ladies Hosiery and Underwear’. Later the name was changed to Dorothy Perkins. Since its inception, its popularity has grown to an extent that every 2 seconds, it sells a jersey top somewhere in the world (Dorothy Perkins, 2016).It product range includes dresses, knit wear, coats, denim, Jersey tops, lingerie, maternity wear, etc. The brand also offers a wide range of accessories and shoes.

In this paper, a proposal will be provided on how Dorothy Perkins can expand its business to the markets of Bangladesh. Also, an analysis will be done on the factors that will affect the performance of the company in the long run.

• Situational Analysis

The retail sector in general is growing at a slow rate in Bangladesh. The contribution of the modern retail is only 10 percent of sales generated from the retail industry. Though traditional retail contribute maximum to the retail industry, modern retail is expected to grow 4 times more, reaching a worth of US$ 37 billion (Euromonitor International, 2014).

RMG (Readymade Garments) contribute up to 80% of the country’s total annual exports, which stand a worth of $24 billion (Islam et al., 2013). The easy availability of cheap workforce is the primary reason for the exponential growth of the RMG Sector (Islam et al., 2013).

The year 2010 saw an export value of USD 15 billion in Bangladesh (Berg et al., 2016).In the recent years, retail segment in apparels, has a high possibility of growth. The main reason for this is that fashion industry is growing in Bangladesh. It is expected to cross $5 billion per year in Bangladesh. Major players in the apparel industry, like HUGO BOSS, Marks and Spencer plc, JC Penney, Walmart Stores, Inc. etc. have opened up stores in Bangladesh (Mirdha, 2015).

• Marketing Objectives

Market Positioning: To start with, Dorothy Perkins is planning to open two stores, one in Dhaka and the other one in Chittagong, which are two biggest cities in the country. In the second year, the company can think of entering other cities in the country, depending upon the response that it gets from these two markets. The company should also ensure an effective way to reach out to the target market in Bangladesh.

Brand awareness and Management: One of the main challenges of entering a completely new market is to spread brand awareness. Dorothy Perkins would have to face the same challenge while entering the market of Bangladesh. The company has to use various promotional techniques, like holding public events, contests, advertisements etc in order to attract potential customers. The company has to ensure an increase in brand awareness by 15-20% in the first year.

Growth in Sales: Bangladesh being a highly price sensitive market, Dorothy Perkins has to use various methods to lure customers into the stores (UK Trade and Investment, 2015). Competitive pricing can help the company in dealing with the competition that already exists in the market. Method such as seasonal offers, sales and discounts can help the company in getting the attention of the potential customers. The company has to ensure a growth of at least 15-20% by the second year. Also, the online sales should be increased by at least 15% by the second year.

• Segmentation Targeting and Positioning

Demographic segmentation: Dorothy Perkins can opt for demographic segmentation to divide the market on the basis of age, sex and income level. Being a fashion brand, the company should segment the market on the availability of high income and fashion conscious people. As the products mostly cater to the needs of people between the age group of 25-35, availability of young crowd is another factor that has to be kept in mind.

Psychographic segmentation: Dorothy Perkins can also opt for psychographic segmentation. When it comes to fashion, the social status, lifestyle, values, characteristics and attitude of the people etc. play an important part in driving the purchase decision. Thus, it is important for the company to carefully select the location for its retail stores.

Target market: To enter the market, it is best for the company to start small, gain an idea about the market and then expand. The company can start by opening one or two retail stores in Dhaka and Chittagong, which are the two major cities in Bangladesh. These two cities are the most populated cities of Bangladesh, which will ensure the constant inflow of crowd into the stores. Also, these cities are considered to be the hub for office goers and college students. This will ensure that women have a disposable income ready with them to make the purchase. Positioning: The company to design product line specifically for Bangladesh market. The brand has to be positioned in a way that the target market is able to relate to the brand. Dorothy Perkins can opt for user-benefit, competitive and price driven positioning. The following information has to be clearly conveyed to the target customers:

• The product range that the company has to offer and who can buy the products.
• Differences between the products of the company and its competitors.
• Factors that make Dorothy Perkins unique.
• Market Entry

There are various factors that any company has to consider before entering a foreign market. For example, the size of the market, the number of competitors available in the market, availability of proper infrastructure, the various government regulations particular of that market and various political, economic and operational risks. Depending upon these factors the company has to select the most feasible market entry strategy. There are various marketing strategies to enter a market. The most feasible ones that Dorothy Perkins can use to enter the Bangladesh market are mentioned below.

• Direct Exporting: In direct exporting method, the company directly exports the products from the home country. There is no middle man present in this model. Also, the company hires a representative to correspond to the company in the market. Dorothy Perkins can use this method to enter Bangladesh market as it ensures better sales. Also, there is a better protection of intangible property such as patents, trademark, goodwill etc.
• Licensing: Licensing is another method that Dorothy Perkins can use to enter the market of Bangladesh. Here, the company sells the right to use the product or service to a particular company. This can be helpful for Dorothy Perkins to acquire a larger market share, if the company sells the license to a much bigger company functional in Bangladesh market.
• Partnering: Partnering with other firms can be very useful strategy for Dorothy Perkins to start in Bangladesh market, as the culture there is entirely different than the western markets. Entering the market by partnering with an already existing firm there will be particularly beneficial for the company in understanding the preferences of the customer base.
• Joint Ventures: In joint venture, two companies join together to form a third company to work in a particular market. Usually the resources and the profit or lose are shared by the companies. This method of market entry can prove to be beneficial for the company as it will require comparatively less investment from Dorothy Perkins.
• Greenfield Investment: In this type of market entry, the company buys property to build facility in order to carry out the business. Though this type of market entry strategy will require Dorothy Perkins to invest heavily in the foreign market, it will provide design flexibility according to the requirements of the company. Also, getting a new facility will require less investment from the company’s part.

Image1: Annual Urban Population Growth

(Source: The World Bank, 2016)

• Marketing Programmes to reach the target market

Product: Dorothy Perkins is known for its sleepwear, tights and lingerie. Bangladesh, being a religious and conservative nation, may not accept these products with an open mind. The company should develop a product range, keeping the target customers in mind. The company can tie up with local designers and manufactures for this purpose.

Price: Bangladesh has a highly price sensitive market. The company should opt for competitive pricing strategy, in order to grow in the market. Completive pricing strategy will also help in the acquisition of new customers through brand conversion.

Place: The markets of Dhaka and Chittagong are the target for the initial launch of the brand. These cities have been chosen keeping in mind the fashion conscious and high income group of young women.

Promotion: Only through effective communication Dorothy Perkins will be able to increase its brand awareness. The company can create audio and video advertisements to be broadcasted through television and radio. Also, the availability of print media can be utilised for this purpose to reach out to women of the age group 25-35. Online marketing can be used to reach out to the target market, as most of the young crowd has a presence online. Providing various seasonal offers, discounts and sale will help in increasing the footfall in the stores as well as increase the rate of conversion and encourage purchase by the customers.

• Implementation of marketing programs

Dorothy Perkins should price its products to meet the demands of the price sensitive market of Bangladesh (UK Trade and Investment, 2015). The company should opt for competitive pricing. Products designed specifically for women in Bangladesh will help the company in targeting the conservative yet fashion conscious crowd. By targeting the population of Dhaka and Chittagong, the company will be able to reach an advanced, fashion conscious potential customer base. Various communication mediums should be used in order to convey its brand value and offering to the target customers.

• Integrated Marketing Communication

Dorothy Perkins should use all the available channels of communication to reach out to the target market. This may include promotion through television and radio advertisements, printed advertisements through newspapers, magazines etc., online advertisements, promotion through events, holding exhibitions, providing discounts etc.

A very important aspect of using different means of communication and promotion is to maintain the consistency of the message being delivered. The company has to make sure that uniform message is being delivered through all the means of communication.

• Branding

Branding is the goodwill that the company receive from customers. The effect of successful implementation of marketing strategy and advertising is seen on the branding of the company (Clifton, 2009). Good reviews about the company and the willingness to pay high for the products will represent the brand value of Dorothy Perkins.

• Budget

The budget of the company to start its operation in Bangladesh is given below, keeping in mind that the company is starting its operation in two cities, Dhaka and Chittagong.

Image 2 Set up cost

(Source: Author’s Creation)

Image3. Advertising budget

(Source: Author’s Creation)

Image4. Maintenance Cost

(Source: Author’s Creation)

Total Budget= (14422 +10126 +75984) Pounds =100532 Pounds

• Monitoring and Control

Periodic evaluation of the following factors will provide a general idea about how effective the marketing strategy has been in promoting and expanding the business of Dorothy Perkins in Bangladesh:

Increase in cost advantages:

Growth in the operating margin causes significant benefit to any business. The company should monitor its operating expenses and the cost benefits that it is receiving from time to time. This will help it in monitoring the cost benefits it has received.

Increase in sales:

The increase in sales should be recorded by the company from time to time. A growth in the sales shows the effectiveness of the marketing strategy.

Increase in the footfall:

The increase in the footfall in the stores is a direct result of effective promotion. The more they see and hear about the brand, the more customers are likely to visit the stores.

Growth in Market share:

Keeping a track of the market shares periodically will provide an idea about the company’s growth in the market. This is another way of measuring the effectiveness of the marketing programs implemented by the company.

Feedback from customers:

Customer feedback is another important measure of the growth in consumer satisfaction. Conducting surveys inside the stores as well as conducting telephonic surveys will help Dorothy Perkins in getting a feedback about the brand image in the minds of the customers and will also help it in getting an idea for future improvements.

• Contingency Plan

A contingency plan will provide Dorothy Perkins with a plan B in case the main business strategy does not work out. Identifying the risks involved with the business in Bangladesh market will help the company in devising a proper contingency plan.

• Critical business operations should be identified: The critical business operations of Dorothy Perkins should be identified in order to reduce the losses. Here, the critical activities of the company will be procurement of inventory, storing and displaying them, maintaining the stores, etc. Focus on these activities will ensure the continuous functioning of the business.
• Identifying the market risks: The risk that is involved in operating in Bangladesh are unstable political system that may lead to frequent changes in rules and regulations, changing tariff and tax rates, threat form new entrants, fluctuating demand, increase in raw material prices etc. Dorothy Perkins should identify these risks.
• Prioritizing the risks: The next stage is to prioritise the market risks. By doing this, it will be able to deal with one risk at a time and utilise its resources in solving the problem.
• Recommendation
• Dorothy Perkins, while entering the Bangladesh market, should focus on Dhaka and Chittagong. The attention should be on targeting women of age group 25-35.
• Providing discounts and seasonal sale in the stores will help in boosting the brand image as well as increase the sales.
• The company should keep itself updated with the various rules and regulations of the government, to avoid any legal issues.
• Company should keep itself updated with the competitive environment in Bangladesh in order to effectively deal with competition.

• Conclusion

The paper provides a brief marketing plan for the expansion of the women’s apparel brand, Dorothy Perkins, in the market of Bangladesh. The proposal provides a description of the marketing objectives. It also explains how the company will segment, target and position itself in the market. A brief on market entry strategy and how the various marketing programs will be implemented has also been provided. Monitoring and control is particularly important for the

company to evaluate its success in the market. Lastly, how the company can improve its performance in the market has been provided.

• Reference List

BBC News, 2016. Bangladesh profile – Timeline. [Online] Available at: < http://www.bbc.com/news/world-south-asia-12651483> [Accessed 1 June 2016]

Berg, A., Hedrich, S., Kempf, S. and Tochtermann, T., 2011. Bangladesh’s ready- made garments landscape: The challenge of growth. [PDF] Mc Kinsey and Company. Available at: < https://www.mckinsey.de/sites/mck_files/files/2011_McKinsey_Bangladesh.pdf> [Accessed 1 June 2016]

Clifton, R., 2009. Brands and Branding. New Jersey: John Wiley & Sons

Dhaka Tribune, 2015. Economists suggest devaluation of Taka.[Online] Available at: < http://www.dhakatribune.com/business/2015/aug/31/economists-suggest-devaluation-taka> [ Accessed 1 June 2016]

Dorothy Perkins, 2016. [Online] Arcadia. Available at: < https://www.arcadiagroup.co.uk/about-us/our-brands/dorothy-perkins> [Accessed 1 June 2016]

Euromonitor International, 2014. Markets Of The Future in Bangladesh. [Online] Available at: < http://www.euromonitor.com/markets-of-the-future-in-Bangladesh/report> [Accessed 1 June 2016]

Islam, M. M., Khan, A., M. and Islam, M. M., 2013. Textile Industries in Bangladesh and Challenges of Growth. Research Journal of Engineering Sciences, 2(2), pp. 31-37

Mirdha, R. U., 2015. Garment exporters now look to conquer local market. [Online] The Daily Star. Available at: <http://www.thedailystar.net/business/garment-exporters-now-look-conquer-local-market-107506> [Accessed 1 June 2016]

The World Bank, 2016.World Development Indicators. [Online] Available at: < http://databank.worldbank.org/data/reports.aspx?source=2&country=BGD&series=&period= > [Accessed 1 June 2016]

UK Trade and Investment, 2015. Doing business in Bangladesh: Bangladesh trade and export guide. [Online] Gov.UK. Available at: < https://www.gov.uk/government/publications/exporting-to-Bangladesh/doing-business-in-Bangladesh-Bangladesh-trade-and-export-guide> [Accessed 1 June 2016]

• Appendices

Appendix 1

Image5. SWOT analysis

(Source: Dhaka Tribune, 2015; UK Trade and Investment, 2015)

Appendix 2

Image6. PEST Analysis

(Source: BBC News, 2016; UK Trade and Investment, 2015)

Appendix 3

Image7. Country Analysis

(Source: The World Bank, 2016)