Clothing is often seen as an impulse purchase, thus locations for retails must be in high traffic areas in order to enhance a greater potential purchase sales.
Pedestrian footfall figures from CB Richard Ellis Gunne for the third quarter of
2003 show a particularly fierce competition between Grafton Street and Henry Street. On Thursday’s late night shopping, both streets register an average of 7,500 people per hour. However, on Saturday afternoon, Grafton Street is ahead with 20,908 people per hour and the north side’s Henry Street only records 17,138 per hour.
Clearly with the city’s population heading towards the million figure and with an average of 900,000 people walking throughout the city streets every day, there is a lot to gain and compete with, in terms of clothes retailing.
Lingerie Sector
Before, female shoppers used to look at prices; today they are more interested in other aspects of lingerie and quality. Mere commodity is not satisfying anymore as women are looking for design labels, and fashionable articles.
Textile technologies (fibres such as Lycra) have also changed the pattern of underwear and lingerie. This is adding value for various products and therefore explains some higher prices with new models. Diversity in the lingerie sector is making competition among rivals even fiercer. Articles incorporating invisible straps, padding with gel or fabrics for enhancing bras are star products in the lingerie sector. Also, lingerie incorporating plastic pearls, fake stones, and metallic names are having a certain success.
In order to keep consumer’s interest, it is essential to introduce new colours, styles and patterns. It also allows buyers to be fashionable and therefore, it keeps them purchasing new lingerie garments.
A store, such as Penneys, is usually trying to push down purchase prices in detriment of quality. Henceforth, Women’Secret is a specialist retailer and understands the needs of young women for reasonable prices and attractive matching sets.
The average woman is getting larger in size and the industry reports a significant increase in the demand for bras with bigger cup sizes. Control panels for stomach and buttocks are very much appreciated by female purchasers.
Within women’s clothes, day clothing and outer clothing are the primary sectors by value and this is the sector most sensitive to change in weather, fashion and disposable income. The women’s clothing market (that also includes babies and children’s clothing) represents and is worth double of the market for men and boys.
But all women wear lingerie of some sort, and are increasingly regarding underwear as a fashion accessory. Usually, lingerie sales are boosted for special occasions and intense promotions are done during Valentine’s Day, spring, summer, and Christmas.
Business sector
The fashion industry is notoriously fickle. The changing trends and collections are uncertain and risky in the retail environment and even more for lingerie.
The major groups in Ireland’s retail industry are the department stores such as Dunnes Stores, Penneys, Debenhams, Roches Stores and Marks & Spencer.
Franchises also exist along with specialist groups such as Brown Thomas, Barry and Sons Fashion Stores, Arcadia Group PLC, Next, River Island and Oasis.
Internationalisation of European retail clothes is also significant in Ireland. It is a diversification strategy for entering new markets when their domestic markets are saturated. This is the case for Women’Secret in Spain. Besides, the UK is mostly ruling in Ireland in terms of international franchises. Other international franchises include Vero Moda (Only, Vila, Exit, Name it…), Mango, Kookaї, Benetton, Zara, TK Maxx, Laura Ashley, Monsoon (Accessorize).
For the Irish consumer, internationalisation is well accepted as it brings further choice, especially in non-UK clothes. It has been highly criticised regarding the homogeneity brought by the English companies to the marketplace.
Most retail prices in the lingerie sector are aggressively competitive. Indeed traditional high street chains are facing other sources of competition like supermarkets, mail order and online shopping.
Media
One of the greatest influences in the lingerie industry recently has been the proliferation of advertising and campaigning in magazines especially to the target age group of 25-34. Moreover, the endorsement by celebrities and models has been quite efficient in fashion retail and also in the lingerie sector. For instance, Eva Herzigova, a top model who represented the brand Wonderbra. Then, lifestyle magazines have become influential in what people wear and want to wear.
In the lingerie industry, it is important to have marketing communications.
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Magazines: Many important brand names are publishing ads in very trendy women’s magazines such as Elle, Vogue, U, Cosmopolitan, B, and teenager’s magazines such as CosmoGirl, Bliss, 17, Sugar and lifestyle magazines such as OK! and Hello!
Luxury lingerie is also advertised on quality and serious magazines like Time, Newsweek. Usually these are designer products such as Chantelle, Lejaby, Triumph (Sloggi)…
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Newspapers: The Irish Independent, usually used for promotions or discounts, generally on the front page, in the right corner.
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Shop windows can be a strategy for promoting the brand.
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Billboards- mostly used for designer brands such as Wonderbra
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Internet : Women’s Secret in this respect has decided to launch a website and also offers shop catalogues. A valuable asset to Women’Secret is indeed its strong expertise in e-commerce with online shopping available from its website. A possibility is it can launch A-Wear on the internet and make online shopping available to A-Wear customers.
* Sleepwear consists of nightwear, dressing gowns (robes), pyjamas, shorts, vests, slippers
IV/ Consumer Situation
Trends in B2B
- An increasing amount of Franchises are opening up in Ireland. According to the Franchising in Ireland Survey, franchising in Ireland has grown by 542% in the last ten years e.g. Zara, and Pull & Bear, Jane Norman etc are the new additions to Roches Stores; Mango starting off in Arnotts; Morgan in Arnotts.
- A-Wear is very receptive towards franchises in B2B operations as it already has business partnerships with Nails: Now! Insomnia Café and Hair Extensions.
- Consumers want more choice and offers in a single store, e.g. Topshop have introduced confectionary (Chupa Chups, Trebor Bassetts)
- More Irish stores are becoming available to online shopping, e.g. Buy4now.com. Although there is a lack of clothing available for sale on these websites.
Current Perceptual Positions of Current Product Offerings
- Irish people are less prudish than they used to be and lingerie is losing its negative image of being overtly sexual. However, more needs to be done to rid Ireland of the image it has of lingerie being shocking or too provocative, e.g. images of Ann Summers come to mind when one thinks of the term “lingerie”.
- Underwear is becoming funkier, e.g. Penneys has high street fashion trends at low cost but at a detriment to quality.
- Underwear is becoming more widely available - more retail outlets are selling bigger ranges of underwear than before, e.g. Next, Vero Moda (have just begun to sell underwear), Topshop, Miss Selfridge.
- Younger girls (14 yrs up) are buying more “grown up” underwear e.g. the “thong phenomenon”
- At present on the Irish market product offerings are positioned in the low cost, low quality (e.g. Penneys), or the high cost, high quality (e.g. Marks & Spencer, Knickerbox). However, Women’Secret would be the ideal strategic fit to A-Wear in providing low cost and high quality.
Needs of Community
- For low cost, high quality, funky underwear that will appeal to teenagers and young women alike.
- For more brands to enter the Irish market to give healthy competition and also to give the Irish consumer the largest range of choice possible.
V/ Macro-Environment Situation
Economic
- Increase in disposable income in Ireland.
- Euro. Both companies can do business in the single currency without having to deal with foreign exchange rates or conversion.
- Strong links between Spanish and Irish businesses e.g. Zara and Pull & Bear setting up in Roches Stores; Don Carlos with its marketing operation in Ireland.
- Franchising is increasing in Ireland
Political /Legal
- Corporation Tax is low in Ireland at 12.5%
- Strong links between Spanish/Irish businesses
Sociocultural
- Irish population favours Spanish culture- this is evident in the popularity of Irish people owning second homes in Spain, of people going on holidays to Spain each year and also the influx of Spanish goods into the Irish market e.g. Tapas bars, retail stores…
- Irish people are feeling more European with the influence of the European Union and the influx of Spanish people into Irish society. The Irish are developing their tastes from traveling and increasing their awareness of foreign products.
Technical
- Increased use in the Internet and B2B e-commerce. This gives way to A-Wear to expand their clientele base and to learn from the expertise of Women’Secret who is already experienced in e-commerce. Women’Secret.com is available in English, French and Spanish and receives 30,000 visits daily. This gives rise to the potential for A-Wear to increase their clientele base and to reach foreign markets.
- EDI-Electronic Data Interchange- speeds up the delivery of products across borders.
Environmental
- From Plastic to Paper. Women’Secret will have to adapt to Irish regulation by changing their packaging from plastic to paper.
VI/ Swot Analysis
Strengths
- A-Wear is already established and knows the market as well as it has its own distribution channels
- Women’Secret stock turnover is as flexible as A-Wear
- A-Wear is becoming more popular with young Irish. They have revamped their style and image in the last few years.
- The brand name is already in English so this aids the process of brand awareness.
Weaknesses
- Many competitors
- Image of lingerie among Irish is risky because people are more prudish
- The brand name is unknown in the Irish market
Opportunities
- A-Wear is about to expand their range of products
- Their intention is to create customer loyalty
- E-commerce for A-Wear – thus increasing potential market sales
- Woman’s Secret is seeking to gain a foothold in the Irish market and to establish independent stores in Ireland.
- For Women’Secret the aim is to gain brand awareness without making investments and reducing risks.
Threats
- Present competitors reactions to the Women’Secrets entering the market (Oasis might expand units into lingerie, competitors could lower prices…)
VII/ Marketing strategy
Segmentation strategy
- Lingerie: underwear (thongs, pants, bras, tangas), sleepwear (nightwear, dressing gowns, vests, shorts, pyjamas), toiletries bags, slippers and homewear.
- We do not provide basic underwear that is boring, unstylish. We have sexy, sporty, trendy, comfortable garments.
- Another segment is the price-quality proportion.
- Target group: women between 15-34 years.
Targeting strategy
- Our target group encompasses young girls to modern women at the age of 15-34.
- We focus on women who are modern, trendy and prefer good quality but do not want to pay so much money and also on young girls because they are our future customers and do not have as much money to spend. Our target group wants to feel good and confident about themselves with our trendy products.
Positioning strategy
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Within the A-Wear shop: our range of products is underwear and sleepwear for women.
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To other shops: we are definitely not a sex shop; we have style and want to highlight the femininity of our customers.
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The product itself: there will be a differentiation between sleepwear and underwear.
- Underwear consists of sexy (usage of transparent materials), sporty (lot of cotton is used) and trendy (funky and modern design, fashionable colours…); these materials will be applied to different bras, thongs, pants…
- Sleepwear includes comfortable vests, shorts, feminine pyjamas, dressing gowns, and sexy and seducing nightwear. It is relevant to create fashionable clothes with nice prints. They are also designed for making the consumer good. There are not made with uncomfortable textiles.
Product strategy
- Our products are comfortable, trendy, and funky. They are very good quality and are available in a large range. But most importantly, they are reasonably priced. Our customers will get what they expect for the price offered and do not have to pay more. We would like to achieve a high grade of consumer satisfaction.
- Our range of products will be placed in all A-Wear stores in Dublin and later on in the rest of the country throughout its A-wear stores.
- Our Women’Secret products complement the other range of products in the A-Wear shop and will furthermore be extended by seasonal clothes such as swimwear.
Price strategy
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We will keep our prices close to our competitors.
- Offer special discounts: 10% student discount, buy-one-get-one-free policy, when you buy more than €60 you get a discount of 5%...
- We try to give the customer the best price-quality proportion.
Marketing research strategy
- A-Wear’s marketing department will be responsible for marketing research. Further sources will be the central statistic office as well as the Internet.
- In addition, research could be carried out in front of the shop. Leaving customers could be asked about their satisfaction. The only problem could be the representation of the sample because it would be a cluster sample.
Personal Selling
- Of course, we will train well our staff in order to give personal advice if it is asked for. Our products do not feature high complexity or different utility. Moreover, we respect our customers privacy as our products are products and for private use.
Service and customer strategy
- High customer satisfaction is our goal. Therefore, well trained staff is friendly, helpful and can answer any question if necessary.
- A nice, friendly, relaxing and enjoyable atmosphere shall be created by our special designer to please the customers. This should be obvious in the store and highlighted by sufficient space, trendy music, structured areas…
- Our customer service matters to us. A-wear already includes a designer label, nail studio; café and now a lingerie studio allow shopping to become a new experience.
- We focus on customer’s loyalty, which means a relationship up to 10-15 years. Our customers should then become A-Wear customers and vice versa. We reward our customers for their loyalty with bonuses. We pay special attention to our Irish customers as we (as a Spanish company) provide a wide range of products to an Irish company.
- As it has been noticed, Irish sizes (waistline, cups…) are bigger compared to the Spanish ones. Therefore, we will customize the sizes of underwear and sleepwear in function of the Irish’s needs.
- We provide the guarantee if the customers are not totally satisfied with our product. They have the possibility to exchange or return it against a proof of purchase. Clothes must be unworn due to hygienic regulations.
- We would like to set up a complaint management. This can be found online or directly in the shop by filling out a questionnaire. This procedure enables the customers to have their say, to criticize and to propose improvements.
- Similar to A-Wear as Paul Kelly has said: “we do not want to create new trend; we only give today’s trends to the customer, not from tomorrow.”
Advertising strategy
- We have decided to put half a page of advertisement into four fashion and lifestyle magazines. (Cosmopolitan, Cosmo Girl, U-Magazine, and Hello!; presumably later on other newspapers). They cover our target group as Cosmopolitan and Cosmo Girl have a high circulation in Ireland whereas U-Magazine is a fully Irish magazine with the highest circulation in Dublin. (see appendices)
- People standing in the streets and handing out leaflets and vouchers with a 10% discount in order to create a stronger consumer demand in order to create better awareness of Women’Secret brand. This instrument could also be used if sales are going down after the first couple of weeks.
- The advertising strategy will be further supported by Public Relations strategies so the magazines recommend our products. That is the reason why we intend to promote our new collection coming into our stores every 3-4 weeks.
- We have to be careful how to present pictures. They should not offend Irish young people because of their cultural and religious backgrounds. This could lead to a bad image or could be misinterpreted. This applies also to the internet website with sexual connotations.
- Free postcards with fashionable and funky pictures showing the newest and coming lingerie collection should be available at the cash desk for taking away. Following this, a new customer demand can be created.
- We intend to have no advertisements on TV, although it has the highest and easiest customer reach. Lingerie ads are usually not broadcasted on TV because of cultural and social taboos. Besides, TV ad is often seen as annoying and bothering.
- We could use TV ads later on when the brand is already established in Ireland. This channel could be used to promote the image of Women’Secret. As the image is not set yet, it is not wise to use this medium at this early stage of the project.
- We further intend not to go for radio advertisement because lingerie is a product that is visually attached.
Sales promotion strategy
- Buy one get one free promotion
- Student discount: 10 %
- Special discounts in first days/weeks: opening discount
- Buy packs: a bra + pant + sheet bag = 25 Euro
- Monthly special
- Gift vouchers
Public relations strategy
- Should go hand in hand with the internet strategy: the public relations department is in charge of releasing information about the company’s philosophy, new products, specials etc. on Women’Secret website.
- The PR department is also responsible to give appropriate information to the public media (press as well as audiovisual). There should be articles in the Irish Times, The Irish Independent, Evening Herald’s, magazines as well as some information on radio and TV.
Internet strategy
- There should be a direct link from the A-Wear website to Women’secret website.
- The internet will be used as a platform to give customers the ability to shop from home, for those who can not make their way into our shops (distance, disabilities). The advantages of online shopping are:
- time management (people with children, working people),
- more comfort (for people with physical disabilities),
- overcoming a geographical distance.
- Showing our latest fashion regarding underwear, online viewing on the internet should pull the customers in the shop by creating a consumer demand.
- A-Wear customers become automatically Women’Secret customers because of the direct link between these two websites (this refers also to the shops).
- The pictures appearing on the internet should not offend the Irish public.
- A mission statement/philosophy should explain our strategy to enter the Irish market and why we will be placed in A-Wear (as a supplement for the range of products). Furthermore, we focus on the good reputation of Women’Secret and its success in other countries.
Distribution Logistics
Tibbett & Britten is an international logistics service provider. Tibbett & Britten control the European market and thus Ireland. It has a subsidiary in Spain called Tibbett & Britten Iberia (TBI) that managed more than 120,750m² of warehouse and a fleet of 392 vehicles.
This logistics company is specialised in the fashion sector and textile products. TBI is actually working for Grupo Cortefiel and Women’Secret. TBI also deals with some of our competitors which are Marks & Spencer, Debenhams and the Arcadia Group.
Besides, TBI delivers the entire Women’s Secret line of products to its franchises in Europe from its newly built warehouse in Toledo, South of Madrid.
Therefore, Women’Secret can deliver its products safely to Dublin with the renowned logistics company.
Furthermore, Women’Secret should deal with the incoterm CIF, Cost, Insurance and Freight. This means Women’Secret is taking charge of transportation costs to the port of shipment. All export documentations must be furnished and paid by Women’Secret. It does also include marine insurance. Henceforth, A-Wear will need to subscribe marine insurance as well. Both parties are insured in case something happens during shipment. A-Wear will be required to handle all the risks and costs from the port of destination to the final destination.
Finally, Women’Secret can launch stores through a wide network of retail chains, as A-Wear is already well established in Ireland with its 21 stores throughout the country. Women’Secret will gain an advantage from A-Wear distribution systems.
VIII/ Projected Profit and Loss Statement
Profit and Loss Account can be viewed in the appendix.
Initial Costs
Initial costs will be high for the first year of the franchise in A-Wear. Included in these start-up costs are:
- Initial Franchise fee
- Initial Working Capital
- Total investment costs- this includes refurbishment, altering of shop floor space, addition of tills, uniforms…etc
Initial cost figures present in the Profit and Loss Account are the average costs associated with establishing and running a franchise according to the “Franchising in Ireland Survey 2001”.
Royalties paid to Women’Secret are taken at 7.1% each year (Franchising in Ireland Survey 2001).
Sales
Sales are calculated as a percentage of the overall sales of an average Women’Secret store.
- Overall sales for Women’Secret in 2002 were €79.07 million
- There are 150 stores worldwide
- We calculated the franchise in A-Wear to be ⅓ of the average store, thus annual sales were estimated to be €1, 757, 11.11
Wages:
Wages was calculated upon one full-time worker on 39 hours per week at €7.58 per hour, with two part-time workers working 19.5 hours weekly at €7.58. PAYE was calculated at 10.05%.
Advertising:
Launching the brand Women’Secret in A-Wear is set to be a high cost as it is relatively unknown in Ireland. Included in its launch are billboard advertising, sales promotions such as a free make-up bag with the Women’Secret logo, with every purchase, postcards advertising Women’Secret…etc. Leaflets and free postcards will be on offer in the store, e.g. postcards will be given with every purchase.
Along with in-store advertisements, annual advertising costs will as follows:
- U magazine: ½ page advertisements for 12 months @ €1,800 each
- Cosmopolitan magazine: ½ page advertisement for 6 months@ €7,500 each
XIX/ Controls
Women’Secret will be a franchise. Therefore, few rules must be regarded and respected. This includes necessary standards for use. You will also need to monitor performance against these standards.
Standard
- Women’Secret concedes its name and logo and clothes.
- The Women’Secret look should remain the same as part of the brand awareness.
- A high quality of products and low price should be guaranteed to customers.
- Friendliness and customer services are our policies.
How the plan will be monitored
- As it is a franchise, there will be a signed agreement with the manager of the A-Wear store to keep the appearance of the Woman Secret area similar to the already existing stores in the world. The company’s philosophy should be perceived by the customers and staff.
- There will be a Spanish designer who planned other outlets in the world. He will be responsible for the visual aspect of the shop
- As A-wear is still an Irish company, we want to employ Irish people. At the beginning there will be some Spanish staff with a very good command of English. They will train Irish people to our standards.
Conclusion
In researching this B2B project we have come to the conclusion that the introduction of Women’Secret to the Irish market through A-Wear is a logical and ideal opportunity to expand. In franchising Women’Secret, the brand is able to expand globally, promoting their brand image, without the investment risk. It also gives A-Wear the possibility to expand their clientele base through an updated e-commerce strategy. Brand image is of the utmost importance when expanding a product globally, thus an intensive marketing strategy is necessary.
Through doing this B2B project we have learned that there is insufficient information on the lingerie industry in Ireland which is perhaps due to Irish culture and because of the image with sexuality - however we feel that this sentiment is changing. The resources found on the internet are unfortunately related to the porn-sex industry.
Moreover, it would have been wise to undertake a questionnaire among Irish women in order to acknowledge the real need for lingerie in Ireland.
Bibliography
http://www.awear.ie
http://www.bizplus.ie/bp_online/companies/?ns=45
http://www.cso.ie
http://www.franchisedirect.ie/ (Franchising in Ireland – Survey)
http://www.grupocortefiel.com
http://www.hellomagazine.com/advertising.html
http://www.lingerie-uncovered.com/labels/marks-&-spencer.htm
http://www.natmags.co.uk
http://www.researchandmarkets.com
http://www.smurfit-communications.com
http://www.tibbett-britten.es
http://womensecret.com
Billboard, “Spanish retailers to bow electronic shopping web”, 04/03/99
The Irish Times, Barry O'Halloran, “Brown Thomas to open two new stores in €15m plan”, 18/12/2003
The Sunday Business Post, “Profits at Brown Thomas up by nearly 50 per cent”, 23/07/2000
The Sunday Business Post, “A-wear in €1.5m outlets plan”, 24/08/2003