LITERATURE REVIEW Introduction For myriad reasons, it is difficult for a small fashion enterprise to enter a foreign market. It is especially difficult when that enterprise has yet to tap into all its domestic retail options; however, it can and should be done as “small businesses in the United States can no longer afford to ignore the challenge of international commerce” (Rowden, 2001). The global marketplace is constantly changing and therefore entrepreneurs must adjust. Historically, emerging entrepreneurs would first develop new ventures in their domestic marketplace before expanding globally. Today, those same entrepreneurs have the opportunity and challenge of “a highly internationalized market from the moment they are founded” (Karra, Phillips, 2004). If an entrepreneur in today’s complex and fast-changing world of international business wishes to remain competitive and thrive, he or she must consider the global expansion (Rowden, 2001). Because domestic fashion retail markets have become over-saturated, SMEs have a major motivation to globalize. Innovative products are another key incentive for fashion internationalisation, which is attractive to retailers operating in niche markets such as high-end accessories (Portolese Dias, 2003). Identifying new markets to expand into is essential for growth (Rowden, 2001). But it is critical the market is researched and components of the business model reviewed and revised before entering. This literature review explores a US-based SME, recent buying behavior, key changes in the luxury accessories market and insights on entering the Japanese marketplace. Meredith Wendell Founded in 2008, Meredith Wendell is a New York City-based luxury diffusion-priced fashion accessories star... ... middle of paper ... ... To do so, Meredith Wendell must ramp up online presence, create shopping apps and work on experiential marketing and retail. Meredith Wendell is also interested in the possibility of entering other foreign markets. Investigating economies of scale, style of the product line and sales of luxury accessories would indicate possibilities for entering Brazil, Russia and China. Of course, more research would need to be done, but Brazil and Russia appear to have lower barriers to entry upon first glance. As well, Brazil and Russia would appear to have a higher likelihood of an agent/showroom situation like Meredith Wendell’s current circumstances with their Japanese sales management. If sales and distribution management is not available in those markets, it would be essential for Meredith Wendell to experiment with business plans in order to fit the foreign market.
The reality is that it is almost impossible to separate Martha Stewart the person from Martha Stewart the brand. The success of MSLO lies in the successful creation of the brand from the person. For example, the strength in Martha Stewart's brand can be found in how the customer takes ownership in the brand. On some note, they "relate" to Martha. Martha has touched their lives and made those lives better. "Ask any of her brand loyalists and they'll tell you that Martha understands their lives, which is why they listen to her, follow her advice and buy her products" (Frankel). Attributes such as "tasteful", "stylish", and "homemaker" are personality traits whereas "cooking" and "gardening" are traits of MSLO. Likewise, as we saw in the case, a comprehensive report of MSLO will undoubtedly include stories about Martha Stewart's personal life. The brand and company succeeds on her celebrity status and vice versa.
Choose several countries to enter that is suitable for the luxury market and in order to develop the strategy of the company
The stores are currently only trade in a relatively small number of countries. Therefore there are tremendous opportunities for future business in expanding consumer markets, such as China and India. ·
However entering into a market as different as Japan is not without its risks, and must be ensured to be successful, with the help of market research, marketing, and operational theories, lest the new venture become a very costly mistake.
Fashion industry comprises of businesses designing and selling clothing, shoes and accessories (Spencer, n.d.). Traditionally, retailers work as intermediaries to purchase huge numbers of goods from wholesalers, and then sell them to customers. Currently many fashion companies undertake both types of operations (ibid).
Six years after deciding to be an independent public company in late 2000, Coach Inc.’s net sales had grown at a compounded annual rate of 26 percent and the stock price had increased by 1,400 percent due to a strategy keyed to a concept called accessible luxury. Coach crafted the accessible luxury category in women’s handbags and leather accessories by differentiating themselves on price, but matching competitors on styling, quality, and customer service. The accessible luxury strategy mirrors a focus (or market niche) strategy based on low costs. Coach concentrates on a narrow buyer segment and outcompetes rivals by having lower costs than rivals and thus being able to serve niche members at a lower price. Management believed that new products should be based on market research rather than on designers’ instincts. Coach utilized extensive consumer surveys and focus groups to gain insight in the market, and ultimately a competitive advantage over competition. Coach’s $200-$500 handbags appealed to both middle class consumers who now were able to afford a taste of luxury, as well as affluent consumers with the means to spend $2,000 on a handbag on a regular basis.
For Burberry, it recently closed 17 and opened 18 stores in Dubai, London, Moscow, New York, Seoul and Tokyo. Its various channel of distributions like retail, wholesale and licensing can help to expand those opportunities to the company. However, it seems that Burberry rely too much in Chinese market both in region or as tourists with approximately 30% of its sales in Chinese market (Financial times 2016). As mentioned in PESTEL, if the Chinese market experience the decline or political issue, it will significantly influence the sales and performance. Moreover, the company is also trying to attract the young generation for future
Investing or venturing into the international market involves critical analysis of the internal and external environment in which the company operates. Usually, a company will decide to venture internationally due to a saturated market or fierce competition in the current country of operation. The demand for a company’s products may have diminished as a result of an economic crisis thus the company will target a foreign market to sustain its sales. In other words, the firms expand internationally to seek new customers for its products. For example, the current Euro zone crisis led to low demand in Europe and many companies extended their businesses to emerging markets where demand was high. A company may also venture in the international market to enhance the cost-effectiveness of its operations especially for manufacturing companies that will benefit from low costs of production in developing world. Global expansion is a long term project as it involves demanding logistics to be successful. Thorough research must be undertaken to ensure that the expansion will create value for share...
Birtwistle, G. & Moore C.M. (2006) Fashion clothing- where does it all end up? The International Journal of Retail & Distribution Management, 35, 210-216.
Expansion across seas can be very advantageous and lucrative for many companies; however, there are many risks associated with doing business overseas, and companies that intend to expand internationally should be careful and strategic when doing so. Not only do companies run the risk of experiencing a product fail due to differences in cultures, they also face severe political and economic risks as well.
The UK clothing retail industry has experienced significant growth which has focused attention on studies in the field with this sector being considered as one of the most competitive markets in Europe. Indeed, often perceived as a global fashion leader, for setting the most innovative and unique trends that have dominated the fashion industries, the UK has proved to be dedicated to producing some of the best fashion designers in history, with each year new born
Sakarya, S., Eckman, M. & Hyllegard, K. H. (2007). Market Selection for International Expansion - Assessing Opportunities in Emerging Markets. International Marketing Review, 24(2), 208-238.
Consumers have limited choice on fashion. They could hardly buy high fashion brands from other countries. Therefore, the characteristic of fashion has a noticeable difference in different countries. fashion was a dominant luxury industry. It is necessary to consume luxury goods to help people become fashionable. Average people do not have enough economic capacity to help them follow the fashion trend. ‘ASOS founder Nick Robertson said that if you loved fashion 10 years ago and you didn’t have easy access to Oxford Street, you were presented with a local high street with two to three clothing stores. The same girl living in the same town can now effectively purchase from any brand in any country’ (Thomson, 2012). Nowadays, because of the convenience of communications and technology, global homogenisation has gradually replaced diversity, so the high street has come into the public view. One can find a variety of high street brands in any city. The appearance of high street fashion had impacts on the diversity of the traditional fashion industry. This enabled ordinary people to buy cheap fashion products, so everybody looks the same as one
Regardless of the success of your company on a national scale, to engage yourself in a successful venture outside of your borders requires several critical elements that one must acknowledge and apply with great care. One of those requirements would be to thoroughly research the cultural environment in which you wish to launch your product no matter how popular and indispensable you believe it might be. In the past, many national giants have hit the wall when introducing a foreign market or launching a new marketing campaign because of the cultural gap they encountered on the other side of their borders. Another way of preventing a flop on an international market is to carefully study the economical past of this country, which might differ quite a bit from the one the company flourished in. In addition to the previous precautions, it Would be advise to make sure that your product will blend seamlessly within the spending habits of the consumers. Overall, meticulous market studies and patience often constitute the way to success on a foreign soil.
...enture into overseas market comes with expectations as well as uncertainties due to unfamiliarity. Charles and Keith, the fashion retailer, has to understand clearly that what appeals in one market might not be accepted in the others and this is almost the same for all industries. Thus, a thorough research on cultural background has to be done before entering an unfamiliar ground.