The Design, Manufacture And Marketing Of New Brand Of Jeans Essay, Research Paper
Contents
Summary
Introduction
1. The Operational Environment of Jeans Manufacturing Companies
1.1 The Structure of the Industry
1.2 Sales of Jeans Manufacturing Companies
1.3 Jeans Production in Greece
1.4 Sales of Jeans Importing Companies
2. Segmentation, Targeting and Positioning
2.1 Segmentation
2.2 Targeting
2.3 Positioning
3. Advertising Campaign Development
3.1 Target Audience
3.2 Campaign Objectives
3.3 Budget Setting
3.4 Media Selection and Planning
3.5 Advertising Development and Testing
3.6 Implementation and Scheduling
3.7 Evaluation
4. Sales Promotion
Conclusion
Bibliography
Appendix
Summary
In this project the group is acting as a representative of Glamor Jeans S.A. clothes manufacturer a company that is founded on January 2000, is based at London s industrial area and one of its branches is located in Athens and is involved in the design, manufacture and marketing of a new product: Glamor 4U Jeans. In the next pages details of the competitive environment in which the company operates are provided together with the indication by which the group conducted the segmentation, targeting and positioning in the clothes market and what the outcome of this process was. Finally, are provided information of designing and advertising campaign and details for the creative and media strategy through which the team supported the product launch. Jeans have been imported for the first time in Europe in 1960, by the manufacturing company LEVI STRAUSS & CO, in a form of a very expensive product, dedicated to meet the needs of a few specific buyers. But as the years gone bye and especially during the 1970 s, jean clothes came out in a larger variety (trousers, shirts, skirts, jackets etc.) and started to address to a bigger part of consumers. Although the sales of jeans are loosing every year almost 5% of its market share, jeans remain all these years one of the main type of clothing
Introduction
The production of jean clothes possesses a large percentage of the Greek textile industry, which is one of the major parts of the Greek industry.
The jean cloth made its first appearance at USA in 1853 with a brown color in order to meet the needs of San Francisco s workers. The manufacturer a Bavarian man called Levi Strauss at first used different kinds of cover soft goods. Seeking of a new material, Levi Strauss found a strong cloth, which was coming from a small French town Nimes. It was known as serge de Nimes and this is where the name denim came from later.
The jean clothes became well known in Europe during the 2nd World War through the American soldiers. They have been imported for the first time in Europe in 1960, by the manufacturing company LEVI STRAUSS & CO, in a form of a very expensive product, dedicated to meet the needs of a few specific buyers. But as the years gone bye and especially during the 1970 s, jean clothes came out in a larger variety (trousers, shirts, skirts, jackets etc.) and started to address to a bigger part of consumers.
In this project the group is acting as a representative of Glamor Jeans S.A. clothes manufacturer a company that is founded on January 2000, is based at London s industrial area and one of its branches is located in Athens and is involved in the design, manufacture and marketing of a new product: Glamor 4U Jeans. In the next pages details of the competitive environment in which the company operates are provided together with the indication by which the group conducted the segmentation, targeting and positioning in the clothes market and what the outcome of this process was. Finally, are provided information of designing and advertising campaign and details for the creative and media strategy through which the team supported the product launch.
1. The Operational Environment of Jeans Manufacturing Companies
1.1 The structure of the industry
The majority of these companies is a part of clothing industry and none of them is manufacturing or importing only jeans. Depending on their size are distinguished in large organized companies that are using updated methods of management and marketing, and in small handicrafts that are having limited opportunities of developing the updated technology and improving their productivity.
Furthermore, there is a large number of import businesses. These are again distinguished in large organized companies that are mainly trading with high class products and are expanding continuously in order to meet the demands of an international competitive environment, and in medium sized enterprises that are having limited opportunities of expanding.
During the last five years, a lot of local companies had to shut down, on one hand because of the increase of the labour costs and hence the operational costs, and on the other hand because of the luck of required for investment funds. This increase of the labour costs, together with the opening of the Third countries markets (i.e. countries outside EEC), forced many manufacturing companies to transfer part of the production process to other countries like Bulgaria and F.Y.R.O.M.
It is worth it to point out that the jeans manufacture industry in Greece has changed a lot since 1991. Until that year, the manufacturing companies covered the demand on jean clothes while the importing companies had a smaller share in the market. In 1991, the local production of well-known brands of jeans that had a large share in the Greek market – like LEVI S , DIESEL etc.- stopped, so these jeans started imported. As a result, the proportion between manufactured and imported jeans changed towards the second ones.
1.2 Sales of Jeans Manufacturing Companies
The table 1.1 shows the progress in sales for some of the main jean manufacturing companies in Greece for the period 1996 1999. According to this table, the total sales of these companies for the year 1998 was 20,885,933 thousand GRD when for the year before the total was 16,997,312 thousand GRD, an increase of 22.88%.
Table 1.1
Sales of Jeans Manufacturing Companies
(In thousand GRD)
COMPANY 1996 1997 1998 1999
INTERSOFT 2,994,641 3,864,826 4,437,942 3,500,000
STAFF 2,021,809 2,616,068 4,294,982 4,300,000
FAVE 1,733,484 1,623,564 1,982,380 N/A
MACEDONIAN CLOTHES MANUFACTURING COMPANY 979,665 1,549,937 1,802,344 1,600,000
LEDAI 706,706 1,083,335 1,561,299 1,770,000
MERIT 1,033,481 1,005,137 1,323,342 1,200,000
GENIMEX – 845,299 1,066,280 1,150,000
3 GUYS – MAGIOPOULOS 624,507 596,195 887,896 1,100,000
PAPATHANASIOU BROS 350,826 1,336,833 839,165 1,000,000
CASTELLO ROSSO 826,305 865,266 802,020 800,000
BANTITO – - 767,379 800,000
HIGHWAY 692,295 894,531 632,366 N/A
VIENE 678,115 716,321 488,538 266,000
TOTAL 12,641,834 16997312 20885933
FROM : ICAP
1.3 Jean Production in Greece
The table 1.2 shows the jeans production in Greece. This production is made mainly by small sized enterprises that are often undertake some stages or all the production process for other Greek or foreign companies.
Table 1.2
Jean Production in Greece
Year Quantity (in million of pieces)
1997 5.8
1998 5.5
1999 5.2
FROM: ICAP
1.4 Sales of Jeans Importing Companies
The table 1.3 shows the progress in sales for some of the main jean importing companies in Greece for the period 1996 1999. According to this table, the total sales of these companies for the year 1998 was 32,821,837 thousand GRD when for the year before the total was 28,142,777 thousand GRD, an increase of 16.63%.
Table 1.3
Sales of Jeans Importing Companies
(In thousand GRD)
COMPANY 1996 1997 1998 1999
LEVI STRAUSS HELLAS 10,501,840 10,792,175 13,350,748 8,200,000
CONNECTION 3,299,187 3,666,691 5,031,047 5,500,000
PAGONI 2,585,501 3,744,876 1,499,621 6,130,693
DIESEL HELLAS 3,905,835 3,919,403 4,153,025 3,900,000
FASHION BOX HELLAS 2,125,804 1,894,452 2,180,952 2,300,000
BRUNI SANDRO DISTRIBUTION 1,484,923 1,462,489 1,924,616 2,200,000
AMERICANINO HELLAS – 129,136 1,554,130 1,397,646
FELOUS FASHION GROUP 1,044,263 1,121,906 1,447,064 1,800,000
VF HELLAS – 599,337 928,309 1,200,000
FAR 1,131,300 812,312 652,325 N/A
TOTAL 26,078,653 28,142,777 32,821,837
FROM: ICAP
2. Segmentation, Targeting and Positioning in the Market
2.1 Segmentation
Because Glamor Jeans S.A. is a new company and in order to collect primary data to decide where in the market should its new product be positioned, the group agreed to assign to a Greek market research company ( ICAP ) a research in the jeans market (Appendix). Proceeding in the market segmentation, the team used the results of this research in order to follow the survey, analysis and profiling stages. The bases used for the segmentation were the consumer s characteristics and responses. The group felt that the best variables for the segmentation were age, lifestyle and usage rate.
2.2 Targeting
The evaluation of the market segments had been made according to the objectives and resources that the company has.
Thus, the target groups were aged between 15 and 39 years, of both gender and of average income. According to ICAP s survey, the main factors that affect the demand for jeans wear are the following:
The price regarding the brand of the jeans. Some well-known brands with high prices, discourage people from buying them, so they turn to other products with lower price.
The population of men and women that wear jeans more than any other are between 15 and 39 years old and in 1996 was approximately 4,000,000, almost 40% of the total population of Greece, with younger people spending usually more money for clothes than older ones.
Consumer s preferences for casual or classic wear are changing always, so the promotion of alternative casual wear and people s lifestyle affects the market. Therefore advertising campaigns may change and lead mostly young people to increase the demand for jeans wear.
2.3 Positioning
Although the sales of jeans are loosing every year almost 5% of its market share, jeans remain all these years one of the main type of clothing.
Glamor 4U jeans will be positioned in high quality as the well-known brands of jeans, like LEVI S, DIESEL etc. as these products have the largest part of sales comparing to the rest (Table 2.1). The price of Glamor 4U will be about 20% lower than the price of LEVI S in order to attract all those people who can not afford to buy LEVI S but they seek the same quality.
With this positioning (Figure 1.1) the group felt that Glamor Jeans S.A. will build a strong image in consumers mind and will be able to gain a significant part of the market share.
Table 2.1
Sales of Jean Trousers
NAME SALES (in pieces) %
LEVI S 1,234,800 28
LEE 220,500 5
DIESEL 485,100 11
MOSCHINO JEANS 88,200 2
EDWIN 264,600 6
RED ROCK JEANS 352,800 8
TRUSSARDI 132,300 3
CALVIN KLEIN 176,400 4
AMERICANINO 441,000 10
OTHERS 1,014,300 23
TOTAL 4,410,000
Figure 1.1
Perceptual Map
PRICE
LEVI S
GLAMOR 4U DIESEL
TRUSSARDI
LEE CALVIN KLEIN
MOSCHINO
RED ROCK
AMERICANINO
EDWIN
QUALITY
45.OO
3. Advertising Campaign Development
3.1 Target Audience
Target audience is the group of people at which ads are aimed. So from the above information, the advertising target will be the group of people between 15 and 39 years old, of both gender and of average income. The 4 million people of this group that spend more money for jeans than any other group, and seek for high quality at a better price than competitors (LEVI S, DIESEL etc.) offer.
3.2 Campaign objectives
Campaign objectives are these that our group hopes to accomplish with this advertisement and the objectives should be defined in such a way to ensure that the campaign will achieve what the company wants.
The main objective is to penetrate the market and win a 10% of it, within a year. There are other objectives that group agreed that the campaign needs to communicate to the targeted audience.
First step will be to build the brand awareness, as it is a new product in the market. Simple clear messages can build name recognition in consumer s mind, and this procedure will take time.
The next step is to build consumer preference, therefore must be communicated through this campaign the high quality of the product at a premium price. Another objective is to persuade them that these jeans are their best choice.
The last step is to convince the target group to purchase the product. In order to attract the consumers to purchase the jeans, there will be a discount offering of 20% of the initial selling price and a guarantee for good performance for 6 months period.
3.3 Budget Setting
The promotion of a new product presupposes the creation of an advertising campaign in order to gain an important share in the sector of clothing and particularly, in the market of jeans. Often, the setting of budgets is determined by the politics of each firm, always according to the needs of the specific market. The most important question that a business has to make for promoting its product, is how big can be the budget of a firm for advertising purposes. There are some budgeting methods at which we can be based on constraining an appropriate budget. Our business has selected the Competitive parity method. According to Brassington and Pettitt ( p. 593), it involves discovering what the whole competition are spending and then matching or exceeding it. Based on primary and secondary data the purpose of our firm is to spend the amount of 500 million GRD., approximately, for the needs of our advertising campaign.
3.4 Media Selection and Planning
The process of advertising a product presupposes the delivery of a message to the consumer. Selecting some advertising media through which the consumer has the opportunity to be informed for the specific product can occur this. These media will be radio stations, magazines, periodicals, newspapers, hoardings and outdoor media.
The criteria at which the group based on selecting these media are:
Radio: It can be transmitted from everywhere. It is a low cost broadcasting media, which give us the opportunity to select stations that appeal to our target audience.
Magazines/periodicals: The major advantage of a printed medium is that information can be presented and then examined selectively at the leisure of the reader. Also, a copy of a magazine is kept for quite a long time.
Newspapers: The main role of newspapers for advertisers is to communicate quickly and flexibly to a large audience. There is the opportunity to advertise information in connection with the audience, you want to attract, e.g. men aged 20-39.
Hoardings and outdoor media: These are advertisements in and on buses, taxis and trains and in stations. They offer an exciting medium, capitalizing on their size and location, which attracts the eye of our target. ( Brassington and Pettitt).
Radio
Examining the Greek radio stations and their audience, the following stations can more efficiently represent the new product:
Radio DJ, Love Radio, Lampsi, Lady FM, Antenna and Sport FM. For the first three radio stations, we will have 4 spots per day in the morning hours ( 09:00 11:00) and other 3 spots in the evening hours ( 19:00 21:00). For all the other radio stations, we will have 5 spots per day only for spring and summer months.
Magazines, periodicals and newspapers
After careful consideration it s been selected the following print media: Escape, Nitro, Click, Lipstick, Elle, Men, Max, The News, Espresso, Kathimerini and Eleytherotypia. We have selected these magazines and newspapers because they are addressed to both male and female sex. Also, they attract people that are aged according to our segmentation. The following table (3.1) shows the cost per magazine for the advertisement.
Hoardings and Outdoors Advertising
First of all, 60 sheet outdoor ads will be located in key areas in big cities and there is a plan of using 10 super Pizas from which 7 in the area of Athens and 3 in Salonica. (Super Pizas are great moving stands, which are the most eye-catching outdoor activity available and are located in every big city). The outdoor advertising will cost 50 million approximately.
Table 3.1
Glamor Jeans S.A. Advertising Budget
Radio Stations Months Spots/day Cost/month(in GRD) Total cost(in GRD)
Radio DJ FM 12 7 5,500,000 66,000,000
Love Radio FM 12 7 4,750,000 57,000,000
Lampsi FM 12 7 6,000,000 72,000,000
Lady FM 6 5 3,500,000 21,000,000
Antenna FM 6 5 4,500,000 27,000,000
Sport FM 6 5 4,750,000 28,500,000
Total 36 271,500,000
Magazines/Newspapers No. of Issues and Months Cost per Issue(in GRD) Total Cost(in GRD)
Escape 12 2,250,000 27,000,000
Nitro 15 2,000,000 30,000,000
Click 11 2,000,000 22,000,000
Lipstick 8 1,500,000 12,000,000
Elle 16 1,750,000 28,000,000
Men 18 2,500,000 45,000,000
Max 14 2,750,000 38,500,000
The News 8 1,500,000 12,000,000
Espresso 12 750,000 9,000,000