taylor pierson - laura gomez-v02

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Marketing and Supply Chain Laura Gomez Martinez Pg Buying and Merchandising GOM12367138 28/04/2105

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TABLE OF CONTENTS

1. Methodology 4 2. Introduction 5

2.1 Marketing Strategy 6 2.2 Pestel 7 2.3 Porter’s Five Forces Model 8 2.4 Boston Consulting Group 9 2.5 SWOT 10 2.6 Product Matrix Ansoff 11 2.7 Segmentation, Targeting and Positioning (STP) 11

3. Marketing Mix 13 3.1 Product 13

3.1.1 Trend and inspiration 15 3.1.2 Unique Selling Proposition 16

3.2 Price 16 3.3 Placement: countries and distribution 18

3.3.1 Competitive Analysis for the target markets 20 3.3.2 Distribution Strategy 20

3.4 Promotion 21 3.4.1 Promotion plan 22

3.5 People 22 4. Production and Supply Chain 23 5. References 24 6. Appendix

6.1 Appendix 1 27 6.2 Appendix 2 27 6.3 Appendix 3 29 6.4 Appendix 4 30 6.5 Appendix 5 30 6.6 Appendix 6 35 6.7 Appendix 7 36 6.8 Appendix 8 37 6.9 Appendix 9 38

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EXECUTIVE SUMARY

This report found that established brands such as Taylor Pierson (TP) could allocate their excess financial resources to the creation of new lines or sub-brands, such as the active wear line “Taylor Pierson Sport” (TPS). In order to test the demand, a good strategy would be to launch this new line in a consolidated market such as the UK first, and then later in the three chosen target markets. It is also important to take advantage of the brand image and reputation of TP in order to expand overseas.

This report found that there was a significant growth in spending on sportswear due to the trend of casual chic with luxury athletic wear. Therefore, many international brands such as Inditex, H&M, Primark, Esprit are now launching active wear collections.

This “casualization” trend occurs in Western countries and also in Asian countries such as China, Hong Kong and South Korea, where demand for active wear is gradually increasing. The report found that in the target markets the supply for sportswear is less saturated than in Western countries. Therefore, moving into these markets with a USP (unique selling proposition) of high quality, British style at affordable prices could be a good opportunity for TP.

This report found that moving into new markets with a brand’s own stores is a risky and expensive strategy, and that a more successful strategy might be to penetrate the market using a wholesales strategy. The risk of this option is that the retailer could lose control of its branding, customer service, staff, promotion tools and pricing, resulting in potential damage to the brand’s reputation due to the malpractice of the wholesalers. Finding good and reliable distributors would take a long time, prospecting many trade fairs and knowing the market very well. The key to a successful wholesale strategy is to prospect the market well, establishing standards and limits within wholesales contracts and transmitting the know how of the TP.

It was found that the demand for clothing online in the target markets is growing exponentially, and so the promotional strategy of TP should focus more on digital media. For instance, selling more through online wholesalers such as Taobao and Tmall and investing more resources in marketing online, such as online PR, email marketing, display marketing, retargeting and mobile advertising and adapting the online strategy to the peculiarities of each market.

Regarding the Supply Chain, the report found that it is more efficient to choose a few suppliers in terms of resources optimization and trying to get a “cooperation” relationship in the long term, instead of an “adversarial” relationship based on cost-price.

In addition, the report found that it is better, in terms of logistical costs, to produce goods in China and keep the stock for the Asian market there, rather than shipping all of the stock to the UK, and then shipping the stock for the Asian market back to Asia.

Also, it was found that outsourcing logistics, warehousing and deliveries through 3PL structures could make expansion to new markets more efficient, as the risk of losing control of the sourcing process decreases considerably.

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1. METHODOLOGY

For this report secondary research was done. Secondary research involved covering books and journal articles on theoretical frameworks of business models and strategies discussed during Marketing, Supply Chain and Buying and Merchandising lectures.

Reports from Mintel, Verdict, Euromonitor International were used to describe market shares, competition, and growth rates. Reports from ICEX (Spanish foreign institute) were used to collect economical information for the target markets. Reports from WGSN were used to collect new trends and inspiration for the six pieces range.

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2. INTRODUCTION

Founded in 1985 by lifelong friends Chris Taylor and James Pierson, Taylor Pierson began as a small shop in London, providing outdoor apparel, camping, fishing and hunting equipment. Today the brand has evolved into the highest quality men’s and women’s casual, classic and trendy clothing with a strong British Heritage.

Taylor Pierson has a strong presence in the UK through 200 own retail stores and concessions in department stores such as Debenhams, Selfridges and House of Fraser. Also it has its own online shop with free delivery in UK and plan to expand to new markets.

Fig.1. Market position in UK

Based on figure 1, Taylor Pierson is a British retailer that focuses on casual wear which affordable prices. The target market is a consumer from 25 to 35 years old who prefer clothing with laidback sophistication at low prices. Taylor Pierson aims to attract consumers looking for quality and a brand image such as Jack Wills, Hollister, Abercrombie and Fitch and Tommy Hilfiger but are not willing to pay such a high price and go to more affordable brands like Gap and H&M. The main competitors for Taylor Pierson are American Eagle, Superdry, Esprit, Gap and H&M.

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The purpose of this report is to develop a new active wear line for Taylor Pierson. The collection consists basic womens sportswear, tops, hoddies, dresses, leggings and joggers for SS16. The range is sold in the UK and also takes part of a strategy to build and international wholesale brand in Hong Kong, China and South Korea.

The new line will be sold under the same name “Taylor Pierson” (TP)1 and “Taylor Pierson Sport” (TPS) will be added in the tags.

This report will develop, using a number of theoretical models, a Marketing, Distribution and Supply Chain Strategy for TPS.

3. MARKETING STRATEGY

It was decided to launch a new line for TP and in this section a marketing strategy is developed. Following the Stract-Tact Model (ST) (Jackson, T & Shaw, D 2009) the marketing planning process for TP is as follows:

Fig 2. Marketing planning process

The TP mission or corporate strategy is simple: “Britishness and quality at the best price”; provide their clients with the highest possible quality at the most competitive price as well

1 TP: Taylor Pierson; TPS: Taylor Pierson Sport line

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as bringing back beauty, sophistication and individuality with a collection that will remain timeless and wearable over future decades.

The mission statement of TP is linked also with its “brand values”. (see Appendix 1).

According to Porter's (1985) four generic strategies – cost leadership, differentiation, focus and combination are used to define competitive advantage of organization. Although Porter uses a single strategy for enterprise’s profitability, other authors such as Cross and Karnani consider that a combined strategy would be most effective (Richard, 2006).

For TP a mix of the generic strategies is applied and is understood in its mission statement: “Britishness (focus and differentiation) and quality (differentiation) at the best price (cost leadership)”.

3.1 EXTERNAL ENVIRONMENT– PESTEL

While the plan of TP is expanding to new markets in Asia through TPS, the UK is still the main market.

In order to keep growth of sales, TP need s to be aware of current and future changes in UK external environment. Using PESTEL framework main political, economical, technological, environmental and legal forces in the UK market are defined.

Political • Open EU labour market for workers from Rumania and Bulgaria in January 2014.

Economical • The success of low cost retailers as Primark forced many brands to decrease their prices in order to motivate consumer’s demand. (Euromonitor international, 2014).

• Rising prices of labour costs in Asia • Fluctuations of currency rates • Rising prices of cotton

Social

• Important increase in sports participations, mainly running due to the positive impact of the London 2012 Olympics.

Rise in the number of people (mainly women) practicing yoga, pilates and spinning has implied and increase of the sportswear demand. (Euromonitor international, 2014).

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Technological • Attempts for more technological developments for online stores like digital fitting rooms and brand’s own payment systems with opportunity to monitor consumer data.

• Internet penetration in the UK is now over 90%, with many fashion retailers having exponential growth in their online sales. For October 2013, it was informed by the British Retail Consortium that 24% of all clothing purchases were made online. (Euromonitor international, 2014).

• M-commerce expenditure is set to continue its recent growth trend, increasing 861.4% from 2011 to 2017 (Verdict, 2013)

Environmental • Ethical and environmental concerns regarding production of apparel in Asia are increasing.

Legal • Changes in labour laws.

Table 1: PESTEL – TP in UK

3.2 PORTER’S FIVE FORCES MODEL

The TP’s main market is in the United Kingdom with 200 stores and a growing e-commerce platform and its short term’s plan is to launch TPS in UK and overseas. In this section, the Porter’s five forces model is applied in order to analyze the competitive environment and to maximize the growth of TP.

New entrants: In the context of UK fashion retailing, the threat of new entries always exists. It could come from global competitors such as Hollister, Abercrombie & Fitch, Jack Wills, Tommy Hilfiguer, Anerican Eagle, Supedry, Esprit, Uniqlo, Primark and Pull&Bear whose sales come from overseas and internet.

The UK market is mature and high competitive what has implied a challenge for many fashion retailers but with the proliferation of middle-market retailers by supermarkets and discounters could have chances for foreign entrants in the long term. (Jackson, T & Shaw, D 2009).

Threat of substitutes: is high as there are many companies competing in low price segment, however main threat for TP comes from pure players and companies with strong e-commerce, as TP's online store is still growing. Threat of substitutes are also coming from luxury market which was growing by 16.9% in 2012 and consumers after crisis are looking for quality over price (Mintel, 2013).

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Buyers power: is high as the offer in the market is very similar and competitive in prices.

Supplier power: is low as many European retailers are producing overseas where the offer of independent factories and suppliers is huge.

3.3 THE BOSTON CONSULTING GROUP

The TPS is a “question mark” that will operate in high growth markets (Hong Kong, South Korea, China) but will have a small market share at the beginning. The objective of the launch of the TPS is that in the middle term is a “star” that is a market leader in high-growth markets and expensive in terms of promotion mix.

In the long term, the “star” could become “cash cows” that operates in markets where the growth rates are lower than 10% per year but still has a high market share. For this case, the “cash cow” is the current collection of TP that provides high cash and enjoys economies of scale. The cash will be used to invest in the launch of TPS in UK and overseas.

Once the market becomes mature, the “cash cow” becomes in “dogs” which have a small share in a low-growth market. (Jackson, T & Shaw, D 2009).

Fig.3: The BCG growth – share matrix: TP and TPS

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3.4 ANALYZING AND AUDITING THE INTERNAL ENVIRONMENT: SWOT FOR TPS

A SWOT (strengths, weaknesses, opportunities and threats) analysis is an essential part of developing the marketing strategy for the launch of the new line. (Jackson, T & Shaw, D 2009) Strengths: TPS will be a potential brand in the active wear market due to its consolidate creative design team by Chris Taylor and James Pierson. TPS can take advantage of the TP brand image that is well established in the United Kingdom and can be displayed in the 200 stores that TP has in the country. Besides, likely TPS can get the same concessions contracts that TP already has in the main department stores in UK. Although TP has no physical presence in the selected markets, has some knowledge from Asian tourists in the UK. TP has a strong financial position and can fund the launch of TPS overseas and also the quality of the products is high. The “British Heritage” concept that is linked with TPS has much popularity in China, South Korea and especially in Hong Kong as it was a British colony until 1998. Weaknesses & threats: TP is a completely unknown and small brand in the 3 chosen markets and doesn’t have physical stores either concessions, therefore TPS can’t take advantage of the TP’s reputation and brand image. Another weaknesses are the inexperience in developing new markets outside UK as it is the first time they expand internationally. TPS collection is limited because it is only focus in women and the range product is not wide. Although TPS is positioned in a range of low price is a bit more expensive than its main competitor in the 3 target markets (such as H&M, Uniqlo and Esprit) that offer more attractive prices. Opportunities: Based on the recent desire for a healthy lifestyle, sportswear has gained notable popularity and there is a rise in the number of women who are willing to buy fashionable sportswear with consciousness of design, colour and trends from the catwalk, and this trend will continue by 2019 In addition, the spending on sportswear will grow by 23.8% due to the trend on casual chic with luxury athletic wear (Fioriti, 2014). TP offers an active wear line with not only competitive-market prices but also high quality textiles to get that niche of the market that wants casual sophisticated clothes at low prices.

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3.5 PRODUCT MATRIX- ANSOFF The product matrix of Ansoff (1988) defines four strategies for growth: market penetration, market development, product development and diversification. It is important to mention that normally the companies use more than one strategy at the same time for developing growth (Ansoff Strategy). This is the case of TP: uses “product development” strategy with a new product named TPS in the current market (UK) and also uses “diversification” strategy as TP launch TPS in the three Asian markets.

Fig. 4: Ansoff Matrix – Taylor Pierson

3.6 SEGMENTATION, TARGETING AND POSITIONING (STP) FOR TPS

In this section is identified the market gap where a group of customers share similar needs are not being targeted by other business. The final target market will be clearly identified, measurable and reachable in UK and in the three target markets. (Jackson, T & Shaw, D. 2001).

TPS wants to target a group of consumers share similar needs are not being targeted by the main TP’s competitors. This market gap is young businesses women that like casual, classic with some trendy and comfortable clothes at affordable prices.

TP with its active wear line can fill this gap in the market because it offers an active wear line at low price, high quality, trendy but respecting the “classiness” and “britishness” of TP.

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The target customer that is reached after market segmentation (see Appendix 2) is shown in a pen portrait (Appendix 10) (Jackson, T & Shaw, D. 2001).

According to Rogers, there are five level classification referred to “innovators”, “early adopters”, “early majority”, “late majority” and “laggards” (Jackson, T & Shaw, D. 2001 cf. to Rogers E.M, 1983). The TP target is placed in “innovators”, “early adopters” and “early majority” consumers.

In addition, the TP target will be placed in the “thinkers” category (VAL – Values and life style: Jackson, T & Shaw, D. 2001):

Thinkers

Motivated by ideals, mature, responsible and well-educated professionals. Leisure activities are focused on their homes but they are well informed about the world news. They have high incomes but they are not wasteful and are rational decision makers.

The “occasion “ of the six range products as follows:

Criss-cross top Yoga, running, spinning, beach holidays

Structured vest Casual outfit, after gym, beach holidays,

Hoddie Yoga, running, spinning, casual outfit, chilling at home

Dress Casual outfit, beach holidays during the evening,

Leggings Yoga, running, spinning

Slim jogger After gym, chilling at home

Table 2: Occasion of the pieces

4. MARKETING MIX

4.1 PRODUCT

The product range is an active wear line that consists 2 tops, 1 hoddie, 1 dress, 1 legging and 1 slime joggers for SS16 (Appendix 3: “spec” of the range). TP “sport line” has the same logo, packaging and tag than TP. The chosen colours and prints are in the Appendix 3.

The benefits from these six pieces are “looking cool”, “feeling special” and “fitting in”. The augmented product model for fashion retailers (see Appendix 4) shows the “package of benefits” that TPS is selling to customers in its unique selling proposition (USP) (Jackson, T & Shaw, D 2001).

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Core benefits

Product Core benefit

Criss- cross top Support for breasts

Structured vest top Feels fresh and light

Hoddie Keeps torso warm

Dress Feels cute and attractive

Leggins Feels comfortable for run

Slim jogger Feels comfortable for after gym

Actual product – Criss cross top

Attribute Benefit

Silhouette (criss-cross) Sophisticated, trendy, breasts push up

Fabric Waterproof, thermodynamic, breathable

Inside pocket Put the iphone or keys in the pocket

Zipper in the back Decorative, helps to fit better the garment

Actual product – Structured vest top

Attribute Benefit

Silhouette (structured) Sophisticated, trendy, minimalist, snug

Fabric Breathable

Invisible pockets on the sides Practical

Trimming (buttons on the back) Decorative

Actual product – Hoddie

Attribute Benefit

Silhouette (wide and wrinkled) Trendy, sophisticated

Fabric (cotton elastane) Thermodynamic, breathable

Fitted cuffs Helps to run faster and snug in yoga.

Wide hoddie without cords Trendy, comfortable

Actual product – Dress

Attribute Benefit

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Silhouette Sophisticated, trendy, minimalist, comfortable

Fabric Breathable

Trimming (belt and straps ) Decorative and slim effect

Actual product – Leggins

Attribute Benefit

Silhouette Comfortable, waistband with belt effect, trendy, slim effect

Fabric Waterproof, thermodynamic, breathable

Colors Trendy for gym and running , fun color

Zip pocket in the back Put the iphone or keys in the pocket

Zippers at the ankles It is easier to take it off

Actual product – Slim jogger

Attribute Benefit

Silhouette Comfortable, waistband with belt effect, casual-chic

Fabric Breathable, warming

Pocket in the back and on the sides Put the iphone or keys in the pocket

Trimming (2 drawstrings at the waist) To adjust the waist, slim effect, snug

Fitted ankles Trendy, warm

Augmented benefits

Department stores open till late

Return policy 30 days

Personal advice in fittings

Excellent purchasing environment: music, lights, sales assistants, store odor

Shopping experience

Brand image: British heritage, elegance, quality, classic.

Table 3: Attributes of the product – TPS: Core, actual, augmented

4.1.1 Trend and inspiration

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There is a trend of “Casualisation” that is a move from fitted tailoring to unstructured garments with minimalist styling, and relaxation of work dress code that implies in less importance on formal suits and more emphasis on smart casual clothes. In addition, there is an international growth in the active wear market (Edit, 2015).

Fig 5: Colour trend and inspiration for TPE. Source: WGSN

4.1.2 Unique Selling Proposition (USP)

According to Leboff (2012) unique selling point is unique value that will attract consumers. However today with fast information flow disadvantage of USP is threat that competitors will copy it. The main USP of TPS is its quality, british heritage and trendy pieces at affordable prices. Second area where TPS tries to build USP is creating ecofriendly image using organic cotton and recycled polyester.

4.2 PRICE

TPS pricing policy is value to midmarket, design and brand image ranging to upper midmarket.

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Being the average intake margin 65% and the average selling price £18, the selling price for each garment is assigned in function of the expected demand and estimated margin. Therefore, the cost price per garment is obtained.

The UK prices are as follow in the table and for each overseas market are adjusted as function of the exchange rate plus additional cost from transportation costs.

Range Qnt Tops 2 Sweatshirt 1 Dress 1 Bottoms 2

Total 6 Table 4: product range and quantities

num Style SKUs Selling Price Margin Cost Price

1 Criss-‐cross Top TP00001 £15,00 65,00% £5,25

2 Vest top TP00002 £16,00 60,00% £6,40 3 Hoddie TP00003 £20,00 63,00% £7,40 4 Dress TP00004 £25,00 63,00% £9,25 5 Leggins TP00005 £16,00 70,00% £4,80 6 Slim Jogger TP00006 £18,00 70,00% £5,40

Average price £18,33 65,17% £6,39 Table 5: Selling price per SKU

TPS has 3 different intermediaries prices for its overseas markets: Agents 10% 80%

Style SKUs Selling price Cost price Margin Margin

Agents Margin TP

Price for Agent

Criss-‐cross Top TP00001 £15,00 £5,25 £9,75 £0,98 £7,80 £12,08 Vest top TP00002 £16,00 £6,40 £9,60 £0,96 £7,68 £13,12

Hoddie TP00003 £20,00 £7,40 £12,60 £1,26 £10,08 £16,22

Dress TP00004 £25,00 £9,25 £15,75 £1,58 £12,60 £20,28

Leggins TP00005 £16,00 £4,80 £11,20 £1,12 £8,96 £12,64

Slim Jogger TP00006 £18,00 £5,40 £12,60 £1,26 £10,08 £14,22

Table 6: Price for Agents

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Distributors 28% 72%


Distributors Margin TP

Price for Distributor


Hoddie TP00003 £20,00 £7,40 £12,60 £3,53 £9,07 £12,94

Dress TP00004 £25,00 £9,25 £15,75 £4,41 £11,34 £16,18

Leggins TP00005 £16,00 £4,80 £11,20 £3,14 £8,06 £9,73

Slim Jogger TP00006 £18,00 £5,40 £12,60 £3,53 £9,07 £10,94

Table 7: Price for Distributors

Mutibrand Stores-‐

Independent boutiques– Department

stores 35% 65%


Stores Margin TP

Price for Store


Hoddie TP00003 £20,00 £7,40 £12,60 £4,41 £8,19 £11,18

Dress TP00004 £25,00 £9,25 £15,75 £5,51 £10,24 £13,98

Leggins TP00005 £16,00 £4,80 £11,20 £3,92 £7,28 £8,16

Slim Jogger TP00006 £18,00 £5,40 £12,60 £4,41 £8,19 £9,18

Table 8: Price for Mutibrand Stores- Independent boutiques– Department stores The cost price per each SKU is showed in the Appendix 5.

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4.3 PLACEMENT: countries – distribution The new line of TP is sold in UK through its 200 stores and concessions. The new target markets are China, Hong Kong and South Korea and have been chosen for their market attractiveness.

South Korea (2014) GDP growth 3% GDP per capita 34.670 USD Population 51.302.044 Population women 25.248.655 Unemployment rate 3,1% Life expectancy 79,55 Main cities Seoul, Busan, Incheon, Daegu, Daejeon

Table 9: South Korea –economical figures (Exteriores, 2014) In 2013 The Apparel sector has recorded a positive growth of 18,6% since 2008. There are many specialist retailers brands offering value-for –money garments and premium branded clothing that are becoming more popular. Therefore, there could be market for TPS as is offering low prices with a premium brand positioning. Active and casual wear (7% of growth compared to previous year) shows higher growth rate compared to formal wear and is expected to continue for the next years. Besides, now the South Korean consumer is more social conscious (saving the planet) and most of the materials of TP’s garments are recycled. (Euromonitor, 2014)

Hong Kong (2014) GDP growth 7,7% GDP per capita 42.437 USD Population 7.234.800 Population women 3.856.800 Unemployment rate 3,3% Life expectancy 83.48 Main cities Hong Kong

Table 10: Hong Kong –economical figures (ICEX, 2014)

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The sales in the apparel sector in Hong Kong has increased 10,4% versus 2012 due to increase of consumer confidence, expenditure and growth of the popularity of active wear turn due to rising awareness consumer health within sportswear in 2013. So, the active wear has increased 13,6% versus 2012 and their forecasting till 2018 will be optimistic (Apparel: 4,8% and Active wear: 7,9%)

HK is an interesting market due to its strategic position and good shopping reputation in Mainland China. Therefore, TPS could be tested in the HK market to be sold later in China (Euromonitor, 2014).

China (2014) GDP growth 7,8% GDP per capita 9. 464 USD Population 1.357.380.000 Population women 644.994.400 Unemployment rate 4,10 Life expectancy 75,2 Main cities Beijing, Shanghai, Tianjin, Guangzhou, Shenzhen,

Dongguan, Chengdu, Hangzhou

Table 11: China -economical figures (Exteriores, 2014)

Recognising the huge potential in China’s apparel market, the sales in apparel and active wear has increased 8,2% and 0,6% versus 2012 respectively and their forecasting till 2018 are positive: 6,6% of increase for Apparel and 5,7% for active wear. (Euromonitor, 2014)

4.3.1 Competitive Analysis for the target markets for TPS

The main competitors in UK for the new line are M&S, Next, Primark, New Look, Matalan, H&M, River Island, Zara, Gap, Tommy Hilfiger, Uniqlo, Jack Wills and Abercrombie&Fitch (Euromonitor, 2014)

In South Korea, the TP’s competition is divided in international firms (Uniqlo, Zara, Tommy Hilfiger, Gap, H&M, Giordano) and local brands as Bean Pole, Kuo, Hazzys, Roem, Maestro and TRY. (Euromonitor, 2014)

The same happens in Hong Kong, local brands such as IT Group, G2000, Giordano, and Bossini International Holding and international brands such as H&M, Zara, Esprit, Uniqlo and Jack Wills are the main competitors for TP’s new line. (Euromonitor, 2014)

In the case of China, the local brands (Metersbonwe (Me&City, Banggo), Ochirly, Baleno, La Chapelle and Yishion) are still well positioned versus the international brands (Bestseller Fashion Group (Vero Moda, Only, Selected), Uniqlo, Zara, H&M) which are expanding strongly in the Chinese market. (Euromonitor, 2014)

4.3.2 Distribution strategy

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The new line is distributed in UK through bricks and mortar retailers (200 own stores), concessions and ecommerce platform (www.taylorpierson.com). The allocation and top down range plan are shown in the Appendix 6.

In Asia, TP is placed through agents, distributors, department stores, multibrand stores and independent boutiques. In Hong Kong those Department Stores that best suit in TPS’s target are City Plaza, APM, China Hong Kong City, Elements, ISquare, Langham Place, Olimpian City and The One (ICEX -Hong Kong 2014).

In China, those are Shanghai IFC Mall, Plaza 66, Jiu Guang Department Store, Times Square, Super Brand Mall, Grand Gateway, Mei Long Zhen Lestan Shanghai and Citic Square (Shanghai). For Beijing are Oriental Plaza, Grand Pacific, Sogo and Parkson. For Guangzhou are Tianhe Mall and China Plaza (Exteriores-China, 2014).

In the case of South Korea those are Shinsegae, Lotte, Hyundai, Galleria, AK Plaza, Daegu and Donga (Exteriores-South Korea, 2014).

All these distributors are contacted in the main fashion trade fairs in the three markets. In Hong Kong the most suitable fashion fairs for TPS are Hong Kong Fashion week in SS and FW (HKTDC, 2015)

In China are China Sourcing fair: Fashion Accessories in SS, Moda Shanghai in FW, MS- Moda Shanghai FW, Canton Fair in FW and SS and Fashion Brand Guangzhou in FW (China Exhibition, 2015).

In the case of South Korea, those are Asiamania! In SW, Preview Seoul and Mode Seoul (Tradefairdates, 2015)

The wholesale price is establish for each intermediary (see section 7.2 Price) and a clause about not to be able to raise more than the selling price is included in their contracts.

In addition, the TP ecommerce platform is active and adapted (language and trade marketing actions on site) to the 3 markets and as well as selling online through online multi brand stores and online shop malls.

The distribution center (from Li Fung) is in Shenzhen (China) where deliveries are sent to the intermediaries (B2B) and to the final client (B2C).

4.4 PROMOTION – BRANDING COMMUNICATION The branding of TP is based on tangible elements (see Appendix 7: logo, packaging and tag) and intangible elements such as the sensation of elegance, britishness and distinction. The brand identity of TP (Kapeferer, 2009 in Jackson, T & Shaw, D 2009) is as follow:

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Fig 6: Brand identity of TP

4.4.1 Promotion plan

The promotional plan is based in the following points:

-‐ Advertising: fashion magazines for women range age 25-35 and include ads in the fashion trade journals in order to attract buyers in the trade fairs.

-‐ Sales promotions: markdowns during 9 weeks in June and July, gift cards. -‐ Public Relations: to contact with the main fashion bloggers to wear TPS, organize a

opening party in some sport cubs. Contact with specialized PR agencies in the 3 markets.

-‐ Personal selling: to implement the selling know how from the UK stores to the all sales channels in the 3 markets both B2B (online and offline wholesalers) and B2C (experiential retailing, TP’s customer service).

-‐ Visual Merchandising: to train the B2B channels how to implement the Visual Merchandising of the UK stores regarding to colors of the brand, “britishness”,

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promotional sales material, colour of the point f sale, lighting, mannequins and props. Also, provide and train about the TP catalogues, postcards, gift and loyalty cards.

-‐ Direct marketing: to collect DDBB from specialized DDBB’s Agencies, from the store and loyalty cards and from internet users has registered in the online site (.CH, .HK, .SK). Once the data is collected, launching promotional activities such as direct mail by post and email messages, mail order catalogues, newsletters and magazines inserts.

-‐ Fashion Trade Fairs: to assist to main fashion fairs in the 3 countries, to organize seminars about fashion ecommerce and trends, TP’s stands with promotional material.

-‐ Guerrilla: pop-stores in specific department stores and trendy markets. -‐ Sponsorship: to associate with tennis schools, sponsor marathons, yoga events, trendy

gyms & spa-resorts and women entrepreneur events and seminars. -‐ Digital: to adapt the TP online site to each country: language, specific trade marketing

actions in the web. To launch a marketing online strategy (banners) based on display marketing and retargeting on sites related to outdoor activities, health and fashion. The banners are displayed in mobile also.

-‐ Social media: to connect the current social media platforms (Facebook, Twitter, Pinterest, Blogging, Youtube, Linkedin) to the new markets: ie: #TPgoes to South Korea Hong Kong, China.

4.5 PEOPLE

For the TP to succeed in selling its garments it must ensure that all involved in the value chain (clients, suppliers, wholesalers, staff in store) have a clear understanding of their product needs and expectations. The training about “TP values” to its wholesalers is key in the TPS’s success. (Jackson, T & Shaw, D. 2001).

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5. PRODUCTION – SUPPLY CHAIN

TP outsources overseas from two suppliers for its production. One supplier “X” produces the 2 tops and the hoddie and the supplier “Y” produces the dress, leggings and joggers. Both are from Shenzhen (China) and have been chosen considering their skills, expertise, history, product knowledge, facilities, fibres, fabrics, factories and infrastructure. Regarding to sustainability, all the suppliers are forced to use recycled polyester.2

The order is fully factored and includes fabrics, trims, (see Appendix 8) packaging and labeling . In the appendix 5 the buying price (asking price) and cost price per SKU are detailed. (Martin Christopher, 2011).

The transaction is in CIF terms, therefore the documents and transport cost are paid by the supplier till UK port but the risk (insurance) is responsibility of the supplier till Shenzhen port. The costs in destination are assumed by TP.

The transport, warehousing and distribution are managed by a 3PL (third party logistics: Li &Fung) and the sourcing (see Appendix 9) by TP. (Martin Christopher, 2011).

Once the stock is full manufactured, a percentage of the production goes to UK (200 own stores and concessions) and the other percentage remains in Shenzhen. From the distribution center in Shenzhen (Li&Fung), the stock is delivered to the intermediaries (B2B) and final clients (B2C) in the 3 chosen markets.

In the medium term, a co-partnership with both suppliers is required in order to get a long term relationship on the basis of mutual confidence (Martin Christopher, 2011).

Initially the foreign payment terms are Letters of credit. In the long term, cash against documents is required.

2 Due to the consumers from the target markets are more social conscious and the rising concept of green consumption (Euromonitor HK, SK), the recycled polyester is one of the requirements for the suppliers.

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6. REFERENCES Ansoff, H.L (1988), Corporate Strategy. London: Penguin. Ansoff, H.L. Strategies for diversification. http://shr.receptidocs.ru/docs/1/509/conv_1/file1.pdf (Accessed: 1 April 2015) China Exhibition, 2015, Trade events: http://www.chinaexhibition.com/trade_events/list-0-91-0-Fashion_and_Accessories.html(Accessed 20 April) Edit (2015). Active wear on the up and up but ahead of fall. https://editd.com/blog/2015/04/activewear-on-the-up-and-up-but-ahead-of-a-fall/)(Accessed: 20 April 2015) Euromonitor : Apparel and footwear in China: https://www.portal.euromonitor.com/portal/analysis/tab(accessed 10 April 2015) Euromonitor International (2014) Passport. Apparel and Footwear in the United Kingdom. https://www.portal.euromonitor.com/portal/analysis/tab (Accessed: 10 April 2015) Euromonitor, 2014: Apparel and Footwear in Hong Kong, China. Oct 2014: https://www.portal.euromonitor.com/portal/analysis/tab (accessed 26 April 2015) Euromonitor, 2014: Apparel and Footwear in South Korea: https://www.portal.euromonitor.com/portal/analysis/tab (accessed 26 April 2015) Exteriores, 2014: Ficha pais China http://www.exteriores.gob.es/documents/fichaspais/china_ficha%20pais.pdf (accessed 27 April 2015) Exteriores, 2014: Ficha pais Corea del Sud. http://www.exteriores.gob.es/Documents/FichasPais/Coreadelsur_FICHA%20PAIS.pdf (accessed 26 April 2015) Fioriti, J. (2014), Opportunities in Sportswear Across all Price Segments. Available at: https://service-verdictretail-com.arts.idm.oclc.org/verdict/sectors/clothing-and-footwear/womenswear/trends/article46493.ece (Accessed: 02 April 2014) HKTDC, 2015, Sourcing Events : http://www.hktdc.com/sourcing/events_searchresult.htm?bookmark=true&query=fashion&locale=en (Accessed 14 April) ICEX, 2014: Ficha Pais Hong Kong: http://www.icex.es/icex/es/navegacion-principal/todos-nuestros-servicios/informacion-de-mercados/paises/navegacion-principal/el-mercado/estudios-informes/4640544.html?idPais=HK (accessed 12 April 2015) Jackson, T & Shaw, D 2001. The fashion buying & merchandising management.

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Jackson, T & Shaw, D 2009. Mastering Fashion Marketing. Kotler, P & Amstrong, G; Saunders, J. and Wong, V (1996) Principles of Marketing – The European Edition, Prentice – Hall Europe, p.546 Leboff, G (2011), Sticky marketing. Kogan Page. Martin Christopher, 2011: Logistics and Supply Chain Management. Mintel (2013) Clothing Retailing-Europe-October 2013. http://reports.mintel.com/display/590747/# (Accessed: 5 April 2015) Porter, M. E., (1985), Competitive Advantage: creating and sustaining superior performance. London, Free Press. Porter's generic strategies. Business Process Management Journal, Vol.12 pp.433-454. Richard S. A., Marilyn M.H. (2006) Linking strategic practices and organizational performance Rogers E.M (1983), diffusion of innovations, The Free Press, 3rd edition. Trade fair dates, 2015: http://www.tradefairdates.com/Fashion-Trade-Shows-South-Korea-FSL248-L120-S1.html (Accessed 25 April) Verdict Report, (2013), UK Clothing Sector Trends. https://service-verdictretail-com.arts.idm.oclc.org/verdict/sectors/clothing-and-footwear/clothing/trends/article39367.ece (Accessed: 10 April 2015) Wgsn 2015, Active wear blog: Sportswear with skincare benefits: Roxy and Biotherm Neck Warmer, http://www.wgsn.com/blogs/2015/01?cat=580 (Accessed 20 March). Wgsn, 2015, Active wear trends http://www.wgsn.com/blogs/tag/activewear (Accessed 10 April) Wgsn, 2015, sport active wear design https://globalfashionawards.wgsn.com/content/meryl%C2%AE-sportactivewear-design (Accessed 4 April)

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7. APPENDIX

Appendix 1: “Brand values” of Taylor Pierson:

Britishness Inspired by history and tradition, blending old and new to create something that is distinctly Taylor Pierson. Wherever Taylor Pierson goes in the world, we will always stay true to our British roots.

Entrepreneurial We always innovate in design and processes to bring you the most trendy and chic pieces with our British roots.

Innovative We always innovate in design and processes to bring you the most trendy and chic pieces with our British roots.

Responsible Integrity is at our core; it's inherent in us to act properly and treat everyone, whether our people, our suppliers or our customers, with respect.

Excellence It's not just about our high quality product: we believe in excellence in everything we do, it's that simple.

Appendix 2: Market segmentation (STP):

Demographic segmentation

Age 25-28 ; 28-31; 31-35

Gender Female

Marital status Single, married

Income High and average, non dependent from the family

Occupation Students, employees

Education Graduates, non graduates

Religion Non fundamentalist religions

NRS socio-economic classification

Middle class Managerial

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Lower middle class Supervisor, junior management

Skilled working class Skilled manual workers

Purchasing behavior segmentation

User occasion Outdoor pursuits, sports, casual

Benefits wanted Image enhancement, value, high quality, service excellent, britishness, elegance

Loyalty level Monthly and/or annually

Readiness to purchase If there is a desire of active wear purchase, the readiness is high.

Geographic segmentation

Country United Kingdom, Hong Kong, Singapore, China (only main cities such as Beijing, Shanghai, Guangzhou).

Town v. country Main towns of the targeted countries

Drive time Low drive/transport time from their offices/house to the store

Climate UK: temperate and oceanic climate with abundant rainfall throughout the year.

HK: subtropical and monsoon

SGP: tropical rainforest climate

Beijing-Shanghai-Guangzhou: mainly dominated by dry seasons and wet monsoons.

Hemisphere UK: Northern hemisphere

HK: Eastern and Northern hemispheres

SGP: Northern hemisphere

Beijing-Shanghai-Guangzhou: Eastern and Northern hemispheres.

Psycho-graphic segmentation

Social class Average – high spending power, university education, career woman

Lifestyle Active lifestyle, beach holidays, trendy gyms

Personal type Working woman who prioritize her career and free time. She takes care of her body and mind. She likes to practice outdoor activities and be trendy and elegant but without

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spending too much. She enjoys spending time with friends and family.

Spending attitude High propensity to spend but always looking for bargains with high quality.

Appendix 3: “spec” of the range and Colour palette and prints

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Appendix 4: Augmented product model for fashion retailers. Source: Kotler, P; Amstrong, G; Saunders, J. and Wong, V (1996) Principles of Marketing – The European Edition, Prentice – Hall Europe.

Appendix 5: Cost Price and Buying Price (asking price) per SKU:

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Appendix 6 – Allocation and top down range plan:

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Appendix 7: Logo – packaging – tag

The six pieces has the logo on the front in the case of the tops, hoddie and dress and on the side in the case of the leggings and joggers.

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Appendix 8: Fabrics and trims of the 6 pieces:

Criss-cross top Fabric: Dri-FIT 89% recycled polyester and 11% elastane

Trimming: zipper

Structured vest Fabric: 100% Dri-FIT recycled polyester

Trimming: 4 buttons

Hoddie Fabric: Body 77% wool/23% nylon. Rib 97% cotton/ 3% elastane.

Mini dress Fabric: Body: Dri-FIT 92% recycled polyester/8% elastane. Lower body: Dri-FIT 84% recycled polyester/16% elastane.

Trimming: 4 straps. 100% recycled polyester.

Leggings Fabric: Dri-FIT 78% nylon/22% elastane. Gusset lining: Dri-FIT 100% recycled polyester.

Trimming: 1 zip behind, 2 zips on the ankles

Slim jogger Fabric: 60% cotton / 40% recycled polyester.

Trimmings: 2 exterior draw cords

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Appendix 9: The critical path – Production

Order confirmed 11/3/15

Fit sample approval & Ratios confirmed

12/3/15

Lab Dip / strike off approved 18/3/15

Sample sealed 26/3/15

Trimmings approved 26/3/15

Bulk fabric approved 18/4/15

Pre production approved 20/4/15

Production starts 23/4/15

Production sample approved 21/5/15

Shipment (by sea) EX CIF Shenzhen to London

31/5/15

Delivery to DC in London 05/7/15

Appendix 10:

Pen portrait: SAMANTHA (pen portrait) is a twenty-eight years old fashion buyer worker who lives in Hong Kong in a shared flat in Soho with two flatmates in their late twenties. She is from Shenzhen (China) but was grown up in Hong Kong and graduated in Business in the London Business School. She likes classic brands with a strong “britishness” such as Burberry, Jack Wills, Barbour, Mulberry, Hunter boots etc.

She just got promoted to Senior buyer and her incomes are now average high. She is a single career woman who prioritizes her career and free time. She practices outdoor sports such as running, and volleyball. She goes three times per week to a trendy gym to practice yoga and spinning. She has more than three active wear outfits and she likes to be trendy at gym. She likes fashion but is not a strong fashion follower. She goes shopping to fast fashion retailers such as H&M and Zara and sometimes to luxury stores. She reads fashion magazines such as Glamour and Vogue and South China Morning Post. She goes to the beach in the weekends, barbeques and hiking. Even she has a good salary, she doesn’t like wasting money unnecessarily and always look for bargains with high quality. She prefers to have dinner outside with her friends than cooking at home. She loves travelling to beach destinations such as Philippines and Bali.

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