SHOW YOUR CARREER WITH REISS

Young Business Consultants – Marketing Plan Beijing

It is recommended to watch presentation full screen

Executive summary

A £ 3.6 million investment is needed to adapt the UK

experience stores the culture and build up the network to franchise. The joint venture will earn 6 million in revenue

with the campaign “Show your Career with Reiss.”

The joint venture will create the entry with a long term strategy of a franchise. This is targeted on the blue ocean middle class

with quality UK products.

How to create a global brand while

penetrating the Beijing market with a

joint venture? The Reiss brand will reach 3% of the

urban core with the marketing campaign “Show your career

with Reiss” in combination with a

total of 9 experience stores.

Reiss: From 1970 until now Reiss is

known as a individual, sexy and

stylish brand.

Reiss the brand Offers individual and

aspirational look at affordable prices, successfully combining

good design, quality and value.

Key values underpinning the brand’s image

creative, contemporary, essential, comfortable, affordable, directional

Established a reputation for good quality, fashion

forward, price competitive offerings

Time line

Concept has proven itself, time to expand abroad.

Aspirations The aspirations of this plan is

becoming a well known quality brand within the Chinese market of Beijing

The vision of Reiss

The mission With the local Chinese

partner Booshing will the UK concept stores of Reiss

adapt to the Chinese culture, a joint venture

with Booshing will create the start for a larger

franchise in Beijing China to penetrate this market.

Strategic intent Financial performance to

ensure a long term growth of the Reiss brand.

Overall objectives Create a global brand name

Reiss.25% increase of international sales and 8% internal rate of

return.

The vision for the organization

Establishing and developing the brand name Reiss

internationally.

Chinese objectives- Open 3 stores with the joint venture and have these running at 100% after

4 years.- Adapt the UK concept .

- Open 6 franchise stores and have these up and running at 100% after 4

years.- Apply the marketing campaign “show your career” for 3 years.

- Create top-of-mind awareness with 3% of the urban core (550.000

people).

Review of what has been going wellThe middle class is growing but also the

spending power is growing. So people have more money to spend. But is it’s

important to know, are they able to pay Reiss’ product for more than one time? Not only the extreme rich have money to buy clothes that provide more than

just the basic need, warmth. The middle class are able to afford Reiss clothes and

this group will expand. Reiss has the possibility, knowledge and the resources

to take its share of this new and growing market

Market overview and situational analysis

Where are we currently?Reiss is Currently still in the UK. There the

concept has proven to be successful in both the men's wear as the women's wear.

One of the possibilities to grow is to expand to Beijing. Beijing will be a raising

city with raising economy in the future. There are many long term possibilities abroad. This will be an opportunity for

Reiss to meet its objectives.

Factors that have contributed to this

Branding – Introduce the brand in China, having a good name

Marketing – With the right marketing plans achieve the objective

The experience store - the stores in Beijing

What has been going badly, in need of attention?

The fast growing market of Beijing should stay under constant survaillants. The economy is growing really quick.

The corrupted government , the culture and the currency should all be under

constant research. Reiss needs a local partner to enter a new market. It is necessary to have the right network

with the right partners.

BEIJING AS THE NEW MARKETWith the strategy joint venture > Franchise

Internal analysis and measures

of capability++•Good quality products/services•Permanent and seasonal renewing•Development brand life cycle (not established for now)•Introduction product life cycle (Chinese already know about high quality and fashion brand)•Large target --•High prices•Web site•No distributor takes the risk, Reiss has no influence on the distributor

Product and brand lifecycle positions

Resource analysisMen: Manager/Staff/Security

Money: 3,6 million pounds for 3 stores in the first 3 years

Minutes: Objectives 3years (2013/14) Opening 3 stores in 20111,5 year building brand1,5 expand the name by franchising

Reality checkNeeds and wants of

middle class are changing. Reiss can fill

this gap.

Reiss is capable to achieve this with the

right resources.With this, Reiss outrun its

competitors.

Portfolio analysis

Preliminary assessment: strengths/weaknesses

• Renewing and seasonal collection: never bored to see the same clothes• Good quality: it explains the price !

• Start life cycle

These strengths apply to the middle class in Beijing.

How to improve the weaknesses? Website : can help to see what do the

shop propose The brand: not known in China, internet

can help High prices : the middle class is growing

and their spending power too.

China’s huge consumer market continues to become a magnet

for luxury European brands

Established brands in Beijing Swarowsky

Tiffany & Co Levi’s

Louis Vuitton Zara

External analysis++• Beijing = touristic city• Growing power spending/middle class• Enough partners to work with• Expatriate people• Cheap labour--• Imitation/fake• Us market• Corruption• Competitiveness of industry •Culture = different consumer habits• Customers has not perception of Reiss

Preliminary assessment: opportunities/threats

- Enough partners to work with- Growing of the spending power and the

middle class- Enough space in China.

- Permanent renew of collection- Good known brand

- Quality of its products Critical Success Factors

BrandingSave the value proposition

Reach the Objectives

There are many opportunities with

the right resources, threats have to be secured by research

- US market is very important- Be careful about imitation and fake

- Adapt to the culture, size, and colours- Us market important

- High prices- Middle class is fragile since the social

security system is far from perfect.

Critical issues analysis and positioningSTRENGTHS WEAKNESSES

- Targeted Marketing and Personalization (+)- Rapid access and compare product catalogue (no need to move, customer can check the new arrival on the website) (+)

-Few selling area in the world and no in China (-)- Products targeted to professional and High level (-)

OPPORTUNITIES THREATS

-The Internet is a great opportunity in developing a marketing specialist, providing ways to see the clothes in a user and obtaining customer loyalty. (++)- government will be stable(+)- urbanization of farmers to cities (+)

- REISS can be associated to other name(-)- important US market (-)- amount of corruption will not grow, but is still there. (-+)-Middle class is fragilesocial security system not perfect

Entry strategy for the next 3 years•Joint Venture •Franchise•Promotional activities •Adapting the stores •Improving skills of management•Hiring staff

Bring the message: “Show your career with

Reiss”

Reiss’ products are higher than the average of market and it has a medium target,

but we can conclude that Reiss is the best on its segment (Street fashion and Exclusively fashion)

Probable customers moves:

Follow the early adopters

Growing middle classFashion victims

Starting business people

competitor moves and

developmentsCompetitors will react by new offers, special

sales and price changes.

Quick market adaption and new

advertisements on short term strategy

Principal assumptions underpinning the plan

CSF’s Marketing

Get in touch with market

BrandingValue proposition

Life Cycle projections• Sales: Keeps on increasing. By decreasing, start new seasonal

collection • Previous successful product is decreasing

constant renewal of product life cycle • Profit/ Unit: If brand is more known, profit will increase. The

more sold, the higher the profit.

What should Reiss do in order to kill

competitor?

High investments in the brand to create customer loyalty

Big idea: “show your career with

Reiss”

The target market and its characteristics

Women (age)   Men (age)

15-24

25-34

35-44

TOTAL

15-24

25-34

35-44 TOTAL

Casual (%) 0 28 27 55% 0 25 20 45%

Formal (%) 0 25 25 50% 0 25 25 50%

Fashion (%) 35 30 0 65% 35 0 0 35%

Shoes (%) 20 40 0 60% 15 25 0 40%

Accessories (%) 10 40 20 70% 0 30 0 30%

Bags (%) 0 40 20 60% 15 25 0 40%

Jewellery (%) 0 90 0 90% 0 3 7 10%

- Urban core population of 18.54 million- Objectives: 3 joint venture stores+ 6 franchise stores/ 3% urban core / within 3 years -Young people are very influenced by fashion (15/24y)- Young active person (25/34y)-Women buy more than men - Reiss fit more to women needs than men needs- Targeting customers and consumers

Target segmentation ( 3%)

Market segmentation

of the urban core,divided in

segmentations

Preliminary market objectives

Existing products New products

Market UK

Market penetration The Reiss stores in the UK

Product development

Develop new fashion adapted to the citizen

of Beijing fitting, color and model)

Market

China

Market development: Middle class is an upcoming market.- Providing existing products adapted to people of Beijing.

Introduce the brand into the new market in China by having a strong marketing.

Diversification

Providing on the new market. introducing the brand Reiss developing a new market

Competitive stance and competitive advantage

The current market is people who are not aware of the brand Reiss. Reiss has to excel out of the others. By introducing the brand, it will attract the early adapters.

The competitive advantage is being an exclusive brand from the UK, unique brand because it is the first Reiss store in Beijing. This is attractive for early adapters.

Profits forecast and sensitivity analysis

The Chinese market is evolving

faster than the UK market.

The positioning statement: Focus on target market

Reiss’ fashion is for young active and middle aged in China, focused

in Beijing. This target group wants/needs to

spend more time, money on their appearance, the middle class is

growing, so there is more money to spend.

The clothing piece (fashion) is a luxury good, a must have for every

young professional.That provides individual, stylish

and sexy properties and shows your career success.

The possible competitors for Reiss are: Levi’s, Louis Vuitton, Zara, Calvin

Klein, Polo Ralph Lauren

Product by Kotler

Marketing and competitive strategy and the competitive stance

Type of strategyFirst 18 months: Start 3 joint venture stores

with a local partner. Adapt the experience shop to the market of China

Next 18 months: go on with 6 franchising stores, sell the concept of the adapted experience shops

to franchisees. The big idea:Show that you are successful

by fashionable and luxury clothes

Marketing actions:Chinese Celebrity as the new face. Fashion showsBig store opening

Issues of differentiation/ competitive stance:

Competitive targets and prioritiesexcel in all the other competitors. Being unique.

PAY OFF/ SLOGAN: SHOW YOUR CARREER

3 things that would make a difference:#1: Work together with Booshing#2: Strategy: Start an experience shop to develop new target group#3:Collaboration with a Chinese celebrity for campaign on long term to stay in the marketGong Li, worlds famous Chinese movie star (crouching Tiger, Hidden Dragon)

Breakpoint thinking Inventing a new market: dress for the moment – for every occasion a new Reiss piece

Implementation Product Price

range ¥

place people promotion

Physical

evidence

Processmanageme

nt

- casual cloth

- formal cloth

- fashion cloth

- accessories

- bags

- shoes

- Jewellery

- ¥600 / 3.000

- 500/ 2.000

- 500/ 2.000

- 90/ 600

- 355/ 2.100

- 500 / 1.700

- 250 / 900

1 GBP = 10,1210

CN¥

1 CN¥= 0,0988041 GBP

In Beijing in a bigmall like

“LandgentCenter Mall 乐中心 “ or in a

famousStreetlike “WangfujingStreet “ .

- Manager:1 Chinese

and 1 English

- Staff:Profession

alstaff,with skills

inHigh

fashion

to provideExperienceShopping

(menand

women)

-Newspaper ( free)

- Radio

- Television

- flyers

-Participateto FashionEventprepare afree fashionshow toIntroducethe brand.

Acustomise

dshop with

amixture ofChine andUK style.

A lot oflight to

seethe cloth,coloursand

people

as well aspossible.

The process willbe that the

customerwill look the

clothesAlone, somebodyfrom the staffhas to look athim/her all thetime and whenthe customeris hesitating, thestaff has to goand offer somehelp. The shopWill have toprovide a lot of fitting room sothere will be noline. And alwaysone cashieravailable.- Provide the best service

- Reiss is a good and trustable brand- Change clothes 15 days after buying it without washing it and show the bill. - Special customer phone line - Information website

Development of the brand in Beijing

Market mapping:Possible places for development of the brand: Shopping malls, shopping street. In total there will be 3 stores in the centre of Beijing. Competitor advantageFills the gap for the middle class

Selling propositionSelling individual, stylish and sexy clothes.

For every occasion, dress for the moment!The bases for differentiation and competitive advantages:strong branding, being unique

Leveraging assets and strategy

The delivery of greater value: when the brand is familiar with the market group, China can expand to more stores.

Show your career by

wearing Reiss

Competitive advantage, selling proposition and brand values

Budgets The share of the joint venture 52% to the

Chinese partner and 48% for Reiss. 25% increase of sales means £ 5.220.750. UK stores make £ 20.000.000 in sales with 25

stores. This is £ 800.000 per store. The assumption is that the joint venture and franchise stores will run up to 20% in the first year, 50% in de second, 90% in the third and 100% after this period.

Joint venture opens 3 stores in the first year. The franchise opens 6 stores after 18 months.

One store year 1 £160.000 (20% of 800.000)

Year 2 £400.000(50% of 800.000)

Year 3 £720.000 (90% of 800.000)

3 stores and 3 years £ 3.840.000 in revenues

Investment•An investment of £ 2.5 million is needed per store. •A combined £ 7.5 million investment.•£ 7.5 mil/100% X 48% = 3.6 million

for 3 stores in Beijing.•This investment covers promotional activities, store costs, store development, franchise developments and overhead.

Franchise contractThe franchise will be a hard franchise to keep control over the brand. This means that:

The initial fee of £ 50.000Royalties of 5% of the gross revenue Marketing fee of 10% of the gross revenue.

•90% of assortment is controlled by Reiss

90% of the shop is designed by Reiss

90% of the price is maintained by Reiss

Down mark after season is possible

Risk management•The Chinese Yuan will rise in comparison to the UK Pound because of the growing economy of China and that the Chinese government has kept the Yuan low. •This trend will be combined with 50% hedging of the money earned in China. Funds will be transferred to the UK when the currency is high for the Yuan so Reiss gets more Pounds. To apply risk management, the other 50% will be transferred every quarter. •More risk management contains factoring by an UK bank from the franchise companies. This is done because Reiss gets the receivables right away and is able to reinvest and focus on their core competence, fashion. An irrevocable letter of credit will be used for transactions. The Chinese partner will make sure all the paperwork is correct with the bank.

Review

Are the objectives reachable?25% increase of international sales, £ 5.220.750

The joint venture will generate £ 6 million in sales revenues the first three years. This is reachable because Reiss will not enter a red ocean with killing competition but a blue ocean where market share is available with the growing middle class.

Have al stores up and running in four years.The marketing idea of showing your career will make sure that Reiss sticks out in the market overflowing with people who have more money than ever before. The farmers have found a better paying job and have the culture of showing your money.3% of the urban core (550.000 people)

This culture of showing what you have is an important assumption for Reiss. This is the basis of the marketing plan and essential for the success of the 9 stores. The cultures needs to be open for the UK clothes and Reiss needs to be open to adapt the clothes to the culture. The profit will be generated by meeting in the middle.

Action Plan

Internet like social and specialized website

(Part 25%)

Television during

entertaining show

(Part 15%)

Print campaign(Part 35%)

Sponsoring :fashion show

or special event(8%) Shop promotion

(7 %)

STEPS TARGET

- Present the product - Show that the product is accessible to

all - Quality product - Positioning on the Chinese clothing

market - Reach the 25% and 8% within 3 years- Open franchise shops

- Young workers - Person paying attention to their

image - Customer of elegant, fashion and

formal clothes

Implementation and control•The three concept stores will be managed by a UK manager and

a Chinese manager to convert the UK style to a more local concept. Adapting the UK experience store concept to the

Chinese shopping culture.

• A local partner will do market research to provide valuable information for the adaption process. Which clothing lines work

and which not?

• Actively creating a Chinese business network for potential franchise partners and to avoid problems with corrupt

authorities. Increase market coverage by using the established network to franchise.

• Creating strong guidelines for franchise shops to market the brand name Reiss. Reiss will control 90% of the stores products price

and design.

• To increase efficiency, standardization of the concept will be used for the franchisers.

All these things combined give Reiss high control.

Contingency thinkingThe competitors of Reiss all

deliver the same core product (clothes), but in a different

package. Because Reiss has many years of experience in a

competitor market in the UK, the company will be able to survive sudden changes in the market. The designing of the clothing is already adapted to a changing

fashion world.

Potential problems with the Chinese market will

be resolved by the Chinese partner and the

established network.

A threat that every company has is if the product would not catch

on in the Chinese market. The customer does not want to

buy the value that Reiss delivers. To avoid this the joint venture will invest money and time in market research to develop the brand. A long term campaign instead of

short term.

A total different potential threat that could be fatal to the success is the

cooperation with the Chinese partner. The different culture could clash in

ways of management and approaching the customer. Time and resources will be invested in creating a strong long term relationship with this partner. A characteristic of Chinese is that they value relations. Once the cooperation

is working, the locale partner will value Reiss. A worst case scenario could be: the Chinese partner buys out Reiss or

Reiss would buy out the partner.