Whistles Project Research and Proposal by Allee Lizama

Introduction Whistles was founded in 1976 by Lucille Lewin as a multibrand curated boutique on George Street in London. Originally, Whistles focused on new and innovative designers such as John Galliano, Dries van Noten and Jean Paul Gaultier, however, as Whistles shifted towards inhouse design, it experienced targetdrift, ending up as an outdated and ‘mummy’ brand. In 2008, Whistles’ CEO, Jane Shepherdson led a management buyin of Whistles, and began an effort to save the dying brand. She focused on the dire financial situation and redeveloped the product line in mid2009. Shepherdson reinvented the brand image by targeting younger and trendier women and developing completely new product lines. Whistles reemerged as a contemporary midmarket brand with a ‘modern and effortless’ look. Shepherdson’s success can be seen today, with sales increasing 24% to £49.3m in the 2013 fiscal year. Project Statement: Whistles’ current success means that the brand can now focus on expanding its global presence, especially in the critical Manhattansector of the US market. This market strategy plan will assess Whistles’ current situation and prove that expanding Whistles’ to the US is a successful plan. Current Market Profile The global apparel industry is currently growing at a healthy rate. Costswitching behavior and product differentiation are fairly low in the current competitive market. The apparel i ndustry is of great importance to the global economy in terms of trade, employment , investment and revenue around the world. Due to the nature of trends and and the saturation of the market, the apparel industry has short product life cycles and vast product differentiation. The market is currently characterized by rapidly changing demand coupled with long and inflexible supply

processes.1 The United States apparel market is the largest in the world, comprising about 28% of the global total, with a total market value of $331 billion. Within the US, w omen’s clothing is the largest segment of the market, accounting for 50.4% of sales . T he exponential growth of emerging global cities does not mean that mature cities, such as New York, are becoming irrelevant. When analyzing total market size, these cities will continue to host half the women’s apparel market worldwide for the foreseeable future.2 Political : As Whistles seeks global expansion, it must take local tax and copyright regulations into account or risk major lawsuits and bad press. Economic : During the Great Recession of 2008, the middle market suffered heavy losses and seemed to be going obsolete. Instead, upperclass consumers were trading up for luxury products, while the middleclass was trading down for cheap products due to sudden losses in purchasing power. Since the economy began rebounding in 2012, we have seen increased demand for trendy bands that can bridge the cheaplux gap that exists in the market. The middle market executives of these upandcoming bands worry about what another global recession would do to their businesses. As such, many are guarding themselves by ensuring that they have plenty of liquidity to help them manage any potential downturn.3 Social/Cultural : Sustainability is a growing concern for every industry, but it is particularly relevant in the apparel industry where the rise of massproduced fast fashion has led to excessive global waste. Therefore, we have begun to see a trend towards brands with higherquality, which follow fashion trends without spitting out copycat pieces made with harmful synthetic materials. Ecofriendly, higher priced, brands are the next big concept, “as the evidence is mounting that consumers associate eco with quality, and care more about where and when their clothes are

Clothing, Shoes & Apparel | Statista. (n.d.). Remy, N., Schmidt, J., Werner, C., & Lu, M. (n.d.). Unleashing Fashion Growth City by City. 3 Ibid. 2

manufactured.” As early as 2010, sales of ‘low end’ retailers had fallen by 21%, which the average consumer spend increasing 8.03% and ecofashion sales op 68% from 2009.4 The increasing importance of celebrities, bloggers, athletes and microcelebrities due to social media is another trend affecting the apparel industry. Celebrities, such as the American socialite, Olivia Palermo, who is regularly featured on streetstyle blogs wearing Whistles, and The Duchess of Cambridge, Kate Middleton, who wore Whistles in her official engagement photographs to the Olympics closing ceremony, have helped tremendously with brand awareness. Shepherdson argued that "Our profile is growing (abroad) because of women like [Kate Middleton] wearing our clothes."5 Technological/Physical : In order to remain relevant, brands must successfully adopt technological innovations. In the current era, digital, ecommerce and social media strategies are critical. Revenue from US apparel and accessories retail ecommerce totaled $44.7 billion in the 2013 fiscal year.6 Because all brands are competing over the internet, today’s consumers expect to receive the a brand experience and to see new and innovative ideas both instore and over the web. See Appendix A1 for a graph on the forecast of the U.S. Apparel Retail Sales. Growth : For the first time since Shepherdson took over the brand, Whistles is reporting profitability, with the 23.6% sales increase making Whistles one the UK’s fastest growing retailers. The slowpaced recovery of the middleclass and the increasing midmarket demand in the US market is a massive opportunity for Whistles. The growth of U.S. consumer spending in terms of U.S. consumer spending on nondurable goods (an indicator of retail clothing sales), U.S. personal income (drives consumer 4

Mid market and eco retailers see growth. (2011, April 12). Cochrane, Lauren. "Whistles Conquers the 'middle Market ' of British Womenswear." The Guardian . N.p., n.d. Web. 3 Oct. 2014 6 Topic: Apparel Market in the U.S. (n.d.). 5

ability to purchase clothing), and U.S. retail sales for clothing and clothing accessories stores (a measure of consumer spending on clothing) are key factors driving growth in the apparel industry.7 The European midmarket began growing earlier than the US midmarket due to differences in rates of economic recovery for certain sectors of the population. Thus, as the European midmarket begins to reach maturity, these brands are focusing on US expansion. Overall, the immediate and foreseeable future of global apparel retail market is very positive. According to MarketLine, it is expected to reach almost $1.3 trillion in 2014, representing more than 13% expansion in the next five years. By 2018, the US retail industry is forecasted to reach a value of $472.4 billion, which is a 27.3% increase from e 2013 (CAGR of 4.9%). In McKinsey th & Company’s “Fashion Scope” report, New York was ranked 10 out of the top 20 Growth cities

for absolute growth in women's apparel sales by 2025.8 The market winners will be those aimed at affordable luxury, residing somewhere between the mass fastfashion and luxury segments.9 See Appendix A2 for a graph of the Product Life Cycle. Market Segmentation The middlemarket fashion industry is best segmented by differences in its consumers. As a middlemarket fashion company, Whistles will seek to reach the middleclass socioeconomic bracket. For purposes of this strategy, Whistles should understand the distinct divisions within the middleclass in the United States. While definitions are loose, generally speaking, to qualify as “middleclass” in the US, one’s annual income should fall between roughly $25,000 and $80,000. As Robert Reich, former Secretary of Labor describes, fifty percent above or below the national median household income recorded by the 2012 US Census at $51,0171011 defines the middleclass. These estimates are often contested as many consider the range of the middle class AddThis Smart Layers: Personalizing the Web. (2013, March 13). Keller, C. (2014, September 1). McKinsey on Marketing & Sales. 9 Ibid. 10 United States Census Bureau. (2012, January 1). (State and County Quickfacts). 11 Williams, G. (2014, April 24). What It Means to Be Middle Class Today. 7 8

to reach at least $100,000 because the buying power of the USD has stagnated due to external factors such as the economy recovering from the Great Recession of 2008. Whistles should split this consumer base into three segmentsuppermiddle class, middlemiddle class, and lowermiddle class. Segmenting the middleclass further can help to accurately display consumers based on their demographics, geographics, psychographics, and behaviors. Additionally, this process is especially useful because middleclass is not just an income category as Jacob Hacker, a professor of Economics from Yale University, explains in an interview with USA Today , “To most Americans, middleclass is more than an income category, it’s an aspiration, a way of life.”12 This means that we have to consider income and a number of the aforementioned categories as major factors in the middleclass lifestyle. This segmentation process will help Whistles to better target consumers who will value our products over competitors. Segment 1: Lowermiddle class America’s lowermiddle class earns roughly $25,000 to $50,000 annually. In a research article called, “Middle Class: For Itself and for the Others,”Anna Tarkhnishvili writes: the lower middle class consists of...people in technical and lowerlevel management positions...They have lower educational attainment and lower incomes. They enjoy a reasonably comfortable standard of living, although it is constantly threatened by taxes and inflation.13

Tarkhnishvili’s research touches on this segment’s psychographics. Additionally, this group does not have a huge disposable income and tends to rely on large discount chains such as KMart or Walmart. According to a 2012 AdAge article, “The Demographics of Retail,” 35.9% of KMart’s consumers and 31.8% of Walmart's come from this income bracket.14 They place more emphasis on finding affordable goods than goods that offer prestige or luxury. It is difficult to pinpoint a 12

specific geographic area for this group because it exists all across the US, however, this group won’t live in the more expensive areas of the country i.e. the Upper East Side of Manhattan, where the median income is $106,000.15 Instead this group could be on the outskirts of an expansive urban environment such as Bronx County, NY.16 The demographics of this group includes both men and women, but predominantly women, from an age range of 18 and older. Generally speaking, this segment tends to have children. Segment 2: Middlemiddle class The aptly named middlemiddle class annual household income falls between $50,000 and $80,000, making it wealthier than the lowermiddle class, but not a direct comparison to the elite, uppermiddle class. The slightly higher income for this segment, however, isn’t always reflected in their lifestyle and purchasing behaviors. This segment is finding itself increasingly “squeezed,” meaning as the Pew Research Report describes, “economists also report a lack of jobs growth in middleskill, middleincome jobs...employment growth over the past three decades has steadily gravitated toward lowskill jobs.”17 Furthermore, as a report from American Progress tell us, the income of this segment has stagnated, to “near record lows.”18 Authors, Keith Miller and David Madland, explain, “middleclass incomes have been either stagnant or declining since peaking in 1999. As a result, the median household in the United States is now actually earning less than it did in 1989…”19 Altogether these facts help us understand the behaviors of this segment; it is easy for them to slip into the lowermiddle class segment and difficult for them attain uppermiddle class stature, thus this segment also looks to buy from places that offer quality goods, but at cheaper prices. A 2014 article in The New Yorker titled,

PRIZM. (n.d.). Carmichael, M. (2012, March 19). The Demographics of Retail | Ad Age Stat Advertising Age. 17 Carmichael, M. (2012, March 19). The Demographics of Retail | Ad Age Stat Advertising Age. 18 Miller, K., & Madland, D. (2014, September 16). What the New Census Data Show About the Continuing Struggles of the Middle Class. 19 Carmichael, M. (2012, March 19). The Demographics of Retail | Ad Age Stat Advertising Age. 16

“Where the Middle Class Shops” by Amy Merrick, examines this segment’s buying behaviors. Merrick states, citing research from a senior partner and managing director from the Boston Consulting Group, Michael J. Silverstein: The middle quintile of American households generally families with children, earning roughly seventy thousand dollars a yearstockpile household goods at Costco and purchase groceries at Trader Joe’s...They browse for clothes at mall stores like Gap, but they buy only when the prices have been marked down at least once...Ubiquitous Macy’s coupons and T.J. Maxx’s designer discounts satisfy people’s desire to save money on quality products.20

In terms of psychographics, Nielsen’s segmentation tool, “PRIZM,”21 shows that the majority of this segment has attained at least a college degree, if not higher. More educational levels, means that this group is more likely to take advantage of and value new technologies. In addition, this group is largely occupies a mix of professional/white collar jobs. The demographics of this group again include both men and women, and they are the majority of adults in the US. However, as college graduates, this group, compared to the lowermiddle class tends to be older and more established, for an age bracket of 25 years and older. Lastly, this segment can afford to live in moderately priced urban areas or in comfortable suburban communities such as Nassau County, New York. Segment 3: Uppermiddle class The third, and final segment is the uppermiddle class, whose annual income is between $80,000 and $100,000 (and by some measurements, beyond $100,000). Their income is just below the upperclass and they feel pressure to keep up with that class, especially in terms of psychographics and behaviors. Again, Tarkhnishvili describes the uppermiddle class, she states, “ Upper middle class, made up of professionals distinguished by exceptionally high educational attainment

20 21

Merrick, A. (2014, February 6). Where the Middle Class Shops The New Yorker. Carmichael, M. (2012, March 19). The Demographics of Retail | Ad Age Stat Advertising Age.

as well as high economic security......They normally earn around $100,000 a year.”22 With graduate

degrees and higher incomes, this segment's first priority while shopping isn’t always finding a deal. AdAge reports that only 6.5% and 11.1% of consumers at KMart and Walmart, respectively, belong to this segment.23 Uppermiddle class members, rather, are, what Krystina Gustafson of CNBC calls, “aspirational shoppers.”24 She defines aspirational shoppers as: someone whose income isn’t high enough to make them a true luxury buyer but still has an appetite for designer duds...today’s aspirational shoppersoften people with a household income of about $100,000are more rational...choosing accessible brands that offer a range of products at a lower cost.25

In their buying behavior, uppermiddle class consumers seek the prestige of luxury brands, but at a lower price. Regarding psychographics, the aforementioned traits are true, as well as this group's affinity for online shopping and use of online resources like social media when making a purchase decision.26 The demographics of this group varies, including both men and women, however, the age range is more specific as those who attain graduate degrees are typically older, so this segments age range is 3055 years old. This segment can afford to live in expensive suburbs such as Arlington County, Virginia and first cities such as New York City. This segment also heavily varies in terms of relationship and child status. Although much of their demographics and geographics vary, members of uppermiddle class tend to mirror each other in terms of lifestyle and behaviors. Experian summarizes characteristics of this class as: Are twice as likely as average Americans to have graduate degrees...Hold fasttrack jobs in finance, information services and the arts...earn dual incomes if married...like to look good and feel good...patronize highend stores like Bloomingdale’s, J.Crew and Victoria’s Secret.”27

Rugaber, C. (2014, April 2). More Americans see middle class status slipping. Tarkhnishvili, A. (2013). Middle Class: For itself and for the others. Science Journal of Sociology and Anthropology, 2013 . 24 Gustafson, K. (2013, December 13). Middle Class Buying Luxury Again But At a Bargain. 25 Tarkhnishvili, A. (2013). Middle Class: For itself and for the others. Science Journal of Sociology and Anthropology, 2013 . 26 Ibid. 27 ASPIRING CONTEMPORARIES. (2014, January 1). Retrieved October 2, 2014 23

The elite status of the uppermiddle class makes them the perfect target market for a premium middlemarket brand like Whistles. Target Market and Customer Value Analysis: Whistles’ target market should be the uppermiddle class segment. Whistles can best meet the aspirational shoppers’ of this segment needs and demands. Whistles midmarket price range, yet high quality of clothing in relation to its competitors (i.e. J.Crew) will offer this segment the value they desire, but not at the overbearing high costs of luxury fashion brands. In particular, Whistles will use its women’s apparel line to target the female demographic of this section. Whistles’ women’s apparel offers a mix of casual to business professional, which meets this segments needs as professional employees who enjoy looking good and feeling good at work and at home. Whistles can also target the 28 to 55 year old age range of the uppermiddle class segment because their women’s line is not suited for younger age ranges whom are dominating the fastfashion industry. Whistles will target members of the uppermiddle class who live in wealthy, northeastern cities such as New York City. Specifically, Whistles should focus on consumers who live on New York City’s Upper East Side, whose median income is, according to Nielsen’s Zip Code database, $106,000. 28 In addition to being able to afford Whistles, this geographic area exposes these consumers to upscale department stores like Bloomingdales, where Whistles has already placed some of its products. In this sense, these consumers may already be aware of Whistles’ brand and quality, opening the opportunity for Whistles to setup a flagship store in New York City. Furthermore, the monotone, classy patterns in Whistles designs are trendy in Northeast American cities. Lastly, this group values the ability to shop online and research brands using social media. Whistles can meet this demand as it previews it offers this service and previews its upcoming seasonal lookbooks online. Moreover, Whistles utilizes

Carmichael, M. (2012, March 19). The Demographics of Retail | Ad Age Stat Advertising Age.

several social media outlets including Instagram, Facebook, and Twitter, all which give the upperclass consumers the transparency they desire. To better understand Whistles’ current position in our target market’s mind, it is necessary to perform a customer value analysis, which will show us where we are in relation to our competitors. We chose to compare Whistles to four other middlemarket clothing brands that target the uppermiddle class; those brands are: 1) Theory, 2) Vince, 3) Reiss, and 4) Karen Millen. Our customer value analysis compared the relevant data for each company such as buying criterias (quality of material, craftsmanship, customer service, online presence, and ethical manufacturing) and their importance, and the average price of each brand’s product (we choose a standard black leather jacket), This data gave us numbers for relative quality and relative price which were plotted on a Customer Value Map. The map shows us that our target market perceives Whistles as medium quality, for medium price in relation to its competitors. Karen Millen falls on the “Fair Value” line, which shows that customers perceive this competitors quality in relation to its price as fair. We want to improve our relative quality score while maintaining our prices, so innovation will be required. Lastly, this data provides an Importance Performance Analysis which plots our target market’s buying criterias in relative to attribute performance and attribute importance. Overall, Whistles and our competitors should continue to excel in customer service and craftsmanship, but we should consider how much emphasis we place on ethical manufacturing as it is an “overkill,” or receives a lot of attention, but it’s not that important to our target market. The full results and graphs of the Customer Value Analysis are available in Appendix A3 through A5 at the end of the document.

Competitive Analysis As the demand for fashionable midmarket brands grows in the US, many newer European brands are working on US expansion to gain a competitive advantage in the saturated

European market. Since Manhattan is the fashion capital of the US, these ‘upandcoming’ brands will be vying for market share and competing with Whistles. Thus, we will discuss competition in terms of ‘upandcoming’ competitors and the competitors that are already wellestablished in the Manhattan and greater US market. There are five French midmarket brands that are currently expanding into the US market and are aesthetically similar enough to Whistles that they are a potential threat. These include, Zadig and Voltaire, The Kooples, Sandro, Maje and Comptoir des Cotonniers. All but Comptoir des Cotonniers have used a concession/wholesaleled approach, entering the US market first through Bloomingdales. To date, all of them have several standalone stores, most prominently in Soho and West Village or on Madison Avenue. Because each brand uses a slightly different aesthetic and pricing structure, there is room in the US market for all of these brands to survive in harmony with Whistles. However, Whistles needs to come into the US market aggressively in order to immediately create brand awareness levels at or above all of these ‘upandcoming’ brands. Additionally, there are two Swedish brands owned by the multinational corporation, Hennes & Mauritz, which have plans to expand into the US by the end of the 2014 fiscal year, and thus are potential threats to our positioning. These brands are & Other Stories and COS. Other Stories is the most fashionable brand owned by H&M, showcasing the Swedish retailer’s design credentials by incorporating quality fabrics and emphasizing craftsmanship to create premiumfeeling items. Most clothing items are between $50 and $400 US dollars. A major strength of & Other Stories and the crux of their differentiation strategy is its extensive lines of cosmetics, shoes, jewelry and lingerie. & Other Stories is focusing on ‘seasonality’ by introducing four mini collections per season. 29

Dacre, K. (2013, October 29). The Rise of High End Street: Zara, Whistles, and Cos Pioneer a New Age For Our High Street.

COS is often described as the ‘older sister’ of the H&M family, with its target market being women professionals aged 2549. Its aesthetic is fairly minimalist, letting the design speak for itself and keeping items on the racks for longer than many trendier stories. COS’s items tend to be slightly cheaper than Whistles, so our focus on uniqueness cannot be lost. Overall, these brands have a major competitive advantage because of H&M’s massive supply chain network, buying power, and general customer awareness. The first major competitor in the US market environment is Theory, a New Yorkbased fashion label founded in 1997. It defines its aesthetic as comfortable, sophisticated and modern. Theory has sixteen standalone stores throughout most of the major metropolitan cities in the US and also sells its apparel in Bloomingdales, Lord & Taylor, Saks Fifth Avenue, Neiman Marcus and Barney’s. Theory has also used a concession/wholesale led approach abroad, selling in major department stores around the world. Theory’s strengths include premium fit and fabric quality, a successful menswear line, and their signature “stretch” fit and ‘Theory pant’ which have both developed cult status. Theory also leverages social media effectively and has a charity project called ‘the Icon project’. Theory’s major competitive advantage over Whistle’s is its established brand awareness and image among American consumers, housing over 20 specialty stores in New York alone. The second major competitor in the US market environment is Vince, a Los Angelesbased brand launched in 2002. Vince has a highly edited collection of women’s knits and cashmere sweaters sold exclusively in department stores. It defines its aesthetic as “synonymous with a modern, timeless aesthetic and effortless sophistication.”30 Its product lines are considered everyday luxury essentials. Vince’s strengths include its popularity for basics among celebrities living in LA, its ability to create luxury basics that lastwell and sellwell, its

rapid expansion, and the current President, Karin Gregersen, who has experience with the well established luxury brands, Chloé and Givenchy. 31 The third major competitor in the US market environment is Reiss, a British brand founded in 1971, which has firmly established themselves in the US market. Reiss’s major strengths are its overall high brand awareness, global penetration, and celebrity following that includes members of the British Royal family and Hollywood stars.32 The final major competitor in the US market environment is Karen Millen, a United Kingdom based retailer with six standalone stores in the US. Karen Millen has historically been known for their party pieces and occasion wear, but throughout the 2014 fiscal year the brand has been trying to reinvent itself through “exclusive, wellmade contemporary pieces with longevity, [and] with designs aimed at women who want to tap into the zeitgeist without being slaves to trends.”33 A major strength of the company is its latest campaign, which was shot by the worldrenown fashion photographer, David Bailey, and styled by Katy England, who is famous for her work with Alexander McQueen and Topshop SWOT Analysis Strengths: 1) Highly successful creative and financial leadership, 2) High Quality Product and Design, 3) Upscale Brand, 4) Ability to deliver Internationally, 5) Stimulating Store Environment, 6) Worn by Kate Middleton and Olivia Palermo, 7) Association with Royalty, 8) Clothing for both sexes, 9) Menswear helping to build brand awareness, and 10) utilizes several social media outlets Weaknesses: 1) Small company, 2) Independent company, and 3) Lacking global/international presence Opportunities: 1) Associations and endorsements from celebrities and designers, 2) Expanding into other segments such as childrenswear, 3) Instore technology, 4) Continue partnerships with sustainable/green companies, and 5) Global expansion to increase awareness

Picker, L. (2013, November 22). Vince Surges in First U.S. Apparel IPO Since Michael Kors. reiss.com 33 metro.co.uk . 32

Threats: 1) Growing competitive environment with companies that offer similar products, 2) rapidly changing fashion trends, 3) Rising production costs, and 4) There are cheaper alternatives

Competitive Positioning For the uppermiddle class, young, female professional, Whistles is a trendy midmarket luxury brand, which offers the best quality and design at its price point, because of its directional, timeless and modern aesthetic that is classically associated with contemporary designers such as Celine. Based on our customer value map (Appendix A2), Whistles offers great quality of craftsmanship, design aesthetic and product quality relative to price, with its major threat being the success of Theory in the US market, offering a similar pricing structure and aesthetic. Our customer has a disposable income for special pieces to build into their wardrobe, which helps differentiate us from many of our competitors who offer luxurious basics. As Shepardson stated “When money is tight, it pays to buy quality clothes that are classic enough to last a few seasons, but are utterly special and desirable.”34 In the multidimensional space of the US retail market, Whistles is positioning itself as an answer to the cheaplux gap that developed during the economic recession, polarizing the market primarily into highend luxury and lowend fast fashion. Whistles is on the ‘top rung of the high street ladder’ or the alternative to designer labels at a better price point. Whistles aesthetics is relevant to the general shift from traditional Americana midmarket brands, such as Ralph Lauren, J.Crew, and Banana Republic, towards to trendier, more ‘highfashion’ appeal in the US. The brand’s personality can be described as a “slightly pareddown, quite minimal, and unfussy…[look with an] effortless, sporty feel to it.”35 It embodies the confident coolgirl who isn’t trying too hard.

Crisell, H. (2014, May 19). Meet Jane Shepherdson, the Woman Behind Whistles’ Cult Following. New York Magazine Ibid.

34 35

Whistles has communicated this unique value in the minds of consumers through activities such as participating in London Fashion Week and creating freestanding stores in trendy regions that contain contemporary designer labels, such as Dover Street in London.36 The company’s CEO, Jane Shepherdson, is the driving force behind the brands positioning. Shepardson believes that most brands “look at history way too much..[which] leads [them] into dilution of their creative core.”37 In order to remain relevant Shepardson believes brands “have to kind of ignore [history] and identify what's new, what's the exciting thing”38 to succeed in such an innovative and trendseeking market. Conclusion Proposed Strategy and Objectives Strategic Statement: Our overall strategy for Whistles is to develop a new market for our existing womenswear line. This means that we will continue to target our European uppermiddle class segment, but add the US upper middle class as another segment in our strategy. We must be prepared to respond to different external factors such as taste/preferences in our US segment differently than in our British segment. We also need to consider our supply chain in this strategy. We plan to maintain our vertical integration and humane and sustainable product development as best as possible. Objectives: Our primary objectives are to build brand awareness and positioning within this segment and maximize profits in our first year of targeting the US uppermiddle class. We hope to achieve aided brand awareness in the first year so that our target market will recognize Whistles among our competitors. We must also focus on longterm sustainability of our sales and profits. Since we are entering a welldeveloped market with existing products, we can estimate the cost and demand functions for our products and markets.39 We can then price to best

Alexander, E. (2014, January 17). Whistles Receives Official LFW Welcome. Vogue (United Kingdom) . Indvik, L. How Whistles Reemerged As One Of The Most Exciting Brands in Fashion. Fashionista . (2014, May 22) 38 Ibid. 39 Mooradian, Matzler, and Ring. “Chapter 33: Pricing Strategies.” Strategic Marketing . (pg. 288). 36 37

maximize our US profits. Overall, we aim to build on the growth of the midmarket apparel industry in the United States and maintain our current European sales to maximize profit.

References Alexander, E. (2014, January 17). Whistles Receives Official LFW Welcome. Vogue (United Kingdom) . Retrieved from: http://www.vogue.co.uk/news/2014/1/17/whistlesjoinslondonfashionweekschedule AddThis Smart Layers: Personalizing the Web. (2013, March 13). Retrieved October 2, 2014, from http://buxtonco.com/stateoftheapparelindustrypart1/ ASPIRING CONTEMPORARIES. (2014, January 1). Retrieved October 2, 2014, from http://www.experian.com/smallbusiness/uppermiddleclassmarketing.jsp Carmichael, M. (2012, March 19). The Demographics of Retail | Ad Age Stat Advertising Age. Retrieved October 1, 2014, from http://adage.com/article/adagestat/demographicsretail/233399/ Clothing, Shoes & Apparel | Statista. (n.d.). Retrieved October 4, 2014, from http://www.statista.com/markets/415/topic/466/clothingapparel/ Crisell, H. (2014, May 19). Meet Jane Shepherdson, the Woman Behind Whistles’ Cult Following. New York Magazine . Retrieved from http://nymag.com/thecut/2014/05/meetthewomanbehindwhistlescultfollowing.html Dacre, K. (2013, October 29). The Rise of High End Street: Zara, Whistles, and Cos Pioneer a New Age For Our High Street. Retrieved October 8, 2014, from http://www.standard.co.uk/fashion/theriseofthehighendstreetzarawhistlesandcosp ioneeranewageforourhighstreet8910655.html Gustafson, K. (2013, December 13). Middle Class Buying Luxury Again But At a Bargain.

Retrieved October 3, 2014, from http://www.cnbc.com/id/101262672# . Indvik, L. (2014, May 22). How Whistles Reemerged As One Of The Most Exciting Contemporary Brands in Fashion. Fashionista . Retrieved from http://fashionista.com/2014/05/whistlesceojaneshepherdson Karen Millen is changing direction and is leaving occasion wear behind. (2014, April 15). Retrieved October 4, 2014. Keller, C. Magnus, K.H., Hedrich, S., Nava, P., Tochtermann, T. (2014, September 1). Succeeding in tomorrow’s global fashion market. McKinsey& Company . Retrieved from http://www.mckinseyonmarketingandsales.com/succeedingintomorrowsglobalfashion market Kochhar, R. (2014, January 27). Despite recovery, fewer Americans identify as middle class. Retrieved October 8, 2014, from http://www.pewresearch.org/facttank/2014/01/27/despiterecoveryfeweramericanside ntifyasmiddleclass/ Massey, W. (2014, July 25). Did you know...that Whistles has reported its first profit since the 2008 management buyin?. RetailWeek. Retrieved from http://www.retailweek.com/cityandfinance/retailweekknowledgebank/didyouknow thatwhistleshasreporteditsfirstprofitsincethe2008managementbuyin/5062560.a rticle Merrick, A. (2014, February 6). Where the Middle Class Shops The New Yorker. Retrieved October 3, 2014, from http://www.newyorker.com/business/currency/wherethemiddleclassshops Mid market and eco retailers see growth. (2011, April 12). Retrieved October 8, 2014, from

http://www.fashionunited.co.uk/fashionnews/fashion/midmarketandecoretailersseeg rowth2011041211734 Miller, K., & Madland, D. (2014, September 16). What the New Census Data Show About the Continuing Struggles of the Middle Class. Retrieved October 8, 2014, from http://www.americanprogress.org/issues/economy/news/2014/09/16/97203/whatthenew censusdatashowaboutthecontinuingstrugglesofthemiddleclass/ Mooradian, T.A., Matzler, K., Ring, L.J. (2012). Strategic Marketing . Williamsburg, VA: Good Dog Publishing. Neuville, J. (2011, October 10). The French Contemporary Wave That’s Reshaping ReadytoWear. Business of Fashion. Retrieved from http://www.businessoffashion.com/2011/10/thefrenchcontemporarywavethatsreshapi ngreadytowear.html Picker, L. (2013, November 22). Vince Surges in First U.S. Apparel IPO Since Michael Kors. Bloomberg Businessweek. Retrieved from http://www.bloomberg.com/news/20131122/vincesurgesafter200millionfashionipo pricedaboverange.html PRIZM. (n.d.). Retrieved October 8, 2014, from http://www.claritas.com/MyBestSegments/Default.jsp?ID=20# Ranchhod, A. (2004). Strategic Marketing in Practice . Oxford. Remy, N., Schmidt, J., Werner, C., & Lu, M. (n.d.). Unleashing Fashion Growth City by City. Rugaber, C. (2014, April 2). More Americans see middle class status slipping. Retrieved October 8, 2014, from http://www.usatoday.com/story/money/personalfinance/2014/04/02/moreamericanssee middleclassstatusslipping/7220635/

Soller, K. (2013, November 22). The Anonymous Fashion Line That's Cleaning Up on Wall Street. Retrieved October 4, 2014. Tarkhnishvili, A . (2013). Middle Class: For itself and for the others. Science Journal of Sociology and Anthropology, 2013 . Retrieved October 3, 2014. Williams, G. (2014, April 24). What It Means to Be Middle Class Today. Retrieved October 8, 2014, from http://money.usnews.com/money/personalfinance/articles/2014/04/24/whatitmeansto bemiddleclasstoday United States Census Bureau. (2012, January 1). (State and County Quickfacts)Retrieved October 8, 2014, from http://quickfacts.census.gov/qfd/states/00000.html (2014). Inside Theory. Theory. Retrieved from http://www.theory.com/Inside_Theory/Inside_Theory,default,pg.html (2014). Our Story. Vince . Retrieved from http://www.vince.com/aboutus/page/aboutus (2014). About us. Karen Millen . Retrieved from http://us.karenmillen.com/info/About_20Us?subtab=corporateinformation#Corporatesoc ialresponsibility

Appendix A1:

A2: Product Lifecycle

A3: Customer Value Analysis Product: Women’s Apparel Date: October 8, 2014 Market Segment: U.S. Uppermiddle class Competitors

Theory

Vince

Reiss

Karen Millen

Buying Criteria Quality

Importance

(nonprice) Attributes

Weights

Quality of Material

15%

Craftsmanship

30%

Customer Service

30%

Online Presence

15%

Ethical Manufacturing

10%

Sum of Importance Weights: 100% Performance (010) Us

Competitor

Whistles

Theory

Vince

Reiss

Karen Millen

4.0

5.0

4.0

2.0

4.0

5.0

3.0

1.0

2.0

5.0

4.0

5.0

4.0

3.0

5.0

Quality Scores:

4.4

4.1

3.05

3.35

$1,500.00

$935.00

$850.00

Price : $900.00

$995.00

Price Sensitivity: Weight on Quality vs. Price

Quality

50%

Price

50%

Sum

100%

Computing Relative Price Relative

Competitor

Whistles

Theory

Competitor

Reiss

Karen

Price = (Price X/Avg Price):

Vince

Millen

0.87

0.96

1.45

0.90

0.82

Competitor

Competitor Competitor

Computing Relative Quality Relative

Competitor

Quality = (Quality Score X/Avg Quality):

Whistles

Theory

Vince

Reiss

Karen Millen

1.11

1.26

1.03

0.77

0.84

A4: Customer Value Map

A5: Importance Performance Analysis