Celenia Arroyo, Brandon Dye, Alyssa Orozco, Lareka Reed & Kassandra Vitogiannis
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Table of Contents About Tiffany & Co. ______________________________________________ 3 Tiffany & Co. Product History_____________________________________ 4 Financial Report__________________________________________________ 5 Product Life Cycle______________________________________________ 56 Brand Positioning and Marketing Strategy________________________ 67 Consumer Demographics_____________________________________________ 7 The Jewelry Industry____________________________________________ 89 Overview of Competitors (Zales, Blue Nile, Sterling Jewelers)___911 Competitor’s Marketing and Advertising_________________________1112 Sales and Growth of Tiffany____________________________________1316 Bibliography_____________________________________________________ 18
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About Tiffany and Co. Tiffany & Co. has a strong brand identity that gives consumers the luxury brand perception of Tiffany’s products. Tiffany & Co is known for their extraordinary design in the products, the impeccable craftsmanship of their jewelry, and the professional customer service that customers experience. They adhere to a social and economical responsibility when obtaining metals and crafting their jewelry.
SWOT Analysis
Strengths Brand loyalty Quality products Brand recognition Domestically made Innovators Environmentally friendly
Weaknesses Expensive Pricing Lack of media advertising No sales promotion Limited stores
Opportunities International expansion New product lines New markets Increase product awareness Celebrity endorsements
Threats Economic state Price competition Counterfeits Raw materials cost
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Looking at Tiffany & Co’s five year history on the stock market, we can immediately recognize the drop in the price of shares in 2009 due to the recession. After the recession, the company’s stock has slowly been increasing with minor drawbacks. For the most part, there is an upward growth that looks and is predicted to continue to grow. Below is five year history of the stock's value according to Yahoo! Finance. Tiffany’s Financial Report
Within the past five years, due to the recession in 2009, the net income was the lowest in 2009 and 2010. After 2010, the revenue and net income started to rise for Tiffany & Co.
Product Life Cycle The product life cycle determines the state of a company or product. The cycle includes four stages: introduction,
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growth, maturity and decline. Tiffany & Co as a whole company is in its maturity phase. The company has been around for a long time, and today it is a wellknown brand. In addition, the imagery that has been created of the little blue box has placed it in the maturity phase. Sales are pretty consistent. Below is a diagram showing the different phases companies go through. Hopefully Tiffany & Co continues to remain in the maturity phase and avoid the decline.
Brand Positioning and Marketing Strategy Tiffany is positioned as a global prestige brand. Two of Tiffany’s top competitors are Blue Nile Inc. and Zale Corporation. Primary advertising is done through the newspaper and magazine ads and also digital media advertisements. In 2011 Tiffany’s spent $234,050,000(6.4% of net sales)on worldwide advertising. Here are some examples of Tiffany’s print ads: 7
Consumer Demographics and Psychographics The demographics of Tiffany’s market include people with a middle to higher income. The majority of their products are designed for women, but they do sell men’s products such as watches and leather goods. Many celebrities are associated with wearing Tiffany’s jewelry to promote and market Tiffany products as luxury. The psychographics of Tiffany’s customers include people who desire high quality jewelry and want to associate themselves with the brand name. Consumers also desire other brand name accessories or apparel. The higher class customers may purchase their products more frequently while middle income customers may purchase products once or twice for a special occasion. People that shop at Tiffany’s may live in expensive areas and follow other fashion trends. Tiffany’s customers shop at other luxury retail stores to buy brand name 8
clothing or other accessories.
Jewelry Industry Major US companies include Sterling Jewelers, Tiffany & Co and Zales Corp. Jewelry store’s customer base are those with a discretionary income. The jewelry industry’s profits are dependent on marketing and product placement. The interesting part of the industry is that small jewelry stores can compete with the larger chains. The prices of jewelry are inelastic because there is no dramatic change in purchasing. The industry is broken down: the fifty largest companies generate about forty percent of the revenue. Number of Retail Stores in Thousands
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In comparison to other competitors, as of 2009, Zales ranks the highest in the number of retail stores in the jewelry industry. With Tiffany & Co., ranks eighth.
Among the major companies in the jewelry industry, Blue Nile Inc., Tiffany & Co., Zales Corp., and Sterling Jewelers Inc., the graph below compares each of the companies revenues.
Zales Corporation Zales Corporation is another leading jewelry store in 10
America. The public company was founded in Texas in 1924. The stores under the corporation are Zales and Gordon’s, Zales Outlet, People and Mappins and Piercing Pagoda. According to Bloomberg, their earnings for 2012 were 1.9 Billion USD. Zales has a wide variety of customers due their multiple stores that can appeal to a range of customers. These stores cover every major jewelry category that targets both men and women. Consumers can visit these stores in the majority of shopping centers. They also provide kiosks to offer jewelry at entry level price points. Zales offers many discounts that range from 20%70% off to accommodate customer demand regardless of their income or the economy.
Blue Nile Blue Nile has grown since 1999 to become the largest online retailer of certified diamonds and fine jewelry. Blue Nile’s main product is their engagement rings. Their high quality diamonds are certified by independent grading labs. Customers are allowed to customize their jewelry as well as educate themselves about jewelry and the process of purchasing their own diamonds. Blue Nile’s revenue in 2012, was $388.15 million according to Gale Business Insights.
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Blue Nile’s customers are primarily men seeking to buy an engagement ring. Women are also drawn to the website for other jewelry that they sell such as necklaces and earrings. The company is known for customized jewelry at a lower price than what retailers will sell. Blue Nile encourages customers to purchase by offering free shipping, gift wrapping, Blue Nile credit card, and insurance if the jewelry is lost, stolen, or broken. For those who need more information, the website provides plenty of information for first time shoppers.
Sterling Jewelers Sterling Jewelers is an American specialty jewelry store. It is the largest specialty fine jewelry company in the United States by sales. The company operates chains of fine jewelry store with about 1,300 stores according to the previous chart. The store brands under the company are Kay Jewelers, Jared, J.B. Robinson, Osterman, Belden, Friedlander, Goodman, LeRoys, Marks & Morgan, Rogers, Shaws, Weisfield and Ultra Diamonds. According to Yahoo! Finance, the earning for 2011 were $2,744.20 million. Since Sterling Jewelers has many brands, they are able to reach a wide variety of consumers to target every demographic
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and psychographic. Their retail stores are located in the majority of shopping centers to reach out to their customers more easily. They carry both men’s and women’s jewelry that cover every category. Each store’s prices vary as well as each store’s products, which can cover different levels of income families that can satisfy their wants.
Competitors Marketing and Advertising Strategies As stated above Zales, one of Tiffany’s biggest competitors, stays competitive by the the visual marketing and the use of media outlets in print advertising as shown previously. As with Tiffany, promotional and marketing strategy are shown with in store displays, sponsorship airplanes customer experience, print, and the symbol of the blue box. This is largely due to the very fine and upscale brand of opulence and prestige. The Zales brand capitalize on television and print advertising. This most common form of marketing allows them to highlight their strengths and their brand identity of fine jewelry and competitive price. As the other fine jewelry competitors have a very similar strategy to Tiffany’s, Zales is one of the only brands to utilize media advertisements, such as television, and even price promotions.
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Zales offers coupons, price rollbacks and price matching. Like Zales, Sterling Jewelers have a similar strategy when it comes to companies like Kay Jewelers and Jared. They focus on television advertisements that highlights their fine jewelry while offering their promotions. On companies websites for Zales and Sterling, their homepage consists of seasonal discounts for jewelry that can be given for the holidays or any special occasion. These companies spend a great amount on promotional advertisements that highlight their seasonal merchandise to be purchased for themselves or as gifts. As for Blue Nile Inc., most of their sales promotions are offered online on their website. The incentives that Blue Nile has for customers includes free shipping and lifetime warranty with a purchase of their products.
Sales of Tiffany/Growth Tiffany & Company is labeled a holding company because it functions through its subsidiary companies (the "Company"). Tiffany & Company is considered the company's chief 14
subsidiary. Tiffany & Company is a subject retailer and jeweler. Tiffany & Company merchandise chain includes an endless selection of jewelry (91% net sales in fiscal 2011), as well as china, sterling silverware, timepieces, crystal, stationery, fragrances and accessories. The Company is involved with product design, manufacturing and retailing activities, through Tiffany and Company and other subsidiaries. Citation:(http://investor.tiffany.com/index.cfm) Tiffany was established by Charles Lewis Tiffany in 1837 when he opened the first store in downtown Manhattan. Tiffany has come full circle; more than 250 Tiffany & CO. stores and boutiques provide jewelry around the universe. The Company has a variety of operating sections. The first operating section is the Americas section (50% of fiscal 2011 sales) which consists of sales managed in TIFFANY & CO. stores in the USA, Mexico, Canada, and Brazil. The sales of Tiffany and Co. products through an assortment of markets such as internet, catalog, businesstobusiness, and wholesales operations also drop into the 50%. Citation: (http://investor.tiffany.com/index.cfm) The next functioning section is the Asia Pacific region (21% of fiscal 2011 sales) consists of sales transacted in
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Tiffany & CO locations in Australia, China, Hong Kong, Korea, Macau, Malaysia, Singapore and Taiwan, as well as sales of TIFFANY & CO. products in certain of those markets through Internet, and general procedures; Japan (17% of fiscal 2011 sales) consists of sales transacted in Japanese department stores and in selfsupporting stores, as well as sales of TIFFANY & CO. products all the way through internet, businesstobusiness and wholesale operations; and Europe (12% of fiscal 2011 sales) consists of sales handled in TIFFANY & CO. stores in Austria, Belgium, France, Germany, Ireland, Italy, The Netherlands, Spain, Switzerland, and the United Kingdom, as well as sales of TIFFANY & CO. products in certain of those markets through Internet, and extensive operations. Citation: (http://investor.tiffany.com/index.cfm) Other (1% of fiscal 2011 sales) consist mainly of wholesale sales of TIFFANY & CO. products to selfgoverning distributors for resale in particular promising markets (such as the Middle East and Russia) and wholesale sales of diamonds obtained through bulk purchases that are subsequently deemed not suitable for Tiffany's needs, as well as earnings expected from licensing agreements. Citation: (http://investor.tiffany.com/index.cfm)
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“The Company's key growth strategies are: to selectively expand its channels of distribution in important markets around the world without compromising the longterm value of the TIFFANY & CO. trademark; to increase sales in existing stores by developing new products; to increase its control over product supply and achieve improved profit margins through direct diamond sourcing and internal jewelry manufacturing; to enhance customer awareness through marketing and public relations programs; and to provide customer service that ensures a superior shopping experience. The Company's shares are traded on The New York Stock Exchange with the symbol TIF. Headquartered in New York, Tiffany has more than 9,000 employees around the world.” Citation: (http://investor.tiffany.com/index.cfm)
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This graph (pictured above) shows the increase of Tiffany’s Dividends Issued from 19972013.
Financial Highlights
This chart (pictured above) shows Tiffany’s increase of financial components from 2010 to 2011.
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This chart (pictured above) shows Tiffany’s increase of financial components from 2008 to 2009.
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Bibliography Blue Nile Inc. SWOT Analysis. Dec 2012. Business Source Complete. Web. 10 Mar. 2013. "Jewelry Stores." Gale Business Insights: Global Collection. Gale, Cengage Learning, 2012. Business Insights: Global. Web. 11 Mar. 2013. "S&P Picks And Pans: Home Depot, Tiffany, Leap, Watson Pharma." Businessweek Online (2007): 19. Business Source Complete. Web. 10 Mar. 2013. Rep. N.p.: n.p., n.d. Web. <http://viewer.zmags.com/publication/a0b9bb3c#/a0b9bb3c/16> "Tiffany & Co. SWOT Analysis." Tiffany & Co. SWOT Analysis (2013): 18. Business Source Complete. Web. 10 Mar. 2013. "Top Jewelry Chains in North America, 2009." Market Share Reporter. Ed. Robert S. Lazich and Virgil L. Burton, III. 2012 ed. Detroit: Gale, 2012. Business Insights: Global. Web. 9 Mar. 2013. Zale Corporation SWOT Analysis. Mar 2012, p17. 7p. Business Source Complete. Web. 10 March 2013.
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