MA Final Project
IMC Plan: Prada Restaurant
Savannah Collage of Art and Design Luxury and Fashion Management
Chuhao Zhou
“Careful observation and interest in the world, society, and culture are at the core of Prada’s creativity and modernity. This has pushed Prada beyond the physical limitations of boutiques and showrooms, leading us to interact with diverse, seemingly distant worlds, and introduce, very naturally, a new way of creating fashion.” ------ Miuccia Prada and Patrizio Bertelli
Table of Content 1.0 Executive Summary 2.0 Introduction 3.0 Company Overview 3.0.1Company History 3.0.2 Financials 3.0.3 Prada’s Current Situation in the Chinese Market 3.0.4 Company Future Outlook 4.0 Situation Analysis (Secondary Research) 4.0.1 China PESTLE Analysis 4.0.2 Market Overview 4.0.3 SWOT analysis 4.0.4 Competitor analysis 5.0 Primary Research 5.0.1 Research Goals 5.0.2 Research Design 5.0.3 Research Analysis 6.0 Target Consumer Identification 6.0.1 Demographic Segmentation 6.0.2 Behavior Segmentation 6.0.3 Lifestyle Segmentation 6.0.4 Target Consumer Profile
7.0 Restaurant Overview 7.0.1 Mission & Vision Statement 7.0.2 Restaurant Business Model 8.0 Marketing Strategy 8.0.1 Strategy Goal & Objective 8.0.2 Place Strategy 8.0.3 Product Strategy 8.0.4 Price Strategy 9.0 Media & Promotion Strategy 9.0.1 Media & Promotion Strategy Goal & Objective 9.0.2 Media & Promotion Strategy Overview 9.0.3 Media & Promotion Strategy 9.0.4 Media Ideation 9.0.5 Activity Map 10.0 Budget 11.0 Conclusion 12.0 Bibliography 13.0 Appendix
1.0 Executive Summary
This project is to promote Prada’s first full-service restaurant, Mario 1913, to the Chinese market in Shanghai. This promotion includes creating an Integrated Marketing Communication Plan for Mario 1913 based on the secondary and primary research to identify Prada’s current market situation and consumers’ behavior and attitudes. Prada is an Italian-based luxury brand with a long history; their core values are innovation, excellent quality and Italian aesthetic heritage, so the restaurant is based on values. In addition, China is the biggest market for Prada; however, its losing popularity with discerning Chinese consumers because they expect exception quality in Italian heritage. Food is very important for Chinese, so there is an opportunity to help Prada gain success in the competitive market. According to the primary research, the Chinese target consumer prefers social networking and is influenced by western culture. This is a positive for Prada’s restaurant business as social media is the most important section of the strategy to promote Prada’s restaurant business and help consumers to better understand Prada. In addition, the excellent quality of food, service and the dining environment communicates Prada’s core values and aims to Chinese consumers.
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2.0 Introduction
The luxury and fashion industry is becoming more and more diversified and competitive, and consumers' tastes have become more selective. With globalization, the Internet and social media are becoming more and more developed and affecting more consumers because it’s easier to get more information and news. Therefore, consumers require more than simple marketing tools in order to enjoy the shopping experience. More and more brands as a result are beginning to diversify their sales tools to attract consumers to improve their brand image and consumer preference. A trend that has become popular for luxury and fashion brands is to extend into the restaurant business. Luxury brands and companies such as Gucci, Chanel, Dior, LVMH Group, Hermes, Bulgari, Ralph Lauren, and Shanghai Tang have all opened a cafÊ or restaurant in the global market. Prada is known as one of the first luxury and fashion brands that Chinese consumers recognize. In their mind, Prada, Louis Vuitton, and Gucci are the three most classic luxury brands. However, in a competitive market, Prada's popularity has decreased for Chinese consumers. In consideration of other opportunities for Prada, the restaurant experience is very important for the Chinese, and a popular trend for a luxury brand is to open a restaurant. Opening a restaurant will allow Prada to gain more brand awareness in the market. This project will develop a new strategy for Prada by opening a new restaurant called Mario 1913.
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The restaurant is created based on Prada’s history. Prada was founded in 1913 by Mario Prada, so the name Mario 1913 combines the two important elements together to give to the name to Prada’s restaurant. In addition, the new restaurant will open in Shanghai, China, located on the fourth floor of Prada’s flagship store located in a shopping mall in the busiest district, Jinan. The restaurant aims to provide Prada’s customers innovative Italian food with excellent service in a state of the art dinning environment.
* Prada’s flagship store located in Shanghai
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Consumers have become more and more sophisticated and conscientious, making it difficult for brands to maintain popularity and brand preference in the Chinese market. Chinese consumers are one of the strongest luxury consumption groups in the market; therefore, securing their brand preference can help the brand earn more profits. According to the report “Luxury Goods Worldwide Market Study” of Bain Company (year), the global luxury market surpassed Euro 1 trillion in retail sales value in 2015, with Chinese consumers playing a primary role in the growth of luxury spending worldwide. They account for the largest portion of global purchases (31%). In addition, Chinese consumers’ critical attitude is reflected not only in the purchase of luxury goods but also a diversified experience. With an emerging middle class and young generation that have become more and more active, consumers are beginning to look for a different experience, especially in food and beverage, furniture, and travel. A Goldman Sachs report from 2015 found that China used half of all expenditures on food and clothing (Five Retail Priorities: China 2016 WGSN). For the Chinese, food is as important as a god to people. Prada can leverage this value by creating an exceptional experience. The goal of this project is to help get more consumers to shift their preference to Prada, consolidate the relationship between Prada and consumers, bring a more diversified brand experience to discerning consumers, create more excitement for the brand through the Prada cafe shop and Mario 1913, and, finally, to increase Prada’s sales and enhance competitiveness in the Chinese market.
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3.0 Company Overview
3.0.1 Company History Prada was founded in 1913 by Mario Prada, Miuccia Prada's grandfather, in Milan. Located in the prestigious Galleria Vittorio Emanuele II, Prada’s first store was an exclusive and stylish store, selling luggage, accessories and luxury goods with fine materials and sophisticated workmanship (Prada official website). The Prada brand has become one of the most prestigious and widely-recognized brands in the fashion and luxury industries. Also, Prada represents the best of creativity and the Italian manufacturing tradition, sophisticated style and uncompromising quality (Prada Annual Report 2014). Prada is a famous brand with a long history. In its nearly century of development, Prada became a world-renowned brand through commitment to creativity and innovation. The distinctive features of Prada are of unequalled quality, creativity and exclusivity. These are very famous in the luxury and fashion market. Prada’s products include leather goods, apparel, shoes, accessories, jewelry, sunglasses, fragrance and so on. The leather goods are the signature product for Prada, especially the Tessuto Nylon and Saffiano bag. Also, the Group operates 594 DOS, 35 franchise operated stores and a network of selected, high-end multi-brand stores and luxury department stores in 70 countries (Prada Annual Report 2014).
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In 1919, Prada became an official supplier to the Italian Royal Family. Over the years, Prada has become more popular, reaching a turning point at the end of the seventies when Miuccia Prada (Mario Prada’s granddaughter) launched a partnership with Patrizio Bertelli. This partnership combined creativity and business ideas to improve Prada’s business in its international expansion. In 1977, Patrizio Bertelli set up IPI spa to consolidate their production resources. From 1983 to 1986, Prada opened a second store in the prestigious Via della Spiga in Milan. The new store showed the brand image as modern and innovative; then, it opened new stores followed by New York, Madrid, London, Paris and Tokyo.
* Prada Store
Meanwhile, the first apparel collection presented and introduced the first footwear collection in Milan in 1988. In 1993, Prada made its debut in the men’s segment. At the same time, Prada created “Milano Prada Arte,” which soon became “Fondazione Prada”; the purpose was to gather “the most challenging mental provocations of our time” in art, architecture, cinema, philosophy and culture in general. In 1997, the leisure line was launched with the distinctive “Red Line” on the product. From 1999 to 2001, the company purchased the shoe brands Church’s and Car Shoes. Then, Prada entered into a licensing agreement with the Italian eyewear manufacturer Luxottica, the leader in the eyewear in the industry, which they renewed in 2012. The Prada e-store first went online in 2010. In the following year, 20% of the share capital of Prada spa was successfully placed on the Main Board of the Hong Kong Stock Exchange. Most recently, Prada purchased the famous Italia pastry shop,Pasticceria Marchesi, in 2014. * Pasticceria Marchesi 14
3.0.2 Financials The market value of Prada in 22 Jan. 2016 USD 61,962.4 million (Reference USA). According to the Prada 2015 Financial Report, the net revenues for the first six months of FY 2015 amounted to Euro 1,824.4 million, up by 4.2% compared to the same period last year at current exchange rates and down by 5.9% at constant exchange rates. In addition, Prada released financial data for the first three quarters of fiscal year 2015 (9 months ended October 31): Prada’s stock price has fallen by 1.5% in May 12, 2016 (Yahoo). Also, the total sales of Euro 2.58 billion, based on unchanged exchange rates, increased 1.2% compared to last year. Net profit was Euro 235 million, falling by 26.4% compared to 2014. Because the costs of expanding retail channels increased, Prada's net profit margin decreased over the same period with 9.1% in the third quarter (Prada Financial Report 2016 Q1).
According to sales channel To consider the sales channel in the first three quarters in 2015, the total sale of the wholesale channel was Euro 296 million, down 15.9% in constant exchange rates. Because the group adjusted the strategy to reduce the size of the wholesale channel, the wholesale channel sales occupied in the total sales dropped to 12% from 14% in the same period in 2014. The total sales for retail channels rose to Euro 2.25 billion, and the constant exchange rates rose 3.8% .
Prada Total Sales by Sales Channel wholesale channel sales
retail channels
12%
88% * Prada Total Sales by Sales Channel in 2015
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According to the market Europe is the biggest market followed by China and the US. In the first three quarters in 2015, the newest data shows that sales of Euro 816 million in Europe rose 7.6% in the constant exchange rates; based on the current exchange, rates rose 8.6%. While the Euro weakness drove visitor growth in consumption, the number of Asian visitors increased significantly. Also, Italy showed strong market performance with a growth rate higher than the other countries in Europe. The Japanese market showed positive growth, reaching sales of Euro 284 million and increasing the constant exchange rate to 4.6%. Sales grew by 10.4% in the current exchange rates. The other markets, such as the Asia-Pacific region, continually showed a weak trend; the sales were Euro 784 million, also decreasing 4.6% in the current exchange rates. The unchanged exchange rates went down 18%. In addition, the Greater China sales of Euro 516 million decreased by 9%, and constant exchange rates dropped 24%. Factors that affected the Asia-Pacific market are decline in local consumption and the number of visitors in Asia-Pacific countries, the Chinese government’s fight against corruption and waste, and Hong Kong’s political unrest. Based on the current exchange rates, US market sales increased 8.5% with Euro 294 million, but decreased 7.6% in a constant exchange rate. The strength of the USD had an enormous impact on the number of local tourists, especially tourists from China and South America. But for the United States, tourist spending in Europe had a positive impact. Prada Net sales by Geographical Area in 2015
Prada Net Sales by Geographical Area Middle East 3% Japan 11%
Italy 16%
The Greater China 19%
Aisa Pacific Except The Greater China 15%
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Europe 21%
Americas 15%
* Prada Net sales by Geographical Area in 2015
According to the product category Sales of shoes showed a positive trend and rose 24% in 2015, and constant exchange rates rose 13%. This footwear product maintained double-digit growth for the sixth consecutive quarter. Apparel sales rose 6%, and constant exchange rates went down 3% of the total sales in 2015. Leather products is the biggest product sales category with sales of Euro 429 million fell 9%, and constant exchange rates fell 13%; the total sales ratio fell from 65% in the same period last year to 61%. Prada Net Sales by Product Line in 2015
Prada Net Sales by Product Line Other 2%
Footwear 21%
Clothing 16%
Leather Goods 61%
* Prada Net sales by Product Line in 2015
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3.0.3 Prada Current Situation in the Chinese Market China is one of the biggest purchasing markets for Prada. The current situation in China follows: • Brand share: 2.1 in the Chinese market (Euromonitor) • Stores in China: 55 (2016) • Store in Shanghai:6 (2016) • Price Range (Leather Goods): USD 1030- USD 5090 • Average Price: USD 3060 Because of the Chinese government’s fight against governmental and personnel corruption and waste, the Chinese luxury consumers who shop overseas affected the Chinese luxury market and spread to Prada; therefore, the Greater China region total sales fell from 26% to 23%, and the net sale of the Greater China increased 3.4% from 29.5% to 32.9% from 2010 to 2011. From 2013 to 2015, the net sales continually decreased from 23.2% to 19.3% with Euro 384.5 million; the Greater China region recorded net sales for Euro 384.5 million, down by 1.2% as reported and down by 19.3% at constant exchange rates (Prada 2015 Interim Report). Prada Net Sales in The Greater China 2010-2015 35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2010
2011
2012
2013
2014
* Prada Net sales in the Greater China in 2015 18
2015
Prada launched its official website in China and also provides E-mail service to send news, new products, events and so on to consumers who resisted buying Prada goods through its official website. Prada also opened social media accounts on Weibo and Wechat to share the information to consumers and posted videos through Youku. It also shares video links on Weibo and Wechat.
Weibo: Followers: 64822 Posts:52 Youku: Total views:3,333 Followers: 19 Posts:22
However, in this competitive market, Prada has had some problems. Since 2011, Prada’s factories in Dong Guan, Wen Zhou, and Hang Zhou attracted the attention of the public when it was made apparent that their products and brand heritage lacked the quality of that produced in Milan, which affected Prada's good quality and authentic Italian descent in the minds of Chinese consumers (Finance Sina). This has affected Prada’s brand awareness and preference.
3.0.4 Company Future Outlook According to Prada CEO Patrizio Bertelli, the company will enhance future communication and interaction with its customers thorough technology and social media; at the beginning of 2015, all of the physical stores began providing WiFi services to help customers better understand the product. By doing this, Prada can in turn better understand customers’ shopping behaviors and habits. In addition, in regards to the product, the design will focus more on innovation, and price differentials will be reduced from 35% to 10-15% in the different regions of China to promote sales growth, especially between China and Europe. While Prada CFO Donatello Galli also thinks that Chinese sales have dropped, the company still feels confident that Chinese consumer consumption patterns may be changing, but the demand will not be reduced. Therefore, the Chinese market will be improved in the future. The company’s new strategy to reduce price differentials in China will encourage more Chinese consumers to make local purchases, which will help Prada’s sales profit growth. • Price range: USD 1030 – USD 5090 • Average price: USD 3060 19
4.0 Situation Analysis
4.0.1 China PESTLE Analysis Political Leadership in China is referred to as the Communist Party of China (CPC). The CPC is the largest political party in the world. It has ruled China for more than 60 years; it is still the only political party and has powerful influence. Meanwhile, China will continue to strengthen relations with most countries; for instance, many developing countries such as Nigeria keep China's currency as a reserve currency, reflecting China's importance in the global economy. The strong political system and stable relations between countries can help to boost economy, social systems, and so on, and the growing economy and stable social system can help maintain market health growth and affect Prada’s restaurant business environment. In addition, according to the Chinese customs office, in order to promote steady growth of China’s imports and exports, the Chinese government adjusted tariffs and implemented a new tax policy in 2016. The new adjustment includes food and beverage: the meat category import tax reduced from 45% to 25%; dessert from 40%50% to 30%-40%; and liquor tariffs with the highest adjustment from 90% to 65% (General Administration of Customers of the People’s Republic of China).
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Economy Strong economic fundamentals China's economic fundamentals are very strong, with the country registering strong economic growth over the past three decades. In February 2011, China was considered the world's second-largest economy beyond Japan and has since maintained its growth and development. China's accession to the World Trade Organization (WTO) and subsequent inflow from foreign direct investment (FDI) helps strengthen the economy. According to World Bank data, China's per capita GDP is raising. In 2014, China's per capita GDP was CNY 63.5 trillion ($7,595) compared to CNY 58.8 trillion ($6,995) in 2013. On January 19, 2016, the National Bureau of Statistics of China announced China’s GDP 2015 amounted to CNY 67.7 trillion, a 6.9% increase over the previous year. According to the International Monetary Fund (IMF), the forecast for global economic growth in 2016 will be lower than last year, and the forecast for China's growth will slowly increase over 2015 with 6.3% in 2016. This growth is mainly due to slow exports and falling labor supply, but China remains the world’s second largest economy (“Asian Development Outlook (ADO) 2016”).
* The World Bank: China's per capita GDP
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Services function as an engine of economic growth Growth in services is becoming an important pillar of China's economy. Agriculture, industry, and other services occupy a large part of China's economy at 50% in 2015. The chart in figure 8 shows that China's service industry's contribution to GDP has increased rapidly in the last 20 years. Service industries occupied total GDP from 31.54% to 50% from 1990 to 2015. In the future, the development of the service industry will gradually improve the service system to better meet consumer demand and contribute to further raising consumption and consumption on economic growth so as to further enhance power.
* Sector’s Contribution to GDP, 1990-2014 23
Shanghai economy As one of the most important financial centers in China, Shanghai’s total transaction volume for its financial markets (not including foreign exchange) reached over CNY 1,000 trillion in 2015 (Shanghai Profile). In 2013, the Pilot Free Trade Zone was established in Shanghai to improve economic growth and, more importantly, establish the city as a global financial center. Furthermore, the Shanghai Stock Exchange linked with the Hong Kong Stock Exchange, allowing citizens and companies of China to gain access to foreign stocks and securities. The Exchange has facilitated the flow of capital in both Chinese and global markets; also, it has strengthened the role of Shanghai as one of the major financial centers in the world. Shanghai’s GDP reached CNY 2.356 trillion in 2014, corresponding to a year-on-year growth of 7% and a 3.7% share of the GDP for China (Figure 7). Meanwhile, according to the National Bureau of Statistics of China, Shanghai’s GDP reached CNY 2.53 trillion in 2015 and ranks top in China’s City GDP Ranking.
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Disposable income per capita totaled CNY 31,306 (US$5,027) in 2015. In 2016, disposable income per capita will grow by 6.8% in real terms. During the period 2015-2030, total disposable income will increase by a cumulative value of 117% in real terms – growing at an average annual rate of 5.3%. In 2014, Shanghai urban household per capita disposable income stood at CNY 47,710, while per capita consumption expenditure was CNY 30,520; food was the major consumption item, though its share of consumers' spending was 34% in 2014. The increasing disposable income and consumption expenditures provide a good economic environment and positive situation for a Prada restaurant business. These consumers not only have the ability to pay, but are also willing to pay, economic position provides a good business environment to Prada.
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Social China is the most populous country in the world, having grown constantly through the 1990s with 1.37 billion people in 2015 and an increase of 110 million since 2000. However, population is declining at a steady pace. Because of China's family planning policy (one child policy), the young generation has begun to decline, reduced from 240.7 million in 2000 to 225.1 million in 2014. Only 187 million young people are expected in 2020. Compared to their parents, the living condition of the younger generation born after the family planning policy has improved; children grow up in a more open environment, and the educational environment is becoming better. So, they have an entirely different ideology: they pay more attention to self-realization and are looking forward to a higher level of demand. This is one of the most important reasons for them to purchase luxury goods. However, the rising cost of living, such as house prices and license plates, bring greater pressure to them. In addition, they also need to pay more for their parents and children. So, the generation also faces more pressure. On the other hand, a growing number of foreigners flock to Shanghai, bringing their western culture which constantly infiltrates Chinese society. In particular, western dining behaviors and concepts affect Chinese dinning culture, and dining experiences such as brunch and afternoon tea have entered the first-tier cities in China and are becoming popular. China's fast street breakfast culture ignores many "petty bourgeoisie" groups of people, bringing an opportunity for Prada to launch brunch during the weekend to win the niche market. Third, the Chinese restaurant industry shows staff shortages and high turnover in the industry because the younger generation has overtaken the generation from the 80s and is becoming the main force of the staff in China. The younger generations are more clearly more focused on their career development and requirements, and they pay more attention to working conditions and advancement opportunities, which cause high staff mobility in the catering industry.
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Technology The National Development and Reform Commission plans to give a fillip (or boost) to innovation by 2020. The government supports the promotion development of technology; it can improve the catering kitchen facilities and provide a more scientific and modern restaurant management system. Also, Internet services are growing. According to MarketLine, mobile penetration stood at 97.85 per 100 people in 2014 with the country having 1.33 billion mobile subscriptions. China's internetconnected population totaled 613.55 million at the end of 2013 with 45.1% of the population using the Internet.
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Mobile Internet and Smartphone's comprehensive development have not only greatly changed people's consumption patterns, but also influenced the development of the Chinese restaurant industry. Many Chinese technical companies are developing Internet applications to promote the development of the restaurant industry by combining online and offline as more restaurants cooperate with third-party websites or mobile applications to provide takeout service and reservation service. Some restaurants also offer a review site, which becomes an important reference to consumers when they choose restaurants. As they become more popular, mobile phones are changing the consumers’ shopping behavior and decisions. Also, mobile phones are becoming a new way to brand and communicate with customers. Meanwhile, China’s biggest mobile application platform, 360 Phone Assistant and other food related mobile applications, constantly launch new products and maintain high download volume, such as “Dazhong Dianping (Mass Review),” “Meituan Food Delivery,” and “Are You Hungry.” “Dazhong Dianping” had the highest average weekly download volume in 2015 with 2.3 million times per week installation volume, more than other category applications. The food mobile application is an extension of the restaurant business, where restaurants can describe menu items and post events. So, these applications have high user activity (Chinese Restaurant Industry Annual Report 2015). The Chinese government requires the self-censorship of local sites and has set up the Great Firewall (GFW); over 2,600 website are banned in China, including Facebook, You Tube, Twitter, Instagram and other popular social networking sites. Because Internet users in China cannot use these banned websites, local social media such as Wechat and Weibo are becoming more popular with Chinese consumers.
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Legal China’s new Food Safety Law has been amended and became effective from October 1, 2015. The content increased from 104 to 154 legal regulations, and the extent of the provisions and penalties are also stronger and deeper. The new law covers different areas, such as production, circulation, sales, etc. to include comprehensive supervision, and establishes the national food safety traceability system. It also added online shopping, baby food, health care products, genetically modified foods, additives and other new regulations in the different areas. The new law also established a stricter legal system. The new food safety law is improving supervision while creating a food safety market for environmental and consumer protection. Prada’s restaurant business also needs to pay more attention to food safety to provide excellent quality of food. In addition, the restaurant needs to obtain a lot of documents, including, hygienic permits, fire protection approval certificates, tax registration, business licenses, and so on, to allow restaurants to operate legally. Among them, the hygienic permit is the most important document of registration to assure key projects including store layout, kitchen, warehouses, etc. operate in accordance with the People's Republic of China Food Hygiene Law. In addition, the price of the food should be approved by the Price Bureau before operation, including menus, drinks, gross profit margins, etc. The restaurant can acquire its liquor license from the Administration for Industry and Commerce after obtaining its business license (SGS.Gov).
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Environment Environmental protection in China has been a basic national policy since the 1980s. In order to balance the pressure on natural resources caused by fast economic growth, development and urbanization, the state has implemented a “green strategy.� This includes increasing efficiency around resource usage, developing clean production techniques, reducing pollution costs in production processes and developing green consumption. It also includes reducing the ecological impact of consumption, developing new energy resources, reforming production methods, moving toward an ecological industrial civilization, and creating a balanced ecological environment. Because the restaurant industry will consume a lot of energy in the production process and produce a lot of pollution, it should pay more attention to the electricity and water usage and use other environmentally friendly technology equipment to reduce wasting of resources and environment pollution.
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4.0.2 Market Overview 4.0.2.1 Chinese Full - service Restaurant Market When looking for the Prada’s opportunity, it is a good way to open a restaurant in Shanghai, China. It is also a trend for luxury and fashion brands to attract more consumers and enhance the relationship between its customers and the brands. With consumers’ increasing investment in lifestyle experiences, more brands are setting up multiple experiences in their flagship stores, combining entertainment and leisure together, including cafes, bars, restaurants, bookstores, art galleries, activity centers, display devices and so on: LVMH Group & COVA, Crystal Jade Restaurant (Europe, Hong Kong, Singapore), HERMÈS & HERMÈS Café MADANG (Seoul), Ralph Lauren & RL RESTAURANT, Ralph’s & The Polo Bar (US, Pairs) , Bulgari & Restaurants & IL Café (Tokyo), Chanel & Beige (Tokyo), Gucci Café (Italy, Tokyo), Armani & Armani Restaurants AQUA (Americas, Asia and Europe), Dolce Gabbana & GOLD RESTAURANT Ristorante Martini Bar, Burberry & Thomas’s (UK), Lanvin & Sevva (Hong Kong), Trussadi & Trussardi Alla Lascala (Italy), and so on. They aim to further communicate the brand information with customers and meet the consumers’ new life interests. Both well-known brands and small independent brands are trying to create a hard copy experience for consumers to enhance their brand images (WGSN Best of Business & Strategy 2015).
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According to the Business Dictionary, the definition of the full-service restaurant is one that “offers fine dining with a wide selection of foods and beverages, and table service. It may also have attached coffee shop and specialized (ethnic) and fast food restaurants.” According to a Mintel report, Chinese consumption growth in food service was 8.1%, reaching CNY 7.99 billion (USD 1.2 billion) in 2014 (“Why Fashion Retailers Are Staying Food Experience”). Meanwhile, full-service restaurants are a well-developed category in China, boasting the highest value sales and outlet numbers within consumer foodservice during the review period. In 2014, full-service restaurants grew by 9% (value sales), 6% (outlets), and 4% (transactions), amounting to CNY 2,547 billion (USD 417 billion), six million outlets and 45 billion transactions. The channel also faced intensifying competition from other foodservice channels, such as 100% home delivery/takeaway and cafés/bars, thanks to the convenience and relaxed dining experience offered by these two foodservice formats (“Full-Service Restaurant in China” Euronmonitor). Increasing chains of European full-service restaurants registered the fastest value growth in 2014, with a rise of 15%. European full-service restaurants enjoyed rising popularity in China as a result of the growing acceptance of western-style cuisine and dining culture.
* Chinese Food Service Restaurant Value, 2009-2014 33
Aside from wealthy consumers, government officials used to be the target consumers of high-end, full-service restaurants. However, since the promulgation of the 2013 ban from the Central Government on the use of public funds for “wining and dining,” the value sales of high-end, full-service restaurants have been severely affected, making many operators change their menus in 2013 and 2014 to cater to middle-income customers. To stay competitive in the context of fierce competition, many full-service restaurant operators have extended their business times by adding breakfast, afternoon tea and late-night supper offerings to their menus in addition to the normal lunch and dinner periods (“Full-Service Restaurant in China” Euronmonitor). In China, people tend to have their meals at set times. Typically, breakfast is consumed from 7.00-9.00hrs, lunch at 12.00-13.00hrs and dinner at 18.00-20.00hrs, and restaurants usually serve meals during these times to meet consumers’ expectations. Snacking has become prevalent in first-tier cities such as Shanghai and Beijing as more consumer foodservice players launched afternoon tea menus that feature desserts and drinks during non-meal periods. With the buoyant growth of the internet service and the rising number of online surfers, consumer foodservice operators made efforts to ride the wave of booming internet foodservice by launching various digital online platforms to serve consumers, through which customers could make reservations and place orders (“Food Service in China” Euronmonitor). In addition, the vigorous development of consumer foodservice has also attracted local celebrities to open their own foodservice outlets in the review period. Relying on their personal influence either via public media or their large fan base, celebrity-owned foodservice operators have proved able to draw consumer attention at the very beginning, as many diners are attracted by the concept of eating a meal and spotting a star. However, consumers’ continuous patronage is highly dependent on the food quality and affordability of the celebrity-owned outlets (“Food Service in China” Euronmonitor). In addition to quality and affordability, service is more important for Chinese consumers in the competitive market. According to a Mintel report in 2015, 31% of China's consumers think the service in a full- service restaurant experience is more important than food or drink.
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4.0.2.2 Chinese Cafe Market When considering the industry more specifically, retail volume and value growth of cafes increased by 3% and 7% in 2014 to reach 63,000 tonnes and CNY 6.6 billion. Meanwhile, key players launched more Italian cafes into the market in 2015 (“Coffee in China” Euromonitor). Meanwhile, despite an increase in sales, instant cafes in first-tier and second-tier cities are expected to slow because consumers are gradually developing a preference for freshly ground coffee (“Coffee in China” Euromonitor). An increasing number of consumers, due to growing sophistication and rising incomes, traded up to fresh coffee, preferring to drink freshly brewed coffee at home. This helped fresh coffee to record retail volume growth of 16%, and retail sales value was CNY 220 million in 2015. Fresh ground coffee pods posted dramatic retail volume growth of 73%, albeit from a very low base. Meanwhile, on-trade coffee also benefited from this trading up trend, posting a 13% increase in volume sales and supported by the robust development of chained coffee specialist shops and cafés in China (“Coffee in China” Euromonitor).
Retail Sales of Coffee by Category in China (2010-2015)
* Retail Sales of Coffee by Category in China: Value 2010-2015 36
Coffee’s target audience has been expanding beyond younger consumers and whitecollar workers. However, as a traditional tea-drinking country, China boasts a stable population of tea consumers. There was no significant shift from tea to coffee in 2015 as the health benefits of tea are deep-rooted among local consumers, while tealeaves are also very affordable (“Coffee in China” Euromonitor). In addition, eating in a cafe or bar occupied a total sales value of 71%. In 2014, because consumers prefer a relaxing and comfortable atmosphere, the coffee/bar store usually satisfied the consumers’ need (“Coffee Bar in China” Euromonitor). Providing a comfortable and relaxing atmosphere to customers is important for Prada restaurant. It will attract and keep customers loyal to Prada longer.
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4.0.2.3 Chinese Full-Service Restaurant Market & Café Market Future Outlook Chinese Full Service Restaurant Market Future Outlook Based on the Chinese food industry’s stable development, it will continually growing in the next several years. According to the Euronmonitor, China’s full-service restaurants will continue to increase from 2016 to 2019 with CNY 3174 billion (USD 491.9 billion) in 2016. Growth will be fuelled by the quickening pace of life in China, especially in urban centers, and the resultant pressure on consumers’ free time to cook. According to a survey by Unilever Food Solutions, over 85% of Chinese consumers eat out at least once a week. White-collar workers contribute most to outside the home breakfast and lunch consumption due to long commutes from home to work, reducing the time available to cook at home. Family reunions and socializing with friends are strong consumption forces for dinner. In addition, there was growing demand among Chinese consumers for exotic dishes and culinary fusions, alongside improving living standards and higher disposable incomes in the review period. Increasing European full-service restaurants registered the fastest value growth in 2014, and the value growth will grow in the next several years with an increase 6% in 2016 and 6.6% in 2017 (Euromonitor).
* Forecast Chinese Foodservice Restaurant Value, 2009-2020 38
To stay relevant, full-service restaurant operators are expected to enhance their customers’ dining experience, winning repeated patronage by creating a better dining environment and an enriched menu. Meanwhile, with increasing knowledge and awareness of health issues in the country, as well as rising hygiene standards, local consumers are increasingly concerned about the food quality and cleanliness of restaurants. Chinese Cafe Future Outlook In the coffee market, China's population consumes only 4.5 billion cups of coffee a year, far lower than North America with 133.9 billion cups coffee. From 2014 to 2019, coffee consumption in China is forecasted to rise 18%, and the United States is projected to grow 0.9% (“China's Changing Tastes Offer Upside for Coffee”). Coffee is expected to post both steady volume and value growth over the forecast period, with this underpinned by healthy demand from coffee enthusiasts. Fresh coffee is expected to register the best performance over the forecast period, posting a retail volume CAGR of 17% and a value CAGR of 22% at constant 2015 prices thanks to consumers trading up to higher quality products. Meanwhile, because of the high sugar and creamer content in 2-in-1 and 3-in-1, instant coffee is increasingly being deemed as unhealthy by consumers. The development of instant coffee may stem from consumers’ increased health awareness. Fresh coffee will continually increase from 2016 to 2020 with CNY 272.3 million in 2016 and will reach CNY 585.5 million in 2020. The market has a lot of potential space to grow, which will help Prada to succeed.
Fresh Coffee sales in China (CNY Million)
* Fresh Coffee sales in China (CNY Million) 2014-2019 39
4.0.3 Restaurant SWOT Analysis Weaknesses
• • • •
• No drink and food experience in the new market • Lack of consumer brand preference
Strong brand power for Prada Large number of customer bases and potential customers Strong brand image Aesthetic Italian heritage
Opportunities
Threat
• • • • • •
• Strong competitors in the market • Customer behavior and expectations differ vastly among different cultures and boundaries
• • • • 40
Strengths
Positive food and coffee market environment in China Chinese government recently reduced its food import tax Rising consumer disposable incomes Chinese consumers prefer western food European food is quite popular for Chinese consumers Younger generations have been affected by western culture and think drinking coffee is a kind of lifestyle Fast-paced life, so more people are eating outside the home Meeting friends and eating outside are more popular Shanghai is a modern city and welcomes new food from other countries Workers usually have lunch of simple food at a coffee shop
4.0.4 Competitor Analysis The food industry still has a lot of competition in the Chinese market, so knowing the competitors can help to better understand the market and brand positioning. In this analysis, the major competitors include luxury and fashion brands who have also opened cafe shops and restaurants and who also share a similar consumer base with Mario 1913 (Prada’s new restaurant). The affected factors of price, food and interior design will be considered. The major competitors include Gucci, Shanghai Tang, and LVMH Group. Furthermore, Bulgari will open a restaurant in 2017 in Shanghai, so it will be a potential competitor in the future. The detailed map shows that Gucci, Shanghai Tang, Vivienne Westwood, SCENA, LUCE Italy Dining Restaurant and W+S CAFÉ By NAPOLEON only opened one café or restaurant in the market. COVA & Crystal Jade Restaurant are chain stores with 3 and 4 stores respectively.
COVA Crystal Jade COVA
SCENA
COVA Crystal Jade
LUCE Vivienne Westwood Cafe
W+S
COVA Shanghai Tang Cafe Crystal Jade 1912 Gucci
* Major Competitors Location 41
Gucci 1912 Gucci opened its first restaurant in Asia in 2015. The restaurant is located on Huaihai Road, next to the Gucci store in the IMP shopping center in Shanghai. They offer simple lunch meals, afternoon tea and dinner in the Italian style; also, all the desserts are homemade in the store and chefs come from Rome. They aim to present Gucci’s Italian heritage. However, customers don't see any elements of Gucci, such as its logo, in the presentation of the food. In addition, the interior color of the restaurant is similar to the Gucci store with brown and gold as the main colors and with heavy use of wood and metal as decoration. The entire restaurant can accommodate more than 100 people at the same time. In addition, it includes two parts, an indoor dining area and balcony. Gucci 1912 also provides a telephone booking service, but customers can also arrive without a reservation. 1912 Gucci is operated by Epicurean Management Company. It is a full service operations and management company focused on developing and strengthening businesses in the food and beverage industry (EMCo.).
42
Shanghai Tang CafÊ Shanghai Tang is a Hong Kong-based international clothing chain company founded in 1994 by Hong Kong businessman David Tang. In 1998, Richemont acquired David Tang's controlling stake in the business. They offer clothing, accessories, jewelries, home ware, etc. Shanghai Tang Cafe is run by Shanghai Tang and provides Shanghai cuisine. The restaurant environment follows the original brand concept—stylish, bright, but also rich Chinese elements. Also, to create a traditional and modern atmosphere, the restaurant’s interior tone shows bright and rich colors and uses contemporary and luxurious Chinese handicrafts , such as embroidery, lacquer and silk as decoration. Jereme Leung, one of the famous creative cuisine chefs in the world, designed the menu of the restaurant; it integrates Chinese and Western tastes as the brand impression as a combination of East and West.
43
Crystal Jade Restaurant Crystal Jade Restaurant was founded in 1991, and its main cuisine is Cantonese food, including a variety of dim sum, handmade pastries and bakery foods. The company is headquartered in Singapore, with more than 100 stores across Asia. There are 100 Crystal Jade outlets crossing 18 cities in 9 countries and counting, including China, Hong Kong, Indonesia, India, Vietnam, Philippines, USA, South Korea, and Thailand. In 2014, the LVMH group spent USD 100 million through its private equity fund Capital Asia to acquire 90% of the Crystal Jade. They opened in Shanghai, Beijing, Hangzhou, Qingdao, Guangzhou, Shenzhen, Foshan, and Wuxi with 13 stores. The restaurant offers vibrant lifestyle dinning experiences from authentic fine Chinese dining, an intimate bar experience, patio dining with a view, to a no frills takeaway counter (Crystal Jade Restaurant Official Website).
44
COVA Cova was founded by Antonio Cova and opened in 1817 beside the famous “La Scala” theatre. In 1994, Cova inaugurated its first café-restaurant in Hong Kong; due to its traditional pastries and impeccable hallmark Italian service, it rapidly enjoyed success in Asia with its Italian cuisine and elegant eating atmosphere. More recently, Cova opened stores in Japan, Singapore and China. Prada and LVMH had actually acquired stores in Milan; Italy's Cova Café and Cova became part of the LV group in 2014. Cova has historically been popular with many musicians and writers, such as Ernest Hemingway. Cova provides a variety of drinks and desserts, including tea, coffees, cakes, cookies, ice cream and so on.
45
Vivienne Westwood Café Vivienne Westwood opened the Café in its store in the K11 art and shopping mall in Shanghai. The coffee shop offers delicate ice cream, cakes, sandwiches, coffees and other beverages. Each tableware is printed with the Vivienne Westwood logo, which easily lets the customers know they are in Vivienne Westwood Café. Meanwhile, the atmosphere of the café was created to reflect a Britishstyle palace; the simple wooden tables and chairs with ornate wallpaper decoration in the store reflect the brand's birthplace in the United Kingdom and include the brand's classic elements – the Golden Saturn logo.
46
W+S CAFÉ By NAPOLEON W+S Cafe was designed by W+S DECO furniture company and is one of the most popular coffee shops in Shanghai with a very good reputation among customers and food critics. Due to the brand’s interior design background, the store design is very attractive and unique, and this is one of the most important reasons for its popularity. The shop design presents a bright and elegant feeling, and the exquisite decorations enhance the store’s attractiveness. W+S Cafe provides simple lunches, high tea and dinner, including sandwiches, salad, dessert and coffee.
47
LUCE Italy Dining Restaurant LUCE is located in the fourth floor of the Shanghai Concert Hall, a restaurant frequented by popular stars such as k-pop star Bigbang, Linkin Park, and so on. LUCE presents “disappeared Rome� as the theme; the paintings show ancient Rome through the wonder of the universe. There is also a unique landscape surrounded by the Shanghai Grand Theatre, Shanghai Museum, and so on. In addition, the restaurant also has two VIP rooms to provide customers with an exclusive area for private parties or dining experiences. Their chefs have worked at The Portman Ritz-Carlton Hotel, so dishes also meet the high quality in LUCE, providing a simple lunch, steak dinners, a variety of cocktails and other drinks.
48
SCENA SCENA is an Italian restaurant belonging to the RitzCarlton. SCENA has an entire glass wall of windows overlooking the wonderful view of the city and the night view of the Huangpu River. The luxurious Italian food complements the store’s pleasant atmosphere. The restaurant provides pure Italian flavored dishes, and brunch is available on the weekend. SCENA’s main dining area can accommodate up to 128 guests along with 16-seat luxury VIP rooms.
49
4.0.4.2 Competitors Pricing Analysis Brand
Gucci
Shanghai Tang
LVMH Vivienne Westwood W+S DECO
Shanghai Concert Hall The RitzCarlton 50
Restaurant Name
Gucci 1912
Stores
1
Food Type
Italia
Chinese (Shanghai)
Main Course Coffee Average Price Average (USD) price (USD)
Price Point (USD) Lunch
20-22
Afternoon Tea
61
Dinner
51-160
Lunch
90
Afternoon Tea
10-13
Dinner
20-130
106
6
75
-
Shanghai Tang Cafe
1
COVA
4
Italia (Pastry)
Afternoon Tea
30-41
11(Dessert)
12
3
Chinese
Dinner
30-150
95
-
1
British Tea
Afternoon Tea
36
4(Dessert)
7
Lunch
10-13
Afternoon Tea
13-46
55
6
Dinner
30-80
Lunch
13-20
Dinner
55-65
60
6
Lunch
33-60
Afternoon Tea
35
105
-
Dinner
90-120
Crystal Jade Restaurant Vivienne Westwood Cafe W+S CAFÉ By NAPOLEON
1
LUCE Italy Dining Restaurant
1
SCENA
1
Italia
Italia
Italia
4.0.4.3 Competitors Social Media Use Restaurant Name Weibo Full-service restaurant (Major Competitors)
Gucci 1912
• No official Weibo account • No #hashtag
Shanghai Tang Cafe
• • • •
Crystal Jade Restaurant
• • • • • •
• No directly official account, works with the Gucci original Wechat account (Service ID*) • QR Code • Map (location) • Dress code Official account (Shanghai Tan Restaurant) • Independent official account (Shanghai Tan No #hashtag Restaurant/ 上海滩餐厅 ) (Service ID*) Followers：3,329 • Reservations Posts：1288 • News • Discounts • VIP service • QR Code Official account ( 翡翠酒家 _Crystal Jade) • Not available # 翡翠酒家＃（Crystal Jade restaurant） Followers：2,101 Posts：74 No official account • Not availablew # W+S CAFÉ By NAPOLEON ＃
• • • •
Official account (LUCE 意大利餐厅 ) # LUCE 意大利餐厅＃ Followers：28 Posts：4
W+S CAFÉ By NAPOLEON SCENA
• Official account (Subscription ID*) • Location • Phone number
Coffee Only (Indirect Competitors) Vivienne Westwood Cafe COVA
＊ More details, see appendix
• • • • • •
No official account #Vivienne Westwood Café ＃ Official account (COVA-CHINA) #Cova Followers：56,868 Posts：341
• Not available • Independent official account (COVA-CHINA) (Service ID*) • Location • News • QR Code 51
4.0.4.4 Perceptual Map & Analysis Restaurant Name
Service Quality
Flavor
Dinning Environment
Full-service restaurant (Major Competitors) Gucci 1912
7.2
6.8
7.6
Shanghai Tang Cafe
8.8
9.0
9.2
Crystal Jade Restaurant
7.8
8.1
8.3
LUCE
8.1
7.3
8.9
SCENA
8.9
8.1
9.2
W+S CAFÉ By NAPOLEON
8.1
7.9
9.0
COVA
7.5
8.0
7.8
Vivienne Westwood Cafe
7.4
6.7
7.5
Coffee Only (Indirect Competitors)
52
Based on the primary research, food, service, and dining environments are the most important factors affecting a customer’s decision to dine in a new restaurant. Perceptual map 1 shows food and service quality; the smaller bubble presents how much services the restaurant provides, and the bigger bubble presents more and smaller means less. 1912 Gucci, Crystal Jade Restaurant, Shanghai Tang and Secna are full-service restaurants, offering brunch, lunch, afternoon tea, dinner and other drinks. W+S and Luce also are full-service restaurants with fewer choices of food and drink. COVA and Vivienne Westwood cafÊs only provide dessert and coffee. In addition, based on the metrics, Shanghai Tang and Scena rank at the top with the excellent quality of service and food. However, the service at 1912 Gucci did not achieve the satisfaction of consumers, shown in the bottom of the map, when compared to the other competitors. Mario 1913 is posited on the top of the map to indicate that they provide better service and food. competitors. In this map, Shanghai Tang and Scena also rank at the top as the first perceptual map. W+S is located in a similar area with Shanghai Tang and Scena, mainly due to its interior company background, which gets more preferences from customers. In addition, 1912 Gucci’s business partner, Epicurean Management Company, did not cooperate with other luxury brands, which may affect the Gucci restaurant business.
53
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55
5.0 Primary Research
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5.0.1 Research Goals So far, the secondary research has outlined the industry’s current situation and future outlook as well as the competitors in the Chinese market. The next step involves primary research in the form of a survey which will help to better understand the target segments’ consumer behavior and their consumer insights about Prada as a brand and retailer in addition to their eating and coffee drinking habits, social media use, payment preferences, and so on.
5.0.2 Research Design In order to determine the fundamental information needed to design the questionnaires, the research design started with secondary research of the Chinese market, country culture, consumer behaviors and Prada’s current situation in China. To ensure deeper and realistic data of consumer insights, the survey focused on Chinese luxury consumers who live in Shanghai. The survey included one-choice questions, multiple-choice questions, and an essay question for a total of 21 questions. The researcher received a total 346 responses, with 203 repliers from Shanghai, 9 from Jiangsu, 5 from Zhejiang, 6 from Shanxi, and 4 from Sichuan; the other provinces each had 1 response.
57
5.0.3 Research Analysis According to the results, most participants responded that Wechat and Weibo are the most common social media, which they usually use every day from 2 to 4 hours. They usually engage in social media from 20:00 to 23:00, so it is good time to post the information on official account for Prada. However, there are only 20% of responds for the luxury brand or company’s official account. In addition, 77% of people will post photos after they try the new food or restaurant, which will help Mario 1913 to create word of mouth, which is highly effective because consumers are willing to trust their friends and family. The atmosphere, food flavor and quality, and service are the most important factors to influence them to go to a high-end restaurant, so this is also the standards which Mario 1913 should achieve and deliver to customers. The price is not the first factor which respondents will consider, and they usually spend USD 230 (CNY 1,500) in a high-end restaurant. Meanwhile, customers usually spend one and two and half hours in the high-end restaurant to meet friends, dating and so on. In order to service more customers, the working hours of Mario 1913 should consider these times. The last survey question received 87% of people willing try Prada’s restaurant, so it is a positive opportunity for Prada to run the restaurant business. However, the other 13% of people who responded negatively indicated that Prada is a luxury brand not a food brand, so the food may not professional. It is the other factors, which Prada should be, figure out in the new business.
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6.0 Target Consumer Identification
6.0.1 Demographic Segmentation Age: 23- 38 Gender: both male and female Occupations: Students, editors, white-collar workers, photographers, stylists Income (Year): at least CNY 250,000 (USD 38,000)
6.0.2 Behavior Segmentation This group of Chinese consumers has been accustomed to using mobile phones to scan QR codes to download an application and use coupons. Also, they prefer to use social networking—more and more consumers connect with friends and latch onto celebrities and brands on a social networking platform. Also, they prefer posting photos on the Internet in addition to discussing their experience with friends, family or others in social media. Meanwhile, with the development of mobile applications such as Alipay and Wechat Payment, mobile payments have become the most popular way to make online payments.
6.0.3 Lifestyle & Attitude The target consumers are the first generation to grow up under western cultural influence. This group of consumers is more educated and more open than their parents; compared with the older generations, they save less, spend more on entertainment, shop on the Internet, are constantly looking for new products, and are more willing to spend money on luxuries. Under the influence of western culture, the young target consumers like coffee more than older people so much that it becomes a habit for them. Furthermore, they pay more attention to western holidays such as Christmas, Halloween, and so on, and they will have western food or drink in a restaurant, not Chinese food. In addition, the target group doesn’t like cooking at home and prefers dining out; they also prefer a relaxed and comfortable atmosphere and spend free time with friends at a coffee shop. Furthermore, because women are influenced by Korean drama, which often includes scenes in coffee shops, they are more likely to prefer cafes and spending more time taking afternoon tea with their friends in a cafe. Meanwhile, the target group pursues value and quality rather than low prices; so, natural and healthy food is more important for them, and they are paying attention to food safety issues and prefer fresh and healthy food. Many Chinese consumers distrust current food safety practices; a recent series of food safety scandals has prompted many consumers to look for what they think is safer and healthier foods, such as western food. Also, the target consumer’s rising interest in fusion cuisine and creative menus, particularly in first-tier cities such as Shanghai, Beijing, Guangzhou, etc., reflect their discerning palette, and they place more emphasis on food because they believe food can cure loneliness and isolation under pressure.
62
63
6.0.4 Target Consumer Profile
Name: Dongyu Zhou Age: 23 Gender: Female Location: Shanghai Occupation: Student Income (Year): CNY 250,000 （USD 38,000） Zhou is studying fashion management in the Italy; she has also completed a summer internship with Prada in Shanghai. She likes to use social media to chat with friends and look for new trends, and she prefers to use food review sites and social media such as Yelp and Chinese Yelp “Dianping” to find new restaurants. Because of her study abroad experience, she has been influenced by western culture and prefers fusion cuisine and creative menus.
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Name: Yang Yang Ageďźš28 Gender: Male Location: Shanghai Occupation: Works in Family Business Income: CNY 400,000ďźˆUSD 61,000 Yang works with his family business, a foreign-related enterprise, to sell luxury Chinese traditional handcrafts, such as embroideries, furniture, and so on, to foreign customers. He goes to high-end restaurants for dates with his girlfriend. He thinks that the environment and food quality are the most important factors when he chooses a restaurant because he wants to provide a better dinning atmosphere for his girlfriend.
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Name: Tianai Zhang Age：27 Gender: Female Location: Shanghai Occupation: Stylist Income: CNY 350,000（USD 54,000） Zhang is a stylist and enjoys going shopping and having afternoon tea with friends during the weekend or in her leisure time. Drinking coffee and afternoon tea are becoming her habit. Zhang also prefers to share new food or restaurant photos with her friends through social media such as Wechat and Weibo, and she prefers to use mobile pay.
66
Name: Dong Qi Age：36 Gender: Male Location: Shanghai Occupation: Business Owner Income: CNY 1,000,000（USD 150,000） Liu is a private business owner. He operates his design and digital media business by himself, so he only has time for a simple lunch each day. Also, he exercises everyday to keep fit and pays more attention to being healthy, so he’s always looking for healthier food. He prefers doing exercises first then enjoying brunch during the weekend.
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7.0 Restaurant Overview
7.0.1 Mission and Vision statement Mario 1913 is Prada’s first restaurant in the global market, providing innovative food with excellent service. The restaurant will be located in the luxury shopping mall Plaza 66 in the Jinan district in Shanghai. In order to provide better service and experience, Prada cooperates with the top hotel management group, Marriot, to achieve high standards in service, food, and environment.
Mario 1913 Mission Statement To encourage Prada's followers to truly immerse themselves into our traditional Italian heritage
Mario 1913 Vision Statement The ultimate dinning experience for discerning customer
Mario 1913 69
7.0.2 Business model Partnership with Marriott International, Inc. Prada will cooperate with the best partner, Marriott International, Inc., a global leading lodging company with 19 hotel brands and more than 4,400 properties in 87 countries and territories. Marriott International reported revenues of nearly $14 billion in fiscal year 2015. Founded by J. Willard and Alice Marriott, and guided by Marriott family leadership for nearly 90 years, the company is headquartered in Bethesda, Maryland, USA (Marriott Official Website). This partner will help Prada to manage the restaurant to meet the excellent quality requirements. Marriott will provide assistance with restaurant development service and restaurant specific service, including master planning, design, layout, marketing, business systems, human resources, insurance, engineering services, etc. Also, these excellent and high quality services will help Prada reduce risk, ensuring the business is successful and more professional to meet Prada’s high-level standard. Moreover, Marriott also helps Bulgari to run and manage a luxury hotel, so Marriott will have sufficient ability and experience to help Prada run a restaurant business.
70
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8.0 Marketing Strategy
8.0.1 Strategy goal & objective Mario 1913 aims to convey the innovative, Italian aesthetic heritage and the excellent quality of Prada. According to its competitors, and taking into account consumers’ preference for using social media technology and its creative menu, Mario 1913 is Prada’s and the world’s first high-end, full service restaurant equipped with first class equipment and comfortable and luxurious interior design to help consumers enjoy Prada’s restaurant dining experience. Taking pleasure in Prada’s creative cuisine in Mario 1913 will help customers better understand Prada. The objective is not only to bring a diversified brand experience and engagement to current Prada customers and increase excitement for Prada, but also to attract more potential customers and cultivate the brand preference to achieve the final goal: increase the profitability of Prada. Prada as one of the most famous luxury brands, but sales are falling with the biggest market in China; however, food is a god to Chinese, so it is a positive opportunity for Prada to open the first highend restaurant in China. Shanghai is a modern city in China, and consumers are more open minded and prefer fusion cuisine and trying new food and restaurants with different dining experiences. In addition, it is becoming a trend for the luxury and fashion brands such as 1912 Gucci and Vivienne Westwood Café in Shanghai to open a restaurant or café, and they aim to provide better experience to consumers. So, it is good opportunity for Prada to open the first restaurant.
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8.0.2 place strategy 8.0.2.1 Shanghai Mario 1913 will be located in the Prada Shanghai’s flagship store located in Hang Lung Plaza 66 shopping mall. This mall is located in the best know shopping district, Jingan, in Shanghai. The Jingan district is called the center of downtown, and its perfect facilities provide more convenience to people, including developed transportation, parking space, a variety of entertainment activity and different types of restaurants (Jing An Gov.). Also, the Jingan district has a top tier shopping environment with high-grade shopping malls and many international brands such as Golden Eagle Shopping Center, Meilongzhen Plaza, Reel Shopping mall, etc. and other luxury brand flagship stores.
* Jingan District 74
8.0.2.2 Hang lung Plaza 66 Hang Lung Plaza 66 is a 5 floor, high-end shopping mall and includes more than 100 well-known luxury and fashion brands, including Louis Vuitton, Hermes, Chanel, Dior and Prada, to name but a few. Also, it has been hailed as one of the most successful commercial developments in China (Hang Lung Shanghai Official Website). Plaza 66 also provides many valueadded services, including brand consulting, parking, restaurant recommendations, reservations, and so on, to provide customers with an enjoyable shopping experience. Meanwhile, Plaza 66 not only has many luxury and fashion brands, but also has many popular and various types of restaurants, including Western and Asian.
* The Plaza 66 Appearance 75
Moreover, Plaza 66 has its VIC program; customers who make purchases at a participating merchant in Plaza 66 mall will earn points (one Yuan equals one point), which allows them to enjoy generous year-round shopping and dining privileges. It also allows them to join in the different promotions and events in the mall (Plaza 66 Official Wesite). Plaza 66 provides an exhibition and event venue, including both inside of the shopping mall and outside to help brands doing promotion (Plaza 66 Official Wesite).
• Atrium on the ground floor (Area A on Floor plan) The 200 sq.m, atrium at level 1 is filled with natural light and is an ideal site for hosting large-scale events, performances and exhibitions. • Gallery on the ground floor (Area B on floor Plan) The gallery on the ground floor, measuring 200 sq.m., is ideal for static displays. • Outdoor plaza at North Shanxi Road entrance (Area C on floor plan) Located at the cross of West Nanjing Road and North Shnaxi Road, the 100 sq.m. plaza display area is perfect for large-scale events and street performances. * The Plaza 66 Floor Plan
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8.0.3 product strategy 8.0.3.1 Food Because luxury and fashion restaurant competitors offer more traditional food, Mario 1913 will provide innovative food to distinguish from others. Its menu provides the finest brunch, lunches, afternoon tea and dinner. • Brunch: starter, soup, main course and dessert • Lunch: 2course (starter and main course) and 3course (starter, main course and the chef dessert) including fresh organic salad, pasta, meat and seafood. • Afternoon tea: the afternoon tea has options for one person to two persons to choose from, including fruit, scones, macaroons, cupcakes, chocolates, fruit tarts, traditional small sandwiches, assorted pastries and snacks with various types of restaurant selected tea, coffee, champagne, etc. • Dinner: includes appetizer, soup, rice, and pasta, main course (meat and seafood), dessert, wine and other drinks. All of the ingredients chosen are organic, including local fresh vegetables. Meat and drinks are imported from Italy to ensure excellent quality. In addition, the desserts and raw materials are all selected from Pasticceria Marchesi to provide customers the most authentic Italian flavor. Also, all the quality of meals is supported by Marriott International, Inc.to be more innovative than the most elaborate dishes of their competitors. • Special Dietary Requirements: the dishes can be tailored to customers’ needs, and special meals have been created for children (complimentary for under 5) to meet the needs of coeliac, diabetic, vegetarian, vegan and low-calorie diets.
77
Dinnerware Design
78
Dinner Design
79
Prada Iconic Bag Chocolate Design
80
Afternoon Tea Design
81
Restaurant Lay-out and Floor Plan Mario 1913 is divided into entrance, reception, 2-4 dining areas, group dining area, 3 VIP rooms bar, bathroom, kitchen and utility room. Also, the restaurant can accommodate up to 150 people with a total area of 750 square meters (8,000 square foot), where customers can join in by person or group.
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Interior Design The interior design of Mario 1913 presents Italy’s style combined with Prada’s original shop design style to create a unique and Italian aesthetic for a Prada restaurant. The restaurant will present a similar color theme, pattern and decoration to provide the same dining atmosphere with Prada’s original stores.
Gate
83
Mario Bar
84
Recception Area
85
Group Table
86
Main Dining Area
87
Service The service focuses not only on consumers’ dining experience, but also strengthening interaction between consumers and the brands to help customers understand the product better. • Wi-Fi Service The restaurant also strengthens technology use in order to provide not only more personalized service but also communicate Prada’s innovation. Based on Prada’s future outlook, the Wi-Fi service will be available in the stores by 2016. Its service will also be provided in Mario 1913. • Payment Method In addition, a variety of payment methods will be provided, including cash, card, Apple Pay, Wechat pay, and Ali pay. • Technology To distinguish from other competitors, Mario 1913 uses an electronic ordering method (iPad), but the paper menu is also available for customers. On the menu, customers can learn about the dynamic food to provide a better dining experience. • Working Hour Mario 1913 opens from Monday to Sunday from 10 am to 10 pm. In order to maintain the excellence of the service, the last order can be taken at 9 pm. Brunch: 10:00-11:30 (only Saturday & Sunday) Lunch: 11:30-2:00(Monday - Friday) 12:00- 2:00 (Saturday & Sunday) Afternoon tea: 2:30-4:30 (Monday & Sunday) Dinner: 5:00-10:00 (Monday-Sunday) *9:00 last order
88
Shopping Bag Design
89
Menu Design
90
8.0.4 Pricing Strategy The pricing strategy is based on the major competitors and the primary research as people usually spend USD 77-155 in a high-end restaurant. Also, when compared to the other competitors, Mario 1913 will provide a wider price range to attract more potential customers.
Brunch (Saturday-Sunday)
Lunch
Pricing (USD)
Average Price (USD)
30-45
35
Monday-Friday
25-40
Monday-Friday
35
Saturday-Sunday
40-72
Saturday-Sunday
56
Afternoon tea
37-65
52
Coffee
7-10
8
Dinner
60-166
112
Note: Menu items and pricing are subjected to change and 10% service charge.
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Dinner Pricing Position
92
Afternoon Tea Pricing Position
93
9.0 Media & Promotion Strategy
9.0.1 Media Strategy Goal & Objective The media strategy is to create a buzz among the target consumers in China. The tools used are billboards, social media, opening events and the sculpture of the Plaza 66 in the outside to build attraction and help customers understand Mario 1913 opening information. Then, social media, events (exhibitions) and video will be help build interest in customers to learn more details about the restaurant; then, social media will be a driving force to build desire with VIC (Prada VIP Customer) events and to support and increase discussion among target consumers.
The Goal of Media & Promotion Strategy • • • •
Introduce Mario 1913 to the Shanghai Market Increase brand awareness and preference Increase social media followers Increase social media likes
9.0.2 Media Strategy Overview According to the primary research, target consumers prefer using social media, so it will be the most important part of the media and promotion strategy. Strategies include digital, out of home, public relationship and events. Digital includes website and social media, including Wechat, Weibo, Youku and Dianping (Chinese Yelp). Out of home includes sculpture, in front of the main entrance, and billboards. Public relationship and events include opening events, VIC (Prada VIP customers) events, exhibitions and Plaza 66 VIP Customer Event.
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9.0.3 Media & Promotion Strategy Discipline Media
Video
Digital
Objective
Task
Cost （$）
Measuring Effectiveness
This is a short video to illustrate the feeling of innovation, excellent quality and unique food Prada provides to customers to Visually and distinguish with other high-end restaurants. dynamically Prada's high-end restaurant provides a introduce the more youthful feeling to attract our younger restaurant to customers by making its restaurant fun and • Number of Views (20%) consumers; also attractive, but also representing its excellent • Share of voice $67,026.72 create a Mario 1913 dining experience. After first launching the • Hits from Social media dining experience video, Prada will continue promoting it to for targeted create a buzz and surprise among the target consumers. consumers. The video will be put on both Wechat and Weibo as a brideg to connect customers with social media and to help them find more information.
• Provide basic information about Mario 1913 (Location, working hours, contact Provide information, news, food, social media, etc.) (5%) the traffic number hits Website imformation of the • Make reservations with Mario 1913 $16,756.68 reached over 1.1 million restaurant • Social media icons link to Wechat and Weibo official accounts • Link to Prada's official website
96
Discipline
Media
Digital
Social Weibo Meida
Objective
Task
Cost （$）
• Prada's sales people will post the information on Wechat Serve as the platform • Content includes basic information for for consumers and Mario 1913, such as about us, location, non-consumers to news, opening hours, events, etc. share their dining • The video grabs the attention of experience at Mario customers with the link to more information 1913 with their friends; about Mario 1913 also, it works as • Content creates a buzz interactive platform • Opening a new page on Prada's official between customers account will provide more information and Mario 1913. and services, inclduing how to make reservations, chat online services, etc. • Platform promotes word of mouth Working similar as Wechat, but, when compared to Wechat, it provides more public information so consumers can see the information about Mario 1913.
• Opening Mario 1913 on its official account will provide basic information of Mario 1913 • Customers can #hastag and discuss content on it • Provides basic information about Mario (20%) 1913 (Location, working hours, contact $67,026.72 information, news, food, social media, etc.) • Create word of mouth • Create buzz
Similar to Chinese Yelp, Dazhong Dianping is the most popular review website in China with over 2.6 • Provide basic information about Mario million commercial 1913 (Location, working hours, contact tenants. Also, the information, news, food, social media, etc.) Dazhong average page views • Make reservations with Mario 1913 Dianping per month reached 1.7 • Social media icons link to Wechat and billion views and 64 Weibo official accounts million visitors in 2015. • Link to Prada's official website The reviews reached 25 million people. Mario 1913 opened a review page on Dianping.
Measuring Effectiveness
• Number of views hit over 5.5 billion from Wechat (Wechat has 5.5 billion active users, and over 40% of users are ages between 2635) • Followers of Prada's Wechat official account increased 50% with 75,000 (50,000 followers in March, 2016)
• Number of views hit over 1.98 billion • Number of posts • Number of replay • Number of forwards
• Number of views • Number of posts • Number of reviews hit over 15,000
97
Discipline Media
Objective
Catch attention of and attract broader Sculpture audiences as well as visitors passing by Out of Home
Promotion
98
Catch attention of and attract broader audiences, as well as potential Billboard customers and visitors, and spread information about the opening information
PR & Event
Task
Cost （$）
Measuring Effectiveness
• To create buzz • Introducing Mario 1913 opens in the Plazz 66 • The sculpture will be on only show on Plaza 66 • Brand consideration hits • The billboard ads will be on posted on (10%) 25% Plaza 66 and the other Prada stores location. $33,513.36 • Brand intention hits 35% Ads such as opening of the restaurant will be posted on specific floors. The ads in this area also will attract potential customers. • To create buzz
The opening event will invite celebrities to enjoy the dining experience in Mario 1913. All of the invitees have powerful influence, including famous including film stars, singers, bloggers, senior editors, senior food critics, Create excitement and so on. The star such as, Liu Wen, Lu and entertainment Han, Yang Mi, Ji Dong, Liu Tao, Wang Kai, as well as buzz both Gao Yuanyuan, Sun Feifei, Steven Liu and from target markets so on. . Before the event, the celebrities, (25%) and public media Prada and Mario 1913 will post the opening $83,783.4 to draw traffic to event information to introduce the event social media and to audiences. Then, during the event, they Mario 1913 will live broadcast when they are eating in Mario 1913 and share their experience with audiences. Also, they will hastag #Pradarestaurant, #Mario1913 and #Prada in Weibo with pictures to attract more audiences to pay attention on Prada's new restaurant.
The number of customers hit over 600 the following day
Discipline
Media
Objective
Working similar as an opening event, but more focus on Wechat. Prada VIC Also enhances Event the relationship between Prada with current target consumers
Task
Cost （$）
Measuring Effectiveness
The Prada VIC event will be held after the first opening weekend. The VIC will be invited to join the newPrada Keep the VIC restaurant and share the dining (5%) membership in the experience with their friends. Also, they $16,756.68 next year will receive an invitation card before they go to the party, and a gift box after the dinner, including wine, food, and limited edition gifts form Prada.
• Followers of Prada Weibo The exhibition will be held after the account increased restaurant opens. The Italian chef will 30% make the dessert look the same as Prada • Number Work similar as real one during the exhibition. Also, the of reviews of Exhibition opening event, but exhibition welcomes audiences to take (10%) Dianping page PR & Event this event is for the pictures and share on social media with $33,513.36 Promotion increased 10% Event public the added hastags: #Pradarestaurant, • Brand #Mario1913 and #Prada in Weibo. consideration (Location: Atrium on the ground floor increased 30% (Area A on Floor plan)in Plaza 66) • Brand intention hit 45% The Plaza 66 VIC event will be held Attract more the first opening month. Plaza 66 VIC potential customers members can use the 40,000 points in Plaza 66 and create exchange for a Mario 1913 luxurious (5%) VIC Event excitement and double dinner, allowing them to join the $16,756.68 entertainment for new Prada restaurant and share their them dining experience with their friends, family or loved ones.
• Brand consideration increased • Brand intention hit
99
9.0.4 Media & Promotion Ideation Video
100
101
Wechat Design
102
103
Weibo Design
104
105
Dazhong Dianping Design
106
107
Website Design
108
109
Print Ads
110
Billboard Design
111
Sculpture
112
Prada VIC Event
113
Exhibtion
114
Plaza 66 VIP Event
115
9.0.5 Activity Map
116
117
10.0 Budget
10.0.1 Meida Budget Allocation Meida Budget Allocation
Video 20% Event 45%
Out of Home 10% Website 5%
Social Meida 20%
119
10.0.1 Mario 1913 Budget
Mario 1913 Budget First Year (USD) Total Income Brunch Lunch Afternoon Tea Dinner Others
12,050,874 300,300 1,588,440 1,708,200 7,358,400 1,095,534
Cost of Good Sold Rent Utilities Food & Drinks
7,284,687 1,259,250 602543.7 5422893.3
Gross Margin
4,766,187
Total Expenses General and Administrative Expenss Interior & Decoration Furniture & Equipment Kitchen & Equipment Property Management Fee (Plaza 66) Marriott Management Fee Other Operating Expenses Salaries Ads & Promotion & PR
120
3,109,498.3 2,037,201 453,600 409,525 57,000 755550 361,526 1,072,297.08 526,146 305,133.60
Others Profit
241017.48 1,656,688.7
Tax Net Profit Net Profit Margin
698950.692 957,738.0 8%
Mario 1913 121
11.0 Conclusion
Prada is one of the most famous luxury brands in the fashion industry, but the market environment and consumer preference are always changing. Therefore, this project aims to create a new business strategy to help Prada deliver its core values: innovation, excellent quality and Italian aesthetic heritage to better communicate with the consumer. In addition, it is becoming a trend in the luxury and fashion market for luxury and fashion brands including Chanel, Gucci, Burberry, Dior, Armani, and so on to open a restaurant or cafÊ. To better communicate with consumers, the project includes primary and secondary research. The results show a positive response for Prada’s new business with over 80% of people who want to try it. Also, they prefer using social media and are willing to share with others after they tried a new food or restaurant. These strategies create word of mouth and buzz to introduce Mario 1913 to the new market. After customers dine at Mario 1913, they will truly immerse themselves in the exclusive dining experience and have a chance to better understand Prada’s core value, not only to improve the brand popularity but also enhance the relationship with consumers and to attract more potential customers. Finally, customers may go to the Prada shopping to increase its sales. In its nearly century of development, Prada became a world-renowned brand through commitment to creativity and innovation. The distinctive features of Prada are of unequalled quality, creativity and exclusivity. Miuccia Prada and Patrizio Bertelli always look for a new way to create fashion. Mario 1913 will be this new way to realize the vision.
123
12.0 Bibliography
“Are You Reaching the Global Chinese Luxury Consumer?” Luxury Society. Com. Nov 13, 2015. Web. April 3, 2016. “Best of Business & Strategy 2015.” WGSN.Com. N.d. N.p. Web. Feb 2, 2016. Chitrakorn, Kati. “Can China End the Illicit ‘Daigou’ Trade?” Business of Fashion.Com. February 5, 2016. Web. May 8, 2016. “China's Changing Tastes Offer Upside for Coffee.” The Wall Street Journal.Com. September 16, 2015. Web. May 8, 2016. “Country Profile: China. 2015.” Market Line. Com. N.d. N.p. Web. May 8, 2016. “C-Annual Report 2014.” Prada.Com. N.d. N.p. Web. April 4, 2016. “C-Interim Financial Report 2015.” Prada.Com. N.d. N.p. Web. May 8, 2016. “E-Interim Financial Report 2015.” Prada.Com. N.d. N.p. Web. May 8, 2016. “Five Retail Priorities: China 2016.” WGSN.Com. N,d. N,p. Web. February 8, 2016. “HLP 2015 Annual Report 2015.” Hang Lang. Com. N,d. N,p. Web. April 21, 2016. Kansara, Vikram Alexei. “The Digital Iceberg.” Business of Fashion. Com. February 15, 2016. Web. May 08, 2016. “Luxury Brands Open a Restaurant.” Finance China.Com. Aug 14, 2015. Web. May 08, 2016. “Prada OPI.” Prada.Com. N.d. N.p. Web. April 9, 2016. “Shanghai: Profile of a Consumer Market.” HKTDC.Com. August 21, 2015. Web. May 09. 2016. Wang, Fang. “Prada luxury OEM Industrial Chain Labeled Dongguan Production Italy.” Sina Finance.Com. Jan. 9 2010. Web. “Why Is Prada Eyeing the Restaurant Business in China?” South China Morning Post.Com. February 02, 2016. N.p. Web. May 08, 2016. “Why Fashion Retailers Are Staying Food Experience.” Business of Fashion.Com. 9 Aug. 2016. N.p. Web. April 2, 2016. Zhang, Fan. “Prada Will Narrow Price Differential With the European.” Luxe.Co. December 16, 2015. Web. May 08, 2016. “2016 FMCG Sales Forecast: Quality, Health and Convenience Will Be the New Year Noost.” Nielsen.Com. Jan 8, 2016. Web. May 08, 2016. “2015 China Restaurant Industry Annual Report 2015.” China Net Financial.Com. May 17, 2015. Web. May 15, 2016.
Official websites Crystal Jade.com Armani.com Bulgari.com COVA.com Dianping.com Goggle Map.com Gucci.com Jingan.gov.cn
Marriott. com.cn Marriott.com Epimgt. com Pasticceria Marchesi.com Plaza 66.com Prada.com Shanghai Administration for Industry and Commerce.gov.cn Shanghai Tang.com
The Ritz-Carlton Shanghai.com The State Council The People’s Republic of China. gov.cn Travel.michelin.com Tripadvisor.com W+S DESO.com Wechat.com Weibo.com WorldBank.org 125
13.0 Appendix
13.0.1 Primary Research Q1:What's your age?
Q2:What’s your gender?
Under 18 1%
18-24 22%
34 up 32%
25-34 45%
Q3: What’s your household income monthly?
Male 34%
Female 66%
Q4:Do you know Prada？
No 13% CNY 25,000 Up 21%
Under 8000 CNY 36%
CNY 15,000 － CNY 24,000 15%
CNY 8,500 － CNY 14,000 28%
Yes 87%
127
Q5: When talking about Prada, which product can present Prada? Fragrances 1%
Accessories 0%
Q6:If you know Prada, have you ever buy the Prada’s product?
Shoes 7% Apparel 11%
Yes 44% No 56% Leather goods 81%
Q8:How much time do you usually spend on social media per day? 8 hours up 6%
Q7: Which social media do you usually use? (Multiple choice) 338
128
Less than 2 hours 28%
122
Others
5-8 hours 18%
61
2-4 hours 48%
Q9:What time do you usually see the social media? Before 8：00 6%
After 00:00 8%
Q10:Do you follow any other luxury brand or company’s official social media account?
Yes 20%
9:00 － 12:00 16% 1:00 － 3:00 5% 4:00 － 7:00 10%
8:00 － 11:00 55%
No 80%
Q11: What activates you interest in the brand or company social media account? Key words: discount, new product, product price, fashion show, new event. Q12:Will you post the photos on social media, if you tried some new food or restaurant?
Q13:If your friends post some images and information on social media about food or restaurant, which you never tired before, what would make you want to try it? (Multiple Choice) Exciting Food
No 23%
268
Good environment
Yes 77%
234
Pretty services man
Others
68
8
129
Q15:How much time do you usually spend in a high-end restaurant?
Q14:What elements attract you to the high-end restaurant? (Multiple choice) 260
Atmosphere 115
Price
237
Food quality
255
Flavor 93
Location
1:30 hr– 2: 30 hr 80%
167
Service Others
3 hr up Less than 7% 1:30 hr 13%
4
Q16:If the luxury brand were to open a restaurant, will you interest in it?
Q17:Why would you go to a high-end restaurant? (Multiple choice) Meeting with friend
No 18%
Dating
Yes 82%
130
186 163
Business
123
Family
122
Others
10
Q19:What’s your preference making a reservation?
Q18:How much do you usually would spend in the high-end restaurant?
Others 3%
Booking Sites 3%
Up Under CNY CNY 500 3,000 13% 11%
Online 29%
CNY 2,500 － CNY 1,500 33%
CNY 1,000 － CNY 500 43%
Phone call 65%
Q20:What payment method do you prefer? Cash
86
272
Credit / Debit Card
Alipay
81
78
Others
Q21:If Prada were to open a restaurant, do you want to go?
No 13%
Yes 87%
1
131
Mario
Font: Snell Roundhand Black
13.0.2 Logo Design Processing Prada’s restaurant is called Mario 1913. The name is based on Prada’s brand history of founder Mario Prada who established the brand in 1913. The name combines the two most important elements together to be the name for Prada’s restaurant. The purpose of the logo design is to help the customers to better understand and remember Prada. The logo uses a gold brown color and delicate outline to represent Prada’s Italian aesthetic heritage and the luxurious feeling to represent its suppliers of the Italian royal family history.
Font: Helvetica Neue Regular
Mario
1913
Mario
1913
Font: Exmouth Regular
C: 24% M: 37% Y: 58% K: 0%
R: 207 G: 169 B: 114
Mario C: 19% M: 32% Y: 58% K: 0%
R: 219 G: 183 B: 118
Mario C: 36% M: 56% Y: 93% K: 0%
132
1913
R: 184 G: 126 B: 43
Font: Times New Roman Italic
1913
Font: Exmouth Regular
C: 36% M: 56% Y: 93% K: 0%
R: 184 G: 126 B: 43
Mario 1913 Font: Exmouth Regular C: 36% M: 56% Y: 93% K: 0% # b87e2b
R: 184 G: 126 B: 43
13.0.3 Pricing Strategy (CNY)
Brunch (Saturday-Sunday)
Lunch
Pricing (CNY)
Average Price (CNY)
198-298
233
Monday-Friday
168-268
Monday-Friday
218
Saturday-Sunday
268-468
Saturday-Sunday
368
Afternoon tea
239-418
52
Coffee
45-65
55
Dinner
388-1088
738
Note: Menu items and pricing are subjected to change and 10% service charge.
133
13.0.4 Media & Promotion Strategy Budget According to the Prada 2015 Annual Report, the advertising and communication costs are Euro 98,534,000 with 368 stores in the global market (Page 77). * One store advertising and communication costs = Euro 98,534,000 / 368 = Euro 267,755 = USD 305,133.6 = CNY 1,983,242.56
13.0.5 Wechat Account *Wechat Subscription ID: mainly sends news and information once a day. No payment service through Wechat. *Wechat Service ID: helps brands or companies better manage and provide service to customers through 4 daily news posts. Payment service available through Wechat