W.S. Studio Strategic Marketing Plan by Daisy Zhang

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W. S Studio Strategic Marketing plan Daisy Zhang

Photoshoot/Styling/Packaging Design/ Logo Design/Digital Flats Design: Daisy Zhang Sketch: Yitian Sun Patterns and Prints Design: Salle Des Machines. Fr Modelling: Hayley Wallbridge Lianne Hayward Rebecca Harris Rochelle Harber Date Submitted: 6th June 2014 Word Count: 5,473

The overall objective of this project is to set up a new fashion label named W.S Studio. Introduced in January 2014, W.S Studio is an emerging womenswear brand offering ready-to-wear (RTW) collections and a distinctive personalisation service targeting the bridge apparel market. The strategic marketing plan will address branding, positioning, targeting and promotion of the business in preparation for the launch of the first autumn/winter collection in 2015 -2016 as well as the opening of an online store. The major areas of focus for the plan include researching the market environment and defining the brand position amongst its competitors, defining the consumer segment, creating a merchandise range plan accommodating existing logical resources, adopting a series of promotional strategies to boost the brandâ&#x20AC;&#x2122;s expansion, and finally to forecast the profit and loss of the business.

1. Business Introduction 2. Macro-environment Evaluation 3. Micro-environment Evaluation

CONTENTS

4. Brand Positioning 5. Marketing Mix and Strategies 6. SWOT Analysis 7. Implementation 8. Financial Plan 9. Conclusion 10 Appendices 12. Bibliography

1. Business introduction 1.1 Company brief W.S. Studio is an emerging brand launched by three fashion graduates, Daisy Mengxuan Zhang (Marketing Executive), Wenbo Wang (Design Director) and Yitian Sun (Designer) in 2014. The studio is based in London, and the business is entirely based online. Our company is positioned in the premium market, targeting working women aged between 25 and 37. W.S is an abbreviation meaning the surnames of the two designers Wenbo Wang and Yitian Sun. The word ‘Studio’ highlights the bespoke service the business provides. Designed by Daisy, the logo is simple and textbased with a typewriter print style in black and white. As a sign of how interactive the online shopping experience has become, as well as how popular the personalisation trend has proliferated amongst consumers today, the studio aims to provide accessible urban couture with an integrated internet-based personalisation service to consumers. Ready-to-wear collections and customisable products are offered directly through B2C’s official online store. The former is produced in the company’s factory in China, and the latter is semi-produced in the factory and assembled at our London studio according to customers’ specifications. W. S Studio also aims to offer a series of augmented services such as live chat service, free alterations and free delivery.

Future Vision To be the best contemporary bespoke e-tailer that embodies the individuality of modern women.

WHAT we do: Offer garments with individuality, fine quality and modern design style.

OUR MISSION

WHO we do it for: Give individual attention and create sensory â&#x20AC;&#x2DC;digital personalisationâ&#x20AC;&#x2122; shopping experience to modern female Internet shoppers.

HOW we do what we do: Operate the business in a safe, environmentally friendly and economically optimum manner. Actively recruit diverse, innovative and skilled employers to achieve operational excellence.

W.S Studio Brand Onion Brand In Actions Communicate on social media Viral marketing, fashion blogger advertising

Viral marketing, fashion blogger advertising,

Values Personality Independent

Admired Values

Fashion conscious

Essence

1.2 Brand Value The brand aim is to offer garments with individuality, fine quality and a modern design style. The brand aims to fill the gap in the market for women who are tired with throw-away fast fashion yet dislike highly branded merchandise or are too pragmatic to pay expensive prices for luxury products. Modern consumers see experience as new luxury and look for clothing that is stylish and affordable. Secondly, the core value of the personalisation service is to provide ultimate individual attention to each and every client. Personalisation will be a very important value in the future, and there is great confidence in the online bespoke service and the luxurious, warm and personal experience that will be brought to clients. W. S studio will become a platform for consumers who crave the opportunity to own a garment that is designed with their own preferences in mind.

Digital bespoke service - Be exclusive & affordable Exquisite prints

Offer intimate connecLondon based contemporary tion and exceptional brand that embodies the individualcustomer service ity of modern women. Best in class quality

Operate the business in a safe, environmentally friendly and economically optimum manner Confident

Modern and chic design style â&#x20AC;&#x201C;luxurious but minimal

Approachable

Chic and Edgy

Customisation products made in England

High functional online store

Considered selection of quality fabrics Target to fill the gap in the market for women who are tired with through-away fast fashion yet dislike highly branded merchandises or too pragmatic to pay dear prices for luxury products.

Aristocratic

Recruit diverse, innovative and skilled employers to achieve operational excellence

W.S STUDIO Brand Identity Prism Constructed Source (Brand)

Per s o

iqu Phys

Relationship

nalit

Custo (Pote mer Refle ge a m i c ntial) ted I Self r mage e Style conscious m Custo tial) Creative Inovative oten P ( Digital bespoke brand Premium, Upper side of middle market

Contemporary fashion Luxurious, warm and personal Best in class quality and operation

Middle class Unique Trendy Stylish

Constructed Source (Customer) Developed based on the â&#x20AC;&#x2DC;Brand Identity Prismâ&#x20AC;&#x2122; by Jean-Noel Kapferer, The New Strategic Brand Management, 2012

Internal Facets of the Brand

Represent modern women who see experience as new luxury and look for something exclusive, stylish, affordable and effortless.

Fashion conscious Independent Admired Aristocratic Confident

Culture

HOW OUR BRAND FEELS ?

External Facets of the Brand

An emerging contemporary womenswear brand with online only presence. Offer ready to wear collection and distinctive personalisation service targeting to premium mid market consumers.

2. Macro-environment Evaluation PESTLE analysis is a technique that facilitates a wide scan of the context and actual or potential macro level factors that affect a business and the decision which it makes (Cheverton, 2004). In this section, relevant macro environment changes within PESTLE framework is studied using a series of published sources such as government reports, academic press, economic statistics and social trend surveys, to help W.S studio to capture understanding of the current state of the market and achieve its objectives. A full demonstration with recommendation is written in Appendix 1.

1.3 Objectives • •

•

Political

Economical

Social

Corporation tax in the UK will be lowered to 20% from April 2015 (Oxlade, 2014) (Appendix 1).

The British economy is currently growing faster than in any year since 2007 with a GDP growth forecast of 2.4% in 2014 and 2.4% in 2015 and 2016 (OECD, 2014).

Indie women have become a significant consumer group with sizeable purchase and persuasion power in and outside the UK (WGSN, 2013).

Nearly one million 16 to 24 year- olds are unemployed in the UK. A rate of 7.1% unemployment has caused net debt to be two and a half times higher as a proportion of GDP than it was 20 years ago(The Times, 2014).

The increasing level of social inequality is described as unsustainable and self-defeating. The rich will get richer and the poor will get poorer (Brody, 2014)

The income tax personal allowance for 2014/15 is £10,000, rising to £10,500 for 2015/16. The basic rate income tax limit will decrease to £31,785 from April 2015 (Menon & Narasimhan, 2014)

For sales revenues from the first collection to reach £165,293, with 67% generated from the ready-towear collection and 33% from the customisation sector. To obtain £9,200 net profit from the first collection in year one, £16,800 net profit from the second and third collections in year two, and £22,400 net profit from the fourth and fifth collections in year three. Spread the brand via multi-channel marketing, especially via social media communication. Gain 1,000 ‘likes’ on the official Facebook page and 1,500 followers on Twitter within year one. Acquire 9,000 unique visitors in the first year, 40% of whom will be sourced from social networks (3,600 users), to convert 15% of unique visitors to register on the site ( 1,350 users), and have 60% active registered users (750 users). Build a smartphone-optimised site for mobile shoppers and have 14% of sales transactions via the mobile channel. Packaging to be 100% recyclable and biodegradable.

From 1st January 2015, intra-EU e-business operators will be taxed in the Member State in which the consumer is located (Menon & Narasimhan,2014). Labelling requirements stated in ‘The Textile Products (Indication of Fibre Content) Regulations’ have to be considered (hmrc.gov.uk)

The Eurozone economy is reported to have experienced just 1.1% of growth this year and 1.4% is forecast in 2015 (Cable, 2014).

Import duty ranges from 4% to 9% on women’s apparel imported from Mainland China (gov.uk)

The European population is projected to shrink from 738 million to 719 million by 2050, and there is a proportionate shift from younger to older people. The median age in the UK is 39.8 and the childbearing rate of 1.91 is below the replacement level – crudely defined as 2.1 (Harper, 2013).

Environmental

Technological

Since the difference between summer and winter is becoming less apparent, the traditional seasonal retail calendar may become meaningless, and the whole fashion system will be forced to change (Leonard, 2007).

90% of generation Y’ers check their phones as part of their morning routine, and are reported to be more comfortable about adopting online shopping than any other generation (Cosco, 2012).

Disposable fashion is argued to be unsustainable. With the rising awareness of environment protection, consumers’ passion for throwaway fast fashion may decline (Milsener, 2012).

The majority of Generation X’ers use technology only for convenience purposes such as online banking and shopping, and they are very willing to buy in new ways (WGSN, 2013). Generation X dominates the highest proportion of all generational groups who own multiple devices such as smartphones, tablets and PCs (Forrester, 2012).

A positive CSR brand image can bring commercial advantages to an organisation as well as add value to the product or service it offers (Milsener, 2012).

72% of Britons currently own a smartphone and three out of four UK mobile users will own a smartphone by 2016 (E-marketer, 2013). Consumers now tend to move towards multiple devices in order to make purchases, and online shopping is becoming a socially connected event (Kumar& Sundaram, 2012).

Legal

In the future, shoppers will be swayed by various green and ethical issues, and life-story labels will be the largest benefactors from the trend (Watson, 2010).

George Osborne recently suggested that the National Minimum Wage could soar from the current rate of £6.31 for those age 21 and over to £7 per hour next year (Chapman, 2014). Employers opposed to this increase claim that an unaffordable rise could harm job creation and hit small or struggling businesses (Parker, Rigby& Giles, 2014) (Appendix 1 - TableA1.51 -Current National Minimum Wage).

Apple’s launch of iBeacon has expedited the development process of hyper-targeting technology. Hyper-targeting delivers a highly personalised experience to shoppers with real-time and location-based tracking and thereby will largely facilitate the sales of bricks and mortar businesses (Levy, 2010).

Small and medium-sized enterprises (SMEs) such as W. S Studio often do not wish to register for or pay to establish ownership of designs, preferring to protect their designs through an Unregistered Design Right (UDR) (Conran, 2014). UDR arises automatically without the need for registration and can be retained for up to 15 years.

Worldwide shipments of 3D printers are forecast to increase by 75% in 2014, followed by almost double the number of unit shipments in 2015 (Churchill, 2014).

Communicating via globally recognised social networking sites such as Facebook and Twitter cannot reach those overseas audiences located in countries with Internet censorship (Eades, 2014).

60% of CEOs believe that smart machines will take over millions of middle class jobs, especially within the service and knowledge industries, and CIOs (Chief Information Officer) who have not attempted to champion digital workforce initiatives with their peers in the C-suite by next year will be cut short by 2023 (Gartner, 2013)

3 Micro-environment Evaluation It is essential to understand the changing marketing environment that our company will compete in. Fashion e-commerce and the bridge apparel market have been specifically researched in order to gain a clear view of future perceptions of the target customer base.

3.1 E-commerce •

E-commerce is the fastest growing retail sector in Europe(BBC, 2012).

•

Online retail would account for 21.5% of total retail sales by 2018(Rigby, 2014).

•

E-commerce contributes to 8.3% of the national economy in the UK(BBC, 2012) (Table 3.11 & Chart 3.13)

•

In 2014, £45 billion online sales are expected along with forecast growth of 16% on online consumer spend compared to 2013 (Rigby, 2014)

•

Clothing is the third most common type of merchandise purchased online, constituting a 63% share of electronic transactions (Sands, 2014)

Table 3.11 – Online Retail Sales Ranking (Centre for Retail Research, 2014)

Online Retail Sales

Online Sales (£bn) 2013

Growth 2013

Online Sales (£bn) 2014

Growth 2014

UK Germany France Spain Italy Netherlands Sweden Poland Europe

£38.83 £28.98 £22.65 £5.75 £4.48 £4.48 £3.13 £2.92 £111.21

16.8% 39.2% 12.0% 22.5% 18.6% 11.6% 15.9% 24.0% 21.1%

£44.97 £35.36 £26.38 £6.87 £5.33 £5.09 £3.61 £3.57 £131.18

15.8% 22.0% 16.5% 19.3% 19.0% 13.5% 15.5% 22.6% 18.1%

Chart 3.12 – The Most Common Types of Products Purchased Online (Nanji, 2013)

Chart 3.13 – Online retail shares of home market 2014 (estimiate) (Nanji, 2013)

*The SWOT micro-environment analysis is discussed in - 6 SWOT Analysis * The full analysis of the micro marketing sector is investigated in Appendix 2

3.2 Bridge Apparel Market

Old Rule: Avoid middle-market positions between low-cost and premium. New Rule: Seize the new-middle-ground position, above the best of the conventional offerings and below ultra-premium solutions. -Paul Nunes & Brian Johnson (2004) Graph 3.14 – UK retail sales YOY (BBC, 2013) •

The middle ground market is expected to be worth an estimated £8.6 billion in 2014, a 30% increase from 6.7 billion in 2011 (Sillitoe, 2011)

•

44% of consumers with a household income of over £60,000 think that they always have to choose between buying expensive merchandise to meet their needs, or merchandise that appears to be cheaper than what they would like to pay, yet is not what they really want (Nunes & Johnson, 2004).

•

45% of households with an income of over £89,000 said that they would be willing to spend more on purchases if there were better products and services that still fit their budgets (Nunes & Johnson, 2004).

•

Consumers’ increasing awareness of environmental protection has led to a trend of outgrowing unsustainable fast fashion (Appendix 1- Environmental Factors).

•

Britain’s ageing population, who make purchase decisions based on quality and service over price, will continually benefit premium middle market retailers. (Sillitoe, 2011).

Graph 3.15 – UK Consumer Spending (BBC, 2013)

Objective: To consider five key elements: the uniqueness of design, being highly price-competitive, exclusivity, unique product benefits, and the level of product quality (Jackson & Shaw, 2005) in building a contemporary retailing niche position that is purely based online. The use of an innovative digital bespoke service, a market-oriented pricing strategy, social media promotions and other augmented services help to attain differentiation in the market segment.

4. Brand positioning

USP: The first online-based retailer focusing on the middle-ground market and providing a digital customisation service.

The business idea was initially fostered by the question of where fashion-conscious women go shopping when they get older and move out of the target customer base of stores such as Topshop and Urban Outfitter. To fulfil this demand, a brand was created with the value proposition of it being more aspirational, more personal, of better quality and less conspicuous, whilst maintaining high fashion credibility and accessibility.

Positioned within the upper range of the middle-ground market, W. S Studio aims to attain high fashionability to maintain the pace set by fast-growing Parisian counterparts such as Sandro, Maje and The Kooples, and to have a pricing policy parallel to British mid-players such as Whistles and Reiss. Having an operating module based purely online, the business can effectively access this new market and reach a wide geographic customer base. The e-tailer position also enables the company to offer a large product mix, as well as reduce its operational costs and stock levels.

Positioning Map

Positioning Map 2

High Fashionability

Farfetch.com

Maje The Kooples All Saints

3.1 Phillip Lim Kenzo

Whistles Reiss

Asos.com

High Price

Low Price Zara Topshop

Sandro Maje The Kooples

£300

Average price index

W.S Studio

£400

Karen Millen W.S Studio Whistles Reiss Jigsaw

£200

John Lewis Hobbs

All Saints Zara

Wallis

£100

0 20

Average age of buyer Developed based on the positioning map produced by Long Tally Sally, in Mastering Fashion Marketing written by Tim Jackson and David Shaw (2009).

Low Fashionability

4.1 Customisation product positioning Consumers today want something that’s unique and reflects their personality. Retailers understand this and we are seeing more companies offer personalised products. As this trend gathers pace in 2014, there is a huge opportunity for small to medium enterprises to carve out a market niche against bigger retailers, while adding value to existing products through customisation. Nicholas Carlson, Business insider (2014)

Although personalisation is a premium add-on service of W. S Studio, equal attention is paid to both sectors of the business and this service has been positioned to be a key competitive advantage. The aim is to generate 33% of seasonal sales revenue through this business sector. The company’s personalised products occupy the niche between being entirely customised and selecting a single given option. Target customers are modern professional women who typically have more desire for and thoughts about fashion products than others. They want garments that allow self-expression, but often do not have the time or inclination to design everything themselves. The company gives them the opportunity to build “improvements” upon existing products. Additionally, this service broadens the product’s width and depth within a limited budget. The company can charge prices approximately 25% to 30% higher than RTW collections, facilitating an increased profit gain.

However, two risks of a mid-market brand offering a personalisation service are pointed out by Nunes and Johnson in Mass Affluence: Seven New Rules of Marketing to Today’s Consumer (2004): 1. Offering a product that is customised to the point that the company can no longer fully leverage its scale. W.S Studio’s approach: Up to 3 changes are allowed on each bespoke product, such as replacing fabrics or prints, which are already prepared, or changing the length and moving pockets. By doing so, the company can complete customisation within 10 working days, and the service admission can be controlled, so that it will be to be merely 30% higher than the basic cost. 2. Customers will have a negative perception of the mass production that supports affordable newmiddle-ground offerings W.S. Studio’s approach: Although material components are prepared in the factory in China for cost-saving reasons, all of the company’s customised products will be completed in the company’s studio in England with delicate workmanship. We also provide after sales consulting and complementary alteration service to bespoke shoppers.

My Account | View Chart (1)

ABOUT // SHOP // LOOKBOOK // HOME

TOPS

ABOUT // SHOP // LOOKBOOK // HOME

TOPS

CUSTOMISE

BOTTOMS

Choose a print:

DRESSES

Match with a fabric:

DRESSES OUTERWEAR

OUTERWEAR

CO-ORDERS

CUSTOMISE

* Free UK/EU Standard Delivery

Details: Details:

Colour: Beige Composition: 97% polyester, 4% elastane

Black cerry graphic print Colour: Grey/ Black Composition & Care: 99% polyester, 1% elastane Macchine wash or dry clean

March with a fabric:

Find W. S Studio on:

PRESS // SHIPPING & RETURNS // TERMS & CONDITIONS // SIZE GUIDE // CONTACT

Qty:

Find W. S Studio on:

8 1

Add to Cart

PRESS // SHIPPING & RETURNS // TERMS & CONDITIONS // SIZE GUIDE // CONTACT

4.2 Targeting Strategy Late generation X & Early generation Y Women aged 25 – 37 Middle Class Level of Income: £25,000 to £60,000 per year. The company targets fashion-conscious female shoppers with an average income level. Aged between 25 and 37, they are middle-class late generation X or early generation Y. They are professional and intelligent, and are likely to have a bachelor’s or master’s degree. They are the most likely to be multiple device owners, viewing technology as an important part of their daily lives, and they are willing to embrace new digital retailers. Compared to their peers, they are more independent and forward-thinking, and are potentially the first among their friends to shop at a new store or through a new channel. From a psychographic point of view, they seek clothes that are trendy yet sophisticated that can easily fit multiple aspects of their lifestyles. Geographically, W. S Studio will focus on serving UK and EU customers at the entry phase. The target will extend globally according to future sales performance. The company is likely to share customers with brands such as Whistles and The Kooples.

4.3 Consumer profile W.S Studio consumer Geographic

Demographic Gender Age Generation Life-cycle stage

Occupation Education Income Housing NRS social grade (Jackson& Shaw, 2009)

Psychographic Lifestyle Personality Self-image Purchasing behaviour

Personal interests

UK and EU internet shoppers within A (Thriving), B (Expanding), C (Rising) geographical segments according to ACORN categories (Appendix 9 - The current UK socio-economic groupings by the National Readership Survey (NRS)). The geographic target is planned to expand to the international market in year 2. Female 25-37 Late generation X & early generation Y • bachelor state • newly wed: no children • full nest1: w/child under 6 Professional, working in fashion, the media, or other creative industries Well-educated to degree or masters levels or have learned through an occupation in business £25,000 - £60,000 Renting or first property A - upper middle class: Higher managerial, administrative or professional B – middle class: Intermediate managerial, administrative or professional C1 – lower middle class: Supervisory or clerical and junior managerial, administrative or professional Career stage, busy, social, urban lifestyle. View technology as an important part of daily lives and feel comfortable in embracing new digital retailers. Style conscious, creative, innovative, confident, independent. Can balance life and work, family and social activities. Aware of fashion trends but not a slave to fashion. Seek to be fashionable, chic and trendy. Purchase products with high quality and wearability (functionality& practicality). Mix fashion products from different market levels See the internet as an important shopping platform Moderately price sensitive - happy to pay a bit more if a better choice presented itself Moderate to low brand loyalty – have numerous options and are likely to explore emerging brands To maintain loyalty, a brand needs to offer an exceptional shopping experience, to frequently communicate through social media, emails and promotions, and to constantly improve. Sports, social networking, blogging, music, travelling

The fashion industry is highly competitive and fragmented, and marketers have to concisely define their competitors and continuously provide creative and upgraded merchandise to add competitive advantages in order to maintain growth (Wiley & Sons, 2009). W. S Studio competes directly and indirectly with a number of competitors across a variety of market levels and retail channels. The premium middle market has its roots in France, where rival contemporary brands such as The Kooples, Maje and Sandro are among the most popular in the rapidly expanding market (Mccarthy, 2012). However, Sandro and Maje have weak global expansion strategies with only 13% and 6% of non-France sales respectively (Business of Fashion, 2014). The Kooples, which is currently focusing its efforts on the UK, is considered a key threat to the business. With the USP of offering garments for couples, The Kooples advertises via many media channels in the UK to raise its brand awareness, for example, on billboards, on the London Underground and even on Eurostar boarding passes. Its retail stores are always located next to top tier brands in order to create a luxury brand image. With a free UK express delivery policy to boost sales, its online store is well-designed to be highly functional and easy to navigate. However, The Kooples has significant weaknesses of low quality compared to its price point, and low size availability in stores (Raphael & Elicha, 2012). Furthermore, English mid-market brands Whistles and Reiss (which have similar target market and price points to W.S Studio) are considered key competitors within the domestic middle market. They share common advantages of having a well-established brand position, reputation and recognition, but Whistles and Reiss have experienced poor performance in marketing and digital customer communication/interaction. W. S Studio faces a significant threat from influential retail theatre Farfetch.com within digital retail channels. The site consists of numerous premium products from more than 1000 designer labels, sourced from over 300 brick-and-mortar boutiques worldwide. With 4.3 million visits per month and a basket value averaging £409, the company anticipates £163 million in annual sales in 2014 (Lawson, 2013).

4.4 Competitive Environment

Table 4.41 – Farfetch visitors by countries (urlm.co.uk/www.farfetch.com) 38

£185

5 Marketing Mix & Strategies

5.1 Product The product mix falls into one of two categories: a ready-to-wear collection and customisation. The RTW collection will be designed to be responsive to fashion trends and will be offered on a season-by-season basis. Personalisation and alteration services apply to selective designs in the RTW collection. A range of different prints and fabrics will be prepared for customisable silhouettes. The semi-finished clothing will be produced by the company’s Chinese manufacturer, and the set of components will subsequently be assembled in the company studio in London according to client specifications. The company’s approach to personalisation is considered to be more cost-saving and efficient than conventional bespoke tailoring methods. It is believed that consumers will not only be influenced by the positioning of the brand, but also by the benefits that are built into the product by suppliers, such as quality and design. Aldo Gucci, the son of the original Gucci brand founder Gucci Gucci, stated ‘quality is remembered long after price is forgotten, and this is the ultimate truism of all good fashion marketing management’ (Jackson & Shaw, 2005). Therefore, whilst guaranteeing fair profitability, production will be monitored, and the product quality will be optimised wherever possible.

5.2 Price Pricing is critical to every company’s success; the guidance provided by research must lead marketers to make the best possible bets in setting prices (Bakken, 2012). The business plans to adopt a market-oriented strategy in order to directly target the bridge segment. Pricing decisions are made in line with defined competitors. Ranging from £70 to £495, the price point is slightly lower than that of premium designers, at the upper end of the mid-market sector. Considerations in setting the pricing policy also include price competitiveness, (Table 5.21), the market survey (Appendix 15 – W. S Studio Market Survey) product designs, market circumstances, consumer type, promotion budgets, manufacture and distribution budgets, break-even points and the overall profit level.

Competitor price research (S/S 14 & A/W 14/15) Price in pound £ Top

Trouser/Jeans

Knitwear

Dress

Skirt/Shorts

Outerwear

Price Range

3.1 Phillip Lim

155-1570

155-850

335-1160

285-560

380-1315

220-830

495-1570

Joseph

65-1895

65-655

155-1095

125-495

115-1350

165-535

295-1895

Kenzo

65-1550

65-320

155-345

145-480

155-1550

200-260

400-1100

The Kooples

55-725

55-215

105-595

140-240

175-255

135-195

195-725

Whistles

35-695

35-350

65-495

65-325

75-695

45-495

95-495

Reiss

29-495

29-135

79-495

79-120

120-395

79-225

169-450

155-1570

22-149

69-139

45-169

49-225

49-350

Jigsaw

Source : brand boutiques/online store , harrods, selfriges, Farfetch.com, Net a porter.com , My wardrobe.com, mytheresa.com etc. Researched on 8th May 2014

Table 5.21 – Price mix of competitors

5.3 Range Plan The company has 1,213 units of garments. The target sales total across both sectors is £165,293, of which 67% will be generated by RTW and 33% from customisation. The cost of sales will be £43,193, and the company aims to generate £94,551 profit from sales. The net profit and other budget forecasts are explored further in the Financial Plan section of this report.

5.31 Ready-To-Wear Range

Table 5.311 -Product width and depth W.S Studio A/W 15/16 Width

In the RTW range plan, the company has 14 styles composed of 6 colours, 11 fabrics and 5 different graphic prints within 7 categories (Table 5.311 – Product width & depth). 835 units of garments will be produced, of which the basic styles with opening price points will have high production and the ones with full price points will be produced less. For instance, 80 units of ‘Basic turn down collar merino jumper (RSP £70)’ will be ordered, compared to 45 units of ‘Black grainy suede biker jacket (RSP £495)’. This is because basic styles can potentially sell faster than expensive ones, and the risk of holding large numbers of stock of the latter has to be considered. Signature garments such as the ‘Graphic print cropped top’ and the ‘Wide-sleeved graphic print dress’, are expected to be popular and will also be ordered a little more than other styles. The three types of size ranges are available according to varying designs (Table 5.312). According to premium-mid market levels, the business controls the RTW mark-up ratio at approximately 5.3, with signature pieces having a higher margin in order to represent the luxury side of the brand. The average price across the range is £197. The complete price range is £70 - £540, which appeals as it is narrower than that of competitors, such as the £55-£ 725 range of The Kooples and the £35 - £ 695 range of Whistles, for instance. This is due to the limited budget that only allows 14 styles to be launched. The company plans to broaden its product mix in future collections. The target cost is £28,145.The principal total value of the RTW is £150,500 if all products are sold at full price; a realistic sales target in the first season is to sell 50% of products at full price and the target sales revenue stands at £109,865 (post- VAT = £91,554). Two sales promotions will be arranged in order to uplift sales and remove stock. 20% of garments are planned to be sold at a 30% off reduced price during Christmas sales in December. Another 15% of products are targeted to be sold at a 40% off price during the end of season sales in February and March. 15% of stock will possibly be unsalable due to unpopular styles or sizing. The unwanted products will be handled by third party.

Depth

RTW

14 Styles priced from £85 to £540, and within 7 categories of skirt, top, jumpsuit, coat, dress, jacket and jumper.

Bespoke

7 silhouettes can be customised to 132 styles.

Fabrics 11 fabrics (cotton, polyester, acrylic, polyamide, silk, acetate, elas(Beige, grey, black, white, tane, merino wool, viscose, dark brown) lambskin, calf leather) 5 prints A number of different coloured fabrics and graphic prints can be mixed and matched to various combinations

Size range 3 sizes to 5 sizes depending on different styles 3 to 5 sizes alteration available

RTW SALES PLAN

AUG SALES

SEPT

OCT

NOV

DEC

JAN

FEB

£13,184

£17,578

£20,874

£15,381

£17,578

£14,282

12%

16%

19%

14%

16%

13%

NEW SEASON

XMAS SALES

END OF SEASON SALES

SALES £25,000 £20,000 £15,000 SALES

£10,000 £5,000 £0

TOTAL

£7,691

LAUNCH

A/W 15/16 Collection

MAR

£3,296

SALES %

Subsequently, it is assumed that the total sales revenue will be approximately £109,865 with around £63,409 post-VAT sales profit. In general, retailers expect more sales when a new season starts, during the Christmas sales as well as during the end of season sales, however, the business aims to have only 6% sales during the launching phase since, as a new brand, the company will take time to gain a customer base. It is planned generate most sales during November, during the Christmas sales in December, and during end of season sales in February.

Colour 6 main colours with 7 multi coloured graphic prints.

AUG SEPT OCT NOV DEC

JAN

FEB MAR

109,865

100%

Structured print top

girl

£95.00

£79.17

£18.00

£61.17

5.28

77.26%

S-L

Multi/Grey

£85.00

£70.83

£16.00

£54.83

5.31

77.41%

S-XL

Multi/Grey

60% cotton, 40% viscose. Crew neck, dropped shoulders, Machine wash or dry £6,650.00 long sleeves, Concealed back zip clean

W.S Studio AW 15/16 RTW Range Plan Cotton blend girl print skirt

Price in Pounds £

Total Value at RCP

Total Profit

£150,500

Total Cost

£97,272 Name

£28,145 Retail Price

Graphic print cropped top

Beige voluminized tweed skirt

£190.00

£125.00

Wide-sleeved graphic print dress

£235.00

Price Range £70-‐£495 RSP-‐VAT

£158.33

£104.17

£195.83

Ave. Mark Up No. options AverageRSP Ave. Margin Ratio £193 Target Cost

£35.00

£25.00

£40.00

77%

5.3 Mark Ratio

Profit

£123.33

£79.17

£155.83

5.43

5.00

5.88

No. units

Profit Margin Size Range

77.89%

76.00%

79.57%

Colour

No. Units

S-L Multi/Beige

XS-XL

Beige

XS-XL Multi/Beige

£185.00

£154.17

£35.00

£119.17

5.29

77.30%

S-L

Grey/Black

Basic turn down collar merinos jumper

£70.00

£58.33

£15.00

£43.33

4.67

74.29%

S-L

Beige

Structured print top

Cherry

girl

£145.00

£95.00

£120.83

£79.17

£28.00

£18.00

£92.83

£61.17

5.18

5.28

76.83%

77.26%

XS-XL

S-L

Grey/Black/

Multi/Grey

Buy at retail price

Attributes

Material

Doll graphic print with beige Fabric 1: Cotton100 colour tweed panels. Cropped Fabric 2: 72% cotton, length, round neck, short wide 17% polyester, 8% £11,400.00 sleeves, dropped shoulders. acrylic, 3% polyamide Concealed centre-back zip Hand wash or dry fastening clean Fabric: 72% cotton, 17% polyester, 8% Short length, tuck pleats, acrylic, 3% polyamide waistband, centre-back zip Lining: silk 30%, £8,750.00 fastening. acetate 70% Fully lined Hand wash or dry clean Fabric 1: Cotton100% Doll graphic print with beige Fabric 2: 72% cotton, colour tweed arm panels. 17% polyester, 8% Crew neckline, short wide sleeves, acrylic, 3% polyamide dropped shoulders. Lining: silk 30%, £15,275.00 zip Concealed centre-back acetate 70% fastening. Hand wash or dry Regular fit clean Cropped length jacket crafted in lustrous ribbed fabric with a tailored fit and clean silhouette. £9,250.00 Front pockets Collarless

£5,600.00

99% Polyester 1% Elastane Machine wash or dry clean

A textured, ultra-stretchy, pure 100% Merino Wool wool knit Slim-fit beige jumper Dry clean with turn down collar and long sleeves

Fabric: Viscose 100% Lining Composition: Contrast black cherry print skirt Polyester 97%, featuring elasticated waistband, Spandex/Elastane 4%. £6,525.00 loose pleat detailing and a rear zip Machine wash or dry fastening clean

60% cotton, 40% viscose. Crew neck, dropped shoulders, Machine wash or dry £6,650.00 long sleeves, Concealed back zip clean

Buy at cost Total Profit price

£2,100.00

£7,400.00

£1,750.00

£5,541.67

Black suede jacket

£85.00

£70.83

£16.00

£54.83

5.31

77.41%

S-XL

Multi/Grey

£5,100.00

Graphic print pencil skirt is fitted 60% cotton, 40% over the hips with aside hem frill viscose. detail, featuring a top hoop and Machine wash or dry hidden zip side fastening. clean

grainy biker

Face graphic print long dress

£2,600.00

£960.00

£3,290.00

Double-breasted wool blend coat

£1,750.00

£1,200.00

£1,260.00

£960.00

£495.00

£225.00

£412.50

£187.50

£90.00

£42.00

£322.50

£145.50

5.50

5.36

78.18%

S-L

77.60%

S-XL

Black

Black/White

Semi-fitted grainy suede biker jacket panelled with ribbed wool along the sleeves Funnel collar, fully lined, £22,275.00 concealed asymmetric zip fastening through front, two concealed zip pockets at front, two internal pockets.

Material: 100% Lambskin Lining: 52% viscose, 48% cotton Specialist leather clean only

£4,050.00

£14,512.50

Stretch mid-weight cotton blend fabric long dress with all-over print and flounced hem. Sleek, elegant silhouette Round £10,125.00 neck, sleeveless, and Concealed centre-back zip fastening.

56% cotton, 32% polyester, 12% viscose Machine wash

£1,890.00

£6,547.50

£2,700.00

£9,487.50

£3,250.00

£11,104.17

£1,500.00

£5,750.00

£1,875.00

£5,625.00

£28,145.00

£97,271.67

£10,129.17

£325.00

£270.83

£60.00

£210.83

5.42

77.85%

S-L

Dark Brown

Fabric: 70% wool, Contrast side pockets , statement 30% polyamide. split lapels, two interior pockets, Lining: 100% viscose £14,625.00 concealed button fastening Dry Clean Only

£5,958.33

£3,466.67

Face jumpsuit

High-shine pleated Leather skirt

£4,281.67

£3,290.00

Daisy print top with leather panels

£4,177.50

Totals Cotton blend girl print skirt

Graphic print pencil skirt is fitted 60% cotton, 40% over the hips with aside hem frill viscose. detail, featuring a top hoop and Machine wash or dry hidden zip side fastening. clean

£4,281.67

835

Black Cherry crop Jacket

Black skirt

£5,100.00

£1,260.00

£265.00

£145.00

£120.00

£220.83

£120.83

£100.00

£50.00

£25.00

£170.83

£95.83

£75.00

5.30

5.80

4.80

77.36%

S-XL

79.31%

75.00%

S-L

XS-XL

£1,750.17

Black/White

Black/Multi

835

Silk-blend jumpsuit featuring point 60% viscose, 40% silk Collar, three quarter sleeves, Hand wash or dry elasticated waist at back, two side clean £17,225.00 pockets, buttoned cuffs, and button placket through front. Regular fit

Supple stretchy fabric with nonFabric: 100% cotton stretchy leather panels Crew neckline, short wide sleeves, Fabric 2: 100% calf leather £8,700.00 dropped shoulders,seam detail Concealed centre-back zip Specialist clean fastening

High-shine leather skirt with raw 100% Calf leather edged seams £9,000.00 Short length, tuck pleats, centre- Specialist clean back zip fastening

£150,500.00

Table 5.312 -Size range of RTW Product Name Graphic print cropped top Beige voluminized tweed skirt Wide-sleeved graphic print dress Black Cherry crop Jacket Basic turn down collar merinos jumper Black Cherry skirt Structured girl print top Cotton blend girl print skirt Black grainy suede biker jacket Face graphic print long dress Double-breasted wool blend coat Face print jumpsuit Daisy print top with leather panels High-shine pleated Leather skirt Total

Number of Units in Each Size XS S (UK6) (UK8) 20

5.32 Customisation Range M (UK10) 20

L (UK12) 20

XL (UK14) -

Total No. Units 60

8 -

9 23 15

10 24 15

10 23 15

8 15

45 70 60

16 20 16

17 20

16 20

16 835

16 14

65 60 75

Seven designs within the RTW range are selected to be customisable, and each can be assembled in 15 to 24 combinations. 396 sets of components will be ordered from the factory in total, with the same sizing policy being adopted across ranges. The entry price point is £110, the average price point is £197, and the full price point is £294. The retail price listed for each personalisation product includes the customisation fee, which is around 25%-30% of the RTW price. For example, the RTW price of the ‘Cotton blend girl print skirt’ is £85 and its customisation charge is 27% of its RTW price, so the customisation retail price is £85*(1+27%) = £110. The average mark-up ratio of the customisation range is 5.3. The total manufacturing cost of the range is £15,048. The production cost of each custom product is estimated to be £7 higher than the same silhouette sold in the RTW range. The extra production cost includes more packaging and shipping expenses CUSTOMISATION RANGE SALES PLAN incurred when shipping from China, as well as extra assembling costs.

The principal total value of the range is £81,512, while the business aims to sell 50% of products at full price and 50% stock will be left unsold. We will not arrange price reduction sales on custoAUG SEPT OCT NOV DEC JAN FEB MAR misable sector since which will potentially devalue the position of customisation service. Our approach to sell the unsalable 50% of products is to assemble them to be RTW garments and sell them during the sales activities of RTW range. We plan to sell 30% unwanted stock along with RTW’s sales promotions (approximately 40% off) and prepare to possibly have 20% unwanted ones to give SALES £2,771.40 £3,879.96 £7,205.64 £8,314.20 £7,205.64 £7,205.64 £9,977.04 £8 to third party. SALES 5% is slightly different 7% to that13% 13% 13% 18% Subsequently, the target sales revenue is actually £55,428 (post VAT = £46,190) with £31,142 sales profit. The sales plan% for the customisation range of RTW. Due to15% the two-week lead-time, the peak sales of customisable products will occur ahead of Christmas, in October and November. Moreover, it is assumed that bespoke consumers, who would like to spend more on this premium add-on service, often have an inelastic demand to personalisation (and are less sensitive to price reduction), so the volume of purchases will not dramatically increase over LAUNCH NEW SEASON BUYING FOR XMAS END OF SEASON S the discount phase. However, the reduced entry level will potentially stimulate elastic demands from a significant amount of new customers.

CUSTOMISATION RANGE SALES PLAN

SALES AUG

SEPT

OCT

NOV

DEC

JAN

FEB

MAR

£12,000.00

TOTAL

£10,000.00

SALES

£2,771.40

£3,879.96

£7,205.64

£8,314.20

£7,205.64

£9,977.04

£8,868.48

£55,428

13%

15%

13%

18%

16%

100%

SALES %

£8,000.00 £6,000.00

LAUNCH

NEW SEASON

BUYING FOR XMAS

END OF SEASON SALES

£2,000.00 £0.00

*Decision based on the considerations of: UK and EU obesity situation Potential sales performance of individual styles Nature of different silhouettes Cost efficiency/ level of profit margin Budget

£12,000.00 £10,000.00

SALES can be described as inelastic if the percentage change in the unit quantity sold is less than * Demand for fashion products the percentage change in the price. In other words, a price increase does not deter consumers from purchasing and vice versa (Jones, 2005).

£8,000.00 £6,000.00

SALES

£4,000.00

SALES

£4,000.00

£2,000.00 £0.00

AUG SEPT OCT NOV DEC JAN FEB MAR

ABOUT // SHOP // LOOKBOOK // HOME

W.S Studio AW 15/16 Customisation Range Plan *The retail price listed for each product includes the custom fee

Total Value at RCP

Total Profit

£81,512

Total Cost

£52,879

Name

£15,048

Retail Price

Graphic print cropped top

Wide-sleeved graphic print dress

Black Cherry crop Jacket

£245

Price Range £108-‐£294

RSP-‐VAT

£204.17

Price in Pounds £

My Account | View Chart (1)

Ave. Ave. Mark No. options No. units Available combinations Margin up ratio £197.07 77% 5.27 7 396 132

AverageRSP

Target Cost

£43.00

Profit

£161.17

Mark up ratio

5.70

Profit Margin Size Range available combination

78.94%

S-L

5 prints with 5 matching fabrics can assemble to 25 different styles, but one combination is already used in the RTW collection. So there would be 24 combinations available. This rule applies to all customisable garments.Also,to ensure we ca assemble 3 units of each combination, we prepare 72 sets of components(24 x 3).

5.4 Place

Prints and fabrics are illustrated in the lookbook

Buy at No. Units Fabric 1 retail price

Fabric 2

Buy at cost Total profit price

Aprox. Custom RTW price fee in% of RTW price

SHOP AUTUMN - WINTER 2015-16

TOPS

ABOUT // SHOP // LOOKBOOK // HOME

BOTTOMS DRESSES OUTERWEAR

72 £17,640.00

£3,096.00

£11,604.00

£190.00

30%

CO-ORDERS

ABOUT // SHOP // LOOKBOOK // HOME

The business will operate on a CMT basis (buying its own CUSTOMISE fabrics and sending them to the manufacturer to be made a print: into garments), and retail directly to customersChoose through its own transactional website.

CUSTOMISE * Free UK/EU Standard Delivery

ABOUT W. W. SS STUDIO STUDIO ABOUT £295

£240

£245.83

£200.00

£53.00

£42.00

£192.83

£158.00

5.57

5.71

78.44%

XS-XL

79.00%

S-L

72 £21,240.00

45 £10,800.00

£3,816.00

£1,890.00

£13,884.00

£7,110.00

£235.00

£185.00

Details:

25%

Black cerry graphic print Colour: Grey/ Black Composition & Care: 99% polyester, 1% elastane

My Account | View Chart (1)

With aa chic chic and and innovative innovative styling styling at at its its With heart, W. W. SS Studio Studio embodies embodies the the individuality individuality heart, of modern modern women. women. Fashionable, Fashionable, cleverly cleverly cut cut of pieces inin carefully carefully selected selected fabrics, fabrics, colorful colorful pieces prints, and and sophisticated sophisticated detailing. detailing. prints,

30%

Macchine wash or dry clean

March with a fabric: ABOUT // SHOP // LOOKBOOK // HOME

ABOUT // SHOP // LOOKBOOK // HOME Find W. S Studio on:

PRESS // SHIPPING & RETURNS // TERMS & CONDITIONS // SIZE GUIDE // CONTACT

TOPS ABOUT // SHOP // LOOKBOOK // HOME

Black Cherry skirt

£190

£158.33

£36.00

£122.33

5.28

77.26%

XS-XL

£8,550.00

£1,620.00

£5,505.00

£145.00

30%

BOTTOMS

ABOUT // SHOP // LOOKBOOK // HOME

DRESSES

Match with a fabric:

OUTERWEAR

NEWSLETTER CO-ORDERS

CUSTOMISE

* Free UK/EU Standard Delivery

Structured print top

girl

£120

£99.75

£26.00

£73.75

4.60

73.93%

S-L

£5,386.50

£1,170.00

£3,318.75

£95.00

26%

NEWSLETTER Cotton blend girl print skirt

Daisy print top with leather panels

£110

£91.67

£24.00

£67.67

4.58

73.82%

S-XL

£4,950.00

£1,080.00

£3,045.00

£85.00 27%Newsletter Sign up to W. S Studio

to be updated with the latest news and new arrivals direct to your inbox

£180

£149.83

£33.00

£116.83

5.45

77.98%

S-L

72 £12,945.60

£2,376.00

£8,412.00

£145.00

NEWSLETTER NEWSLETTER

Colour: Beige Composition: 97% polyester, 4% elastane

LOOKBOOK 6

LOOKBOOK

24%

LOOKBOOK

W. S Studio on: Online Store -FindHomepage

Find W. S Studio on: Totals

The target cost is about £7 higher then that of RTW products.

Details:

Qty:

396 £81,512.10

£15,048.00

Find W. S Studio on:

50 Find W. S Studio on:

PRESS // SHIPPING & RETURNS // TERMS & CONDITIONS // SIZE GUIDE // CONTACT

Add to Cart

Mobile Site

Online Store Illustration

PRESS // SHIPPING & RETURNS // TERMS & CONDITIONS // SIZE GUIDE // CONTACT

http://daisyz8.wix.com/wsstudio 132

5.42 Supply Chain and Distribution 5.41 Online Store www.wsstudiofashion.com is the official brand site as well as the online store, which can be accessed via PCs, smartphones and tablets. The site has been established based on service provider Wix.com with a £15 operating fee per month. Currently, English is the only language option on the website. Containing a top bar and left side menu, the site is designed to be concise and functional with plenty of white space. Both the brand information and the online store page can be found very easily. Users can link to social network accounts via the bottom menu. The product page contains detailed descriptions and quality photographs, and a ‘share to social network’ function. To improve the customer experience and help to raise the customer conversion rate, a live chat function has been enabled, and the company is prepared to be patient when spending a significant time with customers to explore options and resolve issues. Other contact methods are email and the facility to leave a message on the site. PayPal is used for money transactions, and major card types such as Visa and MasterCard are all accepted. It is worth mentioning that the business has focused on developing an Omni commerce channel and linking the user experience via multiple screens. Nowadays, smartphones are the most common starting point for online activities and tablets are the most frequent starting place for shopping and trip planning. Online shopping is a multi-screen activity, and 67% of e-consumers have used multiple devices sequentially to accomplish their purchases (Burger, 2012). W.S Studio’s mobile site is smartphone-optimised with minimal design based on the need for functionality. The company plans to have 14% of sales transactions that originate from mobile shoppers. Furthermore, Web-Stat will be used as the agency enabling analysis of site visiting information in terms of the number of unique visitors, the most popular pages, the most frequently browsed products, and so on. The service charge is £5 per month. The company aims to spend £3,860 on website maintenance, which includes the salary of the website maintainer.

Product

Website

Live Chat

‘Back room’ supply chain management has a direct impact on the success of the ‘front of house’ distribution (Jackson & Shaw, 2005). Sourcing objectives of W. S Studio are efficiency, quality and a strong ethical commitment. We have an agreement with a factory located in Xi’an, a second-tier city in Mainland China. China is considered the biggest sourcing destination in the world, where labour and material costs are much lower than in the UK. The factory is run by a relative of one of the company’s designers, so that we can ensure a good relationship and good communication with the supplier, as well as guarantee a stable oversea supply chain and superior product quality. The company’s RTW products will be fully produced in the factory, and be labelled ‘Made in Xi’an’, using the city name instead of China to give consumers a more distinctive perception. The company aims to effectively leverage data at the point of sale to efficiently respond to market demand. If the company is under-producing certain styles, it has the ability to react immediately and to place more orders within a certain time frame. Having stringent safety regulations and ethical policies, the supplier guarantees that small volume of in-season top-ups can be achieved within approximately 5 working days. The carrier of the first collection is Parcel China (http://www.parcelchina.co.uk) via ocean freight. The lead-time is 2 to 3 months, and the total distribution cost with import duty is £3,851. Detailed shipping quote, tax rate and costs are provided in Appendix 7. Secondly, research shows that 80% of consumers are more likely to purchase a product online when offered free shipping and 64% are more likely to make a purchase when offered free returns and exchanges (Nanji, 2013). W.S Studio currently delivers to UK and EU customers . The B2C distribution will be operated by FedEx. Free delivery will be offered on all products (Appendix 16- W.S Studio delivery & return policies). There will be free returns on RTW products and free ‘send back’ for alteration on customisable products. Taking the shipping rate of FedEx into consideration, it is estimated that there will be around £5 ‘front room’ distribution expenses for each item, forecast to be approximately £6,600 in costs for B2C delivery in total. Besides, the London studio locating in Hammersmith is rented at an annually rental of £1,500.

Mobile site dropdown menu

Chart 5.421 – Purchase Drivers

Mobile site product page

Customers

Distribution Budget in Year One (Price in Pounds £) Studio rental £1,500

Website operating fee (Wix.com)

Cost

Annual cost

£15/month

£180

Website maintaining £3,860 Web-Stat application £5/month

£60

£300/month

£3,600

£20

Studio in London

Garment Sample

Web Maintainer salary (Part time)

Domain name

Product distribution from China £3,851 B2C shipping £6,600

Factory in China

Total

£15,811

5.51 Brand Communication

5.5 Promotion Market promotion consisted of conveying the values of the products and the organisation via mass media to a defined market, in order to influence people’s perceptions and promote customer loyalty (Molenaar, 2012). W.S Studio’s promotion objectives are to maximise brand presence via various marketing communication approaches, and to integrate the brand via service marketing. The company aims to acquire 9,000 unique visitors in its first year of which 40% will be sourced from social networks (3,600 users). The company also aims to convert 15% of unique visitors to register on the site (1,350 users) and for 60% of registered users to be active (750 users). The promotional budget for year one is £10,632.

Constrained by a limited marketing budget, W.S studio aims to focus mostly on social media promotion, where the aim is to actively post interesting contents on a daily basis, and to make consumers feel encouraged to share messages regarding the business with their social network friends. It is reported that around 3.4 billion conversations about brands occur every day and 70% of purchase decisions are influenced by word of mouth (WOM) (Flory, 2012). W. S Studio aims to build direct communications through setting up official accounts on Facebook, Twitter, Tumblr and Pinterest, and to gain 1,000 ‘likes’ on the Facebook page and 1,500 followers on Twitter within year one. The company will also work on monitoring conversations concerning the brand on the above social networks to gauge the potential for impacting purchase decisions. The Pnyxe Social Forum application (£4/month) will be adopted for use on the online store. This engages visitors to connect to social network friends and start a topic or comment on other people’s accounts via a social forum page on the company website. Furthermore, consumers now curate their own collections of products on communities such as Instagram, Tumblr and Pinterest. W.S Studio aims to trace the actions of potential customers in order to gain valuable insights into product trends within the targeted segment, and therefore to refine stock decisions accordingly. Secondly, a vital way to convert attention into sales is by creating trust, by using recommendations from well-known people (Flory, 2012). W. S Studio will offer a free trail opportunity to create bespoke garments to 10 selected popular UK fashion bloggers per month who appeal to the brand’s identity. We will offer product alongside with brand storybook, and a look book as a press pack to fashion bloggers. The company expects to gain brand publicity by having people blogging and posting about the brand’s outfits on their networks.

5.52 Direct Marketing Direct marketing can make promotion more personal and assist in increasing the loyalty level of existing customers (Flory, 2012). W.S Studio’s direct marketing strategy is to communicate with registered customers via direct emails with certain product benefits, based on their purchase history and via references to other participants. The MPZMail Email Marketing agency will be used, incurring a £3 charge per month. The brand storybook will also be sent to first time customers along with their purchases.

5.53 Google Adwards We will use Google Adwards to advertise to potential customers. The service package also includes Search engine optimization (SEO) to enable our site to rank higher in the search results (£0.5 per click). The approximate total cost in year one is £4,000.

*Active user : purchased within 6 months

Packaging and Printing Materials

5.54 Packaging

Price in Pounds £

W.S Studio will not use plastic bags. The products’ outer packaging will be a box and paper that are both 100% recyclable and biodegradable. All packaging materials and booklets will be produced in China.

Name Packaging box

Size label

Unit price

Unit

Total cost

280×200×60

£0.150

500

£75

400×300×80

£0.260

500

£130

450×350×100

£0.400

250

£100

£0.24= 500units

500

£1.2

Activity

Cost £1,548

500

Packaging and printing materials (look book, brand storybook, etc.)

500

Pnyxe Social Forum application

500

£4/month £48/ year

500

Press pack to fashion bloggers (exclude lookbook and brand storybook costs)

£5,000

MPZMail Email Marketing agency

£3/month £36/ year

Google adwards

£4,000

Total

£10,632

Woven Label

£0.016

1250

£20

Price Tag

£0.027

1250

£33.8

Price Tag String

£0.003

1250

£38

Brand storybook

£0.540

500

£270

collection lookbook

£0.700

500

£350

shipping cost (Ocean freight China to UK)

All of above ≈ 400 kilos ≈ 2 Cubic Meters £1,548

Total

Marketing Budget in Total

£530

Aside from the above strategies, there will be a free delivery & returns policy, a free alteration service for customisable products, and sales promotions, which are mentioned in the Product and Price sections of this report. The brand storybook is discussed in Appendix 5.

Strengths • • • • • • • •

Pure online retailing saves operational costs and reaches a wide geographic market Unique position of being a premium-mid market retailer with a digital bespoke service High fashionability, good product quality with well-targeted price points Stable supply chain in China, low production costs Mobile-optimised online store Live chat service Free delivery & returns, free alterations Multi-channel promotion with strong social networking promotion and communication

Weaknesses

6. SWOT Analysis

• • • • • • • • • •

Limited business budget Low product mix Narrow size range Zero brand awareness Low ethical involvement Two week lead-time to receive customised products is inefficient for customers The E-shop can only display product prices in GBP (but can be paid in other currencies) The E- shop is in the English language only Shipping is only to the UK and EU Unable to attract non-online shopping consumers

Opportunities • • • • • • • •

Growing amount of e-shoppers Ship to more countries Enable more languages Enable the prices to be displayed in different currencies Broaden product mix and size range More advertising and communication channels Improve production time of customised products Increase payment types and currencies accepted

Threats • • • • •

Potential low turnover at the entry phase Hard to gain consumer’s trust Shoppers will hesitate to purchase a customised product because they cannot return it Risk of handling large returns Failure to attract non-English speakers

December 2015 February 2016

Implementation Timeline

• • May 2015

May - June • • • • • • • •

7. Implementation

•

Timing and distribution are vital to successful sales. In a traditional fashion schedule, brands tend to have autumn/winter collections showcased in March and delivered to shops in September (Jones, 2005). Due to the budget limitations, W.S Studio will not showcase products via big fashion weeks, but will present garments during the UK graduate fashion week in May 2014 and 2015 (Daisy Zhang and Yitian Sun will participate GFW in summer 2014 and 2015 respectively). The implementation schedule for distribution is to finish the production of the entire range by January 2015, allowing 6 months for shipping and other matters, and launch on the market in June 2015. The company intends to start advertising from an early time in order to gain brand awareness, and to launch products earlier in order to allow a longer sales period for the first collection to ensure stock can be cleared before the next season, or to have extra time to reorder from the factory if low stock levels occur.

February -April 2014 •

• • • • • •

• •

Completed the market research in preparation • for developing promotional strategies. Brand profile and customer profile clarified digital range plan completed Promotional Plan completed Microenvironment researched brand position defined Competitors analysed

Website established Financial forecast completed Brand styling shoot finished Strategic Marketing plan competed Sample garments and sample packaging produced final marketing plan completed Graduate fashion week Samples of brand storybook and product lookbook produced The brand story book and the look book published online business e-mail address created Brand accounted on Facebook, Instagram, Twitter, pinterest, WSA degree show

• • October - December • • • • •

Production of the full range started Product packaging samples send to printing manufacturer for large volume production range produced by December stock ready to send to the UK product packaging ready to send to the UK

•

• • • •

March 2016 • • •

June 2015

March - April 2015

Second market research based on physical product samples compeled Final product range decided, order list sent to manufacturer in China garment samples from manufacturer produced and sent to us for quality and silhouette monitoring Few changes are made on the samples from manufacturer Garment samples from manufacturer confirmed Fabric and material purchased for the whole range production

Second time attend to graduate fashion week Final stock check, website ready. Actively adopt Social media promotion to the new collection

• •

July - September

•

Christmas Sales End of season sales

• • • •

Garments and packaging arrived at London Products shooting competed Website updated with the new collection Promotional platforms approved and new campaigns ready to advertise online Start marketing and PR activities contact to fashion bloggers

First collection launched

•

Stock from last season cleared Assess sales and profit Evaluation the effectiveness of marketing strategies Assess customer satisfaction Assess the increasing rate of twitter and facebook followers Assess number of unique visitors and registered customers

W.S Studio Strategic Marketing Plan

8. Financial Plan - Profit and Loss Forecast

Prospected In Recurring Operating Income (IROI) from year one is £9,200, which is generated by sales of the first collection A/W 2015/16. From the second year we will have both spring summer collections and autumn winter collections, so more sales revenue is expected. The net profit is forecasted to increase to £16,800 in year two, and £22,400 in year three. The break-even point of the first season occurs when £126,000 sales revenue generated, and this point will likely be reached in January 2016 according to the sales forecast. Net cash used for investing activities in year one is £60,000, and some expenses are to be paid from sales profits.

Revenue Sales revenue - VAT Cost of sales Gross profit Distribution costs Administrative expenses Other expenses (operational costs, travel expenses, salaries to accountant etc.) Marketing costs Salaries to shareholders Studio Rent and purchase of Equipment Operating Profit (Profit on ordinary activities before taxation) Tax on profit ordinary activities Profit on ordinary activities after tax Retained profit brought forward from last year Less dividend paid on ordinary shares Retained profit carries forward

2015 - 2016 £’000 (one collection) 165 138 (43) 95 (16) (2) (5) (11) (46.5) (3) 11.5 (2.3) 9.2 0 9.2

2016-2017 £’000 (two collections) 290 242 (90) 152 (35) (5) (10) (25) (53) (3) 21 (4.2) 16.8 9.2 26

2017-2018 £’000 (two collections) 350 292 (110) 182 (39) (7) (15) (30) (53) (10) 28 (5.6) 22.4 26 48.4

9.2

(15) 33.4

9. Conclusion A strategic marketing plan addressing brand positioning, range planning and digital communications to showcase the upcoming emerging designer W.S. Studio, in preparation an online store opening. Having a nichefor position as a middle market e-brand with personalisation service, W. S Studio has the potential to rise to the top tier within the market segment. In the marketing plan, a brand profile and a customer profile are clearly demonstrated. The market position and pricing policy are designed aligning with the marketing demands that are defined from secondary and primary marketing research. In this year, the brand will focus on digital communication and obtain brand awareness through multi marketing channels. The weaknesses such as low product mix, long lead-time of customisation products and limited shipping destinations will be improved gradually along with the expansion of the business scale.

*UK Corporate tax – ‘Small profits’ tax rate (profits £300,000 or less) : 20% (gov.uk, 2014)

APPENDICES

Table A1.11 - Corporation Tax rates

Chart A1.21 – Consumption Expenditure – UK

Appendix1. Analysis of the PESTLE environment and its impact on W.S Studio

Rate

From 1 April 2011

From 1 April 2012

From 1 April 2013

From 1 April 2014

Profits £300,000 or less (‘small profits’ rate)

20%

Profits above £300,000 (‘main’ rate)

26%

24%

23%

21%

A1.2 Economical From a purely statistical perspective, the British economy is currently growing faster than in any year since 2007 with forecasted GDP growth of 2.4% in 2014 and 2.4% in 2015 and 2016 (OECD, 2014). “The story on the UK remains very positive, with business surveys pointing to robust activity, confident indicators bouncing strongly, credit growth strengthening and asset prices rising,” said James Knightley at ING (Cable, 2014).

A1.1 Political Political change can signal shifts in values and priorities in the country and be reflected in the marketing strategies of many consumer products (Cheverton, 2004). W.S Studio, as a startup company, can be affected by many political decisions at present or in the future with regard to the tax rate, the GST, duties, tariffs, trade policy, currency policy, regulations of worker health and safety, etc. In order to stimulate economic activities, levels of corporation tax in the UK have been reduced from 23% to 21% from April 2014 and will be lowered to 20% from April 2015 (Oxlade, 2014)(Table A1.11). The income tax personal allowance for 2014/15 is £10,000 rising to £10,500 for 2015/16. The basic rate income tax limit will decrease to £31,785 from April 2015 (Menon& Narasimhan, 2014), while it is reported that the bank of England will not raise interest rates until 2015 (Cable, 2014). The updated tax policies will be beneficial to W.S Studio and help to exceed the spending power of mess consumers. Another positive factor to the company is the Seed Enterprise Investment Scheme (SEIS) in the UK. From 6th April 2014, the government announced to make SEIS permanent, offering a range of tax reliefs such as income tax and capital gains tax to individual investors for helping small, early stage companies raise equity finance (DLA Piper,2014). However, due to the online presence, W.S Studio will be impacted by the recent changes to the place of supply rules of value added tax. From 1st January 2015, intra-EU e-business operators will be taxed in the Member State in which the consumer is located (Menon& Narasimhan, 2014). Furthermore, the company has to consider the level of import tax, sales tax, and payroll tax, which would also cause overhead expense to the business. To sum up, the future of the company from a political point of view is relatively secure because UK is considered a low risk political environment to operate within. UK political system is stable compared to many other nations and there are no serious threats to the fashion retail industry. The current labour administration has generally proved to be efficient and the tax system is among the most attractive in the developed world (Table A1.12) (Gov.uk, 2014).

Table A1.12 - Income tax by country comparison

Country

Income Tax Range

Average Annual Salary

United Kingdom

0% - 45%

GBP 26,500

12.45%

Australia

0% - 44.9%

AUD 74,613

21.4%

Canada

15% - 29% (federal) + 4% 25.75% (provincial)

CAD 58,328

16.7% (federal) + e.g. 11.7% (Ontario)

USA

0% - 39.6% (federal)+ 0% - 13.3% (state) + 0% - 3% (local)

USD 55,048

25% (federal) + e.g. 5.9% (New York) + e.g. 3.4% (NYC)

UAE

N/A

Singapore

0% - 20%

SGD 76,188

Switzerland

0% - 40% (levied at federal, cantonal and municipal levels)

CHF 84,192

e.g. 21% (Genève commune in Geneva canton)

Tax Rate on Average Salary

Although British economy set to be fastest growing amongst G7, the turnaround is still described as “goldilocks”, because it is “neither too hot nor too cold” (Coren, 2014). Nearly a million of 16 to 24 year- olds are out of work in the UK. 7.1% unemployment had caused net debt be two and a half times higher as a proportion of GDP than 20 years ago (The Times, 2014). The employment situation links closely to people’s spending power on fashion products, and W. S Studio will have to consider this impact when developing the targeting strategy. Next, the euro zone economic environment, which has an impact upon W.S Studio’ sales performance within the Europe, is reported to eke out just 1.1% growth this year and 1.4% in 2015 (Cable, 2014). Therefore, W. S studio will only have very little room for error on pricing and market positioning strategies. Additionally, since the brand is sourcing from China, the fluctuation of currency exchange rate, as well as the increasing labour and material costs will be liable factors that affect the cost price and the profitability.

Chart A1.22 – Consumption Expenditure – European Union

A1.3 Social Social changes, culture diversities, and demographic facts of aging, races and ethnicities are crucial to apparel industry. Fashion retailers often align their product ranges to specific social segments to better serve the targets (Jackson & Shaw, 2005). Recently, indie women have become a significant consumer tribe with sizable purchase and persuasion power in and out side the UK. Married women occupy less than 50 per cent of the female population currently in the UK (Doughty, 2014). The research of NBC Universal Integrated Media Group shows that Indie women are 10% more likely to be the first among their friends to shop at a new store and 18% more likely to be a “fan” or follow a brand on Facebook (WGSN, 2013). “We see many examples of brands from soft drinks to cellphones who talk to the traditional 18 to 24 year old single. But the new single, the single parent of the more affluent, later, life-stage single is a segment that’s still emerging and expanding. “Said Adam Bowen, VP-strategic planning director at DraftFCB (WGSN, 2014) This may be seen as an opportunity for W. S Studio which is planning to target on 25 to 37 year old women with average to high-income level. To be able to include those Indie women into the target group, the brand’s product portfolio will have to be developed with the intention of ensuring the design appeals to this demographic population. In addition, the increasing level of social inequality, which is described to be unsustainable and self-defeating, has raised our concern nowadays. The rich get richer and the poor get poorer. Neville Brody (2014), the head of Brody Associates, illustrated the case down to a neat metaphor: “If the world was shrunk to 100 individuals (with all the existing human ratios the same) six people would own 50% of the wealth and 50 would suffer from malnutrition.” The schism from haves to have-nots is leading to a morbid social awareness that gradually stamping on our psyche. Design is integral to the mechanisms of the social construct, while more and more big designers pale in significant branding against the issue of massive inequality. Thus, designers are desired to not limit the scope for the simplification of easy-to-remember brands. Neville Brody encouraged that the best respond that designers can give to the social status is to take more risks, because minority interests will become extinct

and individual tastes will be ignored if risks are no longer taken (Bloomberg Business Week, 2014). Aging population has been a growing social concern in the UK. The European population is projected to shrink from 738 million to 719 million by 2050, and there is a proportionate shift from younger to older people. UK is considered to be an old country. The median age is 39.8 and the childbearing rate of 1.91 is below the replacement level – crudely defined as 2.1 (Harper, 2013). While this social phenomenon will benefit middle and high market level retailers as older people tend to buy less buy better quality.

A1.4 Technological With the Internet becomes an integrated part of our daily lives, consumers’ rapid acceptance of digital shopping and communications has shifted the fashion business environment. With considerations of technological developments, W.S Studio applied a purely online business model to target to late generation X and early generation Y, who are proved to be very active at this trade sector. Generation Y view technology as part of their daily life and are constantly connected. 90% of them check their phones as part of their morning routine (Cosco, 2012). It is reported that Y-ers are actually more comfortable about adopting online shopping than any other generation. They are likely to shop via new digital channels such as scanning images in a magazine or using click-to-buy when watching an online video (JTW Intelligence, 2013). Gen X-ers are also considerable online spenders. The majority of them use technology for only convenience purposes such as online banking and shopping, and they are very willing to buy in new ways (WGSN, 2013). The research from Forrester’s The State of Consumers and Technology: Benchmark (2012) demonstrates that generation X dominates the highest proportion own multiple devices such as smartphone, tablet and PC of all generational groups. Meanwhile, the fast global uptake of smartphones and tablets has modified how we shop and communicate, and as well has created more marketing opportunities to retailers. It is reported that 72% of Brits own a smartphone currently, and three out of four UK mobile users will own a smartphone by 2016 (E-marketer, 2013). Consumers now tend to move towards multiple devices to make purchases, so Omni retail channel has to be developed. At the meantime, online shopping is becoming a socially connected event. Businesses increasingly invest in social networking promotion because which approach brings highly positive Return On Investment (ROI). It helps market-

ers recognize potential customers, retain existing customers, acquire new customers through viral marketing, and build up relationships with them effectively (Kumar& Sundaram, 2012). W. S Studio will use social media marketing as an important part of the promotional strategy. Platforms like Facebook, Twitter and YouTube will be employed to communicate and interact with customers, while the company will also work on minimizing the risks of making customers feel that they are being used as spam agents or worry about the privacy issues. Some other technological advancements have largely improved the way companies target to potential consumers. Apple’s launch of iBeacon has expedited the development process of hyper-targeting technology. High street retailers will begin to take this proposition more seriously and deliver highly personalised experience to shoppers with real-time and location-based tracking. Hyper-targeting can take the online personalisation instore and thereby will largely facilitate the sales of bricks and mortar businesses (Levy, 2010). It may threaten pure online operators. The proliferation of mobile applications is another important opportunity for fashion retailers, and many of whom have benefited from selling or communicating to smartphone users via apps. While, emerging brands like W. S Studio will have to firstly build up brand reputation as well as gain enough amount of customer base, and then the next step will be developing shopping or branding apps to diversify the approachability or consolidate the customer relationships. Lastly, the emergence of 3-D printing and Smart machines has sparked a flurry in the society. 3D printing technology, which largely reduces costs via improved designs, is widely employed in fashion and textile industry. Worldwide shipments of 3D printers are forecasted to increase 75% in 2014, followed by a nearly doubled amount of unit shipments in 2015 (Churchill, 2014). Additive manufacturing is an organic blend of craft and hi-tech. The technology which enables designers to manufacture things they couldn’t make with traditional methods is expected to be put in use in the near future (Highfield, 2013). 60% of CEOs believer that smart machines will take over millions of middle class jobs especially within service and knowledge industries. It is predicted that organisations do not develop programs and policies for a “digital workforce” by next year will not perform in the top quartile for productivity and operating profit margin improvement within their industries by 2020. CIOs who have not attempted to champion digital workforce initiatives with peers in the C-suite by next year will be cut short by 2023 (Gartner, 2013)

Table A1.51 – National Minimum Wage

A1.5 Legal For emerging companies, legal elements appeal to be vital. Negative legal issues can lead to unexpected financial losses or damage of brand reputation. W.S Studio has to ensure it complies with both UK law and EU law when force into the market, such as the label requirement stated in The Textile Products (Indication of Fibre Content) Regulations 1986. W.S Studio also has to ensure it is abiding by Chinese legislations to be able to cooperate with local manufacturer as well as import goods from China. The recruitment activates of the studio will be affected by national legislative policies of minimum wage, worker’s health and safety, work place, human rights and equal opportunity. Recently, George Osborne suggested that National Minimum Wage could soar to £7 per hour next year from the current rate of £6.31 for age 21 and over (Chapman, 2014) (Table A1.51). Mr. Osborne proposed that the recovery meant businesses could afford to pay more and the proceeds of growth should be shared by workers. However, as opposed employers claimed, an unaffordable rise could harm job creation and hit small or struggling businesses (Parker, Rigby& Giles, 2014). Intellectual property is the essence to designers, the theft of which could negatively affect designers’ livelihoods and economical growth. The majority of the UK’s 350,000 designers, who contribute £16 billion to the UK GDP, rely on Unregistered Design Right (UDR). To trade within the fashion industry where designs are rapidly superseded, small and medium sized enterprises (SMEs) like W. S Studio, in particular, often do not wish to register or pay to establish ownership and tend to protect their creativity through UDR (Conran, 2014). UDR arises automatically without the need for registration and retains up to 15 years. The update in April 2013 from Intellectual Property Office (IPO) amended that to use a very small part of an existed design for inspiration is not defined as infringement. Although the reform helps to remove unnecessary barrier to innovation,W. S Studio has to be careful about using inspiration from others’ designs to avoid plagiarism. The development of digital marketing channels is one of the core promotional strategies of W. S Studio, yet communicating via global recognized social networking sites such as Facebook and Twitter cannot reach those oversea audiences who are located in countries with Internet censorship. For instances, in Pakistan, Syria, North Korea, Iran and China, a range of major media channels including Facebook, Twitter and YouTube are forbidden (Eades, 2014). Consequently, W.S Studio may have to promote via countries’ specific social networking channels when penetrating into international market in the future.

Year

21 and over

18 to 20

Under 18

Apprentice*

2013 (current rate)

£6.31

£5.03

£3.72

£2.68

2012

£6.19

£4.98

£3.68

£2.65

2011

£6.08

£4.98

£3.68

£2.60

2010

£5.93

£4.92

£3.64

£2.50

*This rate is for apprentices under 19 or those in the first year of level 2 or 3 apprenticeships. All other apprentices are entitled to the National Minimum Wage for their age. *The rates are usually updated every October, so the current rates apply from October 2013.

A1.6 Environmental The increasing unpredictability of climate change is a key issue within the environmental elements that challenges the fashion and textile industry. Beppe Modenese, the founder of Milan Fashion Week, has projected that since the difference between summer and winter is getting less obvious, the traditional seasonal retail calendar may become meaningless and the whole fashion system will be forced to change (Leonard, 2007). Increased temperatures galvanized by global warming in Britain have diminished the traditional buying and merchandising cycle. W. S Studio will launch its first collection S/S 2015 with the focus on UK and EU markets. It is important for the company to investigate into the climate change and develop the buying cycle into consumers demand. Over consumption of textiles for clothing is a major factor exacerbating the environment. Recently, disposable fashion is argued to be unsustainable. With the rising awareness to environment protection, consumers’ passion on throwaway fast fashion may decline (Milsener, 2012). Businesses have to consider not only the environmental factors that affect their sales, but also the impacts that they may cause upon the environment. It is studied that companies with high green credentials are more likely to maintain customer loyalty and avoid negative backlashes. A positive brand image can bring commercial advantages to the organization as well as add value to the product or service it offers (Milsener, 2012). In the future shoppers will be swayed by various green and ethical issues, and life-story labels will be largely benefited from the trend (Watson, 2010). W. S Studio seek to minimize the negative impact upon environment from aspects such as energy consumption control and the use of fabric and packaging material etc.

Appendix 2 - Micro-environment Evaluation with recommendations A2.1 Fashion E-commerce

A2.2 The Bridge Apparel Market

E-commerce is the fastest growing retail sector in Europe, where online retailing increased by a weighted average of 21.1% to £111.2bn in 2013. The future of e-tailing is projected to be very positive. The Centre for Retail Research forecast that online retail would account for 21.5% of total retail sales by 2018, up from 12.7% in 2012. In the UK, e-commerce contributes to 8.3% of the national economy, a bigger proportion than any of other of the G20 countries (BBC, 2012) . A recent survey demonstrated a strong annual start to the performance of online retail in the UK with a 17% year on year (YOY) increase from £6.7bn to £7.8bn during the first quarter of 2014 (Essential Retail, 2014). In 2014, £45 billion online sales are expected along with forecast growth of 16% on online consumer spend compared to 2013 (Rigby, 2014). A number of positive features of e-commerce have enabled this channel to develop at a rapid pace. Small to Medium Enterprises such as W. S Studio can gain numerous potential benefits from e-commerce, such as lower administration/production costs, reduced lead times/stock levels, increased sales, increased internal efficiency, improved relations with business partners, access to new customers and markets, improved competitiveness, and improved quality of information (MacGregor &Vrazalic, 2007). Additionally, the proliferation of smartphone and tablet use has broadened sales opportunities for e-commerce marketers. However, the drawbacks of retailing solely online and the aggressive competition within the online fashion market cannot be overlooked. From a marketer’s perspective, the lack of physical presence challenges a retailer to stand out from the market; non-home shopping customers cannot be targeted, and returns handling and website monitoring can lead to overhead costs. To consumers, online shopping lacks the social aspect of a purchase, as it is usually completed by consumers individually; private issues surrounding personal information or payment processing are a concern, and the minimum order threshold as well as lead times of delivery and its additional costs have to be considered.

Premium mid-market labels are widely recognized as having high quality, accessible prices and high wearability. Gary Harwood, one of the founders and directors of a leading strategic branding and communication design consultancy defined high-end products as being related to scarcity, quality and storytelling, whilst premium fashions are less ostentatious, more accessible, modern, and manufactured with precision (Roumeliotis, 2012). In recent years, the fashion landscape has been transformed by bridge brands such as The Kooples, Rag & Bone and Reiss that fulfil the gap between luxury and mass-market. The affordable premium clothing sector is growing rapidly as people tend to buy less but better quality clothes. According to a study by Barclays Corporate, the middle ground market is expected to be worth an estimated £8.6 billion in 2014, a 30% increase from 6.7 billion in 2011 (Sillitoe, 2011).

Furthermore, the online apparel market is very competitive. Clothing is the third most common type of merchandise purchased online, constituting a 63% share of electronic transactions (Sands, 2014). Thousands of retailers are starting up new businesses online every day and pioneering internet marketers increasingly embrace new techniques and facilities to improve both website efficiency and the user experience to enable more competitive advantages. Consequently, W.S Studio as an emerging fashion brand is now required to promote itself in more integrative and interactive ways. A range of considerations are listed below:

Driving forces behind the consumer trend of moving towards premium fashion from a value or high-end market:

•

Develop Omni-channel retailing and marketing, and link the experience of multiscreen usage (Essential Retail, 2014).

•

Social media integration: strong engagement and instant interactions.

•

A highly functional mobile site: to be mobile optimised, not just mobile friendly (Adeshara, 2014).

•

Personalised product display methods (article name research engines, recommended ranking / price high to low/ low to high).

“Consumers want quality as well as value, and are happy to trade up to buy statement pieces. “ - John Union, head of the Wales region at Barclays Corporate (2011) Demand for premium yet non-pure luxury is increasing, yet current options are very limited. Research shows that 44% of consumers with a household income of over £60,000 think that they always have to choose between buying expensive merchandise to meet their needs, or merchandise that appears to be cheaper than what they would like to pay, yet is not what they really want. Meanwhile, consumers’ high spending flexibility results in a promising market for pure mid-players. 45% of households with an income of over £89,000 said that they would be willing to spend more on purchases if there were better products and services that still fit their budgets (Nunes & Johnson, 2004). In summary, the future prospects for development within the bridge apparel market remains positive for both existing brands and new entrants such as W. S Studio, but the growth of the market will lead to increased competition in the future.

•

The turnaround of the UK economy has supported consumers with higher deposable incomes to allocate more spend to fashion products (Appendix 1-Economical factors).

•

Consumers’ increasing awareness of environmental protection has led to a trend of outgrowing unsustainable fast fashion (Appendix 1- Environmental Factors).

•

Britain’s ageing population, who make purchase decisions based on quality and service over price, will continually benefit premium middle market retailers. (Sillitoe, 2011).

•

Today, nobody wears luxury from head to toe, and luxury consumers prefer to trickle down to mix and match with emerging contemporary products.

Appendix 9 - The current UK socio-economic groupings by the National Readership Survey(NRS)

Appendix 8 - Personnel Plan for Years 1-3 In the first year, we will control shareholders salary to be minimal to enable more cash flow. Web maintainer and accountant are part time. The styling shoots are accomplished by daisy for the first collection. The company will allocate £1,000 for shooting in the future. Employees Director and Fashion Designer (full time) (Shareholder)

Location Studio

Year 1 £16,000

Year 2 £18,000

Year 3 £18,000

Marketing Executive (Shareholder) PA/Assistant Designer (full time) (Shareholder) Web designer and maintainer (part time) Accountant (part time) Photographer/Make-up Artist/Model (on contract) Total People

Studio Studio N/A N/A Studio

£16,000 £14,500 £3,600 £1,200 8 3 Full Time £51,300

£18,000 £17,000 £3,600 £1,200 £1,000 8 3 Full Time £58,800

Total Payroll (per annum)

Grade A B C1

Social Class Upper middle class Middle class Lower middle class

Chief income earner’s occupation Higher managerial, administrative or professional Intermediate managerial, administrative or professional Supervisory or clerical and junior managerial, administrative or professional C2 Skilled working class Skilled manual workers D Working class Semi and unskilled manual workers E Non working Casual or lowest grade workers, pensioners, and others who depend on the welfare state for their income, Tim Jackson, david shaw mastering fashion marketing p. 62 * The grades are often grouped into ABC1 and C2DE and these are taken to equate to middle class and working class respectively. Only around 2% of the UK population is identified as upper class,[3] and this group is not included in the classification scheme.

Appendix 11- The Taylor-Nelson lifestyle segmentation system and price elasticity.

Appendix 10 – VALS types

Tim Jackson, david shaw mastering fashion marketing p. 66

Appendix 12 - eMarketer Webinar: Key Digital Trends for 2014 (Elkin, 2013)

Appendix 13. ACORN Categories ACORN Categories ACORN Categories

ACORN Groups

A Thriving

1. Wealthy Achievers, Suburban Areas 2. Affluent Greys, Rural Communities 3. Prosperous Pensioners, Retirement Areas

B Expanding

4. Affluent Executives, Family Areas 5. Well-off Workers, Family Areas

C Rising

6. Affluent Urbanities, Town and Grey Areas 7. Prosperous Professionals, Metropolitan Areas 8. Better-off Executives, Inner City Areas

D Settling

9. Comfortable Middle Agers, Mature Home Owning Areas 10. Skilled Workers, Home Owning Areas

E Aspiring

11. New Home Owners, Mature Communities 12. White Collar Workers, Better off Multi-Ethnic Areas

F Striving

13. Older People, Less Prosperous Areas 14. Council Estate Residents, Better off Homes 15. Council Estate Residents, High Unemployment 16. Council Estate Residents, Greatest Hardships 17. People in Multi-Ethnic, low income ages

Appendix 15 – W. S Studio Market Survey (62 Answers) (23rd February 2014 – 15th May 2014)

Appendix 14– Approximate CP uplifts (Jackson & Shaw, 2005) Retailer Haute couture Luxury Designer Department stores High-street chains Discounters Supermarkets

Uplift Factor RSP = CP x 8 to 10 times RSP = CP x 5 to 7 times RSP = CP x 5 to 6 times RSP = CP x 4.5 times RSP = CP x 3.5 to 4.2 times RSP = CP x 2.5 to 3 times RSP = CP x 1.5 to 2 times

Answers from age group 26- 35(9 Answers) (23rd February 2014 â&#x20AC;&#x201C; 15th May 2014)

Focused Group Survey Researched Date: 3rd March, 2014 5:00 PM London 8 female shoppers aged between 25 and 37, who are considered significant sample of people who match the profile of our target audiences, have been approached as the focused group. The questions and answers are shown below:

Respondent Age Annual income Where do you live? In the past 12 months, how frequently did you shop online? Where do you usually shop for fashion products

1 27 £30,000 London Very frequently Harrods

2 26 £45,000 London/Hong Kong Average, moderately frequently Shopping around where I work

3 32 £30,000 London Very frequently Harrods

4 26 £25,000 London

5 27 £26,000 London

Very frequently I browse fashion products online all the time

Online, bond street, Selfridges

Average Harrods

In the past 6 month, what is your mostly shopped fashion brand?

Religion

ANNA SUI is the mostly shopped luxury brand, French Connection is mostly shopped high street one

AllSaints

Salvatore Ferragamo, Roger Vivier

Maje, sandro

What is your mostly shopped luxury fashion brand? When you purchase branded clothing, which feature of the product that you concern the most? How much would you like to spend on this product

Burberry Prorsum Anna Sui Design Design

RickOwens Design

Salvatore Ferragamo, Mulberry, Rolex

Chanel

Design

£150

£60

£250 -£300

£150 - £200

£100

Yes

30%

20%

30%

20%

No 5

Yes, Evening dress 3

No 7

No 10

Yes alteration to change the length of my dress 2

Structured girl print top Crew neck, dropped shoulders, long sleeves, Concealed back zip 60% cotton, 40% viscose. Machine wash or dry clean Would you pay a slightly higher price for customisation and alteration services of the clothing you purchase currently? how many percent of the retail price would you like to add on for customisation service in terms of making changes of febrics, colour of the garment, colour of the buttons, colour of the trimming, length of the clothes, or adding pockets etc. ? Have you ever had a customisation service? From 1 to 10. (10 as the highest), to what extent are you interested in purchasing customised apparel that are designed by yourself with online bespoke service (via website/mobile)?

Appendix 16 – W. S Studio delivery & return policies Age Annual income Where do you live? In the past 12 months, how frequently did you shop online? Where do you usually shop for fashion products

6 36 £50,000 London Once a week in average Harrods

7 29 £35,000 London Once a week very frequently Net a porter, Farfetch,

8 35 £45,000 London Average

In the past 6 month, what is your mostly shopped fashion brand?

Maje, sandro

Helmut Lang, Whistles

Ted Baker

What is your mostly shopped luxury fashion brand?

Chanel

Givenchy

None

When you purchase branded clothing, which feature of the product that you concern the most? How much would you like to spend on this product

Design

£100

Within £200

£40

Yes

20%

30%

40%

Yes alteration 6

Yes working suit

Respondent

High street

Bibliography

Appendix 17 – Terms & Conditions

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