Sunspel - China Market Entry Strategy by Gabriele Rybalko

Route to china Marketing and Communication Strategy Report Gabriele Rybalko N0750762

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CONTENTS Introduction

Methodology

About the brand

PART I: WHERE ARE WE NOW? Brand overview

Market health

PESTLE analysis

Brand health

Consumer analysis

Competitor analysis

Brand positioning

SWOT analysis

PART II: WHERE ARE WE GOING?

Ansoff Matrix

Chinaâ&#x20AC;&#x2122;s market

Target consumer

PART III: HOW WILL WE GET THERE?

Route to market

Marketing strategy

Year one

Communication plan

Timeline for implementation & Budget

Measurements

Year two

Year three

Conclusion

List Of Ilustrations

References

Bibliography

Appendix

METHODOLOGY To support the foundation of this report, pri-

Equally, face-to-face method was used when

mary and secondary researched is evidenced.

interviewing Chinese focus group participants to gain a deeper insight.

PRIMARY RESEARCH

INTRODUCTION

During a visit to Sunspel headquarters, primary research was obtained through factory

The objective while conducting primary re-

observations.

search was to examine the awareness and reflect the perceptions of Sunspel brand in

SECONDARY RESEARCH

order to find out current situation and the

his report was written

gy and one year communication plan.

to examine and eval-

The plan is going to focus on low cost

uate

channels to fit in Sunspelâ&#x20AC;&#x2122;s budget.

British

heritage cur-

The purpose is to present different tactics

rent situation in existing markets and

Sunspel should take into consideration in

the opportunities it has when launch-

order to attract and engage with domes-

ing into China. Equally, identifying

tic and international Chinese consumers.

the key issues and challenges the brand

It will conclude with the findings from

could potentially face when expanding.

research analysis on how Sunspel can be-

The aim is to propose recommen-

come a successful brand in China as well as

dations on routes to Chinese mar-

maintaining their future in the UK market.

brandâ&#x20AC;&#x2122;s

Sunspel

ket via three year marketing strate6

opportunities brand has when launching in

Secondary research involved the collection

China.

of existing research through the use of web-

The results gained offered detailed informa-

sites, business and database reports such as

tion together with the unique research spe-

WGSN, Statista, Mintel alongside tangible

cific to this live project report, which includ-

books, marketing journals and other aca-

ed an online survey, focus group interviews

demic resources.

and a trip to Sunspel factory in Long Eaton, Nottingham. The method for collecting and analysing data was creating a multiple choice questionnaire via Survey Monkey. Regarding the sample size, while obtaining anonymous online survey results, the purpose was to obtain data from 100 different individuals.

ABOUT THE BRAND

unspel is a British premium brand

In addition, Sunspel’s expertise in crafts-

that was established in 1860 by

manship and innovation lead to variety of

Thomas Arthur Hill. The com-

collaborations with brands that share the

pany was started inspired by the

same vision – perfecting the essentials. Sun-

revolutionary thought - to make simple and

spel has developed products for such brands

casual underwear from high-quality fabrics.

as Paul Smith, Margaret Howell, Richard

Driven by the idea, Sunspel designed the

James, Thom Browne and Nicole Farhi.

first boxer shorts for men that were intro-

Sunspel’s quality clothing was highly valued

duced to the UK in 1947. The business was

by generations of screen stars and the film

further built up by selling Sea Island cotton

industry. Many costume designers, when

shirts and underwear.

looking for a British heritage and authentic-

Today Sunspel is especially famous for their

ity chose Sunspel to dress certain characters.

three key iconic products: boxer shorts,

One of the greatest examples - Daniel Craig

t-shirts and polo shirts. Even though the

in his role as James Bond sporting Sunspel

brand specializes in menswear there is se-

Riviera Polo Shirt in Casino Royale.

lection of womenswear too. Every product

In addition to this, Sunspel has also released

is made from the luxuriously soft cotton and

collections in collaboration with brands

designed with a special attention to detail

such as Dr Martens, Monocle, Union Made

in fabrication and cut. All the collections

and more.

are produced following the tradition of the finest British craftsmanship throughout the years in Sunspel factory in Long Eaton, Nottingham. 8

SiTUATION ANALYSIS Where is SunspeL now?

Mission The purpose of the brand is to create simple everyday clothing from exceptional fabrics that last the test of time.

VISION Whether introducing new products or using organic cottons, the vision is to always create new stories around the brand for customers to experience and want to come back for more on an international scale.

Essence The essence of the brand lies within its rich history and unique products that are all about the mix of classic designs with meticulous manufacturing. Therefore, Sunspel can be described as discerning British contemporary brand.

personality Intelligent, cultured, sophisticated, independent, timeless, modern, innovative, creative.

VALUES

BRAND overview 12

Quality, traditions, heritage, provenance, craftsmanship, sustainability.

pparel market is the world’s fastest-growing consumer market, accounting for more than 18 percent of

all final goods consumed (McKinsey & Company, 2018). According to the ‘’Bain & Company Luxury Study 2018 Spring Update’’ report it is estimated that by 2025 fashion luxury market could reach €390 billion globally in sales, growing 4-5% a year. When it comes to menswear, it has been highlighted as the fastest growing clothing subsector to 2022, as it is predicted to grow 21.2 percent, outperforming womenswear by 5.8 percentage points (PR Newswire, 2017). The increasing influence in fashion alongside with retailers growing investment in this particular category is driving the growth of UK menswear market. Menswear luxury market is currently thriving in otherwise struggling retail sector. ‘’According to WGSN Instock data, new-in products across the luxury menswear sector have grown 14% year over year as the market is increasingly influenced by a more casualised streetwear aesthetic (Coates, 2018). The increased choice of retailers for men has made the menswear market much more competitive and made male shoppers more demanding and less brand loyal, meaning retailers need to do more to stand out and differentiate their offer (Mintel, 2018). This includes an emphasis on product quality, active and consistent online presence and the uniqueness of the customer shopping experience both, in-store and online. Sunspel can enhance their operation within the UK market to increase foot traffic and build upon a customer base. Consumers drive every brand’s revenue, therefore their engagement is

market health

essential in order to meet business objectives, such as international expansion. Sunspel mainly operates within the UK market, with several stores in Europe, Japan, and the US. Therefore, it is crucial for Sunspel to improve their performance in their current marketplace before they can operate in a new market landscape, such as China.

PESTLE analysis

P e s

Political. Fashion business is often affected by certain political factors and regulations. When it comes to Sunspel, Brexit could be a serious threat for British fashion brand as the CEO Nicholas Brooke himself is particularly concerned about potential tariffs with Europe. For example, if existing trade deals disappear – designer, retailers and manufacturers would need to pay to trade with the EU. ‘’This would mean clothing and footwear tariffs of about 11 per cent, or just over £1 billion more each year’’ (Tobin, 2018). This may potentially cause difficulties for cross border trading. Nevertheless, this situation encourages Sunspel to seek for more worldwide approach deepening business relations with other regions around the world, such as China. Further expansion of the business into new markets and being on the lookout for sequent dissemination of the products is crucial for such brand as Sunspel.

Economical. Economic factors are always important in the context of international and domestic trading for fashion business. Despite that after Brexit the British government and businesses will have more freedom in trading with Chinese partners, continuous devaluation of pound will result in increased pressure on Chinese RMB. For Sunspel it could be difficult to sustain wholesale level resulting in decrease of profitability, precisely in domestic Chinese market.

Social. ‘’Two key but contrasting consumer groups are about to grow exponentially: the elderly and retired, and the millennials. To succeed, fashion companies will likely need to focus the way the serve both these groups’’ (Business of Fashion, 2017). Therefore Sunspel needs to consider tailoring their strategies that the products would be suitable for both generations by identifying clear values that would engage both of these age groups. If Sunspel is more flexible and relatable to different consumers, the brand will receive more attention and thus recognition internationally.

t l e

Technological. Digital platforms and strategies become more prevalent, integrated and sophisticated, with e-commerce rising, pure-play brands emerging, and brands engaging with consumers through virtual reality (The State of Fashion, 2017). One of the most significant trends is the recent rise of shoppable media. ‘91% of brands are using more than one social media platform’ (Hainla, 2017). Becoming more involved in social media would allow Sunspel to target a younger market while increasing their profits and brand recognition. By providing convenience through quick and easy shopping Sunspel’s consumer loyalty would increase as repeated purchasing would occur as a result as the brand would have adapted to their lifestyle being fast-paced.

Legal. There are certain laws and regulations that every fashion business must follow. When it comes to Sunspel, as the brand itself focuses on ethics and sustainability within the business and its’ supply chain, obedience to the law has to be ensured. Sunspel is concentrated on creating ethical brands’ image, therefore it is crucial, especially when expanding internationally, that the company complies with the local laws in the local markets everywhere it operates.

Environmental: Nowadays the green side of every fashion business has become essential. Consumers are rapidly becoming eco-conscious. The majority of Sunspel designs are manufactured locally in the UK, with additional outsourcing done in Portugal. To sustain a positive perception, Sunspel garments are made using rare organic sea-island cotton as well as all of the designs meet fair trade standards. Such contribution to the environmental trends allows Sunspel to keep on building strong reputation and trust with their existing and potential consumers.

SALES

AWARENESS

Sunspel experienced consistent growth in recent

Sunspel is a widely renowned for its timeless de-

years and had a global brand sales. For the year

signs and minimalistic clothing and accessories.

ended 31st January 2018, Sunspel made a turnover

However, according to the recent primary research

of £10,538,134 with an increase of £945,985 on

findings, considerable part of survey respondents,

the previous year. (see appendix). This is a positive

which mostly included younger audience, are not

factor which indicates that the business is steadi-

familiar with Sunspel contrary to their competitor

ly expanding. This puts Sunspel in a good position

brands. This indicates that there is a great gap for

to succeed in China. ‘’A business’s cash flow is of-

Sunspel to enhance their advertising by introduc-

ten cited as a key factor in its potential to succeed

ing more diverse marketing activities. This is crucial

long-term. ‘A company may have all the revenue in

to do, especially when preparing to launch in a new

the world, but without the ability to generate cash,

market and proceed the international expansion.

it can easily fail’’ (Smith, n.d.).

BRAND audit 18

PERCeptions

Usage

With their expertise in manufacturing and a great

The brand health check demonstrated that Sunspel

attention to detail Sunspel has gained a byword

is financially improving as profits have increased

for ‘‘a very British kind of luxury’’ (It’s Nice That,

showcasing brand’s development. As there is al-

2018). Based on secondary research findings, Sun-

ways a demand for basic clothing, a market Sun-

spel is perceived as masters in minimalism provid-

spel serves tends to bring steady profit. However

ing products of exceptional quality. Sunspel pro-

that market is quite niche, which means that there

vides basic essentials due to the focus on producing

is area for improvement when launching overseas

timeless classics. Sunspel only design good quality

in order to boost sales that would result in an in-

garments that are meant to last a lifetime, which

crease usage.

makes the brand stand out amongst trend based retailers as their products have a longer life-cycle.

consumer analysis

the portrait of a modern brit Name: William Age: 49 Gender: Male Location: London Occupation: Financial analyst Income: ÂŁ30,000 William is a financial analyst in one of the insurance companies in London. He owns and actively uses luxury items, e.g. smartphone, tablet. His free time includes reading, going for walks with family, dining out and travelling. William is brand conscious and prioritise quality over price, therefore is willing to invest

t the moment Sunspel consumers are hitting older demographic. They are aged 35-55 individuals, who belong to A/B demographics. They are uni-

versity educated, have professional careers and generate large disposable income, at least ÂŁ25,000 per year. This mature audience resides either in urban areas or suburbs. They are well informed and aware of current trends but may not follow them. When it comes to purchasing luxury products, they tend to have a great interest in brandâ&#x20AC;&#x2122;s history and heritage. Sunspel consumers are particularly conscious where they clothes come from and the impact on the environment. They require transparency from the brands alongside high demand for quality. When making purchasing decisions, consumers prefer to trust professional product reviews over friends and family recommendations.

in timeless classics.

Competitor analysis direct competitiors STRENGTHS. The brand has more than two centuries of experience in operation with its factory in Derbyshire, UK. John Smedley is known for using quality raw materials for their products, such as Wool Growers of New Zealand. All the collections are manufactured with a great attention to sustainability. The brand is also favoured by many celebrities. WEAKNESSES. Limited brand portfolio due to the lack of new product offering. John Smedley do not leverage their popularity to the full extent with a poor global expansion. STRENGTHS. N. Peal is a British luxury cashmere brand with rich heritage and an expertise in crafstmanship. Similarly to Sunspel, N. Peal is well-known for their iconic products, such as cashmere jumpers. The company is environmentally friendly. When shopping online, they offer free UK delivery and returns. Furthermore, N. Peal has a huge presence within celebrity endorsement since early times until now, including the names of Marilyn Monroe, Cary Grant, Princess Diana and even Daniel Craig in the latest James Bond films.

indirect competitiors STRENGTHS. Having 163 years of history and heritage, Burberry brand has gained a synonymous with British fashion. The label is instantly recognizable due to the distinctive checked pattern. Burberry has a strong global presence with more than 500 stores in 50 countries, selling products to the end consumer through retail and wholesale channels. The brand is fully engaged with their consumers through social media channels. WEAKNESSES. Premium price range, which excludes a larger percent of customers being unable to afford the products, narrowing a potential consumer base. Burberry offers limited product line, whereas other brands have diversified. STRENGTHS. Paul Smith identifies as a premium British heritage label with a strong global presence. The company has increased distribution network due to apparels being sold in approximately 35 countries. Paul Smith, the designer, is the brand ambassador. WEAKNESSES. Limited brand awareness in comparison to other lifestyle brands. Limited target demographic.

WEAKNESSES. The brand serves a relatively niche target market due to premium pricing. Product offer is also limited. STRENGTHS. As a British luxury label, Barbour has a strong brand name and heritage with three royal warrants gained throughout 125 years of existence. The brand is especially famous for their iconic locally manufactured waxed cotton jackets. Scottish actor Sam Heughan is a Barbourâ&#x20AC;&#x2122;s global brand ambassador.

STRENGTHS. Cos has a unique brand identity with a reputation of high-quality, modern and affordable garments. The brand also has a growing product offering. The brand is largely promoted through consumer advocacy and has a strong online presence. As a part of H&M group, Cos refers to a sustainable practice policy.

WEAKNESSES. Barbour suffers from a lack of awareness in the commercial market. Having a strong link with traditional British countryside apparel presumably narrows customer base, making it less appealing to a younger target market.

WEAKNESSES. Cos is a relatively young label experiencing a lack of customer interaction via social networks due to poor publicity. When purchasing online, delivery and refund options are not flexible.

brand positioning

s Sunspel is a luxury British staples brand, it serves a relatively niche market. Therefore, Sunspel faces a lot of competition from simi-

high price

lar brands that are more popular with having a bigger consumer

base and potentially receiving a bigger profit. Considering Sunspel is a premium brand, the products are manufactured locally from exceptional quality fabrics, which makes the brand stand out in the saturated market. Sunspel and their key competitors, such as John Smedley, N. Peal and Barbour offer similar range of products. However, based on the brand positioning map, they all took different positions. Sunspel stands in-between traditional and contemporary product higher price range axis. Meanwhile, John Smedley remains on a more traditional and relatively expensive product axis. N. Peal stood out by appearing on an expensive and more traditional and classic product scale.

traditional

contemporary

Contrary to this, Barbour took a position between rather contemporary and affordable brands. When it comes to Sunspel appearing in-between traditional and modern product range labels, this indicates that the brand is differentiating themselves by managing to balance innovation and rich heritage, while keeping a fair pricing. However, Sunspel may still be potentially threatened by their competitors who either offer tradition inspired products at similarly high prices or contemporary items at a lower cost. This leads to the idea that Sunspel needs to seek for new ways and marketing channels to support their concept

low price

of modern classics and entice a wider consumer base, e.g. releasing a celebrity endorsed range that would appeal to a younger demographic. Such approach to their vision could make Sunspel a striking brand amongst all of their direct and indirect competitors.

SWOT analysis

• Premium brand image

• Weak brand recognition even in the UK

• High-quality materials

• Only provides products that are basic

• Great attention to sustainability

• Does not have distinct marketing strategies

mier British brand image because of their rich heritage and a long history in the industry,

• Specific and niche totarget consumer

• High price point on majority of the products

strenghts

weaknesses

• Wide range of collaborations

• Insufficient brand awareness

• Endoresed by James Bond film character

ased on SWOT analysis, key Sunspel’s strengths are a focus on sustainability and ethical brand’s image alongside the use of the finest quality fabrics. Primary research results revealed that 88% of respondents consider quality to be the

most important when buying an item from a luxury brand together with the importance of sustainability rated at the average of 75 on a scale of 100. In addition, Sunspel has prewhich benefits the brand in the UK as well as in the international landscape. The variety of collaborations with other brands, such as Dr Martens, Leach Pottery, helps to expand Sunspel’s range successfully. Finally, being endorsed by the famous James Bond character boosts company’s sales.

• Multiple retailers as well as flagship stores across the world

However, the fact that Sunspel is not widely recognized even in the UK remains a great weaknesses of the brand. Primary research showed that only 11% of respondents were famil-

opportunities

Threats

iar with Sunspel. This indicates that brand awareness is not at the level of competitors, such as John Smedley or Cos. As Sunspel does not demonstrate diversity across their marketing strategies - brand comes across as poorly advertised. Accordingly, there is a lack of exposure.

• The growing population of millennial market • Consumers have higher interest in digital texhnology • Internationally recognized people used as brand ambassadors • More retail locations, e.g. pop-up shops

• Economic downturns due to Brexit

Furthermore, Sunspel only provides basic everyday-wear apparel, designs are not distinct

• Rapid change in consumer trends within retail

and instantly recognizable. Therefore, consumers that are trend orientated might potentially

• Culture and linguistic differences from Chinese consumers

A high competition in over-saturated retail market, fast changing fashion and consumer

• Competitors with similar product range at lower prices

market.

choose a competitor brand. trends, pricing pressure might be significant threats for Sunspel when launching into a new Nevertheless, the increasingly growing millennial market opens up a great opportunity for Sunspel internationally. Additionally, Sunspel could benefit from a collaboration with an influencer, as 43% of primary research survey respondents stated that this factor makes them buy into a brand, with the rest of the people saying that it either depends on the brand or the influencer chosen. This shows that widely recognized brand ambassador can highly influence consumers buying decisions and boost sales internationally.

Expansion plan Where is SunspeL going?

Existing markets

Existing products

new products

New retail places could be a tool to gain

Along with introducing new product

profit by selling products to existing con-

ranges, Sunspel could offer tailoring ser-

sumers. This would enable the brand to

vices provided within the store to create

become more accessible to their clients

more personal shopping experience for

due to the wider variety of locations. This

their existing consumers.

could be done by introducing pop-up shops. Sunspel would benefit from this by increasing brand awareness and be-

new markets

coming more attractive to their market.

By developing new store locations Sun-

When launching new products into new

spel would be selling their existing prod-

markets, Sunspel could consider person-

ucts and services through new platforms,

alisation as a tool to build loyal customer

therefore enhancing the experience and

base. It would allow to attract consumers

broadening the range of customers they

who look for more personal and self-cus-

are unable to reach. When introducing

tomized products.

products into new markets, Sunspel could popularize their iconic products, such as T-shirts and boxer shorts to build a brand image and reputation in other countries. This could be done via

ANsoff matrix 30

collaborations with local influencers.

hina is a large economy with an exceptionally strong consumption power. ‘‘For a growing number of retailers, China presents a major opportunity for expansion as local consum-

ers get richer and demand quality goods and services’’ (Rapp, 2018). Chinese consumers are now considered to be a key nationality driving the augmentation of the luxury market as they are the biggest spenders worldwide on luxury products. This means a great opportunity for Sunspel to further grow their business. It is worth to mention that China is not only a huge retail market but also by far the largest e-commerce market and has the highest online penetration on a global scale. Forecasted by LSN global, e-commerce is on track to become the world’s third largest luxury market by 2025. When it comes to menswear market in China, more male consumers are in pursuit of trendy apparel, giving rise to the faster growth of high quality leisurewear with trendy designs and suitable for multiple occasions (Euromonitor, 2018). This indicates that there is a great gap in the market for Sunspel to tap into.

Chinese market 32

target consumer

behavioural segmentation

he report has already illustrated the overall market and the future trends that are

target consumer profile Name: Zhang Wu Age: 28 Gender: Male

Chinese millennial consumers are completely reliant

shaping retail, therefore this will help to

on technology and like to document everything. They

provide a better insight of the target market in Chi-

are particularly keen on capturing memories and in-

na. Buyers of luxury in China are young, increas-

teracting with each other as well as brands through

ingly fashion-savvy and well aware of the price-val-

social media platforms, such as Wechat or Weibo.

ue equation.

Chinese millennials are digitally savvy with a preference to shop online with the use of social media and

Demographic segmentation

e-commerce sites due to wider variety of options pre-

Location: Beijing The main focus for Sunspel in China will be on

sented and an easier access to international brands.

the millennials aged 21-35. ‘‘Aged 35 and younger

In addition, Chinese millennials are frequent trav-

will make up 65% of China’s consumption growth

ellers and make the most of their luxury purchases

Zhang Wu is a graphic designer in one of the

through 2020’’ (Bain, 2018). This particular group

abroad. Specifically, they tend to travel to Britain for

companies in Beijing. Few years ago he came

belongs to A/B demographics, they are university

the quality of the fashion products and are willing to

back to China after studying in the UK. His in-

educated and generates large disposable income, at

pay more for them due to the fact that products are

terests include travelling, photography and mu-

least 200,000 CNY (£23,000) per year.

not mass made, compared to those in China.

geographic segmentation

psychographic segmentation

Chinese millennials live in urban areas of China,

Sunspel target consumers in China makes purchas-

presumably in larger cities. In addition, a considera-

ing decisions based on deeply entrenched social and

ble part of this generation are spread widely around

cultural values. This indicates that these individuals

the world, with a significant number of them liv-

try to behave decently and appropriately to maintain

ing in the UK, mostly due to their studies. ‘‘Chinese

a good public image, therefore they tend to have great

consumers, particularly younger generation, have

intention to purchase sustainable fashion items. Chi-

become international, they are now global citizens’’

nese millennials spend increasing amounts of their

(McKinsey & Company, 2018).

disposable income in search of products and services

Occupation: Graphic designer Income: 200,000 CNY (£23,000)

sic. Zhang Wu is brand conscious and is aware of new emerging trends but prefers minimalistic designs and quality clothing. He is actively engaged with social media, frequently using WeChat and Weibo. He usually shops online with the use of his smartphone.

that are as emotionally and aesthetically appealing as they are practical, reliable and durable.

Expansion strategy how will SunspeL get there?

ROUTE TO Market E-commerce Primary research findings showed that the majority of Chinese millennial focus group participants tend to shop online. There-

Social media

fore, the main route to Chinese market for Sunspel will be a cross

When launching into a new market social media presence for

border e-commerce sites as they provide a great opportunity for

brands is vital. According to the primary research, all the partici-

international brands to tap into Chinese market without a need

pants of Chinese millennial focus group actively follow brands on

of physical presence in China. Selling through e-commerce plat-

social media platforms. Therefore, to support their route to China

forms will be a great chance for Sunspel to test the waters in a

Sunspel will need to utilize WeChat and Weibo. These platforms

completely new market landscape.

will have to be linked with Sunspel’s shops on e-commerce sites

After in-depth research, the main e-commerce site selected is Ta-

and the official website. WeChat and Weibo would play a key role

oBao, which is the eight most visited website in the world and

in Sunspel’s operation within China as it is also a cost-effective

the largest China’s online marketplace. One of the greatest ad-

way to build awareness.

vantages of Taobao is that this platform of Chinese origin, has a distinct popularity with domestic and international Chinese market, meaning that it experiences a significant amount of traffic daily. However, the major limitation of Taobao is that links to this platform is blocked on WeChat, because it is operated by Alibaba Group, who is Tencent’s (WeChat’s owner) major competitor. As this is the case, Sunspel could also launch their products in China via one of the largest China’s online retailers JD.com as they have announced plans to sell £2 billion of UK goods to Chinese consumers in the next two-to-three years. With an increased interest in British products in China, a trade agreement signed between JD.com and the British Government’s Department of International Trade (DIT) will make it easier for British companies to access the Chinese market’’ (Raywood, 2018). For With special campaigns and promotions for UK seasonal products to celebrate Britishness, JD.com can be used as one of tools ensure Sunspel’s success in the region when reaching into Chinese market.

WeChat Over 1 billion active users

Weibo

Over 445 million active users

marketing aim To establish Sunspel as a recognizable and desirable British heritage brand in China in order to gain the maximum exposure in Chinese luxury market attracting domestic and international Chinese consumers to purchase online as well as in physical stores when travelling abroad.

marketing objectives

To enhance Sunspel brand image among Chinese consumers through digital and non-digital channels in order to increase brand awareness and grow social media following by 30% each year. To draw traffic into e-commerce sites via communication activities in order to witness traffic increase by 10% month by month. To increase sales by building Chinese millennial consumer

marketing strategy 40

loyalty and engagement in order to achieve growth in overall profits by the end of each year.

YEARone

In addition, as Licheng Ling is a designer herself, along with having her as an Chinese brand ambassador, Sunspel will team up with Ling’s own label Homeism to release a

limited edition of loungewear for men and women. uch

or the first year of launching into China, Sun-

move will make this collaboration more organic and ad-

spel is going to focus on gaining exposure

vantageous for both sides. Licheng Ling will benefit from

among Chinese luxury consumers domesti-

being associated with British premium brand while ex-

cally as well as internationally.

panding her brand portfolio. As for Sunspel, new range of

To start with, Sunspel will create accounts on the most

products designed by Chinese native will help the brand

popular Chinese social media platforms WeChat and

to gain even greater exposure among Chinese market

Weibo and hire mandarin speaking social media mar-

while still being in-keep with their own ethos, since both

keting assistant who could manage brand’s content as

brands share the same sense of values.

well as reply to customer queries in Chinese or English. For a brand like Sunspel that still operates mainly out-

Finally, at the end of the year Sunspel will open up a pop-up shop in one of China’s shopping

side of China, having such service for full CRM is es-

malls as they have huge amounts of foot traffic and attract the right demographics. Pop-up shop

sential as it would help to overcome linguistic barriers.

will be a great opportunity and a low-investment way to test the waters in China. This will allow

To further increase brand awareness among Chinese millennials Sunspel will also collaborate with Chinese KOL, New York based sustainable loungewear designer Licheng

Sunspel to create a long-term lasting impressions with potential customers by letting them experience the products directly. Pop-up shop will feature the classic Sunspel range as well as the limited edition loungewear, designed in collaboration with Homeism, which will be available exclusively at the temporary store.

Ling. As a micro-influencer she has a fair amount of followers across all of her social media accounts, including Weibo and Instagram, and a high engagement rate with both domestic and international Chinese individuals. ‘’Her style, described as “hyper-focused minimalism” by Vogue, is growing increasingly popular with a young millennial market in China’’ (Zheng, 2018).

communication plan SUNSPEL LAUNCH cAMPAIGN

SUNSPEL X HOMEISM CAMPAIGN

t the start of the year the aim will be to build up

As Sunspel will be releasing limited edition

following on Sunspel’s social media accounts. To

loungewear in collaboration with Licheng

achieve this, the first step will be the release of an ad

Ling and her label Homesim, to present the

campaign that will be displayed on outdoor advertising

collection Sunspel will host an open event at

stands in three largest China’s cities. The purpose of this

their New York City store together with the

campaign is to attract Chinese consumers’ attention while

designer. In relation to this, during the event

introducing them to rich Sunspel’s heritage and quality

they will lead a public discussion about sustain-

clothing. The ad will feature a QR code that when scanned will lead to Sunspel’s WeChat account where all the essential information about the brand and the products will

Clothing meant to last a lifetime. Discover now

be provided. For the attention of tourists, QR codes will

ability in fashion. Event will be live-streamed via social media to create even more buzz about the upcoming collection, which will be available at the pop-up later in the year.

be also incorporated in all the existing Sunspel stores. In

POP-UP SHOP Opening event

addition to this, a customer would be offered a 10% discount code for their first purchase for following Sunspel’s

At the end of the first year, in February, just

official account and sharing with their friends.

in time for Chinese New Year Sunspel will

Later on, Sunspel will introduce a giveaway contest exclusively for Chinese consumers and it will be run around Weibo as it is more open and public social media platform. Participants will be asked to follow Sunspel’s

hold a Pop-Up shop opening event in Beijing’s shopping mall. The purpose is to highlight 160

Your exclusive invite to the ultimate British quality experience

years of Sunspel heritage and officially launch Sunspel and Homeism collection. Sunspel will

featuring

invite the most influential Chinese fashion

account and share a post of their thoughts on sustainable fashion with a hashtag #sustainablewithsunspel in order to win a pair of Sunspel iconic T-shirt.

industry people and will give out 30 invitations to their social media followers. During

February, Oriental Plaza, Beijing, China

the event, the guests will encouraged to share their impressions on social media to spread the word about the temporary store and the products available.

Timeline for implementation March 2019

Sunspel social media posts

April 2019

May 2019

June 2019

July 2019

Aug 2019

Sept 2019

Oct 2019

Nov 2019

Dec 2019

Jan 2020

Feb 2020

QR codes in existing stores Launch campaign release Outdoor advertising WeChat and Weibo ads Giveaway competition Collaboration campaign release

MEASUREMENTS

Influencer posts Live discussion event NYC

To measure the success of the first year communication strategy

WeChat and Weibo ads

Sunspel will have to monitor their social media growth to ensure

Outdoor advertising

that significant increase of followers is achieved by observing social

Pop-up opening party Beijing

media reach and impressions. The brand would also have to record

BUDGET

QR code scans to check consumer engagement rate. In addition, it

ACTIVITY

DESCRIPTION

COST (£)

Launch campaign

Production costs (photoshoot)

Outdoor advertising

Three advertising stands in three different China’s cities. £5,730,00 for a stand per month.

£2,500 £17,190,00

WeChat ad

Ten days lasting ad. £114,6 for an ad per day.

Weibo ad

Promotional ad for target interest demographics. £2.29/1000 impressions. 50 000 impressions needed.

Giveaway competition

A pair of T-shirt for three followers (£70 pounds worth each). Shipping cost to China 3 x £20.

£270,00

Collaboration campaign

Production costs (photoshoot)

Live discussion event NYC

Includes catering/bar (£7,000), collection samples (£10,000) and DJ (£1,500), event photographer (£300), Chinese translator (£800)

£1,000 £19,600,00

WeChat ad

Twenty day lasting ad. £114,6 for an ad per day.

Weibo ad

Promotional ad for target interest demographics. £2.29/1000 impressions. 100 000 impressions needed.

Outdoor advertising

Three stands across Beijing. £5,730,00 for a stand per month.

£17,190,00

Pop-up shop opening party Beijing

Includes invitation cards (100 x £3,00), catering/bar (£15,000), DJ (1,500), decorations (£2,000), event photographer (£300)

£19,100,00

£1,146,00 £114,60

is essential to keep track of traffic on e-commerce platforms and Sunspel’s official website to make sure it’s consistently growing. All of the activities will have to be measured through initial demand for products.

£2,292 £229,20

TOTAL COST

£103,322,60

BUDGET ALLOWANCE

£150,000,00

BUDGET REMAINING

£46,667,40

YEAR two O

YEAR three

The beginning of year two will see Sunspel offering WeChat Pay option in their existing stores

and on e-commerce platforms via POS integration. This will be a great way to engage with

step forward as a brand by introducing a range of homeware in the second half of the year. A

Chinese WeChat users by providing such convenience when shopping online as well as entic-

new homeware range will be developed in collaboration with one of Chinese artists or furni-

ing Chinese tourists to make a purchase in-stores. ‘‘93% of Chinese tourists prefer to use mo-

ture brands to create a collection of home interior pieces. A new generation of savvy Chinese

bile payments when overseas and 73% would spend more if a business offered them a mobile

millennial shoppers pursue a higher quality of life in large cities, therefore unique or designer

payment option’’ (Nielsen, 2018).

homeware has become a new craze for them to discover. This trend is experiencing a significant

Sunspel will also focus on further developing women’s wear range in order to diversify brand’s

growth as younger generations start to live alone or become homeowners (Qiu, 2018).

product offering and expand their target demographics.

Such initiative will enable Sunspel to position themselves in Chinese market as an ultimate

At the end of the year Sunspel will launch a Chinese online shop followed by the introduction

British lifestyle brand, accordingly strengthening their international performance.

nce Sunspel has successfully established an online presence in China and introduced Chinese shoppers to their products via collaboration and the Pop-Up shop, the next step will be building consumer loyalty and increasing engagement. To

achieve this Sunspel will have to invest in digital improvements and new product development.

n year three Sunspel will continue focusing on building Chinese consumer engagement through their digital channels to create trustworthy relationships with their existing consumers and to reach for new ones in order to increase sales and ensure profits are made.

As the business expands and witnesses the growth of consumer base by increased demand for products, the marketing budget grows with it. If this is the case, Sunspel will take another huge

of personalised T-shirts and Polo shirts exclusively for Chinese market. Chinese millennials have a great sense of individuality and self-expression, therefore they demand for unique and innovative products form brands. Sunspel will incorporate customisation services within their Chinese website offering several component options, e.g. colour preferences, pocket style, packaging. This approach would be benefcial for Sunspel as it would make their products even more appealing for Chinese millennials but at a relatively low-cost as it wouldn’t require producing unique products from scratch. Interacting with a Chinese target consumer in this way would help Sunspel to gain a deeper understanding of their target customers’ preferences as the time goes by and consequently increasing Chinese customer loyalty, which will ensure further business growth.

Through careful consideration of the primary and secondary research conducted, as well as the business models used, this report has reflected on current Sunspelâ&#x20AC;&#x2122;s situation and health in the context of the UK market, following with opportunities the brand has when expanding into China. Sunspel might face inevitable challenges when launching into a new market as there are various threats that may affect Sunspelâ&#x20AC;&#x2122;s expansion and the way British business is going to opperate. However, considering that throughout many years Sunspel has gained experience on balancing their heritage with innovative approach, the brand has a great potential to succeed developing and thriving in Chinese market. The marketing strategy plan identified is crucial in terms of successful gradual expansion and prosperous trading. Alongside considering new product development in collaboration with Chinese influencers as well as enhanced service offering, the market entry strategy has also considered the demographic and demands of Sunspelâ&#x20AC;&#x2122;s target consumer. Therefore, the main route to market in China will be e-commerce platforms supported with social media as a vital communication tool to engage with international and domestic Chinese consumers. Through variety of promotional activities in and outside of China Sunspel will be creating connections with consumers that will lead to solid brand loyalty, allowing the brand to continue successfully operating in China and gaining additional profit.

CoNCLUSION 50

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appendix

INTERVIEW 2 Minjeong Kim, 2019. Student: Interview with Nela Grigelova and Gabriele Rybalko, Nottingham Trent University, City Campus, Shakespeare Street, Nottingham. 15th January 2019. Gabriele: How important is shopping experience for you when buying into a brand? Interviewee: For me, I prefer to do it online, because I can look for all the information and it is more convenient and you still can get a refund if the product doesn’t fit. Gabriele: Do you tend follow brands on social media platforms? Interviewee: Yes. Gabriele: And which platforms do you use the most? Interviewee: Instagram or WeChat. Gabriele: What is opinion on British premium brands, e.g. Burberry, Paul Smith? Interviewee: For me it is more traditional type of clothing, it is good they keep their traditional style, but they might open a new market share to as it is getting more popular. Gabriele: If a foreign brand had a more personalised shopping experience/you would be able to customise products, would you be more likely to purchase from them? Interviewee: Yes, definitely, because most Chinese people are buying mainstream brands like Supreme and they don’t even know the meaning of the design. If you are going for style you might want to stay authentic. Gabriele: If a brand would have collaborated with an influencer familiar to you, would you be more likely to purchase? Interviewee: I would first consider his style or work. If they are someone new and interesting, then yes, probably. Gabriele: How do you prefer to shop for luxury items? Interviewee: It depends, if its more than 1000 pounds I would prefer to buy it in a physical store, so I can check the details in person. Nely: And when the item is less than £1000, let´s say from 50 to 200 pounds? Interviewee: Anything less than £500, I will do It online. Interview transcript

INTERVIEW 1 Wong Sasa, 2019. Student: Interview with Nela Grigelova and Gabriele Rybalko, Nottingham Trent University, City Campus, Shakespeare Street, Nottingham. 15th January 2019. Gabriele: How important is shopping experience for you when buying into a brand? Interviewee: The service is important, ultimately, I would more care about the product. If the product is appealing to me, even if the service is bad, I would still buy it. But the service will affect the impression on the brand. Gabriele: Do you tend follow brands on the social media platforms? Interviewee: Yes. Gabriele: And which platforms do you use most? Interviewee: WeChat and Instagram. Gabriele: What is your opinion on British premium brands, e.g. Burberry, Paul Smith? Interviewee: I think it reminds me of high quality and rich heritage. British brands means a high fashion and not a streetwear. Gabriele: If a foreign brand had a more personalised shopping experience/you would be able to customise products, would you be more likely to purchase from them? Interviewee: Yes. Gabriele: If a brand would have collaborated with an influencer familiar to you, would you be more likely to purchase? Interviewee: Yes, because the influencer would allow me to gain a deeper insight on a brand and the product, so I can understand more about it. Gabriele: How do you prefer to shop for luxury items? Interviewee: I prefer to shop in-store, so I can try it on, see the quality.

INTERVIEW 3 Alvis Yuen, 2019. Student: Interview with Nela Grigelova and Gabriele Rybalko, Nottingham Trent University, City Campus, Shakespeare Street, Nottingham. 15th January 2019. Gabriele: How important is shopping experience for you when buying into a brand? Interviewee: In my opinion, if a brand provides an exciting shopping experience and creates a personal interaction with a customer, it makes you want to come back to them. Gabriele: Do you tend follow brands on the social media platforms? Interviewee: Yes. Gabriele: And which platforms do you use most? Interviewee: WeChat, Weibo and Instagram. Gabriele: What is your opinion on British premium brands, e.g. Burberry, Paul Smith? Interviewee: I think British brands represent luxury and modernity. Gabriele: If a foreign brand had a more personalised shopping experience/you would be able to customise products, would you be more likely to purchase from them? Interviewee: Yes, individuality is very important to me. Gabriele: If a brand would have collaborated with an influencer familiar to you, would you be more likely to purchase? Interviewee: Yes. If I wouldn’t be familiar with the brand but would know the influencer, it would make me want to get to know more about them. Gabriele: How do you prefer to shop for luxury items? Interviewee: I prefer to shop online with the use of apps or e-commerce sites.

INTERVIEW 4 Yang Huang, 2019. Student: Interview with Nela Grigelova and Gabriele Rybalko, Nottingham Trent University, City Campus, Shakespeare Street, Nottingham. 15th January 2019. Gabriele: How important is shopping experience for you when buying into a brand? Interviewee: It is very important, especially when more information about the products and offers are provided. Gabriele: Do you tend follow brands on the social media platforms? Interviewee: Yes. Gabriele: And which platforms do you use the most? Interviewee: WeChat, Weibo and Instagram. Gabriele: What is your opinion on British premium brands, e.g. Burberry, Paul Smith? Interviewee: British brands usually have a lot of history behind and the products ten to be a better quality. Gabriele: If a foreign brand had a more personalised shopping experience/you would be able to customise products, would you be more likely to purchase from them? Interviewee: Yes. Gabriele: If a brand would have collaborated with an influencer familiar to you, would you be more likely to purchase? Interviewee: Yes, I would be curious to familiarise myself with the brand as well. Gabriele: How do you prefer to shop for luxury items? Interviewee: I prefer to shop in-store just to find the right fit.

INTERVIEW 6 Zhang Jing, 2019. Student: Interview with Nela Grigelova and Gabriele Rybalko, Nottingham Trent University, City Campus, Shakespeare Street, Nottingham. 15th January 2019. Gabriele: How important is shopping experience for you when buying into a brand? Interviewee: I think it is very important and it doesn’t matter if you do it online or offline. Gabriele: Do you tend follow brands on the social media platforms? Interviewee: Yes. Gabriele: And which platforms do you use most? Interviewee: Back home in China I mainly use WeChat and here I sometimes use Instagram as well so I can be in touch with my course mates. Gabriele: What is your opinion on British premium brands, e.g. Burberry, Paul Smith? Interviewee: For me British brands are all about the history and quality products that are also very unique. Gabriele: If a foreign brand had a more personalised shopping experience/you would be able to customise products, would you be more likely to purchase from them? Interviewee: Yes, I think I would be more likely to buy it. Gabriele: If a brand would have collaborated with an influencer familiar to you, would you be more likely to purchase? Interviewee: If they work on something new and unique, I might consider. Gabriele: How do you prefer to shop for luxury items? Interviewee: Don’t mind shopping both in-store and online. Because more high-end luxury stores are not always available in small cities whereas online you can buy lots of items in one place.

INTERVIEW 5 Li Wei, 2019. Student: Interview with Nela Grigelova and Gabriele Rybalko, Nottingham Trent University, City Campus, Shakespeare Street, Nottingham. 15th January 2019. Gabriele: How important is shopping experience for you when buying into a brand? Interviewee: It is very important because shopping experience is what creates loyalty between a brand and a customer. If a service is great, you ultimately are more attracted to the brand and their products despite the prices. Gabriele: Do you tend follow brands on the social media platforms? Interviewee: Yes. Gabriele: And which platforms do you use most? Interviewee: WeChat, Weibo and Instagram. Gabriele: What is your opinion on British premium brands, e.g. Burberry, Paul Smith? Interviewee: British brands for me equals to high quality and rich heritage behind the products. Gabriele: If a foreign brand had a more personalised shopping experience/you would be able to customise products, would you be more likely to purchase from them? Interviewee: Yes, I like to individualise my style. Gabriele: If a brand would have collaborated with an influencer familiar to you, would you be more likely to purchase? Interviewee: Yes. Influencers usually introduce people to new brands which often turns out to be a great discovery. If I like influencers’ style, I tend to trust their opinion as they help to get a better understanding about new brands and products that I ultimately want to buy. Gabriele: How do you prefer to shop for luxury items? Interviewee: I to shop prefer in-store but due to the lack of usually buy things online with the use of social media.