VALENTINO STRATEGIC MARKETING PLAN ARTD 3039
HAYLEY WALLBRIDGE 25043846
Table of Contents
Page No.
I. Introduction II. Marketing Objectives III. Segmentation IV. Segmentation Profile V. Pen portrait VI. Brand Identity VII. Targeting & Posistioning VIII. Product IX. Price X. Range Plan XI. Place XII. Promotion XIII. Customer Service & Internal Marketing XIV. Forecast & Financial Details XV. Timeline XVI. Implementation & Control XVII. Appendix XVIII. Bibliography
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I.
Introduction
Valentino’s progression over the years can be seen in the year on year improvement in revenue. Between 2009 and 2012 revenue has exceeded targets by an outstanding 70%. While this is a great success, the luxury retail market is still unsteady so a strategic plan must be put in place. Valentino has undertaken major changes over the past few years in particular the new investors of the brand (Qatari Investment Group). Following a marketing audit it has been highlighted that growth and internationalization have been strong, particularly in China. Weaknesses have been identified as not reaching out to the target amount of consumer segments and Valentino’s online presence is weaker compared to competitors.
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II.
Marketing Objectives
Valentino’s marketing intent is to keep satisfying current loyal customers while focussing on growth and expansion. The brand intends to have a strong portfolio that reaches out to all luxury consumer segments in age. Different generations of females have in particular been studied as having different needs and wants in apparel. Studies have come to the current conclusion that there is little advertising in luxury brands aimed specifically at the baby boomers generation. This is of great advantage to Valentino whose current brands reach out to generation Y and X in particular. Intentions of this plan are to research feasibility and profitability of the possibility of creating a new sub brand for the mature female consumer. The objectives are:• New products. To create new sub brand named Valentino Rosa with new product range. • Select a new target market. Understanding the current market as to where there is a gap and understanding the needs and wants of the targeted consumer. • Maintenance. Maintain the current positioning internationally while enhancing the brand over Europe. • Increase brand awareness. The brand is well known already internationally, but awareness of the new sub brand will need to be implemented. • Pricing. To set budgets and determine the timeframe. Determining the entry level pricing of new products. Ultimately increase revenues. • Positioning. Where the new sub brand will be strategically positioned in the market taking in to account competitors and the target market. • Promotion. Planning the launch campaign and methods of advertisement to reach the correct audience. • Profit. If this will be profitable to the brand.
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III. By 2050 the estimated percentage of the population over 65 in Europe will be 42.2%
Segmentation
Population ageing is going to be a fundamental demographic issue throughout Europe in the upcoming years. Reports and investigations have shown a similar conclusion as to the prediction of life expectancy and expenditure etc. of the baby boomers (those born between 19-46 – 64). A recent study released by A.T. Kearney Global Consumer Institute has shown more findings on recent revelations “Falling birth rates and increasing longevity means that for the rest of this century, the fastest-growing consumer group will be over the age of 60.� (Walker & Mesnard, 2011) This is a huge change demographically; and power and control will show a major shift between the generations. As can be seen in fig 1 population percentage is predicted to dramatically increase in the group of over 60s per decade. By 2050 the estimated percentage of the population over 65 in Europe will be 42.2%.
Fig 1
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IV.
Segmentation Profile
The new over 50 year old is different to any other generation reaching this age before. This segmentation profile highlights the targeted consumer for both sub brand Valentino Red and proposed sub brand Valentino Rosa.
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Based upon the segmentation profile for Rosa’s target market, the strength in reaching out to this segment will be through shopping experience, advertising in magazines they read, and internal marketing.
The baby boomers pen portrait informs that the baby boomers will have a significantly higher networth than any previous generations when they reached their 50’s. They also own 80% of all money in savings and loan assosciations. They are the wealthiest generation. This generation care about their health, their 7
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VI.
Brand Identity
The brand identity board visually represents the feel of sub brand Rosa. The colour palette inspired from some of the visuals to the left, is highly significant, as it will be used to decide fabrics for products, the interior for the store and colour theme for advertising. The colours represent femininity, softness, romanticism and sophistication.
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VII.
Targeting & Posistioning
Valentino ROSA will be targeting the older female customers; the most important factor will be that the size and cut will be specifically designed to flatter the figures of older women. Valentino plans to own a wider and well-differentiated portfolio of sub brands; this will allow the brand to have greater coverage of the women’s and men’s markets. Under the Valentino name the diffusion lines are aimed at particular segments of the market. Here the focus will be on the mainline brand Valentino, Red and Rosa.
GENERATION Y CONSUMER FEMALE 14-24
The differentiation targeting strategy Valentino is working to, intends to make products suitable for luxury consumers of a wider age span. This will enable Valentino to be more finely tuned to each generation’s wants and needs. Valentino’s mainline and Red is currently successful in reaching out to the target market of gen Y and gen X. As the baby boomers are a key target group, Rosa will specifically be targeting this generation, they are currently in the background with marketing as it’s aimed at the younger consumer. The feasibility of this brand being a success is high as there is little activity in luxury brands specifically targeting this market currently.
GENERATION X CONSUMER FEMALE 25-45
VIII.
Product
As seen in the augmented product diagram (appendix IV), the actual product benefits are that all products have been made in Italy using the finest fabrics, and are all unique, designed and created by high quality Italian craftmanship. The augmented product benefits are that the products symbolise status and class. The products are accentuating, feminine, show age confidence and sophistication The product range is made up of evening dresses, coats, tops/shirts, trousers, shoes and evening bags.
The design objectives of the product are: • • • • • • • •
Accentuate the older women’s body. Use varied and intricate design. Products vastly evening apparel. Designed to satisfy consumer needs – longer dress lengths, mid-long arm length and lower heel on shoe. Manufacturing precision. Detailed craftsmanship. Fine high-quality materials. Developing the product through design prototypes. 11
IX.
Price
The price architecture of the range will be priced at premium-priced and top-priced. The top range products will help maintain the exclusivity of the brand. A premium pricing strategy will be implemented, this emphasizes the strength of the brand and that it is of high quality. The product range includes the products, cost price, retail price, target margin and total cost. The target margin has been matched to Valentino’s competitors such as Gucci and Fendi. The total cost stays in line with the budget and the amount needed for promotion. The budget for implementing Rosa is 50 million euros. The quarterly measurements expect to see
X. Range Plan Product Retail Price Cost Price Target Margin Unit Buy Total Buy Dress 1 € 1,200 € 792 66% 2,000 € 1,584,000 Dress 2 € 1,200 € 792 66% 2,000 € 1,584,000 Dress 3 € 2,500 € 1,675 67% 1,800 € 3,015,000 Dress 4 € 2,500 € 1,675 67% 1,800 € 3,015,000 Dress 5 € 3,900 € 2,535 65% 2,000 € 5,070,000 Coat 1 € 1,900 € 1,216 64% 2,500 € 3,040,000 Coat 2 € 2,925 € 1,930.50 66% 2,000 € 3,861,000 Coat 3 € 4,100 € 2,706 66% 1,800 € 4,870,800 Top 1 € 470 € 300.80 64% 3,500 € 1,052,800 Top 2 € 690 € 434.70 63% 3,200 € 1,391,040 Top 3 € 900 € 585 65% 3,200 € 1,872,000 Trousers 1 € 490 € 318.50 65% 3,500 € 1,114,750 Trousers 2 € 625 € 400 64% 3,300 € 1,320,000 Trousers 3 € 875 € 577.50 66% 3,100 € 1,790,250 Shoes 1 € 520 € 338 65% 3,200 € 1,081,600 Shoes 2 € 645 € 412.80 64% 3,000 € 1,238,400 Shoes 3 € 765 € 497.25 65% 3,000 € 1,491,750 Bag 1 € 930 € 613.80 66% 2,500 € 1,534,500 Bag 2 € 1,150 € 759 66% 2,200 € 1,669,800 Bag 3 € 1,295 € 854.70 66% 2,000 € 1,709,400 Total
€ 43,306,090
XI.
Place
Valentino Rosa will launch 3 directly owned stores opening in Milan, London and Paris. Opening in Italy will promote the brands roots and heritage and great potential is seen for the brand in London and Paris. In particular to the popularity and awareness of Valentino in these capitals and in relation to the infrographics showing the highest estimation percentage in over 60s income. This will be reviewed annually as plans are to expand the brand quickly. In reference to fig 3 there are now 53% of baby boomers generation on Facebook. In Europe 44% now own a smartphone and 68% use the Internet regularly. With these figures the Internet is a platform that can reach the older generation too. Products will be available to purchase online on Valentino Rosa’s personalised website, this will be available to smartphone. Availability online will initially be all over Europe, progressing to America and then Asia. The visual merchandising of the stores is key in creating an enjoyable shopping experience for target market. As the baby boomers buying behaviour is improved by a pleasing aesthetic. The visuals will be clean, crisp and modern and the colour scheme will be based on the palette on the brand identity board. Valentino ROSA intends to collaborate with interior designer Philippe Starck who’s vision for the store is of romanticism, poetry and tradition.
GALLERIA VITTORIO EMANUELE, MILAN
AVENUE MONTAIGE, PARIS
MAYFAIR, LONDON
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XII.
Promotion
From the 50 million euros budget, 7 million is planned to go on promotional activity. To emphasize the heritage of the brand the debut collection of Valentino ROSA will be shown at Milan Fashion Week. Advertisement campaigns using a new age of models will be used in magazines such as Vogue (Italian, French and UK), Vanity Fair, Harpers Bazaar and Sunday supplements. TV advertisements will be created as baby boomers statistically watch the most TV out of the generations, a aimed between programmes they are most likely to be tuned in to. Social media is another key platform Valentino Rosa will be on Facebook and Twitter.
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“One thing in the aging consumer marketplace that you do want to take advantage of is the primary advertising medium that we commonly refer to as “word of mouth.” (Leventhal, 1997) Word of mouth is a key part of our advertising so focussing on the aesthetics and creating an enjoyable/memorable shopping experience will be on the agenda. As part of the launch Valentino ROSA will host a selected clientele launch lunch. The venue will be in Italy at Palazzina Grassi that overlooks the Canal Grande, which is designed by ROSA’s interior designer Philippe Starck. Having this in Italy will promote the prestige and heritage of the brand and the venue and city emphasize the romanticism. Promotional lunches were initiated by competitor Fendi, and are expected to appeal to the mature luxury female consumer. The benefits will include:• Creating an event of fine food and socialising. • Exclusive private shopping after launch of collection in Milan Fashion Week. • Individual style advice. • High customer satisfaction. • High purchase profitability. • Creating a brand relationship. • Event that will spark word of mouth. • A free gift. • Specifically inviting the target clientele. Inspirational female celebrities of the baby boomers generation will be sent free items to endorse, women such as, Helen Mirren, Susan Sarandon and Michelle Pfeiffer. These women will convey the message of looking youthful and beautiful over 50.
Valentino invites you to an exclusive Launch Lunch to celebrate the introduction of Valentino’s new brand Valentino Rosa. Featuring our first collection for Autumn/Winter 2015-2016.. As seen in Milan Fashion Week. Saturday 3rd October 2015 11am
RVSP By Friday 25th September 2015 E: Valentino-rosa@valentino.com T: 02 9492 5907 RVSP essential for seating allocation. Invitation not transferable.
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XIII.
Customer Service & Internal Marketing
Passionate and knowledgeable staff plays a vital roll in the service that will be supplied to the customers. Valentino academy will teach staff values of the brand, give customer service training and extensive teaching of the product. Visual merchandisers will have plan layouts to how the store shall look, with the best selling pieces made viewable in the window. The objective will be to create and enjoyable, pleasurable and unforgettable shopping experience. Products will be packaged with precision and intricate detail. McGraw-Hill’s Internal Marketing Wheel will be implemented to hire the right people to represent the brand, training and empowerment to deliver high service, providing support systems and measuring internal customer service quality and retaining the best staff through rewards.
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XIV.
Forecast & Financial Details
These are the forecasted revenue targets for 2013 and 2014. They are based on past inclinations, fixed costs and variable costs. The revenue is for the entire Valentino Group, as 2014 will be the year of launching the Valentino Rosa brand a slightly lower percentage increase is expected from the year before.
The budget for Valentino Rosa including promotional is â‚Ź50,000,000 this is based on the revenue from 2013. A higher percentage of the budget will be spent on the cost of the production of the products. From the range plan the unit sales and sales forecast have been predicted as can be seen in the graphs on the following page. Greater sales are predicted during the time around Christmas due to evening dresses being in greater demand and the after Christmas markdowns. Summer months also peak as the brands spring/summer collection will be seasonally appropriate.
The first opening stores will be directly operated stores, this reinforces the brand image, the brand will be working with the same importers and distributors and the mainline brand. The made in Italy label will be on all products.
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XV.
Timeline
April 2014 - 2016 Timeline Sub Brand Launch
FINALISE LOCATIONS OF STORES, INTERIOR DESIGN COLLABERATION WITH PHILLIPE STARCK
PRODUCT DESIGN PROCESS BEGINS
DEBUT COLLECTION AUTUMN/WINTER 15-16 FIRST SEEN AT MILAN FASHION WEEK
CREATE WEBSITE ALSO AVALIABLE ON SMARTPHONES
SHOOT CAMPAIGN AND BEGIN EDITING
CREATE VALENTINO ROSA ACADEMY STAFF TRAINING PROGRAMME
APRIL 2014
LAUNCH OF NEW ADVERTISMENT CAMPAIGN IN MAGAZINES, ONLINE, TV AND BILLBOARDS
ADVERTISMENTS FIRST IN MAGAZINES, SUNDAY SUPPLEMENTS & BUS STOPS IN DESIRABLE TOWNS
APRIL 2016
APRIL 2015
FABRICS SOURCED FINAL DESIGNS SENT TO MANUFACTURER’S SELECT MATURE MODELS FOR ADVERTISING CAMPAIGN
COMPLETION OF STORES DESIGN PURCHASE & PLACE INTERIOR DECOR
CREATE SOCIAL MEDIA PAGES, BEGIN BUZZ ON MAIN VALENTINO SOCIAL MEDIA
ANNUAL REVIEW OF PROFITS
FIRST ADVERTISMENT SEEN ON TV
INTERVIEW, HIRE & TRAIN STAFF FOR STORES
LAUNCH LUNCH HOSTED AT PALAZZINI GRASSI IN VENICE SELECTED CLIENTEL INVITED
DESIGN UNDERWAY FOR SPRING/ SUMMER COLLECTION LAUNCH EVENT
STORES OPENING IN LONDON, PARIS & MILAN
SPRING/SUMMER 16 COLLECTION - FIRST SEEN AT MILAN FASHION WEEK
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XVI.
Implementation & Control
The plan is to be implemented from the date of April 2014 as can be seen on the timeline. After implementation of Valentino Rosa a control process will be put in place. This will entail setting the original standards expected and setting out measurement intervals, which will take place quarterly. Measurements will include:• • • • • • • • •
Monitoring sales of each product Checking if reached break even point The amount of units sold monthly Measuring finance, quarterly profits If product units are meeting monthly targets If the channels, pricing and communicative actions are having the right effect seen through sales If advertising campaigns are creating enough awareness to the mature female luxury consumer Which branch is having the most success How quarterly results compare to the Valentino RED
The first quarterly standards in place for Valentino ROSA are:• To sell 33,000 units in October • An average gross profit of 35% • Monthly gross profit be over 30% Once measured these will be compared with the original standards set out at the time of implementation. If below standard then action will be taken to improve the problem.
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XVII. Appendix
VALENTINO ROSA BRAND IDENTITY PRISM
I. Brand Identity Prism
BRAND PHYSIQUE
BRAND PERSONALITY Luxury
Luxury apparel and shoes High quality Service that delights customers
Strong brand image
Unique Timeless
Beautiful Design Luxurious fabrics
Passionate employee’s
Glamorous Sophistication
Elegance Feminity Passion Heritage Made in Italy
Personal
International
RELATIONSHIP
Reliability High communication Regular updates on social media Customised advice Confident Unique
Sophisticated
Luxurious
Elegant
High-income women Influential woman of power
CUSTOMER REFLECTED IMAGE
BRAND CULTURE
Unique Dynamic Diverse inspiration Strong Values Prestigious Graceful Youthful Feminine
INTERNAL FACETS OF THE BRAND
EXTERNAL FACETS OF THE BRAND
Accentuating women’s bodies
Excellent customer service
Beautiful Quality-oriented
Social Romantic
CUSTOMER SELF-IMAGE
CONSTRUCTED SOURCE (CUSTOMER)
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II. Share of total world population
These figures show the incline of those older than 60, and the decline of those younger than 15. Interestingly these figures quickly increase and decrease at a similar pace. The statistics show that the age group of those over 60 will begin to have more power in particular in terms of expenditure.
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III. How over 60’s are predicted to earn more in 2020 This is the second page of infrographics I have created, I specifically chose the countries of most relevance to the brand. The UK and France show a quicker increase in income making them an ideal market to target.
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IV. Augmented Product Diagram The augmented product diagram is based on one evening dress from the new collection for Valentino Rosa. It highlights the actual and augmented benefits; these are relevant to the entire collection.
AUGMENTED PRODUCT BENEFITS
Young at heart
ACTUAL PRODUCT BENEFITS
Innovative
Craftmenship
High Quality
CORE BENEFIT
Elegance
Finest Italian fabrics
Evening Gown
Made in Italy label
Femininity
Age confident Sophistication
Unique
Intricate Design Valentino Rosa Logo
Accencuates
Status
Affluence
Class
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V. Internal Marketing Wheel
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VI. Competitors Price Range
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VII. Brand Posistioning Map Brand Positioning Map Autumn/Winter 2013 High Price GucciLouis Vuitton HermesChanel Prada Dolce & Valentino GabbanaArmani Burberry Calvin Klein Ralph Lauren
High Quality
Low Quality
Low Price
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