Retail mana final official by Huong Dang

Pathway to Vietnam Course: Fashion Retail Management Lecturer: Mrs. Rebecca Moris Student: Dang Kim Thien Huong ID number: s3463662

Established in the 1970s by Kenzo Takada, Kenzo is now famous worldwide with its Quirky, Edgy, Daring personality. Different than the other luxury houses belonged to LVMH Group, Kenzo is expressing itself as an younger and unorthodox brand. The brand caters a myriad of categories for women, men, kids and even baby clothing but women is still its focus. Already appearing in 28 countries around the world, this international fashion brand is about to approach Vietnamese market again, particularly in Ho Chi Minh city, after a failure in the past. The chosen prime location will be at Vincom Union Square, which locates at Dong Khoi Street, by establishing an exclusive collaboration with Vincom Department Stores. Macro Situation in Vietnam is becoming more favourable for Foreign Business like KENZO to invest. Kenzoâ&#x20AC;&#x2122;s target market, which is the middle and affluent class, has gradually become wealthier and they are thirsty of luxury products to be a proof of their social status. Owing to its direct competitors which are Moschino & Maison Kitsune have not entered Vietnam yet, by penetrating Vietnam market, Kenzo can enjoy the advantages of the first mover with the aesthetic inspiring Personal Branding and Self-Expression. All Kenzo activities are consistent with the brand positioning, which is Value-Based Products and Service. The market targeted by KENZO are young individual who are edgy, youthful, creative-oriented and yearn for self-expression. Kenzo is approaching a very small customer base but possesses high customer loyalty. This niche market will be best satisfied by attaining high-quality unique and collective clothes. Thus, Focus Differentiation Strategy is most appropriate for Kenzo when entering Vietnam market. Moreover, Wide and Narrow assortment strategy will be applied to ensure consistency between Kenzo Vietnam and worldwide. Regarding to pricing, Kenzo is recommend to use Market Skimming Strategy and Prestige Strategy as a result of Value-Based Positioning. An exclusive IMC Campaign will also be implemented in the first 6 months to introduce the brand to its target market. In the view of Human Resource, Kenzo Vietnam will be well-managed and controlled by Management Team and Operational Team under a structured human resource system. A clear roster is also delivered to ensure the store management. This report also provides a detail merchandising plan to ensure product availability in the first year of operation. With $600,000 provided for Budget Plan, the store is expected to generate $885,060 in sales and 18.3% of profit margin. Furthermore, foreseeable risks related to Finance, Operation, Politics and Culture are discussed to assist Kenzo in the avoidance unfavourable outcomes. Lastly, an Evaluation Plan is given with solutions to deal with underperformed activities will help Top Management of Kenzo achieve operational success in Vietnam.

Background

Competitive Strategy

Objective

Operation Plan

Budget

Target Market

Evaluation & Improvement

Observing the assortment plan of KENZO (Appendix A), it can easily be seen that the brand is currently having a broad, yet shallow product mix. The brand caters a myriad of categories for women, men, kids and even baby clothing. However, in each category, there are quite a limited number of products from which the customer can choose. In 1970, Kenzo Takada embarked on a journey to

On the other hand, KENZO still specializes in women

establish one of the most prominent fashion labels in

clothing. This can be seen as they offer more products

the modern era - KENZO Paris. He promptly gained

in each category for women compared to which of the

popularity owing to his oriental and avant-garde aes-

men and kids collection. In addition, KENZO is also

thetic shown through the unorthodox mix of color, print

well-known for its perfume and skincare products aside

and fabric, earning him the title of “The Magician of

clothing.

Color” (Charney, N, H 2006). The brand joined force

KENZO is currently the owner of 110 stores in 28 coun-

with LVMH Group in 1999 - a milestone officially celeQuirky, Edgy, Daring are the three words most thought

tries around the world (LVMH n.d.). The brand tends to

of when mentioning KENZO. The brand is renowned for

locate in High-end Mall or Department Store. They also

Currently led by two Artistic Directors since 2011 -

its youthful and exotic aesthetic captured in its flamboy-

have Stand-alone stores near other luxury brands.

Humerto Leon and Carol Lim, the brand is given a

ant combination of exuberant color, elaborate print,

breath of contemporary air with a new influence of pop

unexpected silhouette and art of layering. It is consid-

Regarding to the Vietnam market, KENZO used to

and subculture mixed (Business of Fashion n.d.). Con-

ered as the vanguard label which first introduced East-

enter Vietnam. Their products were sold in a high-end

sequently, the duo has invigorates KENZO making it

ern-orientation, particularly the Japanese inspiration

boutique called ‘Kenzo La Perla’ in Ton That Thiep

appeal to a broader, younger and more international

(like the purity of Nature), to Europe (Charney, N, H

Street along with other high-end foreign brands. How-

market.

2007).

ever, since the boutique was a combination of different

KENZO’s products always stand out. The brand is

Differ from their predecessor, Humerto Leon and Carol

KENZO unique aesthetic, and thus, failed to target and

created for those who are bold, fearless, yearn for

Lim chooses to not only focus on the signature playful-

attract the target customer of KENZO. Consequently,

self-expression and desire attention from others. Yet,

ness of KENZO but also on wearability and affordability

alas, the boutique closed down after 1 year due to

there are some pieces that are quite easy to wear

(LVMH n.d.). They have successfully established their

insufficient sales.

beside the unusual designs as well. This is the com-

own imprints on the brand starting with the simple

mercial aspect of KENZO making it appealing to a

tiger-motif sweater or the giant eye printed on the front of

In recent years, KENZO has just opened 1 store in

broader market.

their sweatshirt design. Through which, they have reig-

Trang Tien Plaza, Ha Noi, Vietnam - a high-end shop-

nited the appetite for bold imagery that successfully

ping mall (Kenzo n.d.). Moreover, L’usine - a fusion of

makes KENZO stand out against the current minimalism

Fashion and Lifestyle Café - is about to bring KENZO

storm.

back to Ho Chi Minh City (Anyarena 2015). Yet, the

brated KENZO as an eminent luxury fashion house.

brands, it was unsuccessful in showcasing thoroughly

vintage atmosphere of L’usine is not quite compatible Throughout the years, the duo has continued to expand

with KENZO’s regular visual merchandising style which

KENZO’s collection to a new range of customer by

is simple, modern with minimal furniture and a little

bringing the streetstyle youthful, modern spin to the

twist of quirky details around the store. If L’usine also

label. And thus step by step, validating their worthiness

failed to communicate KENZO aesthetic, it might be

and suitability for controlling the rein of KENZO.

heading into possible loss.

Situation Analysis Macro Environment

2.1 1

Political According to MarketLine (2014), Vietnam possesses a stable political context. Additionally, from January 2015, foreign investors have now been authorized to invest in Vietnamese outlet with 100% foreign capital, based on the WTO agreement (Deloitte 2014). This indicates Vietnam as a safe and promising destination for foreign businesses to invest and penetrate which is a positive signal for a business like KENZO. On the other hand,

...

this can lead to many other foreign brands entering Vietnam, thus, creating intense competition for KENZO.

Economical Despite the slight increase in clothing price (General

The following PESTLE analysis will taken into

Statistics Office of Vietnam 2015), consumer expendi-

consideration the macro elements might poten-

ture continues to intensify by 44.1% during the period of

tially impact a fashion brand, especially KENZO,

2011-2015 (Euromonitor International n.d.). On top of

in Vietnam; And on this account, makes proper

that, Vietnamese annual disposable income has soared

preparation for the penetration of KENZO into

by nearly 45% in the same period (Euromonitor Interna-

Vietnam, in particular Ho Chi Minh City.

tional

n.d.)

which

signifies

Vietnamese

stronger

purchasing power. Moreover, over the course of the next 5 years, Vietnamâ&#x20AC;&#x2122;s average per capita income is expected to increase from $1,400 to $3,400 a year as well (Amcham Vietnam n.d.). This, in turn, is a proof of a wealthier market in Vietnam and an expansion of KENZOâ&#x20AC;&#x2122;s potential customer base.

Social

Legal

According to Deloitte (2014), there are currently 70.8%

However, Vietnam also suffers from poor patent protec-

Vietnamese aging from 15 to 64 - the age range that

tion and punishment law which is an exemplary environ-

have disposable income and possess most purchasing

ment for counterfeit products (Euromonitor International

power. On top of that, the middle and affluent class -

2015). This could in turn damage brandsâ&#x20AC;&#x2122; sale and

those who achieve the income of $714 USD or more

image.

(KENZOâ&#x20AC;&#x2122;s potential customer) - will double over the Another point must be taken into consideration is the

course of 2014 - 2020 (Amcham Vietnam n.d.). Vietnamese consumers are status-driven, especially middle and affluent class. The tendency to prefer luxury products or foreign brands can always be found in Vietnam as they communicate high-status; especially in the middle and affluent class market, for instance, Businessmen or professional women. This notion is also emphasized through the Vietnamese mentality as most middle class are even willing to save money for purchasing branded products that exceed their salary (Euromonitor International 2014). Living in a conservative society, young Vietnamese are now less influence by heritage, tradition and social conviction. They prefer unique personality and self-expression(Tran, D 2015 & Dung Tri 2015). They desire to be heard, to stand out, to establish their own personal brand. Thus, they tend to be more risk taking, willing to accept challenges and welcome new trend quickly.

Technological

high tariff placed on imported clothes which is 20% for

According to Vietnam News (2012), Vietnamese Internet

Environmental

usage is in the worldâ&#x20AC;&#x2122;s top 20 country. During the period of 2011 - 2015, the Internet usage in Vietnam has significantly increased by more than 50% (Euromonitor International n.d.), particularly on social media platforms. Into the bargain, E-commerce has gradually become more and more popular as online sales skyrocket by 300% from 2012 to 2013, achieving the total worth of $2.2 billion

(Marketline 2014). Needless to say, newly

emerged channels has significantly affected the way businesses sell, distribute and approach their customers. In order to make the most of the Vietnam market and quickly expand its influence, visibility and reputation, KENZO must take used of this technology trend.

clothing, 25% for handbags and 30% for footwears (Vietnam Customs n.d.), and as a result, significantly impacts the selling price of KENZO in Vietnam.

In 2009, Vedan Enterprise Corp. Ltd - a MSG (monosodium glutamate used in cooking) plant in Vietnam - was discovered to have been polluted Thi Vai River by dumping untreated sewage into it, consequently, causing immense damage to the land, residents and living creatures near and inside the river (Luu, T, T 2011). The case has received various media coverage. As a result, Vedan has turned from being the most popular brand of MSG to being alienated by the Vietnamese consumer overnight.

All of the above Social and Cultural traits present

This case proves the Vietnamese consumer is still con-

KENZO - a luxury brand with a standout, quirky person-

cerned with green and sustainability issues. However,

ality - with opportunities signifying Vietnam as an ideal

they tend to only notice those covered by the media.

market for KENZO to enter. Moreover, as personal

Nowadays, these environmental issues can also be

branding and identity has increasingly becoming more

amplified by social media platforms. This implies both

important in the Vietnamese perception, KENZO can

Opportunity and Risk for KENZO as the label can use

gain more popularity in Vietnam by focusing its market-

Green and Sustainability issues to further promote

ing activities and communication on amplifying how it

themselves or got destroyed by the media heat over the

can solve this need for its customer.

aforementioned matter.

2.2

Competitor Analysis

In consideration of style, Moschino & Maison Kitsune convey most similar aesthetic to KENZO. Yet, they are currently unavailable in Vietnam. Hence, KENZO holds the advantage of the first mover in Vietnam market. On the other hand, in view of the target market of KENZO in Vietnam, who are 20 - 35 years old and have a middle to affluent income, then Kenzo has to face 2 competitors - Phillip Lim (direct competitor) and Chloé (indirect competitor). Both are luxury brands in VIetnam. Phillip Lim was brought into Vietnam by RUNWAY Vietnam (Runway n.d.) - an international luxury group which distributes, retails and franchises luxury fashion houses. The brand, which offers clothing to both female and male, is founded by Phillip Lim who is an Asian-American designers. Its products are classic and functional but combine with a twist balancing between trendy and tasteful. The label offers contemporary look that is enduring with time (Club 21 n.d.). The brand is the direct competitor of KENZO as it also aims at self-expression, usage and well-known for unexpected elements in their garments as well (such as bold colors, mix of materials and prints). However, their products establish the characteristic of being elegant, sophisticated which is quite different from KENZO. In addition, their price is slightly over KENZO’s.

Chloé is a French fashion house also first brought into VIetnam by RUNWAY. However, later on, they established an official brick and mortar store in Rex Hotel on Đồng Khởi street, in Ho Chi Minh City. The brand is a potential indirect competitor of KENZO as it offers quite identical categories (excluding the male line) as KENZO and aims at the same target market - who are female ranging from 25 to 40 years old. However. Chloé is only indirect as the aesthetic of the two brands are comparatively contrasting with each others as Chloe works toward the feminine, utmost romantic appearance.

At present, there is no brand in Vietnam that convey the same aesthetic as KENZO (exhibited through their product’s features, brand value and marketing methods) which makes KENZO unique compared to existing brands in Vietnam. Moreover, KENZO also targets directly into its desired niche market with a affordable price. However, KENZO’s accessibility in Vietnam is limited owing to the insufficient number of stores availability in VIetnam.

Situation Analysis Company Analysis

2.3

KENZO stays true to its brand value as a luxurious French fashion house with a quirky, daring char-

CUSTOMER SEGMENT

acteristic and an added modern twist of digital technology. Through the Osterwalder Business

Throughout our lives as human being, we encounter

Model, it can easily be seen that KENZO has successfully established this consistent image through-

uncountable number of demands. These can originate

out its operation. All of the the company’s key activities, resources, partners and cost structure all

from any source ranging from a new pair of shoes we

contribute to KENZO’s value proposition

just see that make we want to buy or an image of a pizza on a random poster that ignites our appetite. Yet, all of these demands only come from our basic needs such as hunger, shelter, identity, leisure or love and acceptance, etc. According to Udacity (n.d.), if a brand’s product

BUSINESS MODEL

could solve needs, its total available market is huge in comparison to a specific problem. KENZO does not just offer clothes. Its offers uniqueness that stand out. The brand is selling its edgy, bold personality along with its clothes. People buy into KENZO because of its identity. They buy the personal statement that the brand provides. Hence, KENZO targets a Niched market of creative individual - those who speak the same language of fashion style, who understand and appreciate its aesthetic. Regardless of their age, the people who want to stand out and show their identity.

VALUE PROPOSITION KENZO key value lies in its design - a fusion between creativity and functionality (LVMH 2014). The brand offers artistic and innovative clothing but still easier to wear when properly mix and match. KENZO also benefits from a prestigious status of being a French luxury brand which assists in attracting an upper class target customer. On top of that, KENZO is renowned for infusing digital technology in all aspects of the brand. For instance, in its online store, instore display, fashion shows and its marketing material, etc. This established a consistent image for KENZO as an innovative, daring and quirky brand.

KENZO reaps great benefits from its solid brand equity. It stands out and is unique compared to other luxury brands showed through its designs, marketing KENZO offers its product both through online and

angles and digital advancements as aforementioned.

offline means. For the former, KENZO’s official website

Moreover, as the two new creative director of KENZO

- KENZO.com - provides all product ranges of KENZO.

chooses to also focus on wearability and affordability

The website fully embodies KENZO aesthetic with

(LVMH n.d.), KENZO’s price is more reasonably priced

added features that made the website unique and mem-

than the other luxury houses yet its products still main-

orable. A case in point for this notion is the moving digital

tain well-made.

moodboards and their annotation that illustrates the inspiration behind the brand's design. The brand is also

Moreover, the inspiring story of KENZO’s establish-

available in several online high-end retailers specializing

ment and renowned founder - Kenzo Takada possesses

in luxurious brands such as Net-a-porter or Selfridge,

special impacts and has been used in its marketing

etc.

materials such as documentary and short film.

Regarding to the latter, KENZO favors brick and mortar stores or opens stores in High-end Department stores.

The house also receives substantial support both finan-

This sustains its image as a prestigious luxury house.

cially and reputationally from LMVH - the world’s largest luxury group achieving total revenue of more than $40 billion in 2013 (Business of Fashion n.d.).

No information about key manufacturer of KENZO can be found. However, in the annual report of LMVH group, it mentioned the majority of products from LMVH group are produced in France (LVMH 2014). Hence, it can be assumed that KENZO is the same with the other houses in the group. On the other hand, Borderlinx Europe SA is the logistic partner of KENZO which is in charge of shipping (Kenzo n.d.). Regarding to their distributors, KENZO has the tendency of collaborating with luxury, high-end retailers and departments stores. Both online and offline. For example, Selfridges (UK), Neiman Marcus (USA), Farfetch, Net-a-porter and especially Opening Ceremony - the concept store established by KENZO’s two current creative directors. These collaboration provides KENZO expand its selling platform, thus, increase its visibility and accessibility.

KENZO’s key activities are mainly garment design, production and retailing. It is also their Omni-channel

Design-wise, in recent years, KENZO has made various

marketing activities. They are showing a consistent

of collaboration with others brands. Both fashion or

image through all channels as aforementioned in value

non-fashion related to further expand their target market

proposition. Creating a seamless digital experience for

and encourage new purchases. For example, the brand

customer has become one of the brand’s specialties.

collaborates with Vans twice to come up with a new

its latest activities and inform them of new collections.

Moreover, as KENZO is a haute couture house, Fashion

and more affordable sportwear, casual line that captures

show is one of the most vital activities of the brand to

KENZO’s spirit through the colorful patterns (Pratt, R, M

Moreover, it has established a community called

maintain its prestigious status in the fashion industry.

2014). Another case in point is KENZO’s Collaboration

KENZO gives focus to 2-way-communication with its customers by providing them platforms to communicate with the brand and share their experience, for instance, through social networking sites. The brand also offers regular newsletters to keep the customers in touch with

with Google - to custom designed their Google’s Nexus

“KENZO club”, which personalizes the online shopping

7 tablet attracting lots of public attention. These collabo-

experience. By joining the club, the checkout process will be shortened. Customers can also view and track

KENZO is value-driven. They focuses on creating a

rations emphasize KENZO’s characteristic as the

their orders, save favorite items and more.

consistent image throughout all aspects of operation.

pioneer in innovation and creativity (Souza, K, T, D

Hence, the cost for which is relatively high. For instance,

2013).

the cost for constructing a seamless omnichannel digital

The revenue of KENZO mostly generates from garment retailing both through online and offline channels.

experience for their customers from marketing cam-

In Vietnam, their key distribution partner is TamSon, a

paign to Fashion show to online and in-store. This

leading luxury-goods distributor in Vietnam (Breu, M,

creates added-value for the brand and their products.

Salsberg, B, S & Ha, T 2010). Moreover, the popular

On top of that, KENZO also spends on distribution and

coffee fashion shop in Ho Chi Minh City - L’usine - also

expanding their store network in prestigious location.

recently offers KENZO products.

In recent years, it is evident that while most mass market

In the Fashion Industry, the most prominent and

2.4

And KENZO certainly has quite an unique one. The longstanding, inspiring story of its founder Kenzo Takada who is “the first successful Asian designer in Paris” (Charney, N, H 2006) - are scarce in the fashion industry. And KENZO has successfully embedded its unique story into the public mind. Through this, the brand has inspired their target market - the creative individual who own in the market, thus, bringing them closer to the brand. As it is valuable, rare, hard to imitate

Brand Name & Story Uniqueness of design Interactive Digital Experience Marketing

Valuable

Yes

Rare

Yes

jump on the bandwagon owing to the fear of damaging

their value, for example, Chanel, Dior.

desire to stand out and have a position of their

Costly to imitate

online presence, the luxury segment are still hesitated to

memorable brand story which communicates

VRIO competencies Resources/ Capabilities

brands has started to focus more on enhancing their

well-established fashion brands all possess a

and well-used by KENZO, it is their sustainable

their prestigious reputation. However, the situation has Just like other luxury brands, KENZO applies marketing

changed as according to Arthur, R (2015), fashion and

strategy through promotion and fashion shows. The

luxury companies (such as LVMH) are beginning to inte-

brand’s marketing materials such as advertisements,

grate digital experience into their business strategy as

short films, etc. are renowned for not only illustrating the

consumers are all moving online. Thus, the virtual battle

product’s feature but also successfully infused in the

between the brands has been initiated as whichever

innovative digital effects, thus showing KENZO true

brands can establish a memorable and unique experi-

value - quirky and edgy. This is a breath of fresh air com-

ence for their customers will dominate the game.

pared to the conservative vibes in the promotional tools of other luxury brands.

With this in mind, KENZO possesses a temporary competitive advantage as they has already integrating digital

Nevertheless, it is only regarded as “competitive parity”

technology in most aspects of their operation as afore-

as the other brands are also implementing their own

mentioned. Particularly, their official website - KEN-

marketing strategies communicating their own unique

ZO.com - has many innovative ways to reach the cus-

message as well.

tomers. A case in point is for Christmas of 2015, the

Organized to be exploited

Competitive Consequences

that showed their special Christmas collection when the

Yes

Sustained Competitive Advantage Sustained Competitive Advantage

also invest in digital technology, KENZO is ahead of the

Temporary Competitive Advantage

to keep it going, KENZO must continuously update the

Yes

Competitive Parity

competitiveness.

brand illustrated in their homepage a virtual scratch card guest scratch the card with their mouse. Their technology is hard to imitate. And even though various brands pack in creating interesting interaction with their customer. This is KENZO’s competitive advantages but in order Observing the current global fashion industry, undoubtedly, most brands produce quite the same styles as each other. Some brand

technology trends.

are trends-setters. Yet, those trends tend to turn into vertical trends and get adapted by the mass market brands. Thus, losing the originality of the designers and creating the same appearance throughout the industry. And then, there is KENZO which stands out by its brand personality - edgy, quirky and daring. It don’t go with the mass but tend to choose its own aesthetic. its own creative direction. It establishes a fresh appearance embodies both luxury and street style which is fresh compared to the look that high street brand such as Zara, Topshop, Mango, etc. are offering, yet are not that rigid and intricate like others luxurious brands. This, in turn, makes KENZO more noticeable and unique. Moreover, KENZO’s use of high quality material and design are difficult to imitate as well. Therefore, it is a sustained competitive advantage.

All of the effort of KENZO puts out for the 4 above competitive advantages has paid off tremendously as the brand has developed strong core competencies. This, in turn, has enabled above average returns and well-positioned KENZO in the global fashion industry.

The subsequent active SWOT are meant for the critical analysis of KENZO’s potential internal Strengths and Weaknesses in Vietnam and through which comes up with suitable strategies in relation with the Opportunities and Threats of the Vietnam market.

STRENGTHS

WEAKNESSES

- Global brand recognition, inspiring brand name/ story

- Products are made in Europe which results in high produc-

- Innovative and unique design/ R&D team

tion cost and logistic cost.

- The company is led by two talented leaders who are not only

- Lack of intensive market research. This is indicated through

creative but also have experience in retail.

former failure to penetrate the Vietnam market.

- Innovative and Interesting digital experience - Seamless Omnichannel retail experience

SO Strategies

- Vietnamese customers are status-driven, hence, luxury product are always desired in Vietnam.

WO Strategies

- Vietnamese youth are thirsty for Personal Branding and Self-Expression which is what Kenzo offers to its customers.

- Inspire Kenzo’s Brand story to Vietnamese target market,

- Conduct intensive market research to get customer insights

- Wealthier consumer and stronger purchasing power in

who are thirsty of luxurious foreign brand.

and understand their behaviors, in both online and offline chan-

recent years. Middle and affluent class is expected to double

- Utilise KENZO’s Marketing activities to reach target custom-

nels.

in size. This signifies a broader and more capable to buy

ers - those who are looking for Personal Brand and a chance

- Promote European-made products to enhance the luxurious

target market for KENZO.

for self-expression.

branding to middle and affluent class, thus, fully communicate

- Internet Users in Vietnam has skyrocketed in recent years.

- Continue to apply Omnichannel Retailing and Kenzo’s inter-

the value being offer by KENZO

People are more willing to adapt with digital trends.

active digital experience to engross Digital-age population.

ST Strategies

- Vietnam suffers from poor Intellectual Property Protection which is an opportunity for widespread counterfeit products in local wet markets. - Favorable political and economical context in Vietnam will attract upcoming competitors. - Conservative mindset of Vietnamese will hinder Kenzo’s broad acceptance. However, it has high possibility to become popular in the niche market of creative individual.

WT Strategies

- Protect the Brand by producing consistent high-quality prod-

- Create strong branding and positioning strategy to achieve

ucts.

formidable and fitting position in the market.

- Invest intensively in Marketing to differentiate and appropri-

- Formulate a toned down look for the conservative Vietnam

ately position KENZO in the Fashion Industry when the brand

market. This could be created through the mix and match of

penetrates Vietnam.

unorthodox garments of KENZO with more basic items. This

- Establish close relationship with target customers in the

methods should be implemented in the store VM and market-

targeted niche market.

ing materials

In view of the prime location for KENZO in Ho Chi Minh CIty, Vincom Union Square, particularly on the ground floor that has the facade alongside Đồng Khởi street, in district 1 is an ideal position (refer to image 1) for the succeeding reasons: Vincom Union Square is a high-end retailer at Vietnam containing the majority of international luxury brands such as Bottega Veneta, Dior, especially, thriving houses like Chanel and Louis Vuitton. Thus, by locating KENZO near succeeded brands, the area promises a shopping traffic that possesses extensive financial wealth ensuring purchasing capability. Moreover, the center also enjoys the perks of being inside the Central Business District where there are high density of the middle and affluent class. They tend to visit the area for residency, working or shopping purpose. On the other hand, as Vincom Union Square is located near the Opera House - one of Ho Chi Minh City most visited destination, this location also guarantees KENZO constantly incoming tourist flow. Since Dong Khoi street is a main street of Ho Chi Minh City, having the window of the store facing it will enhance the visibility of KENZO. On top of that, the location are easy to access by any types of vehicle or by foot. Customers can either use the parking area inside Vincom or utilize the parking spaces inside and around the Opera House. However, the disadvantage of this location resides in the expensive property cost. Yet, it can be reduced by establishing an exclusive collaboration with Vincom in the distribution of KENZO. Even though this term might appear to limit KENZO’s visibility, it can in fact bring mutual benefits to both KENZO and Vincom. For the former, KENZO can inherit the benefits as referred above plus attain massive exposure at crowded luxury chain and access to the right target customer database of middle and affluent class available of Vincom. For the latter, Vincom can enhance its luxury brands portfolio and status. And by welcoming a fresh and unique characteristic brand like KENZO in its portfolio, Vincom can capture the fashion-forward, luxury and edgy streetstyle segment.

Image 1: Prime location for KENZO’s store at Vincom Union Square

SALES

IMAGE - Raise awareness amongst 65% target market in the first 6 months and 85% in

- Achieve total sales revenue of $850,000

the first year.

in the first year.

- Achieve total 6,000 followers in Face-

- Growth rate increases 10% annually.

book, Instagram and Twitter in the first

- Market share at 3% in the first year.

year. - Achieve 1,000 â&#x20AC;&#x153;talk about youâ&#x20AC;? in social media

PROFIT

CUSTOMER ACQUISITION - Obtain at least 200 customers in the first

- Achieve net profit margin at 18%.

6 months.

- Profit growth rate is at 5% annually.

- Customer acquisition growth rate is at

- Achieve efficiency at 5% annually by

10% annually.

well-manage inventory.

- Achieve 20% repeat purchase quarterly. - Issue 100 memberships to obtain key customer data in the first year.

DEMOGRAPHIC

- Age: 20 - 35

- Age: +35

- Gender: Female & Male

- Gender: Female

- Occupation: in the Creative field (Fashion industry, Design, Media, Adver-

tising industry), Entertainment industry.

tising industry), Business.

- Education level: bachelor and postgraduate

- Monthly Disposable Income: +$1000

- Monthly Disposable Income: +$1500

- Social Class: Middle to Affluent Class

- Social Class: Middle to Affluent Class, Upper class. Resident in metropolitan areas.

GEOGRAPHIC PSYCHOGRAPHIC

Working in the Business Central District - Personality: People who are edgy, youthful in spirit and confident (Walker,

- Personality: People who are confident and successful in working. She

H 2013). They are creative-oriented who yearn for self-expression, unique-

looks for self-expression and personal brand to show her success, thus, her

ness and focused on establishing a personal brand.

social status.

- Motives: Willing to spend money on higher quality product and unique

- Same motives with primary target market

style. Moreover, enjoy the high status that the luxury products provide.

- Lifestyle: Digital-savvy, using social media to express their lifestyle and

- Lifestyles: Digitally-savvy, attracted to new and innovative things (Bagley,

social status. Spending on luxury products is regarded as leisure and proof

C 2015). Willing to spend lots of money on the products that they perceive

of success.

as being value for money.

BENEFIT SOUGHT

- Benefit sought: Creative casual to express Personal Brand and pursue for Self-Expression. - Occasion: they go for shopping monthly, especially in weekend and holidays. - User status: potential, first-time and regular users.

PRIMARY TARGET MARKET PERSONA

SECONDARY TARGET MARKET PERSONA

GIL LE

DO HOANG ANH

Age: 24 years old

- Age: 37 years old

Occupation: Singer, actress

- Occupation: former Harper Bazaar's chief editor

Monthly Disposable Income: $2,500

- Monthly Disposable Income: Private but roughly $3000

Family Life Cycle: Single

- Family Life Cycle: Married without children

Education level: Bachelor

- Education level: Bachelor

Social Class: Upper Middle class

- Social Class: Affluent Class

Personality and lifestyle: She is confident, loves to be unique and stand out from the crowd. Being fash-

Personality:

ionista and trend-setter is an important role of her job. She has a huge base of followers on social media by

- Love to adorn herself.

expressing her unusual charismatic personality. She is known for being wild and not afraid to express her

- Posses high appreciation for beauty.

Personal Brand and Unique Identity.

Hobbies & Lifestyle: She enjoys going to the cinema, shopping in the weekend or cooking at home. However, her favorite hobby is travelling, taking picture and showcasing them on Facebook to express her lavish lifestyle. Shopping to her is a leisure activity. She tends to buy luxury items when there is an upcoming

Behavioral:

special occasion, for instance, meetings or events. For luxury products, she enjoys window shopping at Rex

Constantly needs new clothes to appear in social events. Hence, she tends to shop regularly at weekend in

Hotel but purchases mostly in Vincom.

Vincom, Bitexco and Dong Khoi Street. She always look for new collections and innovative items to fulfil her job and express her Edgy and Bold image..

Behavioural:

She prefers to hangout with friends at upscale coffee shops in District 1 such as Work Cafe at Bitexco or

- Regularly visit exquisite and upscale restaurants such as Refinery and Au Parc in Ho Chi Minh City.

Starbuck Coffee.

- Always shops at brick and mortar store as she prefer to try on clothes prior to purchase. She saves a third

Half of her monthly income is spent on clothing to support her occupation.

of her salary for shopping each month. Maximum spending on one item is $1000.

WƌĞƐƟŐĞ WƌŝĐĞ ,ŝŐŚ ƐƚĂƚƵƐ

Exclusivity

Mass Market Inconspicuous

Conspicuous

Low status

īŽƌĚĂďŝůŝƚǇ

As aforementioned in RADAR analysis, at present, KENZO has strong potential to stand out and become popular among the Vietnam market luxury segment owing to its one-of-a-kind “Quirky, Edgy and Bold” personality. Its unique garment designs, which is so divergent compared to the existing brands, hold great prospect of transforming into a trend to be sought after by the Vietnam market. Into the bargain, KENZO is still more affordable compared to others luxury brands. Yet, it is still able to maintain its position as a luxury status brand due to its far higher price compared to the saturated mass market brands in Vietnam. Therefore, this could be a vital advantage for KENZO in the market .

Competitive Strategies

STRATEGIES MODEL

The Porter’s Generic model evaluates a brand based on its target market scope (broad or narrow) and its source of competitive advantage (Low cost or value-oriented) to come up with fitting strategy for the brand’s future development. In this case, the model will analyze the prime strategy for KENZO to penetrate the Vietnam market.

In Vietnam, KENZO will target a niche market, hence, achieve a small but loyal customer base as formerly discussed. Furthermore, KENZO positions itself as an unique and collective brand whose brand value is assimilated to customers seeking to be outstanding, unique, trend-setters and confident to exhibit their personal brand.

COMPETITIVE ADVANTAGE TARGET MARKET

SCOPE

Therefore, as KENZO is unquestionably value-oriented and aims at a narrow market, the optimum strategy for KENZO to follow is

Low cost

Focus Differentiation Strategy. This suggests all KENZO’s activities in Vietnam should be focusing on differentiating itself in term of style and service from other existing brands. And as a consequence, deliver more values and benefits to its niche market in order to gain high customer loyalty.

Broad

Cost Leadership Strategies

Differentiation Strategy

Narrow

Focus Strategy (Low cost)

Focus Strategy (Differentitation)

5.2 Blue Ocean Strategy While Porterâ&#x20AC;&#x2122;s Generic Strategy focuses on how to compete in Red Ocean Market which means an existing marketplace where demand has already been exploited. The Blue Ocean Strategy encourages companies to target an uncontested market and capture new demand in order to break the trade off between differentiation and low cost (Kim & Mauborgne 2005). To identify if a brand is following Blue Ocean, the subsequent aspects must be taken into consideration: Is any cost eliminated or reduced? And is there any new value has been raised and created by the brand? For example, ZARA has successfully created an untapped market when it invents Fast Fashion which enhances the value by vertically integrated its entire supply chain in-house, thus, enables to provide new styles swiftly. On top of that, the system also allows the discovery and elimination of excessive steps and costs, hence, lowering the retail price for customers. By pioneering this new business model, ZARA has made its competitors irrelevant as the existing fashion brands cannot catch up with its high value yet low cost offering. On the other hand, through observing KENZO, it can easily be seen that KENZO cannot implement Blue Ocean Strategy as it is only differentiate itself with the other brands based on the uniqueness of the styles it offers. KENZO does not target any untapped market in Vietnam. Moreover, as an prestigious French fashion house, KENZO cannot approach its customers with both differentiation and low-cost. The brand must keep the high selling price as it is a distinct sign of a high status brand in the eyes of the customers. Hence, if KENZO lowers its price by using Blue Ocean Strategy, it will lose one of its vital edge.

Based on Ansoff Product/ Market Model, by penetrating Vietnam market, KENZO is bringing in its existing products to a new market. Therefore, it must follow the Market Development Strategy. This means KENZO are recommended to

When referring to the distribution strategy for KENZO, two

import all of the products from French as a means to maintain

notions must be taken into consideration:

and ensure the highest quality standard and capture the excel-

As showed in the Positioning Map, KENZO marks a rela-

lent reputation of European imported products. However, the

tively lower price compared to other luxury brands such

KENZO is a French luxury house with a stand out and distinct

brand should adapt to the Vietnam market by offering appropri-

as Phillip Lim, Chloé, Chanel, etc. This could be consid-

characteristic. Hence, its distribution channels must be able to

ate categories for Vietnam weather and the Vietnamese

ered as one of KENZO’s competitive advantage.

exhibit both these traits. And therefore, we have chosen Vincom as the ideal collaborator for the offline distribution of

perception.

However, in view of the pricing strategy for KENZO in The brand should continue to follow the Wide and Narrow assortment strategy in Vietnam in order to retain the consis-

KENZO as discussed in the Location Strategy above.

Vietnam, the brand should apply Market Skimming Pricing Strategy and Prestige Pricing. The former implies in

Since KENZO is opening in Vietnam, where the Internet and

tency between KENZO Vietnam and KENZO worldwide. More-

the beginning period of KENZO’s Opening in Vietnam,

social media has deeply integrated into people’s daily life,

over, this strategy will assist in identifying the best selling cate-

the brand should exert the practice of deliberately setting

online channels must be utilized. Furthermore, this is also an

gories for the Vietnam market to make suitable adjustment

the product price high to attain the favorable perception

opportunity for KENZO to communicate its brand value to new

later on. On top of that, it can keep the cost down since only

of the customers then lowers the price gradually (Ber-

audience through showcasing the innovative and quirky digital

the best selling items are chosen. The suggested categories

man, B & Evans, J, R 2013). It will also assist KENZO in

experience available on their website. However, due to the fact

for each gender in Vietnam will be showed in the merchandise

retrieve its investment expenditure much quicker. On the

that online shopping for luxury products is underdeveloped in

plan later on.

other hand, even though the product price will be lower

Vietnam, it might potentially equalize KENZO with the existing

over time, KENZO price must be kept to follow Prestige

mass market brands. Thus, KENZO’s online channels in VIet-

In complement to the product itself, KENZO must also focus on

Pricing, meaning the price must be high enough to main-

nam will be used solely to spread the brand value and provide

promoting its brand image and providing its customer with

tain the high status and high level of quality in the eyes of

product’s information to potential customer.

additional services before, during and after sales to enhance

the customer. In short, the price should be kept slightly

the value of their offerings. For instance, excellent customers

lower than competing brands yet similar to the prestige

services, warranty, customer hotlines, etc.

price used in Europe and in their official website.

Regarding to the Vietnamese conservative perception, even

On the other hand, from the viewpoint of the Focus Differ-

though KENZO original design might appear too bold and

entiation strategy (the suggested strategy for KENZO

fashion-forward, those bold catwalk designs can be separated

discussed in Porter’s Generic Strategy), instead of com-

and mixed-and-matched with plain basic items creating an

peting on price aspect with its competitor, KENZO should

easier to wear look. Consequently, making KENZO designs

put emphasis on enhancing the value of their products &

become more suitable to the public who wants to stand out but

service.

also stay safe, for example, the Asian market. Hence, when targeting the Vietnamese market, KENZO should ensure their assortment contain 70% of bold and edgy design and 30% of basic items. This mix and match method can also be applied in the marketing material as well as in the visual merchandising of the store.

its target customer and mainly relies on PR activities to influent the target customers. Two

Furthermore, all products’ tags containing sufficient information about the product must be included on the items by the in-store staffs for the customer.

publish feedbacks and opinion, thus, maximize the media exposure of KENZO products. The second stage is Experience organized in the following 2 months. After the brand value and high status of KENZO have been widely known. This stage will encourage target customer to experience actual KENZO products at store. In this stage, a contest called “It’s me contest” will be organized. first 100 online users who play the interactive games in KENZO website an exclusive chance to freely come to the store, try on KENZO’s clothing, take pictures and post onto KENZO’s Facebook Fanpage and their personal Facebook. - Based on most likes, the 10 final contestants will be invited to join in a Mini Fashion Show where they can showcase their skill of styling using KENZO’s products. The best look will

and repeat purchases by the subsequent activities: - Create a Silver Membership Program with 5% off for customer who purchases for more than 30,000,000VND at one time. And a Gold Membership Program for customer who purchase 5 items in one month. - Continue PR activities by issuing press release, magazine and customer reviews.

operation of the brand in Vietnam and act a communication bridge maintaining the consistency between KENZO Vietnam and KENZO worldwide. 2. Operational Team (Front-stage Employees) including Store Manager, Store Manager Assistant, Sales Assistants and Cashiers. This team will be the team who interacts mainly with the customers. Hence, it is vital for them to represent and maintain the image and value of KENZO in the eyes of the customers. Therefore, they must be well-trained. � The philosophy behind the HR system will be Integrity, Responsibility, Respect and Sharing. These traits will be reflected throughout the following key activities of HR department: - Recruiting people whose value also fits in with KENZO’s. - Training and Development especially the Front-stage staffs - Rewarding & Benefits: must provide full benefits to staff in accordance with Vietnam’s Labor Law. Furthermore, reward mechanism for outstanding staffs is needed to raise employee morale. All relevant staffs should also be rewarded when respective company’s objectives have been achieved.

Leaving

Engage will be the last stage of the campaign emphasizing on promoting customer loyalty

tomer Service Manager, Merchandiser, Treasurer and HR Manager. These personnel are in charge of overall

Purchase

contest.

1. Management Team (Backstage Employees) including Country Manager, Marketing, Sales and Cus-

In-store Staﬀs - Say thank you - Show customer the exit direction - Open the door for customer

fanpage on social media and in-store in order to focus on raising awareness about the

provide a brief summary, KENZO Vietnam’s HR structure will be divided into 2 main teams:

Cashier - Issue Bill - Receive Payments - Assist customer for membership program - Inform customer about return policy

- This stage should also combine with promoting activities in KENZO online website,

The recommended HR structure for KENZO will be elaborately discussed in the HR plan below. However, to

- Cleaning the store at the end of the day - VIsual Merchandising

The winner will win the set of clothing they have just styled in the final part of the contest.

must also provide its employees an active and full of chances for personal development for their staffs.

- Build and maintain Customer Database - Updating and mainternance payment systems and IT system in order to ensure the smoothness of the operation

be chosen by 3 key fashion influencers most engaged with KENZO in the Expose stage.

Moreover, in order to successfully maintain the well-established and well-trained body of personnel, KENZO

- Look for needed stock in the inventory - Restock

- The contest utilizes both the online website and brick and mortar store by rewarding the

To establish a stable and strong presence in Vietnam, an organized Human Resource structure is crucial.

Choose Merchandise & Try on Clothes

magazine editors, models or stylists, etc. By giving them free trial, these key people can

On the other hand, it is essential for KENZO’s product to be neatly boxed and bagged after customer purchase.

Check out the merchandise

ion industry that fit in with KENZO’s style. This could include singers, famous bloggers,

its competitors. These screens can be used to showcase KENZO collection & their inspiration.

Enter the store Enter store

- Allow free sample of KENZO’s products for key people work in Entertainment and Fash-

screens in-store to emphasize on the modern digital, technological advancements that set KENZO apart from

- Open for Enterthe thedoor store customer - Greet the customer by In-store Staﬀs

- Sponsor for famous fashion TV programs such as Vietnam’s Next top Model, etc.

nam store should also follow the above characteristics. Moreover, the new store is recommended to have digital

Sales Assistant - Give information when needed - Inform customer of any promotional activities

- Invite famous celebrities and key fashion influencers to KENZO’s Grand Opening.

showed through the simple, modern and minimal furniture combines with bright neon light. Therefore, the Viet-

Sales Assistant - Provide direction to dressing room - Assist customer with getting appropriate size and colors

main activities of this stage are:

tion available in its store to emphasize the newest collection’s theme. The store also possesses a futuristic vibe

Customer Action

First is Expose occurred in the first 2 months. This stage aims at introducing KENZO to

Globally, KENZO’s in-store is renowned for its playfulness always illustrated through the quirky detailed decora-

Front Stage Line of Interaction

3 phrases: Expose, Experience and Engage. The details of each stage are specified below:

Support Process

the first 6 months. To achieve these objectives, KENZO will organize an IMC campaign with

digital elements, the two factors mentioned above must also strive after the following:

Back Stage Contact Person at Store/ Main Activities

brand should focus on achieving its sales, image and customer acquisition objectives in

above should be consistent with KENZO’s other global stores. And as every aspects of KENZO are infused with

Line of Visibility

For the first year from KENZO’s opening in Ho Chi Minh City, in term of promotion, the

As illustrated in the above diagram, the in-store staffs play an vital role in ensuring customer relationship with the brand since they possess the highest level of interaction with store’s customer. Hence, to ensure customer’s satisfaction and acquire good reputation, it is essential for them to be awared and understand the following: - Sales Assistants must be well-trained in the process of welcoming customers, introducing products and assisting customers when needed. - Store Manager must supervise the store to ensure purchasing process happens properly, smoothly and minimizes waiting time for customers. - When issues happen, sales assistants must seek for advice from Store Manager to ensure high quality of service. - Customer Complaints will be well-noted and reported to Store Manager and Customer Service Manager to reach proper solutions.

The Physical Evidence will be showed through KENZO’s store visual merchandising and packaging. All of the

OPERATION PLAN

HR StafďŹ ng Plan Organization Chart

Country Manager (1 person)

- Managing all operations within Vietnam, involves taking responsibility for profit, revenue, cash and quality targets. - Producing a detailed annual business operating plan. - Producing business performance reports. - Managing staff, providing appropriate training and monitoring their performance.

Full time 5 days/ week

$3000

Treasurer (1 people)

- Directing an organization's budget - Overseeing investment of funds - Managing and limiting risks - Supervising cash management activities & producing monthly financial statements.

Full time 5 days/ week

$550

HR Manager (1 people)

- Recruiting positions in company - Providing training programs - Preparing human resource policies and procedures.

Full time 5 days/ week

$550

Merchandiser (2 people)

- Determines call schedule by reviewing priorities with supervisor; discussing special instructions, product promotions, new products, and price changes - Maintains store shelves by observing displays of company products; also in charge of Visual Merchandising, removing damaged or freshness-dated products; tidying store shelves; providing optimum display of products - Controlling and maintaining inventory

Full time 5 days/ week

$1200

Marketing, Sales and Customer Service Manager (1 person)

- Forecasting and developing annual sales quotas - Managing marketing, advertising activities. Taking steps to measure, enhance, and enrich the position and image of KENZO. - Projecting expected sales volume and profit for existing and new products. - Implementing sales program to meet target - Providing customer service standard - Building customer relationships by recording customer information, analyzing their behavior. - Handling feedback and complaint.

Full time 5 days/ week

$700

Store Manager (1 person)

- Maintaining daily store performance - Coaching, counseling, and disciplining employees; planning, monitoring, and appraising job results - Directly coaching, supervising staff at store - Providing monthly store performance report to Country Manager

As showed in the Store Roster below

$550

Assistant Store Manager (1 person)

- Assisting store manager to maintain daily store performance. - Counselling, monitoring and appraising job results. - Providing information and answer customerâ&#x20AC;&#x2122;s questions. - Assisting Store Manager to provide monthly store performance report.

As showed in the Store Roster below

$500

Sales Assistant (4 people)

- Providing product, promotion, and pricing information by clarifying customer request; selecting appropriate information; forwarding information; answering questions - Providing professional attitude and service to customers.

As showed in the Store Roster below

$250/ person

Cashier (2 people)

- Collecting payments by accepting cash, check, or charge payments from customers; making change for cash customers. - Balancing cash drawer by counting cash at beginning and end of work shift. - Providing daily cash report to Store Manager.

As showed in the Store Roster below

$200/ person

Country Manager

HR Manager

Mkt & Customer Service

Merchandiser

Store Manager

Treasurer

Sales Assistant

Cashier

FRONT STAGE STAFF ROSTER Mon 1

Tue 2

Wed 2

Thur 2

Fri 1

Sat 2

Sun 2

Store Manager Assistant Store Manager Cashier 1 Cashier 2 Sales Assistant 1 Sales Assistant 2 Sales Assistant 3 Sales Assistant 4 Visual Merchandiser The store will be opened from 9am to 9pm. The instore working schedule is divided into 2 shifts: morning shift (8am - 3:30pm) and evening shift (2:30pm 10pm). Each shift must have the presence of 1 store manager or store manager assistant; 1 cashier and 2 sale assistants. However, as the number of customers tends to increase on the weekend, both store manager and store manager assistant must be available at store to supervise store operation and customer service. Visual Merchandiser is a task also covered by the inhouse merchandisers. They only have to come into store 3 times each week to either maintain the level of merchandise display or alter the design of the window and instore display.

MERCHANDISE PLANNING GENERAL - Average Statistic Minimum Gender (%) Gender (Items) Size Ratio Ordered Womenwea Menwear %Women Men XS:S:M:L r% Quantity 1341

70%

30%

939

402

Size XS

Total Cost L

20:15:10:5 536 402 268 134

Per Unit

Total

$150

$201,150

Margin

75%

Retail Price (ex Average Expected Per Unit Total $600

$804,600

Retail Price (inc Per Unit

Total

$660

$885,060

WOMEN Categorie s

Categories (%)

Quantity (items)

Jackets

Tops

Size Ratio XS:S:M:L

Size

Total Cost

Margin

Retail Price (ex GST/VAT) Per Unit Total

Retail Price (inc GST/VAT) Per Unit Total

Per Unit

Total

$238.41

$11,205.23

$953.64

$44,821

$1,049

$49,303

45%

423

169 127 85

$158.86

$67,199.32

$635.45

$268,797

$699

$295,677

Bottom

25%

235

$181.59

$42,673.86

$726.36

$170,695

$799

$187,765

Dresses

10%

$204.32

$19,205.91

$817.27

$76,824

$899

$84,506

Shoes

$104.32

$4,902.95

$417.27

$19,612

$459

$21,573

Bags

$112.50

$5,287.50

$450.00

$21,150

$495

$23,265

Accessories

$79.32

$3,727.95

$317.27

$14,912

$349

$16,403

939

377 282 187 95

Total

20:15:10:5

75%

$154,202.73

$678,492

$616,811

MEN Categorie s

Size

Total Cost

Retail Price (ex GST/VAT) Per Unit Total

Retail Price (inc GST/VAT) Per Unit Total

Size Ratio XS:S:M:L XS

Per Unit

Total

$238.41

$4,768.18

$954

$19,073

$1,049

$20,980

50%

201

$158.86

$31,931.59

$635

$127,726

$699

$140,499

Bottom

30%

121

$170.23

$20,597.50

$681

$82,390

$749

$90,629

Shoes

$124.77

$2,495.45

$499

$9,982

$549

$10,980

Bags

$112.50

$2,250.00

$450

$9,000

$495

$9,900

Accessories

$79.32

$1,586.36

$317

$6,345

$349

$6,980

160 120 80

Categories (%)

Quantity (items)

Jackets

Tops

Total

402

20:15:10:5

$63,629.09

Margin

75%

$254,516

$279,968

6.3 GANTT CHART OF ACTIVITIES

Post-Launch

Launch

Pre-launch

May Recruiting in-store staffs Secure the goods of A/W 2016 In the warehouse Complete the setting up for new collection (30%) KENZO store and Grand Opening Invite Celebrities, Key Influencers, the press to Grand Opening Marketing Activities to promote the Opening Store Grand Opening Give free product trial to celebrities & Key Influencers Marketing activities to promote KENZO (through press release, sponsor major TV) Fashion Program and show KENZO's documentary (Phrase 1) Visual Merchandising New arrival "It's Me" Contest (Phrase 2) Marketing Activities for "It's Me" Contest Marketing activities to promote KENZO's membership program (Phrase 3) Christmas Marketing Activities End of year Sales 10% End of Season Clearance (20%)

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

6.4

RISK ANALYSIS

POSSIBLE LOSSES

MITIGATION STRATEGIES

Shortage of Cash

Ill-managed operation, lack of cash to pay expense.

- Treasurer must forecast Cash inflows and outflows monthly and report to Country Manager to have proper response.

Losses and thefts

Product’s loss

- Security gate. - Sales assistants are trained to avoid thefts. - Daily products checking (first and last working shifts)

Low sales (unmet sales target)

Insufficient profit to pay expense, may lead to bankruptcy.

- Conduct survey to identify issues (low brand recognition or low repeat purchase or poor customer service). - Sales Manager will launch appropriate marketing strategies to push sales.

Low customer turnover

Low sales, insufficient profit.

- Improve customer service. - Create customer database and introduce them new collections.

High employee turnover rate

High training cost, unstable business performance

- Offer sufficient benefits and commission to employees.

Poor employee performance

Poor customer service, low sales, passive working environment, no innovative idea to develop business.performance

- Monthly meeting and review to give feedback and solutions to improve. - Incentives for high-performed employees such as “Staff of the month”, “Most valuable staff”. - Quality Control program to ensure customers receive the best service.

Stock-out

- Lose potential sales performance

- Merchandiser should record and predict sales, keep track inventory at warehouse to ensure product availability.

Customer accident at store

Bad brand reputation and image, low sales performance

- Employees are trained to guide customer about safety practise and support customers when in need.

Employee Accident

Brand reputation and image.

- They must be well-trained about safety practise.

Fire accident

Damage the store’s asset.

- Safe practise, Insurance.

Political conflicts may lead to boycott

Brand reputation

- Apply branding strategy to build good brand image in customer’s mind.

Conservative mindset to strange garment design

Brand reputation and image

- Apply branding strategy to build good brand image in customer’s mind.

Cultural dynamic of employees (from Top Management to Operation Team) may lead to miscommunication in working

Conflicts, low sales, poor working performance, poor cooperation between employees

- Top Management such as Country Manager should spend time to understand Vietnamese culture in order to harmonize between inspiring Kenzo’s value and Vietnamese employee’s perception and working style.

BUDGET KENZO Income Statement June 2016 - May 2017 June

July

August

September

October

$ 52,800

$ 68,640

$ 89,100

November December

January

February

March

April

May

YTD

$ 99,660

$ 98,340

$ 84,480

$ 75,240

$ 74,580

Revenue Total Sales

21,780

Discount & Returns

Net Sales

21,380

27,245

$ 52,015

$ 67,995

$ 87,855

$ 93,505

$ 97,065

$ 99,210

$ 97,790

$ 84,030

$ 74,920

$ 74,335

877,345

Cost of Goods Sold

4,901

6,237

$ 11,880

$ 15,444

$ 20,048

$ 21,236

$ 22,127

$ 22,424

$ 22,127

$ 19,008

$ 16,929

$ 16,781

199,139

Gross Proﬁt

16,480

21,008

$ 40,135

$ 52,551

$ 67,808

$ 72,270

$ 74,939

$ 76,787

$ 75,664

$ 65,022

$ 57,991

$ 57,555

678,207

Losses & Theft

345

245

675

720

825

780

812

650

345

230

245

6,117

Electricity

480

Mainternance/ Repair

360

Duties & Taxes

700

Oﬃce Expenses

350

4,200

Rent Expense

17,000

Telephone

Salaries & Beneﬁts

9,650

Commission

Advertising/ Promotion Public Relation

(400) $

27,720

(475) $

(785) $

(645) $

$ 94,380

(1,245) $

$ 98,340

(875) $

(1,275) $

(450) $

(550) $

(450) $

(320) $

(245)

885,060 (7,715)

Operating Expenses General and Administrative

$ 17,000

204,000

600

9,650

115,800

1,000

4,000

500

700

350

5,200

500

3,000

Liability Insurance

1,000

2,000

Other Insurance

150

1,800

Logistic Cost

100

1,200

Total Expenses Net Proﬁt/ Loss before tax Company Taxes (25%) VAT (10%) Net Proﬁt/ Loss after tax Breakeven Sales in dollars

$ 30,415 $ 29,315 $ 29,945 $ 29,990 $ 29,745 $ 30,700 $ 31,232 $ 30,070 $ 29,765 $ 28,650 $ 28,665 $ 28,665 $ $ (13,935) $ (8,307) $ 10,190 $ 22,561 $ 38,063 $ 41,570 $ 43,707 $ 46,717 $ 45,899 $ 36,372 $ 29,326 $ 28,890 $

348,757 329,450

Personnel

Promotion

Insurance

Transportation

$ $

(2,178) $

(2,548) $

(5,640) $

(9,516) $ (10,392) $ (10,927) $ (11,679) $ (11,475) $

(9,093) $

(7,332) $

(7,222) $

(85,823)

(2,772) $

(5,280) $

(6,864) $

(8,910) $

(8,448) $

(7,524) $

(7,458) $

(88,506)

(9,438) $

(9,834) $

(9,966) $

(9,834) $

$ (16,113) $ (11,079) $ 2,363 $ 10,057 $ 19,637 $ 21,739 $ 22,946 $ 25,071 $ 24,590 $ 18,831 $ 14,471 $ 14,209 $ $

38,019

36,644

$ 37,431

$ 37,487

$ 37,181

$ 38,375

$ 39,040

$ 37,587

$ 37,206

$ 35,812

$ 35,831

146,721 435,946

8EVALUATION & IMPROVEMENT What will be measured?

What metric will be used?

How often will How will it be this be measured? analysed?

Sell-through

Sales ($)

Weekly

Qualitative factors

Quantitative factors

Proﬁtability

Net proﬁt margin (%)

Monthly

Market Share (%) Strategy Eﬀectiveness/ Quarterly Brand Market Coverage Recognition (%)

Customer Service

Customer Turnover (%) Sales ($)

Monthly

Comparison between actual & planned ﬁgure Comparison between actual & planned ﬁgure

What action should be taken if underperformed? - Review Operational Team’s performance at store. - More training and sales tactics. - Marketing – Sales Manager should implement more engaging activities to push sales. - Management Team should have monthly meeting and review to reﬂect and adjust strategy by answering these questions:

Reports of Market 1. Is the existing strategy any good? research agency, internal 2. Will the existing strategy be good in the future? research. 3. Is there a need to change a strategy? - Marketing – Sales Manager should conduct market Customer survey research to gain market trends, competitors’ performance and come up with suitable promotion and communication plan. - More training about customer service. Customer survey - Rewards “Staﬀ of the month”, “Most valuable staﬀ”. Mystery shopper Customer feedbacks & complaints Customer review in social media/ websites

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