Huxbaby Business Report
Kirandeep Dhami, Word count - 3,221
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(Huxbaby 2017)
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(Huxbaby 2017)
CONTENTS 06
EXECUTIVE SUMMARY
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THE BRAND
THE BRAND
Profile of the brand
Current marketing situation
Mission Statement Product/Service Unique Selling Point
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MARKET ENTRY METHODS Methods of entry Internal Micro Analysis External Macro Analysis
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Marketing Objectives Target consumer Swot Analysis
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INTERNATIONAL PROMOTIONAL MIX STRATEGY Evaluation
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COUNTRY PROFILE
INTERNATIONALISATION
Overview
Overview and economy
Reasons for internationalising
THE MARKET
Home market analysis Competitors & Market Positioning
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CONCLUSION
48 REFERENCES & APPENDIX
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Executive Summary The report examines the reasons for Huxbaby expanding their brand and internationalising to another country. The retailer proposes to internationalise to Spain, where the brand currently has no presence in the market. The brand currently has retailers in surrounding countries that have similarities to the proposed new market. Huxbaby are a well-established organic Childrenswear brand based in Australia with products stocked globally including the USA, United Kingdom and other European countries. Their unique selling point of organic cotton and unisex designs has helped the brand become well known within the home market. The retailer will internationalise to Spain where the market is less saturated. Spain’s positive GDP and growing economy would mean the brand would be entering a stable country with consumers able to purchase the brands products. There is a gap in the market for more sustainable brands within the new market. The previous economic recession mean that consumers are more aware of ethical issues and desire to be more sustainable.
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The retailer mainly operate globally by establishing concessions and wholesaling their product to independent retailers. The brand would internationalise to Spain using the same market entry methods, by first establishing a concession within a well-known department store within the capital, Madrid. This would mean the brand would be able to have full control over product placement and marketing of their brand within this area. The concession would be in an area within the department store with high amount of footfall, ensuring the brand has a high amount of attention. This method would be chosen to minimise risk and cost. The brand would choose not to wholesale first as they would have less control with this method. This would also allow them to monitor and gain primary knowledge of the success of this first venture into the new market. After analysing the success of this market entry method, the brand would then start to wholesale their brand to independent retailers and boutiques. This will allow the brand to successfully penetrate and establish themselves into the Spanish market.
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Hubaby Instagram, 2017
Hubaby Instagram, 2017
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Profile of the Brand
Hubaby Instagram, 2017
Huxbaby are an Australian based luxury high street children’s wear brand established by Elad Admon, that produce minimalist, unisex children’s wear with an adult level of style. With sustainability a brand focus, their clothing range is created from organic cotton with materials certified from Global Organic Textiles Standard (GOTS). The brand was established in 2014 with their first store in Melbourne and is now stocked at over 200 stockists worldwide catering for an age demographic of newborn to age 5.
Mission Statement & Philosophy The company’s philosophy is to use organic, ethical materials throughout their product range that are not harmful to the environment, while creating simple stylish products. The brand specialises in creating minimalistic garments with an adult level of style.
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Huxbaby Instagram, 2017
Huxbaby Instagram, 2017
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Profile of the Brand
Huxbaby Instagram, 2017
Huxbaby Instagram, 2017
The Product/Service Huxbaby stock a range of apparel including t-shirts, jumpers, trousers, dresses, accessories and baby clothing. Their products are made from organic cotton with price ranging from £20 to £70, with their most popular products seen in Appendix D.
Unique selling point • • • •
Organic materials used in products Unisex clothing designs Minimalistic, simple designs Global Organic Textile Standard certified products (GOTS)
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Facebook 76,849 Likes
Instagram 118k Followers
Huxbaby use multiple social media platforms as a way of marketing their brand and communicating with their consumer. Their most popular social media platform is Instagram where the brand has 118k followers followed by Facebook with 76,849 likes and Twitter is used for customer enquiries. Instagram is the most popular for Huxbaby because this is their target consumers preferred social platform.
12 Current marketing situation
Twitter 595 Followers
Huxbaby Website
Their objective would be to engage consumers using platforms they use daily by keeping their brand in consumer’s mind. The brand posts regularly on Instagram with an average of two to three posts per day. Their Instagram is used to show followers new products and how consumers are wearing these products. Their marketing platforms follow the same minimalistic colour scheme and layout keeping with the brands aesthetic.
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Hubaby Instagram, 2016
Hubaby Instagram, 2017
Sustainability trends mean that the brands target market are consumers that are actively seeking out a more ethical lifestyle. The growth of the eco conscious and ethical consumer mean that the target market is more concerned about the impact of their purchasing actions. Huxbabys consumers are prepared to spend more money on products with ethical standing, including fair trade products.
14 Huxbaby Target market
Hubaby Instagram, 2017
Hubaby Instagram, 2017
Six in ten consumers now recognize the ethical brand label and 17% purchase fair trade products at least once a month. It is a growing industry with consumers spending on ethical products worth over AUD 21.5 billion (Consumer Lifestyles in Australia, 2016). Millennials would be one of the brands main target consumers aged mid 20’s to late 30’s, with generation X being another target consumer. The main consumer for the brand would be parents shopping for clothing that was modern and innovate, moving away from traditional one sex clothing.
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STRENGTHS - Strong home market presence. - Unique product selling point. - Ethical company with sustainable values. - On trend brand. - Strong social media relationship with consumers.
Hubaby Instagram, 2017
OPPORTUNITIES - Expansion for a physical store or online stock list in Spain, Italy and France. - Opportunities to expand their age range to cater for children older than five years old. Hubaby Instagram, 2017
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WEAKNESSES - Products does not cater for all children age demographics like competitors. - Sustainable products are costlier to create.
Hubaby Instagram, 2017
THREATS - Saturated home market, brands offering same products using organic cotton so the brand has a lower market share. - Competitors offer products catering to a wider age range. Hubaby Instagram, 2017
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Hubaby Lookbook, 2017
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Hubaby Lookbook, 2017
Hubaby, 2016
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La Petite Mag, 2015
Silhouette Models, 2015
Childrenwear Market Overview Children’s fashion is a growing market sector with global market sales increasing from €122.1 billion in 2010 to €135.6 billion in 2015. The sector has grown globally by 6% in 2015 in comparison to womenswear and menswear, 4%. Trends within the retail sector indicate that brands are now imitating adults wear appealing to parent’s desire for their children to be on trend, fuelling aspirational consumption and the growth of the children’s wear market sector (Business of Fashion, 2017). Despite economic recessions, the market growth shows that a consumer is always present for purchasing children clothing. The Asia Pacific regions including Australia, is now the fastest growing market for children’s clothing worldwide with a market sector worth €44.1 billion with projections to reach €65.1 billion by 2020 (Business of Fashion, 2017) as seen in Appendix A. A steady increase in population growth from 19.0 million in 2000 to 24.3 million in 2016 and the increase of immigration are important contributors to market growth (Australia: Country Profile, 2017). Statistics also show that average weekly earnings have increased by 2.2%, suggesting that the target market can afford higher priced products, accounting for the growth in the market (Australian Bureau of Statistic, 2016).
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Australia Market Analysis Huxbaby operate within a heavily saturated market with mass retailers and department stores the main distribution channels for children’s wear, including Target and David Jones. The home market would be heavily saturated with similar brands in comparison to the new market, Spain, as seen in appendix E. Huxbabys competitive edge would be their unisex designs and organic cotton products. The brands main competitors would be other ethical unisex clothing brands within the same sector.
Tiny Style, 2017
Tiny Style, 2017
Anarkid would be a direct competitor because of their unisex clothing range and organic materials. Other competitors would be Milk and Masuki and Phoenix and Fox as they all use organic cotton within their products. As seen in appendix H, a further analysis of competitors and the competitive industry. Market leaders for this sector would be Country Road, a high street/luxury brand with a 6% share of retail value sales. The brand is stocked in department stores such as David Jones (Childrenswear in Australia, 2017).
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HIGH QUALITY
MILK & MASUKI
HUXBABY ANARKID
LITTLE EMPEROR
KENZO
GAP
HUGO BOSS RALPH ARMANI JUNIOR LAUREN
BILLIE BLUSH TOMMY HIL
H&M
LITTLE MARC JACOBS
ADIDAS COUNTRY ROAD
LOW PRICE KMART TARGET
HIGH PRICE
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HIGH STREET VALUE HIGH STREET LUXURY HIGH STREET DESIGNER/LUXURY MARKET LEADER
LOW QUALITY The map shows the children’s wear brands within Australia and a market comparison on product quality and price.
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Hubaby Lookbook, 2017
Country Profile Between 2009 and 2013, the Spanish economy suffered a recession resulting in a decrease in employment and increased taxes. The increase in GDP show a rise of 1.4% in 2014 due to job creation and 3.2% in 2016 and 2.2% in 2017. In 2015, their annual GDP growth of 3.2% was the fastest amongst other European countries like France, Italy and Germany (Spain, Country Profile, 2017).
Real GDP Growth and Per capita GDP: 2010 - 2016
(Spain, Country Profile, 2017) The graph shows the decrease of Spain’s GDP from 2010 to 2012 during the recession and the rise between 2012 and 2016 as their economy stabilised. The growth in their economy and GDP is a main factor for the brand to internalise to Spain, as seen in appendix B. It is an ideal market to internationalise the brand into due to a rise in employment, with the rate dropping from 19.8% in 2016 to 18.4% in 2017 (Spain Country Profile, 2017).
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Reasons for internationalisation • The brands main reasons for internationalising the brand to Spain would be to create an educational experience and fill a gap in the market for an ethical children’s wear brand. • Spain currently ranks 24th globally for sustainability, in comparison to Australia, which is ranked 8th (Robecosam, 2016). • Push pull factors would include the heavy saturation of the Australian market in comparison to Spain. This would mean that there would be a lack of competitors that supply the same product in the new market, enabling the brand to reach new consumers and fill the gap in the market as seen in appendix F. • This would also be an opportunity for Spain to increase their trading beyond Europe, as they currently have little trade with Australia, as seen in appendix C. • The recent decline in Spains economy resulted in consumers forced to decrease living costs, forcing the country to adopt a more sustainable lifestyle. This sustainable attitude has developed from a difficult economy with younger consumers growing up with an ethical attitude. • Consumers new sustainable attitude mean that the brands USP would appeal directly to consumer’s values. The affordable price point would appeal to the Spanish consumer because of their desire to spend less on higher quality products.
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Happy Wall, 2017
The increasing stability of families would also mean that the brands target consumer would be able to afford higher priced products because of the increase in job income. The increase of 14.4% in disposable income between 2016 – 2030 would result in a growth of an average of 1.0% a year (Spain: Country Profile, 2017). This means that consumers would have more income to spend increasing expenditure growth.
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Market Entry methods The chosen market entry method for Spain would be a concession store within a large department store in the capital, Madrid, with potential expansion options to wholesale the product later. The location was chosen because of the high footfall. The brand does not have any of their own physical stores, but concessions and wholesale to stores globally. The first stage of entering the new market would be to establish the brand into a department store because of previous success in the home market within department stores David Jones. This would mean that the brand would have higher control of how the space is merchandised and what products are sold. This would be an effective way to gain brand awareness in the new market. In comparison to wholesaling, this method would mean the brand would have higher control over the process and be able to gain more brand awareness. The next step would be to establish the brand into more concessions and wholesale the product out to stores and boutiques around Spain. Although this method would mean less control, the brand has previously established themselves successfully globally by wholesaling. The brand has had previous success with these entry methods when establishing themselves into new markets. As seen in appendix G, the brand would use an Ansoff matrix to determine a market growth strategy within the new market.
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Method
Stand-alone store
Pros
- -
Concession
- - - -
Wholesale
- - - -
Develop a brand image in the new country High control Way to reach the new markets Low set up cost Gain awareness/reputation by positioning the brand in a well-known store Have control over layout, stock allocation and merchandising Low risk, way to reach a new market. Low cost Brand can sell large amounts of stock Wholesalers could help with promotion of stock and brand
Cons
- - - - - -
- - - -
High risk High cost If placed in the wrong location, it could fail Expensive lease cost Hard to withdraw if the venture is unsuccessful Dependent on footfall
No direct interaction with their consumer Less profit, wholesaler takes a large cut Less communication Brand could lose importance as wholesaler could sell multiple brands.
Huxbaby use stores around the globe to wholesale their product, however this means they have less control over how it is displayed and no direction interaction with their consumer.
The brand has relationships in department stores within their home market, where their brand is stocked as a concession. The brand has more control with this method, however the cost would be higher.
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Micro Internal Analysis LEGAL STRUCTURES THE ECONOMY
SOCIAL FACTORS
CHANNELS OF DISTRIBUTION
THE PUBLIC
HUXBABY
CUSTOMERS
POLITICAL STRUCTURES
CULTURAL FORCES SUPPLIERS
COMPETITORS
TECHNOLOGY
DEMOGRAPHIC
BRAND MICRO MACRO
Micro environment factors would directly affect the business in the home market by affecting the businesses day to day success. However, these effects would be short term and controllable.
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SUPPLIERS • The brands organic cotton material would be imported from India; this material would be sourced internationally because of the warmer climate. • The business has a range of suppliers within India, if there was an issue of importing goods between the two countries, Huxbaby would have to find new suppliers in other countries. COMPETITORS • The businesses main competitors would be Anarkid and Milk and Masuki, these brands provide similar products using the same organic materials. DISTRIBUTION CHANNELS • The business use concessions and wholesalers to sell their products as the middle party between the brand and the customer. CUSTOMERS/CONSUMERS • The main customers for the brand would be parents interested in children wear that mimic a modern aesthetic. • These consumers would be interested in ethical ways of living and would fall into the millennials and generation x category. This would be because younger consumers would be more likely to purchase modern clothing. THE PUBLIC • The business has a positive reputation because of their ethical views and their sustainable product range. • This positive view encourages more consumers to purchase from the business by encouraging them to become more sustainable. This positive brand image would affect sales by increasing them.
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Macro External Analysis LEGAL • Spain is a member of the European Union and the World Trade Organisation and abides by their trading regulations and laws.
ENVIROMENT • With limited natural resources the price of oil would be higher to purchase. • The increased CO2 emissions and pollution would mean potential tax and regulations.
POLITICAL • Spain have a constitutional monarchy and parliamentary system with two main political parties, the Spanish Socialist Worker’s party and the People’s Party. • Spain would uphold trade agreements with other countries based on the EU rules.
ECONOMY • Spain economy and GDP is currently on the rise after an 8 year recession. • A large percentage of the country’s population is still unemployed with promises of millions more jobs by 2020.
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SOCIAL • Consumers within Spain potentially have a lower income to spend on clothing products because of the previous economic situation. • A more ethical consumer has emerged with consumers purchasing from sustainable brands that share their lifestyle and values.
TECHNOLOGICAL
• The rise and popularity of ecommerce mean that consumers are shopping more on online websites than instore. • International Shipping and distribution methods would be used to import and export goods.
CUSTOMER • Consumers spending habits would increase after the recession because of the growth in their economy. • The attitude adopted after a recession would mean that consumers would be less wasteful, they would desire to purchase clothing that is more sustainable reflecting their new lifestyle.
COMPETITION • The threat of existing competitors like H&M and Zara would be a threat to new entrants because of their established reputation and low price point for Childrenswear. • H&M’s conscious collection would be a direct competitor because of the ethical nature of the collection.
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PROMOTIONAL
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MIX STRATEGY
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shop
H U X BA BY
lookbook
about
instashop
sale
shop t - shirts womens singlets sweaters leggings pants dresses shorts rompers blankets bibs hats accessories deluxe gift sets gift cards sizing chart sale
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Hubaby, 2017
shop
H U X BA BY
lookbook
about
instashop
sale
shop t - shirts womens singlets sweaters leggings pants dresses shorts rompers blankets bibs hats accessories deluxe gift sets gift cards sizing chart sale
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Hubaby, 2017
Huxbaby Social media
We’ve gone FAIRTRADE... With ever purchase of our organic cotton products, we will donate 2% of every sale to @FairTrade helping organic cotton farmers
Educational social media posts examples
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Did you know our organic cotton products use NO pesticides and harmful chemicals... #Organic #Ethical #Sustainable
ORGANIC cotton ALL day, EVERY day at HUXBABY.. #Organic #Ethical #Sustainable
Social media posts and platform examples
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Mkkidswear, 2017
David Jones, 2017
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Online marketing advert examples
Superette Blog, 2015
Kids Style File, 2016
Online marketing advert examples
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Evaluation of Internationalisation Strategy Aims and Objectives • To create awareness and communicate resource issues. • To encourage ethical consumer behaviour. • To strengthen brand recognition and corporate reputation by collaborating with a well-known ethical brand, Fairtrade. • Increase market share and awareness of the brand in the new market using marketing techniques such as social media, sponsored posts and organisation collaborations. • Gain Spanish consumer loyalty and market share by monitoring social media activity. Huxbaby have retailers and stockists globally, however the brand is a small independently owned business that does not have a large marketing budget. The brand would focus on connecting with their consumer using social media platforms, online marketing adverts and collaborations. • The brand would collaborate with well-known organisations that share their values to gain brand awareness in the new market.
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• The brand would collaborate with Fairtrade and give a percentage back to the organisation and Fairtrade cotton farmers. • This would be a way of educating their consumer and promoting a strong, ethical brand image. This would be shown through sponsored social media posts on Instagram by adding the Fairtrade logo to show collaboration and recognition. • Fairtrade would also promote the brands image by reposting their social media updates and creating posts on their Spanish social media pages, helping Huxbaby to enter the new market successfully. The success of the collaboration would be measured by analysing the number of followers and purchases gained after each collaboration post. • The success of social media would be measured by the response to social media posts, measuring likes, followers and purchases, determining if they were successful. The brand would place the most emphasis on their social media because of their smaller budget and ease of this method. • Online marketing adverts would be used where the brands advert would be seen on other relevant websites. This would be a costlier method for the brand, the success would be measured by the number of clicks and purchases customers made after reacting to these ads. If these methods of marketing were successful, the brand would then decide to collaborate with other ethical organisations to gain brand and product awareness in their forecasted company plan.
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Evaluation of Internationalisation Strategy: AIDA A - ATTENTION • Create a PR campaign using social media and online marketing promoting their sustainable products.
I - INTEREST • Charitable donations to Fairtrade farmers with every purchase, direct email marketing and social media updates.
D - DESIRE • Collaborate with ethical organisations like Fairtrade, creating social media posts and buzz.
A - ACTION • Clear social media and website message, call to action to help support Huxbaby cause for sustainability.
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Conclusion After analysis of the new market, Huxbaby would choose to internationalise to Spain because of the growing economy, gap in the market for a sustainable children’s wear brand and developing target consumer. The brand would establish themselves with a concession in a large department store in Madrid. Huxbaby would use social media and online marketing to support market entry. Collaborationg with already established organisations enabling them to establish themselves into the new market. Aligning with ethical organisations and promoting their sustainable image would appeal to their target consumer as their ethics would reflect their consumer’s. The brand would be able to fulfil their aims and ojectives of educating a new consumer by changing consumer behaviour. Five Year plan • After first establishing themselves into the Spanish market, with a concession, the brand would start to wholesale their product into independent retailer’s around Spain. These retailers would be in other high footfall areas and cities such as Barcelona. • The brand would further collaborate with ethical organisations encouraging consumers to make sustainable decisions and become a more active ethical company.
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Hubaby Lookbook, 2017
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Hubaby Lookbook, 2017
REFERENCES Aussie Kids. 2015. Buzzfeed. [ONLINE] Available at: https://www. buzzfeed.com/hipstermum/aussie-kids-are-the-cutest-kids?utm_term=. ehjL7YlgD#.so9E9RYzk. [Accessed 8 May 2017]. Australian Bureau of Statistics. 2016. Average Weekly Earnings, Australia. [ONLINE] Available at: http://www.abs.gov.au/ausstats/abs@. nsf/mf/6302.0?opendocument&ref=HPKI. [Accessed 8 May 2017]. Business of Fashion. 2015. Children’s wear comes of age. [ONLINE] Available at: https://www.businessoffashion.com/articles/intelligence/ the-childrenswear-market-comes-of-age. [Accessed 8 May 2017]. Good on you. 2016. Australian made ethical clothes. [ONLINE] Available at: http://goodonyou.eco/australian-made-ethical-clothes/. [Accessed 8 May 2017]. Huxbaby. 2017. About us. [ONLINE] Available at: https://huxbaby.com/ pages/about-us. [Accessed 8 May 2017]. Passport. 2015. Consumer lifestyle in Spain. [ONLINE] Available at: http://www.portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017]. Passport. 2016. Consumer lifestyles in Australia. [ONLINE] Available at: http://www.portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017]. Passport. 2016. Economy finance and Trade Spain. [ONLINE] Available at: http://www.portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017]. Passport. 2016. Income and expenditure: Australia. [ONLINE] Available at: http://www.portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017]. Passport. 2016. Income and expenditure: Spain. [ONLINE] Available at: http://www.portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017].
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Passport. 2017. Australia: country profile. [ONLINE] Available at: http://www.portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017]. Passport. 2017. Childrenswear in Australia. [ONLINE] Available at: http://www.portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017]. Passport. 2017. Childrenswear in Australia. [ONLINE] Available at: http://www.portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017]. Passport. 2017. Spain country profile. [ONLINE] Available at: http://www. portal.euromonitor.com/portal/analysis/tab. [Accessed 8 May 2017]. Robecosam. 2016. Country. [ONLINE] Available at: http://www.robecosam. com/images/Country_Ranking_Update_May_2016.pdf. [Accessed 8 May 2017]. IMAGE REFERENCES David Jones, (2017), Huxbaby [ONLINE]. Available at: http://shop. davidjones.com.au/djs/en/davidjones/huxbaby [Accessed 9 May 2017]. Facebook, (2017), Huxbaby [ONLINE]. Available at: https://www.facebook. com/huxbaby/ [Accessed 8 May 2017]. Fix my broken mac, (2017), IPhone [ONLINE]. Available at: http:// fixmybrokenmac.co.uk/iphone-repair/ [Accessed 8 May 2017]. Happy wall, (2017), World map [ONLINE]. Available at: https://www. happywall.co.uk/wall-mural/motiv/maps/world-map-grey [Accessed 8 May 2017]. Huxbaby, (2017), Hux bear sweater [ONLINE]. Available at: https://huxbaby.com/collections/all-products/products/hux-bearsweater [Accessed 8 May 2017]. Huxbaby, (2017), Look book [ONLINE]. Available at: https://huxbaby.com/ [Accessed 8 May 2017]. Instagram, (2017), Huxbaby [ONLINE]. Available at: https://www. instagram.com/huxbaby/?hl=en [Accessed 8 May 2017].
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Junior Edition, (2017), huxbaby knitwear product [ONLINE]. Available at: https://www.junioredition.com/collections/knitwear/ products/hux-bear-knitted-sweater-in-black-by-huxbaby [Accessed 8 May 2017]. Kids style file, (2016), Huxbaby [ONLINE]. Available at: http://www. kidstylefile.com.au/2016/01/25/huxbaby/ [Accessed 9 May 2017]. La Petite Mag, (2015), Huxbaby aw15 [ONLINE]. Available at: http:// lapetitemag.com/huxbaby-aw15-collection/ [Accessed 8 May 2017]. Mkkidswear, (2017), Our brands, Huxbaby [ONLINE]. Available at: http://www.mkkidswear.com/our-brands/hux-baby/ [Accessed 9 May 2017]. Silhouette models, (2015), Huxbaby shoot [ONLINE]. Available at: http://silhouettemodels.com.au/hux-baby-shoot/ [Accessed 8 May 2017]. Superette blog, (2015), 5 minutes with huxbaby [ONLINE]. Available at: http://blog.superette.co.nz/2015/05/5-minutes-huxbaby.html [Accessed 9 May 2017]. The mini look, (2017), Collection [ONLINE]. Available at: https:// theminilook.myshopify.com/collections/sweaterssweatshirts/products/huxbaby-hux-bear-fleece-sweatshirt [Accessed 8 May 2017]. Tiny Style, (2017), Huxbaby collection [ONLINE]. Available at: https://tinystyle.com.au/collections/huxbaby [Accessed 8 May 2017]. Twitter, (2017), Huxbaby [ONLINE]. Available at: https://twitter. com/huxbaby?lang=en [Accessed 8 May 2017].
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APPENDIX
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Appendix A - Childrens wear Market forecasted growth
FIGURE 1: Forecast of sales of Childrenswear by volume (Childrenswear in Australia, 2017)
FIGURE 2: Forecast of sales growth Childrenswear by Category (Childrenswear in Australia, 2017) The graph shows the estimated growth and forecasted sales of the market from 2016 – 2021. Within the sector, girl’s apparel accounts for 41% of the retail sales and highest forecasted sales, boys’ apparel 39% and babies and toddlers clothing 20% of the market.
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Appendix B - Country Profile
Appendix B shows the postive growth of Spain and the growth in certain sectors in a comparison from 2005 to 2015. It shows that there was a larger increase in growth in education after the recession and their gdp was higher than western Europe.
(Economy, Finance and Trade: Spain 2016)
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Appendix C Country Profile: Imports & Exports Major Export Destinations Exports (fob) to Europe Exports (fob) to Africa and Middle East Exports (fob) to Asia Pacific
2016 Share (%) 72.2 9.3
Exports (fob) to Latin America Exports (fob) to North America Exports (fob) to other countries
5.2
5.7
4.9 2.0
Major import sources Imports (cif) from Europe Imports (cif) from Asia Pacific Imports (cif) from Africa and the Middle East Imports (cif) from Latin America Imports from North America Imports (cif) from other countries
2016 share (%) 67.0 14.3 9.3 4.7 4.1 0.3
The 2016 share of imports and exports show that Spain as a European country trade mostly with other European countries with 72% share of all export from the countries transported to other European countries. 67% of all imported goods come from European countries because of the similarities in European trade laws. These similar trade laws mean it is easier for Spain to receive and send goods. It would be more complicated to trade with countries with different export laws such as China.
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Appendix C Country Profile: Imports & Exports
Economy, finance and trade: Spain, 2016 The graph shows that Spain’s main source of imported goods are from Germany, with 14.4% of total goods imported from this European country. Goods are mainly imported from European countries like France, Italy, Netherlands and UK accounting for 67.0% of imports. China and other Asia Pacific countries like Australia account for 14.3% of imports, the second highest. Like imports, Spain mainly distribute goods to other European countries, with Spain exporting 15.7% of total goods to France with Germany being the second highest (Spain: Country Profile, 2017).
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Economy, finance and trade: Spain, 2016
Economy, finance and trade: Spain, 2016 The graphs show that Spain rely on imports with a ratio of 25.4% of imports to GDP with mineral fuels, oils and other fossil fuels the largest import category accounting for 23.0% of total goods. This is vital to meet energy needs while they export a lower amount of minerals products. However, transportation was the highest export category as Spain is the eighth largest car manufacturer in the world with 64.7% of their total goods exported to EU countries. (Economy, Finance and Trade: Spain, 2016).
Economy, finance and trade: Spain, 2016
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Appendix D: Boston Matrix Question Marks Baby clothing like rompers would have the potential to grow as they have a low market share, but would need investment. The brand would have to decide if the product would be worth the investment and would become stars.
Dogs Products like baby’s hats and accessories would have a low market share for the brand in a lower growth market than their other products. These products generate enough profit to break-even but would not be worth investing in as other products sell better.
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Stars Patterned leggings and trousers are a high growth product for the brand. It is one of the brands best sellers and strongest product, and has a high market share. However this would need investment to ensure that the product stays strong.
Cash Cows Long sleeve tops and jumpers are mature and already successful products for the brand with little need for investment. This would be a low growth product that has already been established into the market and has a high share.
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Appendix E - Spain Market Analysis The Spanish children’s wear market mainly comprises of high street to higher end brands. There are a higher number of high street brands then the Australia market due to Spanish consumers having a lower expenditure than Australian consumers. Luxury high street brands in the home market are made up of sustainable brands whereas there are less in the Spanish market. This is due to a more ethical consumer in Australia, gap in the new market and one of the main reasons for internationalisation. The map shows the children’s wear brands within Spain and a market comparison on product quality and price. A difference in income and spending habits between consumers in Spain mean that there is a consumer for high street brands and designer brands.
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Junior Edition, 2017
Junior Edition, 2017
HIGH QUALITY
KENZO LA COQUETA MARKS & SPENCERS
H&M
PRIMARK
COS
TOMMY HIL
BURBERRY HUGO BOSS
ARMANI JUNIOR
RALPH LAUREN
NiNOS Y NIñAS PEPA & CO
ZARA
NEXT
LOW PRICE
HIGH PRICE
-
HIGH STREET VALUE HIGH STREET LUXURY HIGH STREET DESIGNER/LUXURY
LOW QUALITY
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Appendix F - Push Pull Factors
PUSH • • • • •
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Saturated home market Slowing children’s wear market growth Similar brands offering the same unique selling point Opportunity for brand to enter new market Higher living costs mean consumers have less money to spend on luxury products.
PULL • • • • •
Strong economy after recession Less expensive living costs Stable trading relationships Good consumer spending ability and a higher population Increasing reputation and ranking as an improving sustainable country
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Appendix G - Ansoff Matrix
EXISTING MARKET
NEW MARKET
EXISTING PRODUCT
NEW PRODUCT
MARKET PENETRATION
PRODUCT DEVELOPMENT
• Low risk • Gain market share in childrens wear sector by encouraging new consumers. • Encourage consumers to puchase more frequently.
MARKET DEVELOPMENT
• Moderate risk. • Enter new markets global markets. • Gain a new consumer and market segment.
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• Moderate risk. • Research into consumer behaviour and what products they want. • Analyse competitors.
DIVERSIFICATION
• High risk. • New market that offers prospect for growth . • Extensive research into new products and consumers need.
APPENDIX H - Porters Five Forces BARGAINING POWER OF CUSTOMERS • Customer buying power is low due to a small number of brands that provide organic products. The rise in ethic products mean buying power would increase due to more brands to chose from.
THREAT OF NEW ENTRANTS • Organic materials would be more costlier to source making it more difficult for competitors to join this specific sector of the market.
COMPETITIVE RIVALRY WITHIN CHILDRENSWEAR • Competitive rivalry would be high within the home market because of other brands like Anarkid and Milk and Masuki offering similar products.
BARGAINING POWER OF SUPPLIERS
THREAT OF SUBSTITUTE PRODUCTS
• Huxbaby have different organic cotton suppliers from India. However if there was a distribution issue, supplier power would rise.
• Huxbaby’s organic product range is not unique in the market, other brands provide similar products catering for a wider range of age ranges.
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