Ted Baker Report 2014 by Katherine Chen

Executive Summary Maitreyee Dasgupta Introduction Katherine Chen Tirtha Patil Branding Katherine Chen Competition Analysis Bex Zhang Comsuner Behaviour Rachel Lu Maitreyee Dasgupta Peter Liang Products: Menswear Peter Liang Products: Womenswear Bex Zhang Retailing Lily Mu E-commerce Tirtha Patil Distribution Maitreyee Dasgupta Financials Maitreyee Dasgupta Global Expansions Rachel Lu Conclusion Katherine Chen Compilation: Katherine Chen Editorial Report Content: Maitreyee Dasgupta Layout: Katherine Chen Layout (Consumer Behaviour & Global Expansions): Rachel Lu

Maitreyee Dasgupta

Image 1: Erin Fee for Ted Baker Ad campaign SS13

‘A quintessentially British brand’ Ted Baker has become one of the fastest growing British brand in the present market scenario. This study attempts to make a critical analysis of the selected business areas of Ted Baker namely branding strategy, consumer behaviour, product collections, retailing, e-commerce, distribution, retailing, financial performance and global expansion prospects with the intention of identifying how effective and efficient the performance of the company is in these areas in facilitating and expediting the achievement of its aim. The methodology employed in each section is different. Cumulatively, store observations, questionnaires, interviews and secondary data have been used to understand the working of the brand. Models and theories have been used to analyse the present scenario and predict the future trends of the market. The competition analysis showed that Ted Baker occupies the premium market segment. The brand needs to concentrate its pricing strategy and possibly diversify into a wider brand portfolio. The branding was analysed using perceptual mapping, brand Aaker model and brand identity model to understand the market, competitors and brand expression that leads to customer perception. To demonstrate employing strategies of diversification, this study has employed the Ansoff matrix. It was found that Ted Baker has a strong branding strategy and positioning, which contributes to its continued success. However, the company has problems associated with brand communication and brand identity. The brand needs to add more noticeable semiotics to make it more recognizable to the customer. Also, the ‘no advertising’ strategy may not be suitable for all the markets. It is recommended to enhance brand communication through advertising campaigns, and developing a brand identity that consumers could bear in their minds. The brand also needs to improve upon their trademark and reinvent the brand identity to enhance their market presence. Both primary and secondary research was conducted to understand the Ted Baker consumer. Maslow’s hierarchy of needs, product lifecycle and structured interviews were used to map the Ted Baker consumer. Insights have been provided regarding the market positioning and expectations of the Ted Baker consumer, the global demography shifts, cultural differences and consumer buying decision making process. Opportunities were identified in bridge collections aimed at an aspirational younger customer in the existing market and in up-marketing the brand while expanding in the developing global markets. The challenges for global marketing strategies were identified. The brand has been recommended to modify its product offer and vary its marketing strategy for different consumer attitudes pertaining to different cultures. Using the consumer buying decision making process, the Ted Baker target consumer was examined though structured interviews and questionnaire. This is to understand the consumer perception about each stage of buying decision making process and recommendations were provided in accordance to provide a better alignment of the brand strategies with the consumer expectation. Detailed analysis of Ted Baker’s product portfolio through primary and secondary research showed that The Ted Baker pricing strategy is not competitive. Also the brand presence in Asia is not adequate to meet current Asian consumers’ needs. The product USP was identified using perceptual mapping and secondary observations. Bowman’s strategy clock was used to understand the present positioning of the product. The pricing strategy of each product portfolio was compared with respect to the product lifecycle and was mapped using the product level model. Recommendations were provided to escalate the revenue generation of the brand and create a more fashionable product portfolio.

Ted Baker Brand Report 2014

The in-store retailing of Ted Baker was examined through store observations and secondary research. Models like visual merchandising map, Hofstede’s cultural theory, S-O-R model and Loyalty Strategy matrix were used to identify the weaknesses of the visual merchandising of the brand. Recommendations were provided to enhance the consumer buying experience in the shop floor by using memory mirrors, popular elements in visual merchandising and using smart phone interactive apps like static fitting rooms. As Ted Baker is very active online, a thorough research of the Ted Baker e-commerce website and social networking sites was done to understand the Ted Baker e-commerce strategy. Personal observations and the marketing mix model were used to observe that Ted Baker’s online presence reflects a very lively and accurate brand image. However, the backend processes like the delivery time and customer complaint handling needs to improve. The brand’s three pronged distribution strategy was analysed using secondary research and drawing on the results of primary research. It was noted that the brand needs to increase its profit realization across its wholesale and retail channels. Recommendations were provided on the basis of the Six R’s of purchasing model. The recommendations include strengthening of the retail portfolio in areas already exposed to Ted Baker merchandise through licensing, re-evaluation of pricing strategy, using category management method for analysing the Returnon-Investment across each channe and licensing of intangible brand assets like services and human capital to augment consumer experience. This will enable increased revenue generation through licensing in markets where entry is difficult. The present ERP system used by the brand was also analysed. An in-depth analysis of the brand’s financial reports was done using longitudinal data to understand the brand’s growth and financial performance. In spite of the brilliant stock market performance, it was noted that the profit margin of the brand is showing a decreasing trend as the business model is moving from a high-value, low-volume model to a low-value, high volume model. It was observed that though the operational costs of the brand is in control, the inventory level is quite high which may pose a risk especially for a brand like Ted Baker which is occupying the premium brand sector. The brand is presently on a high lending ratio and needs to concentrate on hedging to minimise its losses due to foreign currency transactions and foreign tax rates which are higher than the domestic market. Ted Baker aims to become the fastest growing brand and is presently concentrating on global expansion. The international strategy framework has been applied here to analyse how Ted Baker’s international strategy depends on both the external environment as the internationalisation drivers and the organisational capabilities as the sources of competitive advantage. The analytical model of market selection is used while referring to a wide range of both quantitative and qualitative secondary data. PESTLE and SWOT analysis have been used to provide the context of external business environment and current organization role within it. It was recommended to build an international team to accumulate experiential learning and knowledge acquisition from new market to maintain the brand image and augment the local consumer experience. It was observed that the ‘no advertising strategy’ may not work in all the global territories and alternate methods than semiotics need to be considered to influence consumer perception in different countries which requires deeper engagement with foreign markets. Ted Baker has no doubt achieved tremendous success in past few years. The brand has kept pace with the changing trends of fashion and has taken technology in its stride. The brand has been highly successful in implementing strategies to make it differentiated from others. However with the changing global scenario, the brand needs to augment and evolve its product, consumer services and marketing strategies to ensure global success. Also, the brand needs to rethink its distribution strategies and expansion strategies to improve upon the financial results.

Image 2: Swanlake Print “© Ted Baker (2011)

Ted Baker Brand Report 2014 10

Katherine Chen Tirtha Patil

Ted Baker London is best known for its glamour, style and uniqueness in designs. Ted Baker has introduced novel trends in men’s and women’s clothing and accessories which has laid down the foundation for high-end fashion in Britain. Ted Baker is a British lifestyle brand and was established in 1988, starting from specializing in men’s clothing and then exploring various avenues of fashion industry. Since then, it has now grown as world’s renowned name for men, women clothing accessories and shoes. The brand’s primary focus has always been on designs and quality, upon which the company has never compromised. The idea of a global fashion brand came to the mind of Ted while he was fishing in 1987. In 1988, the company opened its first store in Glasgow and in the same year established presence in Manchester and Nottingham. The company made presence in London with the outright purchase of Goldberg and Sons in 1990. The Blue collar collection was launched in 1992. The mid 1990s saw the expansion of the brand in other parts of UK. The Ted Baker Woman and Ted Baker Lite lines were introduced in 1995. The company entered US by wholesale trading at Magic 1996. Ted Baker became a public company in 1997. The website of the company www.tedbaker.co.uk was launched in 1998. 2001 saw the launch of sunglasses from the company and 2002, the launch of two new fragrances. In 2004, Ted Baker entered the Australian and New Zealand markets. 2007 witnessed the opening of 11 new overseas locations including Dublin, Melbourne and Miami. The first collaborative store of the company named ‘Ted Baker and Friends’ was opened in 2008. The company introduced its lingerie collection, ‘B by Ted Baker’ in 2010. In 2011 and 2012, the company improved its global presence significantly with stores in Tokyo, Kuala Lumpur, New York, Toronto, and Hong Kong. In 2013, the company celebrated its 25th anniversary (No Ordinary Label, 2014). Ted Baker’s aim is to become a world leading designer lifestyle brand. The company follows a three pronged strategy to achieve this aim: through the expansion of collection, controlled distribution through retail, wholesale and licensing, through the carefully managed development of new as well as international markets (No Ordinary Label, 2014). In order to operate locally and globally, Ted Baker makes use of three distribution channels retail, wholesale and licencing. The company has 11 subsidiaries including No Ordinary Designer Label, Ted Baker Ltd. (Marketline, 2013). This study attempts to make a critical analysis of the selected business areas of Ted Baker namely financial performance, branding strategy, distribution, global expansion, e-commerce, product collections, consumer behaviour, retailing with the intention of identifying how effective and efficient are the performance of the company in those areas in facilitating and expediting the achievement of its aim.

Image 1: Erin Fee for Ted Baker Ad campaign 13

Ted Baker Brand Report 2014 14

Katherine Chen

Image 1: Ted Baker look book AW2013

Figure 1: Ted Baker Brand Aaker Model

Figure 2: Ted Baker Brand Identity Model

Introduction

Ted Baker is an international clothing company that operates in the fashion a n d c l o t h i n g l i f e s t y l e i n d u s t r y ( Te d Ba k e r, 2 0 1 4 ) . T h e c o m p a n y a l s o i s successful because it has a strong brand identity and brand personality, which is rooted in the founder Ray Kelvin’s own quirky nature. (Appendix: SWOT) The objective of this report is to analyze Ted Baker brand and to provide recommendation to the identified brand problems. The subheadings used to fulfill the objectives of this report include brand identity, brand position, brand strategy, brand communication and identification of Ted Baker brand problems. After identification of the problem, the report provides a recommendation on how to deal with the problems. The method used to get information that fulfills the objective of this report is the review of literature, because many authors have information on Ted Baker’s brand. There are fifteen literatures used in the report and they include journals, books, articles and websites.

Methodology

This report is mainly conducted through searching related information that fulfills the objectives. A critical analysis of perceptual maps of designers versus high street perceptual mapping (Fig 7), Brand Aaker model (Fig 1) and brand identity model (Fig 2) to understand the market, competitors and expression that lead to customer perception. To demonstrate employing strategies of diversification, this study has employed Ansoff Matrix model. (Fig 6).

Brand identity

Brand identity refers to the outward expression that describes a brand. Some of the outward expressions that lead to customer perception include visual appearance, trademark and name (Shirazi et al., 2013). Brand identity contributes to customer’s loyalty because the perception of customers on a brand determines success (Shirazi et al., 2013). Brand identity helps in differentiating brands from competitors. The brand identity of Ted Baker provides it with a unique personality based on its functional and emotional value. Both existing and potential customers identify Ted Baker brand as quirky, stylish and excitement (Tseng et al., 2012). Despite the unique personality, Ted Baker brand need to develop a brand identity more of the British culture, and could mirror other British brands such as Paul Smith. Customers perceive Paul Smith’s brand as humorous, stylish and classical (Paul Smith, 2014). Ted Baker may lose its authorized identity of quintessentially British brand when Ted Baker enters Chinese market as 45% of their manufacturing made in China in 2012. (Appendix: SWOT)

Ted Baker Brand Report 2014

rand communication takes place when consumers meet the brand, and the aim of brand communication is to build a brand (Dahlen, & Lange, 2008). During brand communication, consumers meet the brand at the time of sale, in supermarkets or through advertising (Delgado- Ballester et al., 2012). Without good brand communication, consumers might not notice brands. The importance of brand communication is that it affects the behavior of consumers and impacts on their decisions (Delgado-Ballester et al., 2012). Ted Baker communicates about its brand through marketing on the website and word of mouth (Shields, 2011). The approach used by Ted Baker in marketing its brand is unique compared to other companies in the industry that offer similar services. Instead of using the traditional advertising campaigns, Ted Baker markets its brand through word of mouth and promotion through giving gifts to customers. Some of the gifts given by the company include World Cup Football cups and Easter chocolate bunny hotpot (Michelle, 2005). The company does not market or advertise its products, although it aims at selling them in the international level. ‘ ’ So c i a l m e d i a s h o u l d b e p a r t o f a n i n t e g r a t e d approach to enhancing the customer experience.’’ (Emerald Insight, 2012)

Figure 3: Ted Baker Websites

Brand communication

Digital communications are now an indispensable channel for every existing fashion brand, upon the unmistakable growth in social media with 1 billion users on Facebook and over 200 million on Twitter. Ted Baker must intensify their online presence reflected in their small following, and have yet to still tap into other platforms such as Weixin (Chinese social media). By having an inadequate presence, they miss out on great opportunities to strengthen the brand image on an international level and establish consumer relationships. ‘’The internet is the defining influence on the Millennia’s and they are hooked up to and dependent on the internet for managing almost every aspect of their lives.’’ (Stylesight.com, 2012) Primarily, concentrating on Millennias, they are enthusiastically led and native to digital technology synonymous to their identities. Technology acts as a critical part of their daily lives where they are constantly connected online as a way of living, decision-making, creating emotional bonds and for endless inspiration. Social media is paramount for brand engagement where it is expected for brands to provide a captivating experience rather than act safely as a transactional process. ‘’It is members of Gen X who are embracing the convenience and ease of going online at the most rapid pace.’’ (Marketingmag.com.au, 2011) Previously concentrating on Xers as the former Ted Baker consumer, this segment still remains valuable through existing brand loyalty and fondness of the new aesthetic. Despite not being technology-led, they are digitally savvy and open to trying new e-commerce approaches, where technology usage focuses on convenience purposes, and where video content is more powerful compared to social media. Additionally, their cynicism towards traditional marketing factors the greater effectiveness of digital and social media marketing (Keller, 2009).

Figure 4: Social Media icons

Ted Baker Brand Report 2014

Brand strategy Brand strategy refers to the plan used in developing a brand with the aim of meeting the set objectives (Tseng et al., 2012). Brand strategy should have its basis on the vision, and it should always focus on sustaining customerâ&#x20AC;&#x2122;s appeal and differentiating the brand (Chang et al.,2009). Brand strategy influences business operations and assists in brand consistency experiences and behaviors (Tseng et al., 2012). The brand strategy of Ted Baker has basis on achieving the companyâ&#x20AC;&#x2122;s aims. Ted Baker brand aims at becoming a world leader in designer lifestyle (Minton, 2000). The brand strategy focuses on management and development of new and existing international markets (Ted Baker, 2014). This means that the brand manages growth in the existing regions and at the same time putting into consideration new territories (Minton, 2000). Another brand strategy for Ted Baker is to have a controlled distribution through wholesale, retail and licensing. All distribution channel opportunities promote the brand and deliver margin (Davoudi, 2005). Ted Baker is currently situated at the top end of the high street market. Ted Baker trades down by selling their products in department store concessions such as Debenhams, John Lewis and House of Fraser. They also trade down by selling a range of perfumes and toiletries within Boots stores. This means that more people can access their products. Ted Baker trades up by having specialist stores in larger cities such as Nottingham, Leeds and London and by having a higher price than other leading cheaper high street brands. Each store sells different ranges of products according to the market in that specific location. Te d B a k e r â&#x20AC;&#x2122;s c u r r e n t s t r a t e g i e s i n c l u d e b r o a d e n i n g their offering to appeal more effectively to global platform, investing in their digital platforms, launching pop-up stores and growing their brand awareness. The new strategy will talked the current strategies into consideration but focus more on advertising and promotion the brand and their exclusive products, continuing to broaden their offering to appeal to global platform, less affluent and younger consumers, along with creating an unbeatable multichannel experience to set apart from competitors.

Figure 5: Ted Baker SS14 Womens wear

In accordance with the Ansoff Matrix model (Fig 6) will be employing strategies of Diversification- to attract international consumers and less affluent consumersand market penetration to increase awareness of their current products, particularly the exclusive ones to their target market. This model has been used to clarify the market growth strategy and allowed for definitive objectives to be created. Ted Baker’s website now had a cleaner, more sophisticated image. Pages are clearer, better structured and less ‘busy’. According to WGSN: Consumers want ‘apps’, ads and magazines focused on presenting a clean, readable format’ (MarshallJohnson, 2011:Online), this can also be applied to websites. A major change of Ted’s website is the click-and –collect, it increases convenience for the consumers. Social media has been integrated throughout the website on the homepage and. This allows consumer to share and interact with Ted Baker, the only problem for Ted Baker is social media has not been integrated throughout its individual product pages. Major change is required for Ted Baker is the addition of social media icons where the products can be shared and the linked in content. Ted Baker uses social media and blogs also increases awareness of these platforms as this was identified as necessary in the table it shows below. (Fig 7) Due to their closest competitors having significantly more followers/likes/ subscribers etc. and research revealing that Ted baker’s content was similar to their competitors content, suggesting the issue lay with lack of promotion. Future changes are the addition of customer reviews. Once a customer buys something from the website they will be encouraged through email to provide review. These reviews are congregated on the product-viewing page, allowing consumers to make a more informed choice when purchasing online, ‘’Ratings and reviews can make or break season shopping, ‘’nearly half (48%) of shoppers were always or frequently influenced by online ratings and reviews’’(Appendix: PESTEL). Another changes are creating a mobile application for Ted Baker, as nowadays consumers are more tech savvy, this will increase the sales and convenience for shoppers. According to WGSN, ‘’ UK retailers attracted a large number of interest from oversea online shoppers with a 64% year-on-year increase in the number of searches via smartphone. The fastest growth of those searches came from 231% in Germany, 145% Russia and 137% IN Argentina. (Appendix: PESTEL)

Figure 6: Ansoff Matrix Model Ted Baker Brand Report 2014

Brands

Facebook Likes

Twitter Followe rs

You Tube Subscriber s

Pinterest Follower s

Instagra m Followers

Google +

45,896

909

7,537

54,106

200,773

30,891

8,392

2,528

1,258

347

Sina Weibo

Ted Baker

172,593

Coast

48,896

Hugo Boss

5,939,560

234,899

14,287

5,652

109,947

2,981,734

115,559

Paul Smith

449,189

106,621

2,154

7,203

135,194

1,192

80,896

Reiss

140,078

41,378

493

3,414

19.378

94,433

FCUK

351,235

28,643

1,964

5,453

21,342

2,164

Jaeger

13,173

7,407

708

6,498

Thomas Pink

26,788

3,852

736

105

770

454

Armani Exchan ge

1,482,751

61,216

6,659

63,377

1,938

Figure 7: Social Media Followers

Brand position

Brand positioning is important because it refers to the way consumers perceive a product in their mind in regard to other competitor brands in the market (Sengupta, 2005). Through positioning, companies are able to place a brand in the mind of consumers based on the benefits and characteristics of the brand (Okonkwo, 2007). Companies that have good brand positioning in the mind of customers position themselves as the best, and consumers make choices of using them instead of those of competitors. Brand positioning communicates the verifiable value, differentiation and uniqueness of the brand (Sagar et al., 2011). Ted Baker focuses on the design of its products giving attention to maintaining high quality aspect in all its products. Ted Baker brand differentiates itself from others by positioning itself in the mind of customers as a â&#x20AC;&#x153;no ordinary designer labelâ&#x20AC;? (Bheta, 2014). With this positioning, the brand is confident that its designer level is different and that it is distinct from other brands. Ted Baker brand achieves continued success due to having better designs and better products (Ted Baker, 2014). Ted Baker brand achieves continued success due to having better designs and better products (Ted Baker, 2014).

Figure 7: Brand Perceptual Mapping

Image 2: Ted Baker look book AW2013

Ted Baker Brand Report 2014

Image 3: Swanlake Print “© Ted Baker (2011)

Problems of Ted Baker

Despite increasing its profits with up to 18%, Ted Baker brand has a problem in brand communication because it does not advertise or market its products using the traditional marketing methods. The approach used in marketing the brand has never changed from day one. There are no advertising campaigns for the brand, but recently the brand launched a website named ‘no ordinary designer website’ (Ted Baker London, 2014). The problem is that the brand might not be able to penetrate easily in the global market, because many people may not get to know about it while in a new country. Consumers who meet the brand without any brand communication may not have any knowledge on the brand, and there is a possibility that they might not notice the brand. Another problem of Ted Baker brand is that its brand identity is not able to fulfill its purpose of differentiating the brand from those of competitors. The identity of Ted Baker brand is not as strong as the other brands such as Paul Smith, and customers might not bare this brand in mind while making choices of where to purchase. The key part of Ted Baker’s brand identity is the British culture as well as the irreverent sense of humor which may encounter challenges when enter new international market with different culture (Balmford, 2012). There is lower brand awareness of Ted Baker outside UK. (Appendix: SWOT)

Recommendation for Ted Baker is for the management to develop a brand identity more of the British culture, and could mirror other brands such as Paul Smith. The major purpose of brand identity is to help customers to recognize the brand, by ensuing that it is different from that of consumers. In developing a different brand identity, Ted Baker can change its visual appearance and trademark. This will create a different outward expression on the Recommendation brand and consumer recognition of the brand will be easier. Another recommendation for Ted Baker is to enhance advertising campaigns in different countries that will help in brand communication. With the vision of becoming a global brand image, the company has to ensure that it communicates that brand, with the aim of increasing its awareness. Ted Baker brand communication will increase brand familiarity. Ted Baker can enhance brand communication through advertising campaigns, sponsorships, promotions and social media. Ted Baker Company has a strong brand based on strategy and positioning, which contributes to its continued success. However, the company has problems associated with brand communication and brand identity. The problem with brand identity is that the company's brand did not embrace British culture, which the consumer may not be able to recognize the differences of the other brands from UK. Another problem of Ted Baker brand is in its communication Conclusion because potential customers may not notice the brand when they meet it the first time. Recommendation is for Ted Baker to improve on its brand by enhancing brand communication through advertising campaigns, and developing a brand identity that consumers could bear in their minds. Ted Baker Brand Report 2014

Bex Zhang

Image 1: FASHION – IT’S ALL ABOUT THE BOWS (2013)

Methodology This study uses both quantitative and qualitative research to gain insight from the perspective of the customer and from within the company. An analysis of the micro and macro environment was done using a SWOT analysis. Michael Porter’s 5 forces were used to identify and analyse the 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths. Positioning map can help Ted Baker determine their market position and understand their competitors’ market position. The same was plotted by analyzing the competitors through a devised grid. Also, a questionnaire was posted on Facebook and 120 customers of Ted Baker volunteered to answer the question.

Today’s Ted Baker PLC (TED) faces a tough competition. In this chapter, competitive marketing strategies of Ted Baker are examined. Also the task of identifying Ted Baker competitors and analysing their competitors to determine the competitors’ strengths and weaknesses relative to those of Ted Baker’s own product and service (Kotler and Armstrong, 2012) have been undertaken. The first step is to clearly define Ted Baker’s market position. From the beginning, Ted Baker has had a vey clear, unswerving, concentrate on quality, attention to detail and a quirky sense of humour (Ted Baker, N.D.). The brand’s “Mission is to build a thriving company through the creation of a leading designer brand, by conducting ourselves in an efficient and courteous manner and by maintaining Ted's high standards and integrity” (Ted Baker, 2009). The company saw themselves as something that gained the quickly growing brand title of 'No Ordinary Designer Label' (Ted Baker, N.D.). As a quintessentially British brand, Ted Baker is famed for its quirky yet commercial fashion offering, high quality design detailing and distinctive use of pattern and colour. Their unique selling points are the high quality of their products and fashionable design (Appendix SWOT). The second step is to determine what Ted Baker’s product offer ranges are . In fact, one of the strengths of the company is that they offer a wide range of products that fulfill of each customer’s needs (Appendix SWOT). The entry price point for Ted Baker product is around 30 pounds and the exit price point for their product is around 300 pounds. The company aims to provide high quality, fashionable clothes and accessories to urban women and men aged between 25 and 35. It also had collection for children’s wear (Ted Baker PLC, 2013). Ted Baker operates its business through three main channels, include in retail, wholesale and license (Ted Baker PLC, 2013). As of 2013, Ted Baker had 96 stores/outlets and 220 concessions in a total of 22 countries (Annual report and accounts, 2013), the store locations include the UK, Europe, the US, Middle East, Asia and Australasia. All the Ted Baker stores are located in prime shopping areas or city centers. Some of the prominent retail locations across the world where Ted Baker stores were located included Europe, the US, Asia, Middle East and Australasia. Ted Baker is headquartered in London, the UK (Ted Baker PLC, 2013).

Ted Baker Brand Report 2014

Image 2: Ted Baker SS14 (2014)

Figure 1: Michael Porterâ&#x20AC;&#x2122;s 5 forces

Michael Porterâ&#x20AC;&#x2122;s 5 forces model provides a framework for understanding the strategic competitiveness of a firm within a specific market (Investing answers, N.D.). It is used to identify and analysis 5 competitive forces that shape every industry and helps determine an industry's weaknesses and strengths (Investopedia, N.D.). The first one is Competition in the industry and is also the most important one. Ted Baker gained market leadership by selling products that were of superior quality (Appendix SWOT). Because their products have strong brand identity, thus, they are surviving and have 351.9 million pounds revenue generated (Ted Baker Annual Report, 2013). The second one is the potential of new entrants into industry. Though global trade shrinks because of the economic downturn, the global fashion industry continues to grow at a healthy rate (Bodimeade, 2013). The main problem Ted Baker faces today is fast fashion trend (Appendix SWOT). As Ted Baker consider itself as design brand, the company put a substantial amount of time at the designing process. The company targets specific customer and has developed its business on the premise that customers look for good designs and strong brands. The fast fashion brands are also doing the same thing. However, it takes them only about few weeks from designing a product to it being placed on the store shelves (Cachon and Swinney, 2010).Most of fast fashion brand products prices are lower then Ted Baker. The third one is threat of substitute products. Fashion has become a huge part of our everyday lives. When a fashion brand produces popular merchandise, other brands always follow the idea. Through careful observation in high street, similar item can be found in other fashion brands, like Ted Bakerâ&#x20AC;&#x2122;s print shirt. A similar shirt offered by other fashion brand costs much cheaper then Ted Baker. The fourth one is the power of suppliers. In order to gain more profit, Ted Baker started to use factory in Asia where the manufacturing cost is lower than in Europe (Appendix PESTLE). And the last one is the power of customers. Asia is the most populous continent, it is really important for Ted Baker to expand into the Asian market (Appendix SWOT). Ted Baker aims to become a world leading designer lifestyle brand (Ted Baker, N.D.). A clear as well as good product can better achieve their marketing plan. Ted Baker Brand Report 2014

Image 3: Erin Fee for Ted Baker Ad campaign (SpringSummer 2013) photo shoot

Fig 2: Steps in Analysis Competitors

Steps in Analysis Competitors To plan effective marketing strategies, Ted Baker needs to find out all it can about its competitors (Kotler and Armstrong, 2013). “A company can define its competitors as other companies offering similar products and services to the same customers at similar prices” (Kotler and Armstrong, 2013). The best way to get an edge on the competition is that the brand makes itself a more competitive candidate. According as the elementary market research, Ted Baker might see the Hugo Boss, Reiss, French Connection, Whistles and Next as major competitors. Having identify the main competitors for Ted Baker, the next step should be to determine what is each competitor’s objective, what are various competitors’ strengths and weaknesses, and how will each react to actions the company might take

(Kotler and Armstrong, 2013). “No matter what business you’re in, you will benefit greatly from studying your competition” (Halpern, 2008). Ted Baker Brand Report 2014

Fig 3: Positioning Map: Fashion And Price

Fig 4: Which brand has provided fashionable clothes?

Fig 6: Which brand has provided high quality product?

Fig 5: Positioning Map: Product Quality And Price

Positioning Map can help Ted Baker determine their market position and understand their competitors market position. Customers of Ted Baker rated quality of the products and fashionable clothes as two of their favorites aspects of the brand (Appendix SWOT). Use of SWOT analysis can help Ted Baker understand what the competitorsâ&#x20AC;&#x2122; strengths and weaknesses are. Ted Baker Brand Report 2014

Image 4: Cotswold location for Ted Baker Spring Summer 2014 campaign (2014)

Hugo Boss First competitor is Hugo Boss. Hugo Boss is one of the global market leaders in the up-market. The company has got outstanding products and professional logistics systems (Hugo Boss, 2013). As we can see in Positioning Map, customers of Hugo Boss rated quality of the products as one of their favorite aspects of the brand. Because of Hugo Boss providing high quality menâ&#x20AC;&#x2122;s and womenâ&#x20AC;&#x2122;s fashion clothes, shoes and accessories, the company has become as a global fashion brand (Hugo Boss, 2014). The company has the specific aims in the coming 2-5 years. These include in particular sustainable and profitable growth, expansion of the company own retail business, clear distinctiveness of brands and concentration on core competences (Hugo boss, 2013). The strengths of Hugo Boss are that they diversified across the industry, offer products from women's wear, children's and men's wear to accessories for casual to formal wear. It operates under five different brand names which include Boss Black, Boss Selection, Boss Green, Boss Orange and Hugo (Hugo Boss Online, 2014). Each brand produces different type of product with different price that help the company expand the customer range. Other strengths of Hugo Boss are that they have

a presence across 129 counties and operate through 1,200 stores. The company operated through its own stores and also through franchisees. Hugo Boss also has state of the art production facilities spread around the world in Germany, Turkey, Italy, Poland, Switzerland and the United States (Mitchell, 2009). The weaknesses about Hugo Boss are the target market a specific group, which results in a limited amount of people buy from them. The second problem for the company is the exchange rates resulted in a loss in fiscal 2008. For Ted Baker, the company also faces the same problem.

Reiss Ted Baker might see the Reiss as a major competitor. Reiss targets the same market with a similar price range and similar type of customers as Ted Baker. The companyâ&#x20AC;&#x2122;s mission is to be creative and produce directional, design menâ&#x20AC;&#x2122;s wear, womenâ&#x20AC;&#x2122;s wear and accessories by delivering innovative, original products and combining exceptional design, quality and value (Reiss, 2009). Reiss specializes in producing high quality knitwear collection. That has helped Reiss differentiate their product from their competition. In

the Positioning Map, customers of Reiss consider the company produce a good quality of product, however with higher prices. The brand has been acquiring good competences and reputation in combing good quality clothes and design. Other strength for Reiss that is the company has strong store experience. Reiss carefully considers it with staffing, merchandising, music, seasonal graphics and location. When the customers go to their store, they will immediately know this is Reiss. The weaknesses for Reiss have been identified in two aspects. The first one is the Reiss website, is a non transactional website. In an international environment the company need a big platform, which is an online store. The second one is the lack of international reputation. Reiss has no reputation internationally, so approaching a new market it is better to focus on fashionable customers with similar tastes to UK customers. In fact, Ted Baker also facing the similar situation like Reiss. Ted Baker Brand Report 2014

French Connection The third competitor for Ted Baker is French Connection. The company business aims and operations are generating increased shareholder value through the sale of fashion products and the extension of French Connection brands into other lucrative markets through licensing (French Connection, 2014). The company continually assesses markets and relationships for new opportunities to broaden their customer reach (French Connection, 2014). “The overall aim is to improve sales densities and achieved gross margin in our retail stores which will be evidenced by our key performance indicators of growth in like-for-like sales and gross margin percentage” (French Connection, 2014). French Connection have two main strengths, they have a wide target market range and strong marketing. Due to French Connection’s wide target market range strategy, the company a total of 419 stores internationally as of January 2014 (French Connection, 2014). The company operated through its own stores, licensed and franchised. As of 2014, the company operates stores in UK, Europe and North America, and has licensed and franchised stores in the UK, Europe, North America, the Middle East, Australia, Japan, Hong Kong, China and India (French Connection Annual Report, 2014). The company designs to appeal to customer aged between 18 and 35 (French Connection, 2014). Other strength of French Connection that is the company is great at gaining consumers’ attention.

The company operates through five different brand names: French Connection, FCUK, Toast, Great Plains and YMC. “Each brand targets a different audience and has achieved high levels of recognition for style and design reflecting the creative passion and skill poured into the design and manufacture of their products” (French Connection Annual Report, 2014). Each brand is suited for different aged of customers. The main weakness for French Connection is financial loss. At the end of 2014, French Connection reported a financial loss 4.4 million pounds (French Connection Annual Results, 2014).

Image 5: Ted Baker Take the scenic route

Whistles A fourth competitor is Whistles. â&#x20AC;&#x153;Whistles encapsulates an intelligent sense of design with interesting and luxurious pieces. Collections are easy and laid back with an attention to detail and qualityâ&#x20AC;? (Whistles, 2014). According to primary research, customers of Whistles rated prices of the products as one of their

favorite aspects of the brand. Whistles items are slightly lower at upper end of the middle market sector, a bridge between high street and designer. Actually, in order to gain more profit, Ted Baker has already changed their market position similar to Whistles producing product between high-street and designer brand. Thus the position in the fashion market, bridge between high street and designer is the strength of the company. Other strength of the company is that they sell varied casual/ daytime wear. However, Ted baker sells more elegant and sophisticated silhouettes that restrict customer range. A weakness of the company is the lack stores worldwide. Whistles has been around a long time, but most of the company stores are located in the UK (Whistles, 2014). A few of the prominent retail locations across the world where Whistles stores are located includes Channel Islands, China France, Germany, Hong Kong, Ireland, Netherlands, Russia and the USA. Whistles stores in the world adds up to no more than 20 stores (Whistles, 2014). As of 2014, Whistles only had a presence across 10 countries and operated through 17 stores (not including the stores in the UK) (Whistles, 2014). Same as Whistles, one of the weaknesses of Ted Baker is the lack of store worldwide.

Ted Baker Brand Report 2014

Next The last one that has been seen as Ted Baker’s competitor is Next. In the market survey conducted, it was seen that the company provides special print clothing in this season which is very similar to Ted Baker (Appendix market research). “The primary financial objective of the NEXT group is to deliver long term returns to shareholders through a combination of sustainable growth in earnings per share and payment of cash dividends” (Next PLC, 2014). The company aim to create exciting, beautifully designed, excellent quality fashion and accessories for men, women and children together with a full range of home wares (Next PLC, 2014). NEXT is the UK's second-largest clothing retailer after M&S, and targets the midmarket 25-44s (Next, 2014). The good competition advantage for Next is that the company sells really low priced merchandise through multi channeled distribution strategy. Next has been successful at building an international brand over a long period of time and creating a community of loyal customers. NEXT Directory, our home shopping division with almost 4 million active customers in the UK and overseas” (Next Annual Report, 2014). A weakness for Next is that they cannot sell good quality and fashion able clothes and accessories to their target customers. In the position map, the company is located at a very low position. However, they do have a product and pricing advantage that Ted Baker can learn from Next PLC. Image 6: Ted Baker Autum/Winter (2012)

Recommendations Ted Baker has been successful at building an international brand and creating a community of loyal customers. However after conducting a competition analysis of the business operations of Ted Baker and their competitors, several problems have been identified which can affect the future success of Ted Baker. The amount of competition in the fashion market is very high at moment, with companies like Hugo Boss, Reiss who are able to sell high quality than that of Ted Baker. Companies like French Connection, Whistles and Next who are able to sell mass quantities at lower prices than that of Ted Baker. â&#x20AC;&#x153;Pricing as a key strategic tool for creating and capturing customer valueâ&#x20AC;? (Kotler and Armstrong, 2014). A way for Ted Baker to compete in prices would be to decrease production costs. This can be achieving by sourcing more of their raw material from abroad at a low cost (Appendix PESTLE). Ted Baker needs to maintain the company product quality by using industry in Turkey (Appendix PESTLE). Development of a specific product collection like Reiss, the company specializes in fashion knitwear is another aspect that can be looked into. To increase sales in the global market, Ted Baker can operate under different brand name like Hugo Boss and French Connection. Each brand can provide different collection of product with different price range in order to meet the needs of the consumers. Adopt a definite major purpose, which can help Ted Baker PLC grow their profits. Like Whistles, build the company in between high street and designer. Ted Baker has thrived as an international brand in places such as America and Canada, but the sales are relatively low in the UK. This may be due to not enough customers knows about Ted Baker. This can be accomplished by increase amount of stores in international market. Overall, Ted Baker has a good competitive edge selling domestic and abroad.

Ted Baker Brand Report 2014

Rachel Lu Peter Liang Maitreyee Dasgupta

Secondary Research

Documentary

Text

Snapshot

Non Text

Books on Consumer behaviour, management theory

Longitudinal data

books on research methodology

presentation on product lifecycle

World map complied from UN data sources to reflect forecasted demographic changes

World bank data on cash surplus

Reports from websites on global consumer trends

Articles

Secondary Data News

Figure 2: Secondary sources of data

Documentary and longitudinal secondary data (Saunders, Lewis and Thornhill 2012) were used to understand the consumer perception about Ted Baker. Figure 2 illustrates the various secondary data sources used. The advantages and disadvantages of secondary data have been discussed in the chapter â&#x20AC;&#x153;Distributionâ&#x20AC;? later in the document.

Primary Data

The primary research was conducted in multiple levels. Participant observation technique was used (Saunders, Lewis and Thornhill 2012) by observing stores RI YDULRXV FRPSHWLWRUV RI 7HG %DNHU 7HG %DNHU Ă DJVKLS DQG FRQFHVVLRQ RXWOHWV To ensure objectivity to the observation, a grid was analysed and selected (refer appendix â&#x20AC;&#x201C; primary research Liverpool, Manchester). However, the following errors can be there affecting the data reliability: Subject Error: There might be staff behaviour or consumer behaviour which KDG KDSSHQHG IRU D FDXVH VKRUW VWDIĂ&#x20AC;QJ RU OHVV IRRWIDOO LQ WKDW SDUWLFXODU GD\ To nullify the same, the observations were done on a weekend to ensure that proper working of the stores is witnessed. Time Error: The observation should not provide data that are untypical. For the same, observation was done during day time in the regular shopping hours. Observation error: There are very less chances of this happening as all the observations were done in secret.

Table 1: Guidelines followed while developing store observation grid (Saunders, Lewis and Thornhill 2012)

Comment Focused through irrelevant data Unambiguous Non-context dependant

Photographs were clicked and contextual data were recorded during the visit (refer Appendix- primary research Birmingham, Liverpool and Manchester)

there is a possibility of researcher errors. Mutually exclusive

No overlap was ensured

Easy to record

Apart from the store observations, interviews were conducted to capture the perception of the potential and/or existing consumer of Ted Baker about the brand. Structured interviews were chosen to identify the general pattern of Ted Baker consumer of different nationalities to facilitate the descriptive studies (Saunders, Lewis and Thornhill 2012). A structured questionnaire was prepared and face-to-face interviews were conducted. For the interview, the interviewee was informed about the purpose of the interview and appointments were taken according to their convenience with their consent. Neutral locations were used and the questions were provided in written format to ensure proper understanding. Also, observations of the brand Facebook page, blog and Pinterest were undertaken to understand the brand personality and consumer feedback.

Limitations

The following limitations may affect the result of the research: Cultural differences and bias: There may be misinterpretation of responses due to the cultural differences between the interviewer and interviewee. Personal bias: There might be personal bias of the interviewer or the interviewee which may distort the data. Sample subject: The store observations have been done only in UK. Thus, it does not reflect the brand positioning and personality outside UK. To reduce this bias, the perceptions of different nationalities have been captured. Also, the subjects interviewed are between the age group 19-30. Thus, the perception beyond this age group could not be FDSWXUHG DQG UHﾃ？FWHG LQ WKH UHVHDUFK Ted Baker Brand Report 2014

Figure 3: Adjacencies of Ted Baker in Liverpool One

Ted Baker consumer positioning through the Maslowâ&#x20AC;&#x2122;s hierarchy of needs

he much targeted Ted baker consumer is expected to have its unique identity. To get a global perspective of the Ted Baker consumer, 10 consumers of 7 nationalities were interviewed. Out of these 5 were potential Ted Baker consumers while the others have been/are Ted Baker consumers. The average age of the existing consumers was 25.2 years. The potential customer was chosen with an average age of 22.2 years indicating that Ted Baker is popular amongst a younger demography and is an aspirational brand for them. The items bought were dress and bags. The average monthly spent around 470 pounds with the men spending marginally more than women. The consumer shopped from varied channels the popular ones being online and through chain stores. However, during the interview, it was agreed that the flagship stores give better shopping experience. But availability was a factor for certain consumers. Most of the consumers would go to Ted Baker to buy something trendy or for special occasions. This indicated that Ted Baker is looked up as an early adapter of fashion trends catering to the early majority category of consumers around the world. When asked to describe Ted Baker, answers ranged IURP ÂśĂ RUDO SULQWVÂˇ ÂśSODVWLF WRWH EDJVÂˇ ÂśHOHJDQFHÂˇ WR ÂśJHQWOHPHQÂˇ 7KHUH ZDV D FOHDU indication that the brand is considered a brand leading in fashion trends. However, the brand has pricing differences across the countries as one of the consumers commented â&#x20AC;&#x153;My friend recommend the brand Ted Baker to me. But the price in China is 30% higher than my friend told me. I would not buy too much even Iâ&#x20AC;&#x2122;m fond of the styleâ&#x20AC;?. The details of the interview and the questionnaire can be found in the Appendix. The Ted Baker consumer was also studied through store visits as evidenced in the Appendix. The blog viewership and facebook pages were visited to understand the consumer expectations and lifestyle (Ted Baker PLC 2014a, Ted Baker PLC 2014b). Figure 3 gives a snapshot of the Ted Baker adjacencies which gives an idea of Ted Baker competitors and consumers targeted by these brands. Following the consumer responses and on the basis of store observations, the mood boards SUHVHQWHG LQ Ă&#x20AC;JXUH DQG Ă&#x20AC;JXUH ZHUH SURGXFHG E\ WKH WHDP WR GHSLFW WKH 7HG %DNHU WDUJHW male and female consumers. Ted Baker target consumer is 25+ (Corporate 2014), working and having distinct self-esteem needs. The Ted Baker consumer can be mapped on the Hierarchy of Needs theory (Kotler and Armstrong 2008, Maslow 2012) as the consumer having distinct self-esteem needs. If the product lifecycle is plotted on the Maslow hierarchy of needs, the Ted Baker consumers can be LGHQWLĂ&#x20AC;HG DV HDUO\ DGDSWHUV )LJXUH GHĂ&#x20AC;QHV WKH FKDUDFWHULVWLF RI HDFK PDUNHW VHJPHQW PDSSLQJ them on the Maslow hierarchy of needs and positioning the product lifecycle to identify the characteristics of the Ted baker consumer. )URP Ă&#x20AC;JXUH LW FDQ EH FRQFOXGHG WKDW WKH DYHUDJH 7HG %DNHU FRQVXPHU ZRXOG EH LQ \RXQJ ZRUNLQJ age, having aspirational as well as esteem needs. The consumer would have a steady source of income and likes to indulge in shopping.

Ted Baker Brand Report 2014

Figure 4: Ted Baker Target female consumer mood board (Dasgupta, Mu and Zhang 2014)

Figure 5: Ted Baker male consumer mood board (Dasgupta, Mu and Zhang 2014)

Ted Baker Brand Report 2014 50

· Consumers who define fashion, mostly innovators. Self · Market segment - couture and Luxury Actualization · Brands - Armani Privea, Alexander McQueen, Lanvin, Chanel, Dior etc

Innovators

Early Adapters

Product Lifecycle

Early Majority Late Majority

Laggards

Self Esteem Needs

Belonging Needs

Safety Needs

Physiological Needs

· Early adapters, have more design and product conciousness · Market Segment - Luxury, premium · Brands - Chanel, Dior, Loius Vuitton, Paul Smith, Michael Kors etc · Early majority, for some cultures these can be often aspirational needs of owning luxury brands. · Market Segment - Premium, Upper layer of Mid market brands · Brands - Louis Vuitton, Reiss, Hugo Boss, Polo Ralph Lauren, TED BAKER, FCUK, designer bridge collections etc. · late majority, Consumers favouring core products, more emphasis on quality and durability than fashionability · Market segment - Upper to Mid layer of Mid market brands · Brands - Debenhams, Marks and Spencers, bhs, Next etc · Laggards , Consumers who are extremely price conscious · Market segment - Mass Market · Brands - Primark, certain charity shops, certaiin factory outlets and domestic manufacturers of some geographical areas

Figure 6: Mapping of Ted Baker consumers on Maslow Hierarchy of needs and product Lifecycle to identify consumer characteristics and expectation

Global Demography Scenario and forecasted change in working age population

ith the changing global and economic scenario, for an expanding group like Ted Baker, it has become essential to XQGHUVWDQG WKH JOREDO WUHQGV IRU GHPRJUDSK\ FKDQJHV 7KH IROORZLQJ Ă&#x20AC;JXUH UHĂ HFWV WKH JURZWK DQG GHFOLQH RI the working age population in 2030 relative to 2010 and maps it against the present global market presence of

Ted Baker. With the forecasted changes in demography, it can be observed that potential markets for Ted Baker will increase in areas like South Africa, South-east Asia and Australia. It will be beneficial for the group to enter these regions. The Indian SHQLQVXOD $IULFD DQG /DWLQ $PHULFD VKRZV JUHDWHU LQFUHDVH LQ WKH ZRUNLQJ FODVV GHPRJUDSK\ DQG WKXV LW PLJKW EH EHQHĂ&#x20AC;FLDO to expand in these areas through concessions. Also, being developing countries, the â&#x20AC;&#x153;no advertisingâ&#x20AC;? concept might not work for these areas and some promotional activities might be required to gain visibility. Countries in strategic areas like 0RQJROLD 6SDLQ *XDWHPDOD DQG 3DSXD 1HZ *XLQHD FDQ EH XWLOL]HG IRU SURGXFWLRQ DQG ZDUHKRXVLQJ ,W LV QRWHZRUWK\ WKDW countries like China, Spain and France are forecasted to have declining working age demography. Thus, these countries need to be exploited at a faster pace to establish the brand. The UK and U.S. working demography is forecasted to be growing at a steady pace. Thus, it can be predicted that the general demography of UK will not change and Ted Baker needs not shift its product mix for an older demography.

Figure 7: Growths and Declines of Working-Age Populations (Ages 20-59) Relative to 2010 (gramich 2013) Ted Baker Brand Report 2014 52

Discussions

ith the thorough understanding of the Ted Baker consumer, it can be said that the brand understands the target consumer very well. The social network usage of the brand has ‘struck the right chord’ with the consumers. However, the target consumer range is quite limited. The brand has an opportunity of capturing a diverse range of consumers through bridge collections to cater to a younger fashion conscious demography. Also with the change in demography patterns, Ted Baker needs to concentrate on untouched areas like Latin America, South Africa and the middle-east. These areas are projected to be growing markets for Ted Baker consumers. Conversely markets like China and European countries show decline in the working age population. Also, the Chinese market is slowing down with decreased spending in luxury. Presently, bilateral ties between China and UK are in the forming stage which would further facilitate the trade between the two countries in near future (refer Appendix Pestle). These areas need to be exploited in near future to attain full potential for the market. Ted Baker can capture the developing country markets in West Africa and South Asia. These are growing markets with considerable spending capacity (World Bank 2014). The early adapters from these markets can be targeted by Ted Baker through up-marketing itself. However, the ‘no advertising’ concept advocated by Ted Baker (Ryle 2002) may not work in WKHVH DUHDV 7KH OLFHQVLQJ PRGHO PD\ SURYH WR EH EHQHÀFLDO LQ VXFK PDUNHWV

Recommendations

n view of the above discussions, the following recommendations can be made for the brand: 7KH EUDQG FDQ LQWURGXFH EULGJH FROOHFWLRQV WR FDSWXUH WKH DVSLULQJ FRQVXPHU ZKLFK LV D \RXQJHU IDVKLRQ FRQVFLRXV demography. 7KH EUDQG VKRXOG WDUJHW WR FDSWXUH WKH PDUNHWV LQ WKH GHYHORSLQJ FRXQWULHV LQ :HVW $IULFD DQG 6RXWK $VLD WKURXJK XS marketing itself to cater to the early adapters in these areas. The licensing model can be used for market entry. 0DUNHWV OLNH &KLQD DQG (XURSH QHHG WR EH FRQVROLGDWHG LQ QHDU IXWXUH WR UHDOLVH IXOO SRWHQWLDO DV WKH JURZWK UDWH RI WKH target demography is slowing down in these areas.

List of Illustrations

References

Figure 1: Research choices (Saunders, Lewis and Thornhill 2012) Figure 2: Secondary sources of data Figure 3: Adjacencies of Ted Baker in Liverpool One Figure 4: Ted Baker Target female consumer mood board (Dasgupta, Mu and Zhang 2014) Figure 5: Ted Baker male consumer mood board (Dasgupta, Mu and Zhang 2014) )LJXUH 0DSSLQJ RI 7HG %DNHU FRQVXPHUV RQ Maslow Hierarchy of needs and product Lifecycle to identify consumer characteristics and expectation Figure 7: Growths and Declines of Working-Age Populations (Ages 20-59) Relative to 2010 (gramich 2013) Figure 8: Ted Baker 2014 Spring

CORPORATE, 2014. Ted Baker PLC [online]. Financial Times. Available at: http://markets.ft.com/research/ Markets/Tearsheets/Summary?s=TED:LSE [Accessed 03/12 2014]. DASGUPTA, M., MU, L. and ZHANG, B., 2014. Mood Boards [online]. . Available at: http://ted-baker-team.tumblr. com/page/22014]. GOESSL, L., 2010. Understanding the Importance of Consumer Behavior in Marketing. Inside Business >RQOLQH@ $YDLODEOH DW KWWS ZZZ LQVLGHEXVLQHVV FRP LQGH[ SKS XQGHUVWDQGLQJ WKH LPSRUWDQFH RI FRQVXPHU EHKDYLRU LQ PDUNHWLQJ [Accessed 03/12]. GRAMICH, C.A., 2013. Growths and Declines of Working-Age Populations (Ages 20-59) Relative to 2010 [online]. Rand.org. Available at: http://www.rand.org/pubs/ periodicals/rand-review/issues/2011/winter/world.html [Accessed 03/12 2014]. KOTLER, P., and ARMSTRONG, G., 2008. Consumer markets and consumer buying behaviour. In: Consumer markets and consumer buying behaviour. Principles of Marketing. 2008, pp. 143. MASLOW, A., 2012. Abraham Maslow's Hierarchy of Needs and diagrams of Maslow's motivational theory - pyramid diagrams of Maslow's theory [online]. Alan Chapman. Available at: http://www.businessballs.com/ maslow.htm [Accessed 11/19/2013 2013]. RYLE, S., 2002. How to get ahead in advertising - at no cost [online]. The guardian. Available at: http://www. theguardian.com/media/2002/dec/01/advertising. business2014]. SAUNDERS, M., LEWIS, P. and THORNHILL, A., 2012. 5HVHDUFK 0HWKRGV IRU %XVLQHVV 6WXGHQWV WK HG 8QLWHG Kingdom: Pearson. TED BAKER PLC, 2014a. Fashion, Fables and Fish [online]. . Available at: http://tedbakerblog.com/2014]. TED BAKER PLC, 2014b. Ted Baker [online]. . Available at: https://www.facebook.com/TedBaker2014]. WORLD BANK, 2014. Cash surplus/deficit (% of GDP) [online]. World Bank. Available at: http://data. worldbank.org/indicator/GC.BAL.CASH.GD.ZS/ countries?display=map2014].

List of Tables Table 1: Guidelines followed while developing store observation grid (Saunders, Lewis and Thornhill 2012)

Ted Baker Brand Report 2014 54

Consumer Buying Process Peter Liang

onsumer decision processes vary considerably in its complexity. (L.Loudon and J. Della Bitta). However, it is usually divided into 5 stage from prepurchase to post-purchase; which are problem recognition; information search; evaluate alternative; making purchase and after-buying assessment. This FKDSWHU ZLOO XVH WKLV PRGHO WR DQDO\]H WDUJHWHG FRQVXPHUV RI 7HG %DNHU DQG LGHQWLI\ the problems varied from two areas- Asia and Europe mainly based on primary research findings. Finally, the recommendations will be provided along with each stage in decision-making model.

Step1: Problem Recognition Which kind of reasons may drive you buy the new garment? Asia(Male) 15%

11% 5%

30%

39%

For replacement For special occasion (wedding,interview) For fashion trend For gift Sales/Special offer

Which kind of reasons may drive you buy the new garment? Asia(Female) 3% 7% 22%

30%

For replacement For special occasion (wedding,interview) For fashion trend For gift Sales/Special offer

38%

Which kind of reasons may drive you buy the new garment? Europe(Male)

36%

45%

5% 10%

For replacement For special occasion (wedding,interview) For fashion trend For gift Sales/Special offer

Which kind of reasons may drive you buy the new garment? Europe(Female) 20%

24%

For special occasion (wedding,interview) For fashion trend

28% 32%

For replacement

For gift

roblem recognition is the perceived difference between an” ideal “and an “actual” state and usually occurs if consumers are aware of discrepancy between it. (D.Hoyer and J. Maclnnis 2009). Ideal state: The situation consumers would like to be. This is usually affected by cultural differences. As a result, we regard it as desires which are generated by consumers who shop new clothes for the reasons of special occasions; fashion trend and giving gifts in survey. As we can see, there are some differences between males from Asia and Europe in my survey. Most of respondents from Asia male shop new clothes from these reasons (39% for special occasions and 30% for fashion trend); however; only less than a fifth of respondents from Europe male see these problems as reasons for purchasing new clothes. (around 10% for fashion trend and special occasions). This phenomenon is also consistent with interviews results, Chinese and Indian males prefer buying new clothes for the purpose of becoming trendier. In terms of female from Asia and Europe, there is a slight difference between them about the reasons for buying new garments. Most of them agree that buying the gifts and wearing more fashionable are main reasons for shopping new fashion goods ; however, there is around a third of Asia female regard attending special occasions as a important reasons for buying; which is also consented by Indian and Chinese female in my interviews. The other factor which could affect the consumers of identifying the problems before buying is actual state. Actual state: The real situation as consumer perceives it now, which usually influences by external stimulus or running out of products. Therefore, we regard this factor as buying new garment for replacement, and sales in survey to indentify the differences between male and female from Asia and Europe in this factor of problem recognition. As we can see, there are considerable discrepancies of these reasons from Asia and Europe male. Over 80 % of Europe male purchase new clothes for the reason of replacing the old one and buying with reduced price; however, only a quarter of Asia male (11% and 15 %) shop new clothes for these reasons. This finding is also congruous with interviews results. In terms of female, the findings between two areas are completely different. Over 40 % of Europe female respondents (20% and 24%) agree they will buy fashion goods for taking place of old one or products in big sale. These two reasons are also responded by German and UK female in interviews. However, only 10% of Asia females (7% and 3%) buy for these two reasons.

Sales/Special offer

Ted Baker Brand Report 2014 56

The reason for buying the new garment? (Interviews results) Asia (India and China) E Male F For having casual wear and become trendier.

emale 1. F or attending parties or weddings 2. Following the fashion trend.

$V D UHVXOW $FFRUGLQJ WR Ă&#x20AC;QGLQJV IURP PDOHV DQG IHPDOHV LQ two areas in terms of two factors which can affect problem recognition in consumer buying process, there are some recommendations for Ted Baker to enhance the needs from target consumer before buying. There are two techniques to try to stimulate problem UHFRJQLWLRQ Ă&#x20AC;UVWO\ 7HG EDNHU FDQ DWWHPSW WR Â´FUHDWH D QHZ ideal state â&#x20AC;&#x153; ( D.Hoyer and J. Maclnnis 2009). $GGLQJ QHZ FROOHFWLRQ HPSKDVL]HG IDVKLRQ WUHQG FDWHU IRU male from Asia and female from Asia and Europe. 2. Classify current items into different special occasion series, such as interview, party and weddings for Asia consumers.

urope(German, UK, Italy and Czech republic) Male F 1. S ee big price reduction 2. A dd more casual wear in wardrobe.

emale 1. B uying more fashionable casual wear 2. s ome clothing is obsolete or dirty 3. P rice reduction.

3. Offering a special and quality gift collection for female in Asia and Europe. For example, make-up set. Secondly, Ted Baker can try to â&#x20AC;&#x153;encourage consumerâ&#x20AC;&#x2122;s dissatisfaction with actual stateâ&#x20AC;?. ( D.Hoyer and J. Maclnnis 2009). 1. Special offers for memberships or price reduction for limited period of time for Europe male and female. 2. Offering 5% off for consumer when they bring Ted Bakerâ&#x20AC;&#x2122;s reusable shopping bags for purchasing in European countries. 3. Adding more proportion of trend-led items, which enjoy short-period of time in product life.

Step2: Information search

What is the first thing that comes to your mind when you think of Ted Baker? (interview result) German female

Oil painted Floral prints

Indian female

Success without marketing

Indian male

it is one of the luxurious brand like many other brand

Czech republic male Prime

IWHU SUREOHP KDV EHHQ UHFRJQL]HG WKH QH[W VWHS LV information search, which can be divided into two parts- internal and external search.

Internal search:

The process of recalling stored information from memory. ( D.Hoyer and J. Maclnnis 2009). This information recalled from memory is usually examined by brands; attributes; evaluations and experiences.

Recall of brands:

)URP WKH UHVXOW RI LQWHUYLHZV DQG FRQVXPHU SURĂ&#x20AC;OH WKHUH DUH WZR SUREOHPV FDQ EH LGHQWLĂ&#x20AC;HG Firstly, although Ted baker is included in favorite brand choices from some female consumers, the fashion brands of their preferences are mainly concentrate on fast-fashion retailers, such as Topshop; Zara; New look and H&M. Secondly, Ted Baker does not appear in the list of favorite brands from male consumers. Accordingly, there are some recommendations for Ted baker to increase the possibility of brand name in consumerâ&#x20AC;&#x2122;s consideration set. 1. Increase prototypicality, which means making female consumers more easily recall brands that are closest to certain prototype in their consideration set than brands that does not have. ( D.Hoyer and J. Maclnnis 2009). For example, create typical designs in dresses, not just floral print; which can represent Ted baker and the others are GLIĂ&#x20AC;FXOW WR EH UHSOLFDWHG 2. Increase brand familiarity by repeating marketing communications continually to keep brand awareness high and associations strong among make consumers. For example, Sponsor sport activities; Sport stars endorsement or cross-industry collaboration with car brands.

Recall of attributes:

Consumers can often recall some details when they engage in internal search and recalled attribute information can strongly influence their brand choice ( D.Hoyer and J. Maclnnis 2009). This factor in internal search could be evaluated by interviews.

US female

colorful

UK female

their plastic tote bags

China female

Fashion style; Elegance

China male

gentleman

Findings:

1. Some features provided by Ted Baker positively implant in some consumer memory, such as floral prints; colorful; elegance and plastic tote bags. 2. There are some impressions perceived by consumers of Ted baker are not very strong and unique. Such as â&#x20AC;&#x153;Gentlemanâ&#x20AC;? or â&#x20AC;&#x153;Like any other luxurious brandsâ&#x20AC;?.

Recommendations:

1. Providing information that makes attributes, which performed well in consumerâ&#x20AC;&#x2122;s mind more salient and action that in turn facilitate brand choices? 2. Presenting vivid information in concrete words, picture or instructions to imagine ( D.Hoyer and J. Maclnnis 2009) to improve its brand attributes that are unclear or not special from some consumers.

Recall of experiences and evaluations:

The positive or negative experiences and evaluations for brands tend to form strong associative links with internal search. As a result, from our interview, there are two SUREOHPV FRXOG EH LGHQWLĂ&#x20AC;HG DQG DIIHFW FRQVXPHUV LQWHUQDO search from memory. 1. Although Ted baker provides a good variety of clothes, they should extend more stores in different countries (From ,QGLDQ PDOH 7KHUHIRUH QRW Ă&#x20AC;QGLQJ 7HG EDNHU ÂśV VWRUHV LQ certain countries when consumer recall it and want to buy it could lead to negative experiences for consumers. 2. The price in China is about 30% higher than my friend told me from Chinese femaleâ&#x20AC;&#x2122; s comments; so she will not to buy even she is fond of. As a result, Imbalance of product prices in differences could be the negative impressions when consumers process in internal search.

Recommendations:

1. Launching more point of sales in different countries in the world. 2. Strive to balance in product price in different countries, especially in China. Ted Baker Brand Report 2014 58

External search:

Much of the research on exter nal search has Which channels you always use when searching concentrate on examine how much infor mation fashion products you want to buy Asia(Male) consumer acquire prior to making a decision.( D.Hoyer and J. Maclnnis 2009). Therefore, the questionnaire surveys in different genders and areas in term of a 42% From friend's 38% variety of channels frequently used by consumers comments for the purpose of searching fashion products many From internet (online forum/fashion website) find out the problems and come up with some From social media recommendations. (Facebook) 12% From fashion

33% There are numerous types of channels for searching magzines/catalogue 23% From celebrities the fashion goods nowadays and the outcome in surveys differ from genders and countries. As we can see in surveys responded by male consumers, most of male consumers frequently search fashion information Which channels you always use when searching by their friends; fashion website or forum and social fashion products you want to buy Asia(Female) media, such as Facebook; however, there is only one thing different between them that over 40 % of male 35% respondents in Asia prefer acquire fashion information 45% From friend's by celebrity wears but only 10% of male respondent in comments Europe do the same way. From internet (online In addition, there is no obvious difference between Asia and European males in terms or ways of searching fashion information; however, one considerable GLIIHUHQFH EHWZHHQ JHQGHUV FDQ EH LGHQWLĂ&#x20AC;HG $URXQG half of female consumer would like to read fashion PDJD]LQHV RU FDWDORJXHV WR REWDLQ QHZHVW IDVKLRQ WUHQG but only a tenth of male respondents are willing to gain LQIRUPDWLRQ WKURXJK IDVKLRQ PDJD]LQHV $V D UHVXOW some recommendations for Ted baker could come up with as below: 1. Strengthening brand awareness and create unique brand features could leave deep impressions for people, when they give fashion advices for their friends. 2. Regularly collaborate with well-known fashion websites. 3. Sponsor or cooperate with influential celebrities, especially enhancing in Asian male. 4. Increase more interactive activities in social media, such as Facebook. 5. Advertising in wide range of womenâ&#x20AC;&#x2122;s fashion PDJD]LQHV RU ODXQFK IUHH FDWDORJXHV 7HG %DNHU FRXOG FRQGXFW DGYHUWLVHPHQW LQ GLIIHUHQW W\SH RI PDOHÂˇV PDJD]LQHV VXFK DV FDUÂˇV 6SRUWÂˇV DQG businessâ&#x20AC;&#x2122;.

48%

49% 10%

forum/fashion website) From social media (Facebook) From fashion magzines/catalogue From celebrities

Which channels you always use when searching fashion products you want to buy Europe(Male) 10% 41%

12%

36% 38%

From friend's comments From internet (online forum/fashion website) From social media (Facebook) From fashion magzines/catalogue From celebrities

Which channels you always use when searching fashion products you want to buy Europe(Female) 35%

38%

39%

55% 17%

From friend's comments From internet (online forum/fashion website) From social media (Facebook) From fashion magzines/catalogue From celebrities

Ted Baker Brand Report 2014 60

Step3: Evaluate the alternatives

consumer evaluates a brands on the basis of number of choices criteria and these criteria are WKH VWDQGDUGV DQG VSHFLĂ&#x20AC;FDWLRQV WKH FRQVXPHU XVHV in evaluating products and brands.(L.Loudon and J. Della Bitta). As results, using questions survey and interviews could acquire consumerâ&#x20AC;&#x2122;s perception about ranking the given factors which may affect their buying decision and their evaluation between Ted baker competitors based on WKH UDQNLQJ UHVXOWV +RZHYHU WKH Ă&#x20AC;QGLQJV FRXOG QRW UHDOO\ UHĂ HFW WKH UHDOLW\ GXH WR WKH OLPLWDWLRQ RI LQWHUYLHZHHV DQG questionnaires respondents. These are completely different results from Asian and European consumers about evaluating fashion brands prior to buying. The findings and problems can be identified through interviews results.

3UREOHP Ă&#x20AC;QGLQJV IRU $VLDQ FRQVXPHUV

1. The most important reason for Asian people when evaluating brands before buying is brand name; however, most of them are not aware of Ted baker. 2. Manufacturing place for product is also integral reason but Ted Baker does not reveal its specialty perceived by Asian consumers. 3. Ted baker does not demonstrate great abilities in product fashionability when evaluating between given fashion brands .This reason is also take important place in the evaluative criteria perceived by Asian consumers.

3UREOHP Ă&#x20AC;QGLQJV IRU (XURSHDQ FRQVXPHUV

1. Shopping experience plays important role among European people when they consider buying fashion brands; however, Ted baker cannot show special difference between given brands perceived by them through interviews. 2. Most of European consumers are thought of product quality is essential reason when they compare different fashion brands. However, Ted baker cannot show strong performance in it perceived by them. 3. There are also around a third of respondents from Europe (11/39) see product durability as top three important reasons for evaluating fashion brands before buying but Ted baker cannot show great result from interviews.

Recommendations for Ted baker:

1. Enhance brand awareness and reputation in Asian countries. 2. Providing more British-made products for Asian consumers 3. Strengthen fashion ability in products through frequent investigation in fashion shows. 4. Holed more interactive activities or install tech-devices in physical store to improve shopping experiences for European consumers. 5. Quality improvement in products through using quality materials or hi-tech skills. 3URGXFW GXUDELOLW\ HQKDQFHPHQW FDQ EH FRQGXFWHG E\ more careful product tests or adding more complicated process in product making.

Brand name

Ralph Lauren = Hugo Boss > Ted baker= Reiss= FCUK=Next

Product fashionability

Hugo Boss> Ted Baker=Reiss=FCUK > Ralph Lauren > Next

Manufacturing place

No comments

Product feature

Ted Baker> Reiss > FCUK >Hugo Boss=Ralph Lauren= Next

Product quality

Hugo Boss> Ralph Lauren=Ted baker=Reiss> FCUK=Next

Product price

Hugo Boss > Ralph Lauren> Ted Baker=Reiss> FCUK> Next

Store design

Ted baker> Hugo Boss= Ralph Lauren= Reiss > FCUK=Next

Shopping experience

Hugo Boss > Ralph Lauren=Ted Baker=Reiss> FCUK= Next

Product durability

Hugo Boss=Ralph Lauren > Next >Ted Baker=Reiss= FCUK

Product feature

Ted Baker> Reiss > FCUK >Hugo Boss=Ralph Lauren= Next

Shopping experience

Hugo Boss > Ted Baker=Reiss= Ralph Lauren = FCUK= Next.

Product quality

Hugo Boss> Ralph Lauren=Ted Baker=Reiss> FCUK=Next

Product fashionability

Hugo Boss > Ted baker=Reiss =FCUK > Ralph Lauren> Next

Product durability

Hugo Boss> Next >Ted Baker=Reiss= Ralph Lauren =FCUK

Store design

Ted baker> Hugo Boss=Ralph Lauren> FCUK=Reiss= Next

Brand name

Hugo Boss > Ralph Lauren=Ted Baker=Reiss> FCUK= Next

Product price

Hugo Boss > Ralph Lauren> Ted Baker=Reiss> FCUK> Next

Manufacturing place

Same

Ted Baker Brand Report 2014 62

Step4: Making purchase

fter evaluating the product between different brands, customer will enter into next stagemaking purchase. It usually includes a variety of reasons why consumers decide to purchase in Ted baker and the results vary between genders and countries. Clearly, Regardless of different areas and genders, product quality and design are most two important reasons for consumers to buy in Ted baker, which is consistent with the results from interview survey by one ,QGLDQ PDOH RQH &KLQHVH IHPDOH RQH &]HFK 5HSXEOLF male and one UK female. However, these are some SUREOHPV FDQ E\ LGHQWLĂ&#x20AC;HG LQ 7HG EDNHU DV EHORZ

3UREOHP Ă&#x20AC;QGLQJV

1 . Fe w r e s p o n d e n t s b o t h f r o m A s i a a n d Europe purchase Ted Bakerâ&#x20AC;&#x2DC;s product by friend recommendations. This could violate its principle of marketing strategy- word of mouth. 2. Reasonable price and customer services account very low percentage in the reasons to buy Ted Baker products responded by Asia and Europe consumers. It can be seen that customers all perceive that the Tedâ&#x20AC;&#x2122;s products are too costly, not fit to its product performances and also do not think that Ted baker provides excellent customer services to appeal them to buy.

For Ted Baker Consumer, Which reasons drive you most to buy the Ted Baker products Asia (Male) 15% 4% 5%

43%

Quality Design (features) Reasonable price Good customer service

47%

Friend recommendation

For Ted Baker Consumer, Which reasons drive you most to buy the Ted Baker products Europe (Male) 11% 15%

44%

Quality Design (features)

13%

Reasonable price Good customer service Friend recommendation

38%

Recommendations for Ted baker:

1. Expanding business in more Asian countries through franchising or concession model. 2. Launch more creative and interactive promotion campaigns in Europe countries. 3. Slightly adjust price or add more perceived valued on products to increase C/P values perceived by consumers. 4. Enhance customer ser vices, such as free suit PRGLĂ&#x20AC;FDWLRQV LW PD\ LQFUHDVH PRUH SRWHQWLDO FXVWRPHUV to buy Ted bakerâ&#x20AC;&#x2122;s product other than the reasons of quality and designs.

For Ted Baker Consumer, Which reasons drive you most to buy the Ted Baker products Europe (Female) 8% 9% 3%

48%

Good customer service Friend recommendation

Step5: post-purchase evaluation

Design (features) Reasonable price

32%

n addition to the overt types of behavior that result from purchase, the consumer also engage in an evaluation of the purchase decision because they are uncertain of the wisdom of their decision and will rethink this decisions in post-purchase stage. (L.Loudon and J. Della Bitta). Therefore, conducting the consumer interviews and questionnaire surveys through â&#x20AC;&#x153;rating questions, which are often used to collect opinion data (Sauders; Lewis and Thornhill) may identify the problems and come up with recommendations for Ted Baker.

Quality

For Ted Baker Consumers,which reasons drive you most to buy the Ted Baker products Asia (Female) 7% 11% 34% 12%

Quality Design (features) Reasonable price Good customer service

36%

Friend recommendation

3UREOHP Ă&#x20AC;QGLQJV 1. Product durability does not reveal prominent performance evaluated by consumers after buying Ted baker and a quarter of respondent are not contented of this performance. 2. Although most of interviewees are well-satisfied about fashionability of Ted baker products, there is around a third of respondents (33%) dissatisfy of it. 3. In store shopping experiences are not perceived specially by most of consumers. 4. Approximately 34% of respondents dissatisfy delivery serviced by Ted baker and most of them are feel no specialty of it both from questionnaire survey and interviews.

Recommendations for Ted baker:

1. Enhance product durability through the ways mentioned in previous process stage. 2. Fashion ability strengthening can be improved through designer and marketing teams 3. Ted baker could set rest space or recreational space in store to enhance shopping experiences. 4. Delivery services could be improved by more areas for IUHH VKLSSLQJ FXVWRPL]HG IRU SHUVRQDO SUHIHUHQFHV RU upgrade logistic system to reduce the time for shipping

Consumer perception about Ted baker after buying through interview Rating criteria Chinese female Indian Male Czech Republic male Satisfied S atisfied S atisfied S Practical and Wearable Neither satisfied Neither satisfied Satisfied Durable Fashionable Features and detailing In-store shopping experience Delivery Location and convenience

UK female atisfied Neither satisfied nor dissatisfied Satisfied

nor dissatisfied Extremely satisfied Satisfied

nor dissatisfied Neither satisfied nor dissatisfied Satisfied

Neither satisfied nor dissatisfied

Satisfied

Neither satisfied nor dissatisfied

Satisfied

Neither satisfied nor dissatisfied Satisfied

Neither satisfied nor dissatisfied Neither satisfied nor dissatisfied

Neither satisfied nor dissatisfied Satisfied

Extremely satisfied Neither satisfied nor dissatisfied

Satisfied

Reference

Kotler, P. and Armstrong, G., 1991. Principles of marketing. 1st ed. Englewood Cliffs, N.J.: Prentice Hall. Ng, W. and Coakes, E., 2013. Business Research. 1st ed. London: Kogan Page. 6RORPRQ 0 &RQVXPHU EHKDYLRXU VW HG +DUORZ England: Financial Times/Prentice Hall. Swarbrooke, J. and Horner, S., 1999. Consumer behaviour in tourism. 1st ed. Oxford: Butterworth-Heinemann

Ted Baker Brand Report 2014 64

Dimension of Culture Rachel Lu

OVERVIEW

LJHO +ROOLV 3 WKH FKLHI JOREDO DQDO\VW RI 0LOOZDUG %URZQ defined a global brand as one that â&#x20AC;&#x153;has transcended its cultural origins to develop strong relationships with consumers across different countries and culturesâ&#x20AC;?. It's very important for Ted Baker to identify and understand the culture characteristics in different market which impacts their global strategy and marketing strategy directly. The analysis of this chapter bases on Hofstede's dimension of culture framework which provide indices of uncertainty avoidance and individualism to illustrate the consumer needs of appearance in different countries. The TGI's "What the World Thinks Report" (2014) conducted survey across 50 countries to make statements about the attitudes and perceptions of media, shopping and personal appearance. Thus, the challenges and the recommendations for Ted Baker to go global in respects of product offer and marketing strategy will appear.

CULTURES OF APPEARANCE

he differences in perceptions of appearance and shopping behaviour in different countries could be analysed by two of the Hofstedeâ&#x20AC;&#x2122;s cultural dimensions including the uncertainty avoidance and individualism (Figure 2). Hofstede et al (2008) interpreted how the cultural dimension of uncertainty avoidance affects trade. In term of negotiation behaviour, people in the uncertainty avoiding societies including Central Europe and some Middle Eastern countries tend to express emotion and keep away from strangers; people in the uncertainty tolerant societies including China and Southeast Asian countries tend to suppress emotion and are more easily to engage in new activities (Hofstede et al., 2008). In term of trade goal selection, the former would like to pay a price for certainty which means they will choose cheaper low quality products if they feel uncertain about the high quality; the latter would trade both low and high quality products opportunistically (Hofstede et al., 2008). In WHUP RI WKH WUDGH SDUWQHU WKH IRUPHU QHHG H[WHUQDO MXVWLĂ&#x20AC;FDWLRQ VXIĂ&#x20AC;FLHQW UXOHV DQG contracts for doing business; the latter would like to strike up business relationship if there are opportunities present (Hofstede et al., 2008). The high individualism and high uncertainty avoidance culture such as France, Italy and Germany tend to be more ORRNLQJ IRU SULYDWH RSLQLRQ VHOI DFWXDOL]DWLRQ DQG IRUPDOL]DWLRQ %XFNOH\ 3 - DQG Ghauri, P.N., 1999), which implicates a fashion and formal appearance, a personalised engagement are required. On contrary, the low individualism and low uncertainty avoidance culture such as Hong Kong, Malaysia and Singapore are more likely to be concern about the harmony and identity of a collective group (Buckley, P.J. and Ghauri, P.N., 1999) and the willingness to change (Peng, 2011). The Hofstedeâ&#x20AC;&#x2122;s framework has great implication for the global expansion of in terms of marketing methods and entry modes. In the high-context culture like the Arab and Asian countries, it is necessary to establish long-term ambitions. Because business in there have to gradually involve social activities as well as build mutual trust and relationship with consumers (Peng, 2011).

Figure 1: Ted Baker Pinterest StreetWinker Source: http://www.pinterest.com/tedbaker/ streetwinker/

Ted Baker Brand Report 2014 66

Figure 2: Hofstedeâ&#x20AC;&#x2122;s Dimension of Culture Source: Inspector Insight, 2012. How Different Are Cultures [online]. Available via: 2013http://www. LQVSHFWRULQVLJKW FRP VHPLRWLFV KRZ GLIIHUHQW DUH FXOWXUHV LQWURGXFWLRQ WR VHPLRWLFV SDUW >$FFHVV March 2014].

Recommendations. In the countries like German, France and USA, Ted

Baker should focus on the product feature like design and quality to show its valuable. Meanwhile, in the countries like China and other Southeast Asian countries, Ted baker should symbolise the product as a particular social status or identity. Regarding to the product offer, the collections in Japan, South Korea, German and France should be more formal than the collections in Southeast Asian countries where people are more likely to seeking casual wear.

)LJXUH 7HG %DNHU 6SULQJ

Ted Baker Brand Report 2014 68

Figure 3: What the World Thinks - Media Source: TGI, 2014. What the World Thinks 2014 Report [online]. Available via: http:// ZZZ JOREDOWJL FRP >$FFHVV 0DUFK @

ATTITUDES AND PERCEPTIONS OF CONSUMER

n the statement of â&#x20AC;&#x153;I find advertising a waste of my timeâ&#x20AC;?, some Europe and Middle East countries have much higher percentage of agreement than global average such France, UAE, Saudi Arabia and Kuwait (Figure 7KH ORZ SURĂ&#x20AC;OH DGYHUWLVLQJ VWUDWHJ\ RI 7HG %DNHU PD\ EH IDYRUHG LQ WKHVH FRXQWULHV 2Q FRQWUDU\ LW LV GLIĂ&#x20AC;FXOW IRU 7HG Baker to raise brand equity in some countries like Portugal, Spain, USA and Vietnam (Figure 2). The second graph of Ă&#x20AC;JXUH LQGLFDWHV WKH SUHIHUHQFH RI DGYHUWLVLQJ E\ LQWHUQHW ZKLFK WKHUH LV RI UHVSRQGHQWV DJUHH WKDW WKH LQWHUQHW LV WKH Ă&#x20AC;UVW SODFH IRU WKHP WR JHW LQIRUPDWLRQ

Recommendations. Ted Bakerâ&#x20AC;&#x2122;s marketing strategy

should be diversified according to attitudes of consumer in different countries. For example, in Middle East, it is recommeded to enter market with low profile marketing strategy including consumer service, smart promotion, personal selling and social network. Whilst in Portual, Spain and USA, Ted Baker could raise brand awareness by VSRQVRULQJ LQĂ XHQWLDO HYHQWV RU Ă&#x20AC;OPV DSSHDULQJ LQ PDJ]LQH DQG WHOHYLVLRQ 0RUHRYHU LW LV QHFHVVDU\ WR SURYLGH VXIĂ&#x20AC;LFHQW information on internet and placec fashion compaign through well-known website for Chinese consumers.

Figure 4: What the World Thinks â&#x20AC;&#x201C; Personal Appearance Source: TGI, 2014. What the World Thinks 2014 Report [online]. Available via: http:// ZZZ JOREDOWJL FRP >$FFHVV 0DUFK @

Ted Baker Brand Report 2014 70

In the respect of personal appearance, consumers in Middle Eastern and Asian countries stated that they would like to dress to â&#x20AC;&#x153;stand out in a crowdâ&#x20AC;? and â&#x20AC;&#x153;keep up with latest fashionsâ&#x20AC;? (Figure 3). More importantly in Asian countries, consumers are seeking â&#x20AC;&#x153;young-lookingâ&#x20AC;?, which implicates that consumers are more likely to purchase clothes younger than their real ages.

Recommendations. Firstly, Ted Baker should do

PDUNHW UHVHDUFK VXIĂ&#x20AC;FLHQWO\ IRU GLVWLQJXLVKLQJ WKHPVHOYHV with other competitors to establish a unique brand in Middle Eastern and Asian countries where people looking for distinctive dressing and latest fashion. Secondly, as mentioned above, people in uncertainty tolerant societies are â&#x20AC;&#x153;easy travelersâ&#x20AC;? and more easily adjust to the novel actitivities (Hofstede et al., 2008). It would be better for Ted Baker to bring their own brand personality to these market rather than localise their brand image or product (Figure 4). Lastly, Ted Baker should assess the target consumer characteristics differently in Asian countries where people want to make themselves looks younger. Figure 5: The products inspired by Asian culture Source: www.tedbaker.com

LIST OF FIGURES Figure 1: Ted Baker Pinterest StreetWinker Figure 2: Hofstedeâ&#x20AC;&#x2122;s Dimension of Culture Figure 3: What the World Thinks â&#x20AC;&#x201C; Media Figure 4: What the World Thinks â&#x20AC;&#x201C; Personal Appearance Figure 5: The products inspired by Asian culture

)LJXUH 7HG %DNHU 6SULQJ

REFERENCES %XFNOH\ 3 - DQG *KDXUL 3 1 7KH LQWHUQDWLRQDOL]DWLRQ RI WKH Ă&#x20AC;UP QG (GLWLRQ /RQGRQ ,QWHUQDWLRQDO 7KRPVRQ Business Press. Hofstede, G.J., Jonker, C.M. and Verwaart, T., 2008. Modelling Culture in Trade: Uncertainty Avoidance [online]. Available via: http://dl.acm.org/citation.cfm?id=14005 GO $&0 FROO '/ &),' &)72. (1 >$FFHVV 0DUFK @ Inspector Insight, 2012. How Different Are Cultures [online]. Available via: http://www.inspectorinsight.com/ semiotics/how-different-are-cultures-introduction-toVHPLRWLFV SDUW >$FFHVV 0DUFK @ Ted Baker Annual Report and Accounts, 2012/2013. Ted Baker PLC. TGI, 2014. What the World Thinks 2014 Report [online]. $YDLODEOH YLD KWWS ZZZ JOREDOWJL FRP >$FFHVV 0DUFK 2014].

Ted Baker Brand Report 2014 72

Peter Liang

Image 1: Ted Baker Footwear Autumn Winter 2013 campaign

Product USP analysis: The Ted Baker menswear USP is: 1. Quality fabric use: eg. Blazers (core product of menswear in Ted Baker)

Problem: Apart from diversity of fabric selection, Ted Baker doesnâ&#x20AC;&#x2122;t have clear differentiation of quality fabric use from its main competitors. Recommendation: Ted Baker could establish its own fabric development center and use unique, hi-tech and quality fabric in its core products.

2.Distinctive print design: eg Shirt (core product) Fi n d i n g s : It i s o b v i o u s t o s e e t h a t Te d B a k e r c o m p l e t e l y re v e a l i t s u n i q u e a n d d i s t i n c t i v e p r i n t d e s i g n i n p r o d u c t , which can differentiate from its main competitors. Recommendations: Ted Baker could create more iconic print designs for themselves to make consumer easily recognized. E g . C o l o r f u l s t r i p e : P a u l S m i t h .

Ted Baker Brand Report 2014 76

3. Attention to details

3. Attention!to!details! ! ! Brand! Ted!Baker! name!

Reiss! !

FCUK!

Ben!Sherman! !

Hackett!

detail!

! !

Findings:

1. Obvious detail settings differentiated from its main competitors. 2. Competitors still have similar detail settings with Ted Baker.

Recommendations: Findings: 1.

Constantly developing more unique detail designs in core product, which exclusively

Specifying detail settings by staffs to make them more perceivable to consumers.

1. Obvious detail to settings differentiated from its main competitors. belong Ted Baker. 2. Competitors still have similar detail settings with Ted Baker. Recommendations:

1.Constantly developing more unique detail designs in core product, which exclusively belong to Ted Baker. 2. Specifying detail settings by staffs to make them more perceivable to consumers.

Image 2: Ted Baker Footwear Autumn Winter 2013 campaign

Ted Baker Brand Report 2014 78

Price

Product competition

Fashion

Qaulity

! Design Bowman's strategy clock

Differentiation! !

High!

Focused!differentiation! !

Hybrid!

Perceivable!value!to!consumer!

Increased!price/!standard!value!

Low!price

! High!price/!Low!value!

Low!

Low price/ Low value

Standard!price/!low!value!

Price !

High! !

Ted Baker Brand Report 2014 80

Image 3: Ted Baker Image + Own image

When it talks to the product analysis, price competitions must be taken into considerations. As we can see in the entry price chart, the suits-one of the Ted’s core products share the similar price with Reiss and Ben Sherman. Therefore, if competitors make a price reduction strategy, it may intensify the price competitions. According to assessing and responding to competitors price change (Koltler and Armstrong 2003), if lowering price negatively affect market share and profits, raising perceived quality and keeping the same price is a optimal strategy because male are split over the importance of price and quality (appendix). For example, incorporating 3D printing with traditional tailoring and applying 3D program in designs (appendix) could enhance perceived quality and reduce cost of production to maintain the price. Shirts- the other core product of Ted, also face highly competitions with its rivals except for Hackett. Although it seems they share similar entry price of shirts, the average price of Ted (￡85) is higher than its competitors.(￡70).Therefore, if Ted faces the price cutting from its competitors, reducing its price to match the competitor’s price is the injudicious action because it could not only reduce the profit margins but lower the product quality. As a result, there are two pricing strategies Ted could take- improving the quality and increase the price with printing shirts and move this product into higher market position or launching the low-price “ fighting brand “ with its basic shirts to appeal more pricesensitive market segments.

Product price comparison and Competitions strategies

Product price comparison and Competitions strategies Ted Baker

Reiss

FCUK

Ben Sherman

Hackett

Entry/Exit Price

Suit

380/ 550

400/ 450

230

350

500/ 750

Outwears

150/ 700

120/ 600

90/ 190

85/ 385

190/ 800

Shirts

65/ 160

55/ 95

50/ 60

55/ 125

85/ 135

Knitwear

80/ 125

70/ 95

65/ 160

60/ 125

100/ 280

Tops

30/ 65

25/ 50

15/ 30

20/ 45

50/ 115

Footwear

90/ 185

145/ 245

100

80/ 150

150

Accessories

20/ 250

20/ 200

30/ 255

30/ 250

60/ 550

When it talks to the product analysis, price competitions must be taken into considerations. As we can see in the entry price chart, the Ted Baker Brand Report 2014 82

suits-one of the Ted’s core products share the similar price with Reiss and Ben Sherman. Therefore, if competitors make a price reduction

Image 4: One Giant Leap For Ted Baker 2013

1.Suit When it examines the product’s sales and profits take over its lifetime, product life cycle model is the approach to apply in brand’s core product performances. It is stated that suits is belongs to “style” Product Life Cycle (PLC) because more than 80% of respondents would like change the new suit over 1 year (); which can be deduced that suit has long life-span and hard to be out of fashion. Moreover, it should locate in mature stage because Ted baker’s suits are not the new products to consumers. Ted baker’s suits may adopt “cost-based pricing strategy”, which is the best way. It is less affected by fashion trend and usually holds higher production cost. Furthermore, it can get steady profit margins and easily to be accepted by customers. However, it also brings some drawbacks. For example, company may not reap huge profits from this product and profits are easily affected by cost ups and downs. In addition, because this product is in mature stage, market share tend to be fixed and hard to expand. In order to prolong this product lifetime and increase sales, there are 3 recommendations for this product1. Offering free size alteration. 2. Fabric development. 3 .

2. Outwear Outwear category, which is design-oriented could be belong to the fashion Product life cycle but different type of outwear could situate in different stages. In my survey, only 15% of respondents prefer to buy the coat and quilted jacket in Ted baker() and most of items are lack of creativity. As a result, the sales brought by this product category may reach in limitation and it can be enter into mature stage quickly. In addition, compare with its main competitors, the Ted baker’s price in this product sector are higher. It can be argued that Ted Baker adopts “value-base” pricing strategy for this product category and it may be the main problem, which cause fewer customers would like to purchase it. Therefore, adopting “cost-based” pricing strategy may equip coat and quilted jacket with more competitive edge and back to the growth stage.

Over half of respondents are willing to buy blazers in Ted baker (), which can be seen its rapid growth in sales performances. Therefore, it can be lie in growth stage and bring most of profits for Ted baker. Because “Value-based” pricing could enable retailers to acquire huge profits when consumers are willing to accept product value, it is suggested that Ted baker should adopt this pricing strategy for this product sector. However, this pricing strategy also needs to shoulder some risk because of the volatility of customer’s preference for fashion goods. If customers no longer perceive Ted baker’s blazer as good value and its price are still higher than the other competitors, this product sector would quickly drop to the decline stage. The bomber jacket and mountain parka are the relatively new products in Ted baker, which is in introduction stage, and reveals huge potential in my survey because there is around 30% of respondents would like to purchase it. As a result, it is suggested that Ted baker could adopt two pricing strategy for this product sector: 1. Value-based” pricing to gain large profits if it demonstrates great preference by customer continuously. 2. “Competition-based” pricing if sale performance is unstable and be threatened by its main competitors. To evaluate the whole product category in Product life cycle model, outwears uncover its flexibility because it occupies the three stages, which could bring steady revenues for Ted baker. However, large proportions of products concentrated on maturity stage (70%) could be its future risks. As a result, my recommendations are more averagely allocate different types of outwear into different stage and adding more features to cater for mature market.

Ted Baker Brand Report 2014 84

3.Shirt In terms of shirt category, it could be divided into three parts-basic; print and global edition, which could belong to three type of PLC model-style, fashion and fad respectively and adopt three different pricing strategies separately. Regarding to the basic shirts; which belongs to style PLC because it is launched by Ted baker in every season, only 11% of consumer would pay more on basic shirts on Ted Baker. Therefore, it could be in the mature stage and may not bring main profits for Ted baker. It is stated that Ted baker may adopt “costbased” pricing strategy in basic shirts because its average price is slightly higher than its competitors except for Hackett. (). However, over 40% of consumers perceive that the reasonable price of quality shirt is between £40 and £60 .This shows the problems that the price is transcending the customer’s expectations and receives bad feedback of buying. Accordingly, my recommendation is change the pricing strategy to competitionbased and makes slight price adjustment based on their competitor’s change; which may facilitate basic shirts back into growth stage again. Printed shirts, which is the fashion-led products belongs to fashion PLC. Because the average price is much higher than its competitors, it could be adopted by “valuebased” pricing strategy. Although the price of this product overpasses the scope of customer acceptances, nearly 40%of respondents would pay more on print shirt in my survey.

Therefore, adopting the value-based pricing might be the optimal approach for this item and could gain huge profit by it because it is in growth stage in PLC. However, because it is the trend-oriented products, it may quickly enter into decline stage if is out of fashion. As a result, recommendation is make more additionalvalue on this product, not just product itself but package, customer serviceâ&#x20AC;Śetc Global Editions holds many customer supports (28%) ;much higher price(ÂŁ160) and limited time of launching. Therefore, it belongs to the fad PLC and could make temporary profits for Ted. Owing to my observation, these products would reduce huge price in promotion (50% off ); therefore, it could adopt the marketskimming pricing-setting a higher price to skim maximum revenues from the fashionconscious and make a huge price reduction to appeal another price-sensitive market segments. This strategy may earn twice from different customer segment. However, if products are not innovative and easily be replicated, it could be eliminated soon by market.

Image 5: One Giant Leap For Ted Baker 2013

Ted Baker Brand Report 2014 86

Image 6: Swanlake Print “© Ted Baker

Level of product Through level of product model (kotler 2008) with c u s t o m e r s u r v e y ( ) , t h e Te d b a k e r ’s p r o d u c t a n d s e r v i c e strategy can be evaluated and identify some problems.

Problem:

1 . D e s i g n s i n m e n s w e a r p r o d u c t s a r e l a c k o f c r e a t i v i t y. 2. Package performances could be not consistent with brand identity. 3. Deliver y efficiency does not satisfy customer’s expectations. 4. After-sales services does not perform well, compared with other factors. 5. Customers do not perceive good warranty of products

Recommendation:

1. Launch sub-lines to develop other style of products, not just confine in designing one certain look. 2. Design special package for different product lines. 3. Applying new-tech in logistic system and d i s t r i b u t i o n c e n t e r, s u c h a s f l y i n g m a c h i n e t o d i s t r i b u t e . 4. More interaction with customers on online social media to collect the key problems. 5. Make brand magazine, specifying source of production in every single items with free of charge

Product development strategy

When it comes to the new product development strategy, Ansoff matrix could be applied and evaluated.

Existing product

New product

Market penetration

Product development

Current doings:

1. Developing wide range of product lines.

1. Bomber and mountain jacket. (2014)

2. Seasonal or festive promotion

2. Online Exclusive (notebook; flask; playing card;

Pros:

shoes)

Existing market

1. Expanding more customer- based.

Pros:

2. Increasing sales quickly

1. Giving customer more choice of style for daily life.

Cons:

2. Increasing online sales

1. easily confusing customers because of multi-options

Cons:

2. Too often price reductions may lead to loss of

1. Risks to be refused.

customer loyalty. Recommendations

2. Undermining brand reputation if product style or function are not suit for brand identity.

1. Clear segmentation of different lines in features.

Recommendations:

2. Every single line has clear target demographic

1. Launching sub-lines for cheaper prices.

3. Temporary sales for VIP member.

2. Developing new products based on maleâ&#x20AC;&#x2DC;s life style,

4. Launch pop- up stores.

such as sport activity or 3C technology.

Market development

Diversification

New market

Current doings:

1. Expanding business rapidly in several countries.

Launching manâ&#x20AC;&#x2122;s grooming stores.

2. Global Edition collection for the luxurious

Pros:

customer segment. Pros:

1. Quickly recognized by customer because of existing brand name.

1. Complete product ranges provide for customers in new

market.

2. Increase market share. 3. Increasing the corporate total turnovers rapidly.

2. Appealing customers from highest class of society.

Cons:

1. Eroding brand name if new businesses are failed

Failure by culture differences or market saturation.

2. High completion by numerous luxury brands

because of offering lower products or services. 2. The company resources will be reduced because it is shared within too many brands.

Recommendations

3. Lack of expertise to manage new business

1. Expand in emerging market-MINT

4. Reduced innovation if companies diversify too

2. Creating new brand name for luxury market. 3. Enhancing product promotion for mature market, especially suits and shoes.

widely, this can lessen their focus. Recommendations: Coffee shop (agnesb); Furniture(RL);Sport (H&M); Hotel (Bulgari)

Ted Baker Brand Report 2014 88

Image 7: Ted Baker Footwear

Which*prodcut*you*oIen*purchase*in*Ted*Baker* MulKLchoice**

Shirts(print)! Blazers! Bags!

7%! 30%!

Suits!

52%!

33%! 45%!

26%! 19%!

17%!

48%!

!Normal! outwears(coat/ quilted!jacket)! New!outwears! (bomber!and! mountain!jacket)! Global!Edi[on! Grooming! products! Shoes!

Low

High

Stars 1. Printed Shirts 2. Blazers 3. Bright color satchels Market Growth rate

Cash cows 1. Formal suits 2. Normal outwears (coat/quilted jacket)

Question mark 1. New jacket type (Bomber and mountain jacket) 2.Global Edition(shirts/blazes) 3. Grooming products ! Dogs 1. Shoes. !

Low Market share

Boston m a t r i x i s great approach Boston matrix is great approach to sort out different current product categories into different segments and decides which segm to sort out different current product new product development. categories into different segments and decides which segments need new product development. Printed shirts; blazers and bags may belong to “Stars” because around 50% of respondents prefer to shop these three product c Printed shirts; blazers and bags may belong to “Stars” Ted baker; furthermore, the former two situate growth stage in the PLC discussed before. As a result, it because around 50%inoftherespondents prefer tomodel shoprespectively these three product category in Ted baker; furthermore, the former judged that these three products hold high market share and growth rate. It is also indicated that developing more new type of pr two situate in the growth stage in the PLC model respectively this segment is the best strategy. discussed before. As a result, it can be judged that these three products hold high market share and growth rate. It is also indicated that Formal suit and coat/quilted jacket t are classified into cash cows because both of them belong to style PLC and reach the matur developing more new type of products in this segment is the best strategy. which means it Formal possesses the and highercoat/quilted market and lower potential of growth but can brings steady suit jacket t are classified into cash cowsprofits for the brand. because both of them belong to style PLC and reach the maturity Bomber / mountain jacket ; Global Edition and grooming products may belong to question mark because the former two are still stage, which means it possesses the higher market and lower introduction stage before and approximat p o tof e nPLC t i a lwith o f huge g rowpotential t h b u t growth c a n bbut r i noccupy g s s t e arelatively d y p ro flower i t s f market o r t h eshare b r a ndiscussed d. Bomber / mountain jacket ; Global Edition and grooming products may belong respondents would like to shop these in Ted baker stores in my survey. As a result, adding more features on products to make th to question mark because the former two are still in the introduction stage differentiated fromofcompetitors its most suitable development strategy. PLC with ishuge potential growth but occupy relatively lower market share discussed before and approximately a third of respondents would Finally, Shoes could be the “Dogs” in this matrix mainly because of its poor performance in survey (7%). It could reduce develo like to shop these in Ted baker stores in my survey. As a result, this product category. adding more features on products to make these differentiated from competitors is its most suitable development strategy. Finally, Shoes could be the “Dogs” in this matrix mainly because of its poor performance in survey (7%). It could reduce developments in this product category. Ted Baker Brand Report 2014 90

Image 8: Watch our AW13 Show Here!

33%! 26%! 19%!

As a successful brand, numerous product lines in product mix play an important role. In terms of width, Ted baker has 5 main product lines and each of line is adopting “product line pricing strategy”, which means setting a different price steps between Shirts(print)! Which*prodcut*you*oIen*purchase*in*Ted*Baker* various product lines based on its different features and customer MulKLchoice** evaluations. (Kolter, 2008). For example, the price of “Global Blazers! lines” with luxurious goods is much higher than “Tight lines” with fishing style. Furthermore, in product line decisions, it can systematically increase the length of its product in Bags! two waysstretching and filling. (Kolter, 2008). Because the market position 7%! of Ted is in the upper middle; therefore, they could stretch upward Suits! (current strategy) and stretch downward 30%! for luxury segment 52%! to the middle segment, such as set up sub-line for middleprice shirts. With filling-adding more items in product lines, !Normal! outwears(coat/ Ted could add more celebrity endorsement product or British45%! produced products to increase the diversity of productquilted!jacket)! line offer. New!outwears! With length in product mix, “Tight line” and “Endurance line” (bomber!and! has relatively much items than the others (25; 37);mountain!jacket)! therefore, 17%! 48%! it could adopt the “product bundle pricing”(Kolter, 2008), Global!Edi[on! combined main product-shirts with accessories-cufflinks in one bundle with reduced price to increase the revenues. Grooming! Finally, regarding to the depth, Ted’s product size range divide products! two types-casual (1~7) and formal (15~18) with 7 parts of each product. However, According to the World Health Shoes! Organization (WHO), obesity rates have doubled since 1980, Ted baker should add more large size for obese customers; moreover, in my personal experience, the size of Ted’s shirts are not perfectly fit for Asia figures. Size fitting varied from countries may take in to considerations to Ted’s product offers.

Product Mix and Product Line strategy Source: Ted Baker website

Product Mix and Product Line strategy

Product mix Width-number of product line(5)

Pashion(contemporary tailoring ), Endurnce(iconic design), Golobal(luxury), Tight(fishing), Archive(heritage)

Length-number of items in product line

Pashion(15), Endurnce(37), Golobal(6), Tight(25), Archive(9)

Depth- size range

Casual(1~7); Fomal (15,151/2,….18)

Source: Ted Baker website As a successful brand, numerous product lines in product mix play an important role. In terms of width, Ted baker has 5 main product lines and each of line is adopting “product line pricing strategy”, which means setting a different price steps between various product lines based Ted Baker Brand Report 2014

Bex Zhang

In this chapter, the study uses both quantitative and qualitative research to gain in sight from both the perspective of the customer and from with in Ted Baker itself. Academic authors were accessed for further research into product development. Analysis of the micro and macro environment was done using a PESTLE analysis and SWOT analysis. Product life cycle was applied to explain the product stage of Ted Baker and its association with sales. Level of product could examine Ted Baker product and service strategies. Boston matrix can help the company identify different current product category into different segment based on their market share and growth rate. Ansoff matrix can help Ted Baker development their product category. In order to acquire understanding form the consumers’ perspective, a questionnaire with both multiple choice was distributed through social media networks (Appendix women’s wear questionnaire). The questionnaire was posted on Facebook and Weibo, and xx customers of Ted Baker volunteered to answer the questions. For the fiscal year Januar y ended 2012, the company re p o r t e d re ve n u e o f 1 0 7 . 3 7 m i l l i o n p o u n d s f ro m t h e women’s products, reflecting an increase of 20.01% over revenue in 2011. Women’s products accounted for 49.8% of the company’s total revenue in 2012 (Ted Baker PLC, 2013). Ted Baker women’s wear are growing rapidly. Products are a key element in the Ted Baker or overall market offer to consumers (Kotler and Armstrong, 2013). “The garments sector includes women's, men's and children's clothing and accounts for the vast majority of the total market share, with womenswear holding the most dominant position on the UK high street” (Keynote, 2014). Ted Baker offered a wide range of women’s products that enable it to meet the needs of a larger customer base (Appendix SWOT). “A quintessentially British brand, Ted is famed for his quirky yet commercial fashion offering, high quality design detailing and distinctive use of pattern and colour” (Ted Baker Annual Report, 2013). Ted Baker had a very clear, unswerving, unique selling points are the high quality, attention to detail and a quirky sense of humour of their products (Ted Baker, 2014). As the product quality is important to Ted Baker’s customers, the company always selects the premium raw materials to present product quality. For instance, 100% Ovine Leather use in jackets and cashmere use in knitwear (Ted Baker online, 2014). Customer of Ted Baker rated quality and design of the product as two of their favourite aspects of the brand, with 43.7 % of the vote for each aspect. With the designs performance, the company specializes in using printing on dresses, tops and accessories. Every year Ted Baker will produce a new print collection (Appendix Market Research). Thus, the company has won the title of “No Ordinary Designer Label” (Ted Baker, 2014). These powerful and unique product properties considerably facilitate Ted Baker to differentiate with its competitors.

Image 1: Erin Fee for Ted Baker Ad campaign

Ted Baker Brand Report 2014 96

Price Point Comparison

What do you dislike about Ted Baker womenâ&#x20AC;&#x2122;s products?

The first thing to look at when analyzing the Ted Baker women’s product is the price competition. As we can see in the entry price chart, the dresses one of Ted Baker’s core products share the similar price with Karen Millen. Therefore, if competitors make a price reduction strategy, it may intensify the price competitions. In consumer perception, first thing they will be look at is the product price. If customers want to perceive a product but the product’s price is greater than its value, they will not buy the product (Kotler and Armstrong, 2012). Ted Baker’s prices were judge to be high, with 38.2% of the respondents rating prices as a negative feature of the store. Due to the merchandise being manufactured in the UK and Europe (Appendix PESTLE). Form the price point comparison, Ted Baker’s product prices offer is too wide. Is seen like Ted Baker still confuse which market level the company want to target. To satisfy current market demand, so the high prices need to be justified (Appendix PESTLE). Accessory is other core product of Ted Baker are accessories, it also face amount of competitors. Form the table is clearly to see that all Ted Baker competitors are produce accessories. Ted Baker and their competitors all share similar entry price of accessories, the average price of Ted Baker (169 pounds) is higher than its competitors. The company get very high exit price, it is 299 pounds for a handbag (TANNAH Exotic leather tote bag) (Ted Baker online, 2014). Therefore, if Ted faces the price cutting from its competitors, reducing its price to match the competitor’s price is the injudicious action because it could not only reduce the profit margins but also lower the product quality. In order to compete with their competitors, Ted Baker must use strategy other than price to differentiate their merchandises.Other weakness of Ted Baker women’s product is that they clothes fitting problem. Although Ted Baker consider one of the strengths of themselves is that they offer a wide a range of products that enable it to meet the needs of a larger customer base. However, when asked the customers what do you dislike about Ted Baker women’s products, 39.8% of customers rated they dislike fit of the product. Due to Ted Baker target at special type of customers, the company aimed at providing high quality and strong design product to women age between 25 and 35. However, according Mintel womenswear report “young women aged 15-24, who are the main clothes shoppers and the most fashion conscious” (Mintel, 2013). If the product is not offered for different ages of customers, they may be missing out on potential sales.

Image 2: Ted Baker 'Autumny' Exotic Metal Squares Tote Bag - Polyvore Ted Baker Brand Report 2014 98

Image 3: Erin Fee for Ted Baker Ad campaign

When it examines the productâ&#x20AC;&#x2122;s sales and profits take over its lifetime, product life cycle model is the approach to apply in brandâ&#x20AC;&#x2122;s core product performances (Kotle and Armstrong, 2012). It could be decided that Ted Baker dresses belong to style PLC and mapped in between the growth and the maturity stage. Because from my primary research, over 15 % of consumer would buy the new dress after one month and 35 % of consumer would buy a new dress after a year.According to Just-style news, customers sending an average of 14 pounds in dress. However, Ted Baker dress entry point is over 85 pounds higher than average dress prices. This property match with cost-based pricing strategy, which is less affected by fashion trend and usually holds higher cost simultaneously. Therefore, conducting this pricing strategy can get steady profit margins and is easy to be accepted by customers; however, it also brings some drawbacks. For instance, company may not acquire huge profits from this product and market share tend to be fixed, hard to expand. Tops and t-shirts are strong sell points in Ted Baker. That kind of could be belong to style product life cycle and mapped in the maturity stage. For the primary research, when asked what they like to buy in Ted Baker, 30.3 % of customers like the tops and t-shirts. Observation in online store and local stores in Birmingham, Liverpool and others cities, Ted Baker note the variety in designs shirts. In order to keeps the premium with these product, Ted Baker need achieve and develop potential products to generate revenue; Manage and keep assigned collection. Ted Baker coat and jacket belongs to introduction stage in PLC. It could be the reasons that, from my shop observations, the designs of these products are innovative, however they are not exists in market for long time. And Ted Baker declare the company chooses not to advertise, that means if Ted Baker have providing a new collection into fashion market no one will knows what the company offer for new season. Even though it does not bring many profits for Ted yet, it may soon jump to the growth stage if Ted pays more attention on promotions and creative modifications in these products.

Product$LifeJCycle$Strategies$ $

TOP and T-shirt Dress Accessory Coat and Jacket

INTRODUCTION

Footwear Knitwear

GROWTH

MATURITY

DECLINE

Product life cycle strategy !

Ted Baker Brand Report 2014 100

Image 4: Ted Baker Autum/Winter (2012)

Product$LifeJCycle$Strategies$ $

T e d Baker footwear and knitwear fill in decline stage. Although, Ted Baker consider them as life style brand (Ted Baker PLC, 2013) and the company aim at providing everything TOP and T-shirt to their customers. Actually, customers of Ted Baker do not want buy footwear or knitwear Dressclothes from them. Therefore, the company need to set themselves a particular targets. Product development is very important to Ted Baker because their merchandise set them apart fromAccessory their competitors.In terms of Ted Baker accessory, which could belong to maturelyFootwear stage of Coat and PLC model-style. Customer of Ted Baker would like to accept Jacket this item, seeing that the price is reasonable. The entry priceKnitwear point is 25 pounds for a bag (LEWEEN Printed large washbag). Therefore, it should bring profits for Ted Baker. Because most of these kinds of products are classic and quality, it may adopt costbased strategy to match with its position life cycle. DECLINE INTRODUCTION GROWTHin product MATURITY

How$long$do$you$buy$a$new$dress How long do you buy a new dress?$

One!Month!! Half!A!Year! One!Year!

Over!One!Year!

$ !

Ted Baker Brand Report 2014 102 When! it! examines! the! productâ&#x20AC;&#x2122;s! sales! and! profits! take! over! its! lifetime,! product!

Score of Ted Baker product

Score Ted Baker product Score oof f Ted Baker product 8

7 8 6 7 5 6 4

5 3 4 2 3 1 2 0 1 0

Three Level Of Product

Augmented Product

Three Level Of Product

Augmented Product Actual Product

Delivery and Brand credit name

Delivery and credit Brand name

Features

Aftersale service

Features

Aftersale service

Actual Product Core customer value

Core customer Design value Quality Packaging level Design Product Warranty support Quality Packaging level

Product support

Warranty

Three level of product model (Kotler, 2008) could examine Ted Baker product and service strategies. Understand what the customers profit on everything Ted Baker sells. From the primary research, core product (core customer value) and quality obtain higher scores from its target consumers, which conform to Ted Baker Customer expectation. Brand name, design and product support are the obtain second higher scores, which may ascribe its good performance to its successful brand image and distinctive designs. Building up the new core products and adding more cultural features in product designs may straighten these segments of performance in the futures. Nevertheless, packaging, warranty and delivery and credit get lower scores from customersâ&#x20AC;&#x2122; perspective. Thus, Therefore, shortening the delivery time and expand distribution areas may resolve the problems.

What kind of product (for women) would you like to buy in Ted Baker?

In order to acquire understanding from the customersâ&#x20AC;&#x2122; perspective, a question will be ask for Ted Baker customer, what kind of product (for women) would you like to buy in Ted Baker. From my primary research the result shows that 32.6 % of consumer would buy Ted Baker dresses. 29.8 % of Ted Baker customer like their accessories, 30.3 % of consumer would buy the their tops and t-shirts, 23.8 % like their outwear and jacket. Around 18 % of customer would buy their skirts and trousers. 14.9 % of customers responded like their footwear. Rest of the customers of Ted Baker would buy denim, gift, knitwear, swimwear and underwear. However, these are not kind of product the customers really want form Ted Baker.

Ted Baker Brand Report 2014 104

of consumer would buy Ted Baker dresses. 29.8 % of Ted Baker customer like

their accessories, 30.3 % of consumer would buy the their tops and t-‐shirts, 23.8

% like their outwear and jacket. Around 18 % of customer would buy their skirts

and trousers. 14.9 % of customers responded like their footwear. Rest of the

customers of Ted Baker would buy denim, gift, knitwear, swimwear and

underwear. However, these are not kind of product the customers really want form Ted Baker.

Boston matrix

High Question Markets

Market Growth

Swimwear, Knitwear, Gift, Footwear

Dogs Underwear, Denim

Low Low

Stars Dresses, Outerwear & Jacket, Skirts, Trousers

Cash Cows Accessories, Dresses, T-shirts & Tops

Market Share

Boston Matrix

High

Boston Boston matrix is good approach out different current product category matrix is good approach to to sort sort out different current product category into different segment based

into different segment based market share and growth rate. on their market share and growthon rate. their Understanding what are the customers’ perspectives that can help Ted

Understanding what are the customers’ perspectives that can help Ted Baker Baker determine which women’s product fill in which

part of Boston matrix. Form the customers’ perspectives, determine which women’s product fill in which part of Boston matrix. Form the Ted Baker have clearly view about their product market position. Dresses, skirts, trousers, Outerwear and jacket belong to the stars because both of them perform well and customers of Ted Baker would like buying from them. And these products have high market share and growth rate. Dress, accessory, top and t-shirt are classified into cash cows because three of them all belong the maturity and growth stage in product life cycle, which means it possesses the higher market and lower potential of growth but can brings steady profits for the brand. Furthermore, customers of Ted Baker expect these products in their shops. Swimwear, footwear, knitwear and gift may belong to question mark because of the customers will pay less in them and the company difficult reap the benefits of these products. Finally, underwear and denim located in dogs, mainly because of its poor performance in high street and less customer would like to buy these products from Ted Baker.

Image 5: Spring Summer 2014 Look Book - Ted Baker

Ted Baker Brand Report 2014 106

When it comes to the new product and new market development strategy, Ansoff matrix could be applied. In market penetration, one of the strengths of the company customers’ perspectives, ed Ba aker ave cof learly view that about heir product market is that theyTsell wide hrange products can tcater to every demand of Ted Baker consumers. To be more position. Dresses, skirts, trousers, to the stars satisfy to buy customerOuterwear people thatand can jacket be donebelong by selling more products because both of involves them perform well established and customers of Tinto ed Bexisting aker would like buying markets, often by increased promotion or price reductions betterproducts routes to have market, for market example share online and market. from them. And orthese high growth rate. Dress, In product development, customers of Ted Baker rated accessory, top and t-‐shirt are classified into cash cows because three of them all clothes and bags as the company core product. In able to gain more profit on these products, Ted Baker can great belong the maturity growth in product cycle, variety and in designs can stage be achieved throughlife varying the which means it detail. In the market development, entails taking existing possesses the higher market and lower potential of growth but can brings steady products or services and selling them in new markets. Ted been successful operate inothe UK, in theexpect USA these products profits for the bBaker rand. had Furthermore, customers f Ted Baker and Canada. However, in Asia, consumer still does not in their shops. recognition Swimwear, knitwear gift important may belong to question thefootwear, brand. Thus, it has nowand become for the company operate on Asia market (Appendix mark because of the customers will pay less in them and the company difficult PESTLE). In diversification stage, that is the final step of product development. Because Baker think as located in dogs, reap the benefits of these products. F inally, Ted underwear and them denim life style brand, developing new product or service related lifepoor in new market segment, such as coffeeand shopless may customer would mainly because daily of its performance in high street not only enhance brand awareness but further approaching like to buy these roducts from Ted brand. Baker. topthe genuine life style

Ansoff matrix

Ansoff Matrix

Existing Products Existing Markets

New Markets

Market penetration Developing product lines

Market development Expand business internationality

New Products Product development Bag and clothes

Diversification product and service development

Recommendations

Ted Baker is a British brand that designer clothing and accessories for men and women (Ted Baker PLC, 2013). After conducting a thorough analysis of the product development of Ted Baker, several problem has been identified which can affect the future success of the company. From the consumers’ perspective, Ted Baker some of the women’s product were judged to be high than their competitors. A way for Ted Baker to compete in prices would be decrease production costs. This can be achieved by souring more of their raw material from abroad at a low cost (Appendix PESTLE). And continue maintain the high quality of their product is also important to them. To increase sales in the Asia market, Ted Baker must understand the need of customers. Also Ted Baker had a presence opreated through around 27 stores in Asia, but that were not adequate to meet current Aisa consumers needs. The brand should consider a partnership with a preestablished Asia brand. For example, Taobao is a largest online marketplace in China. “China is currently the world's second-largest e-commerce market, with estimates of the revenue achieved last year running as high as 210 billion (about 125 billion pounds )” (Ng, 2013). If Taobao would agree to a partnership, they could both benefit form the relationship. Expading production and the range of the collection will allow Ted Baker to take sales to next level and become fashion market leader as the company expectation. As trend-led boots, coats and jacket are must have for the winter season (Smith, 2013). Understanding the customers need for each season, that helps Ted Baker product development. The company have the potential to grow their customer in internationally, by fllowing these reccomdations. Ted Baker Brand Report 2014 108

Lily Mu

Methodology The research methods for Ted Baker’s retail are qualitative primary researches and quantity secondary researches. The qualitative primary researches were a customer questionnaire, observation about Ted Baker stores in different cities: Nottingham, Birmingham, London, Manchester and Liverpool. Some visual pictures and quantitative secondary researches were supporting to evaluate the retailing process of Ted Baker. To gather data and support analyzing the consumer perspectives, a questionnaire was sent to 50 people to receive consumers’ perspectives. Some visual merchandising pictures of Ted Baker helped to have a direct visual perception about its window displays and products. The PESTLE Analysis, SWOT Analysis were used to analyze the micro and macro environment. Some academic authors were applied for the further research in the retailing process of Ted Baker. Some business models were used. For example, Essential Elements of Visual Merchandising Map was applied to support evaluating Ted Baker’s visual merchandising, Product life cycle was used to analyzing its instore display, Stimulus-Organism-Response model helped to get the consumer behaviors, Hofstede’s Cultural Dimensions Theory was applied to evaluate the cultural communication of Ted Baker and a Loyalty Strategy Matrix used to measure the relationship between loyalty and profitability.

Visual Merchandising

Nowadays, with developing economy and better standard of living, the competition of fashion industry is heating up (Appendix PESTLE). According to Lea-Greenwood (1998), customers are influenced by visual catching displays and retailers have to effectively create the right impression to stand out from competitors by visual communications. Visual merchandising maintains the stores image by attractive visual arts and effective graphic designs to attract and motivate the customers to make purchases in stores (Yoo-Kyoung Seock and Young Eun Lee, 2013). Ted Baker aims to be the leading lifestyle brands in the UK (Appendix SWOT). To have a insight understanding by observing the concessions and own stores of Ted Baker in five cities, from Essential Elements of

Figure 1: Windows display of Ted Baker in Birmingham

Visual Merchandising Map, there are some advantages and disadvantages of Ted Baker’s visual merchandising strategies. First of all, Most Ted Baker stores are divided into three parts: ladies’ area, men’s area and accessories’ area to introduce different colorful collections and decorating by natural elements that inspired from outdoors such as flowers, plants or wooden wardrobe to introduce a nostalgic feel. It helps consumers to clearly identify its products and make a purchase. Also, this makes Ted Baker has a strong personality by offering consumers a natural atmospheric and store image of British lifestyle (Appendix SWOT).

Visual Merchandising

Visual merchandising maintains the stores image by attractive visual arts and effective graphic designs to attract and motivate the customers to make purchases in stores (Yoo-Kyoung Seock and Young Eun Lee, 2013). Ted Baker aims to be the leading lifestyle brands in the UK (Appendix SWOT). To have a insight understanding by observing the concessions and own stores of Ted Baker in five cities, from Essential Elements of Visual Merchandising Map, there are some advantages and disadvantages of Ted Baker’s visual merchandising strategies. Store layout: confusing layout with colorful collections; divided into three parts: ladies’ area, men’s area and accessories’ area.

Exterior: convenient store location; simple window display.

Atmosphere created by Ted Baker: a natural and nostalgic feel.

Interior display: get inspirations from outdoor and decorated by using natural elements.

General interior: the light is little dim; put colorful collections on displays; British cheerful music; without scent in store.

Figure 2

Essential Elements VisualElements Merchandising Map Map Figureof 2: Essential of Visual Merchandising

Ted Baker Brand Report 2014 112

c o l l a g e b e s i d e s h o w s t h e Te d B a k e r c o n c e s s i o n i n B u l l r i n g o f Birmingham divides into women’ and men’ areas and accessories’ area. H o w e v e r, t h e w i n d o w d i s p l a y o f Te d B a k e r i s r e l a t i v e l y s i m p l e by showing some mannequins wearing the new collections. As a lifestyle brand, this might lack of creativities to show a visual impression and get attentions from potential consumers in the future. Compared with Ted Baker, the window display of Jack Wills uses mannequin poses to be dynamic. To reflect real human movement which could attract the consumers by giving a lively visual feeling might encourage people t o e n t e r i n t o t h e s t o re a n d d e s i re t o e x p l o re a n d p u r c h a s e p r o d u c t s .

Figure 3 - 10 : Windows display of Ted Baker in Birmingham The window display of Jack Wills in Birmingham

Ted Baker Brand Report 2014 114

Secondly, Ted Baker seasonally offers a wide range of products, even if it has strong visual in-store atmospheric, however the time of its products display is a Figure 11: The window display of Jack Wills in Birmingham little long. According to the product life cycle model, the products in the maturity time might decrease the sales with the decline of consumers’ interests. To enhance seasonally offers a wide of products, if it has might strong give a theSecondly, interestsTed ofBaker consumer, changing the range in-store display even frequently visual in-store atmospheric, however the time of its products display is a little long. consumer like to purchase when they enter Accordingfresh to thefeeling productand life would cycle model, theexplore products and in the maturity time might thedecrease store. the sales with the decline of consumers’ interests. To enhance the interests of consumer, changing the in-store display frequently might give a consumer fresh feeling and would like to explore and purchase when they enter the store.

Products sales Introduction Figure 12 Product life cycle model

Growth

Figure 12

Maturity

Decline

Product life cycle model

Figure 11: The window display of Jack Wills in Birmingham

Ted Baker Brand Report 2014 116

ers are more willing to communicate with brands and connection ecome increasingly important (Rosemary V and Mohammed R, ith increasing changes of consumers’ need in fashion industry, a strategy will be necessary to build to improve the customer d get loyalty from consumers for retailers (Appendix PESTLE ).

Staff training nto the store ofToday, Ted Baker, it is to see the sales staffs consumers areobvious more willing to communicate with brands and connection and service become increasingly important Ted Baker’s new products smiling and greeting. Ted Baker has an(Rosemary V a and Mohammed R, 2004). Also with increasing giving consumers good impression by building a friendly staffchanges of consumers’ need in fashion industry, a new service strategy will er after communicating with them, it actually shows they have less be necessary to build to improve the customer experience and about their products and brand (Appendix SWOT). get loyalty fromculture consumers for retailers (Appendix PESTLE ).

When enter into the store of Ted Baker, it is obvious to see the sales staffswould dressing Ted much Baker’s more new products and greeting. ght be satisfied and likewith to pay cost of smiling obtaining Ted Baker has an advantage by giving consumers a good en they believe the value of the benefits getting form the brandimpression by building a friendly staff image. However after communicating and John fahy, 2009 ). 57% customers think the service is one of with them, it actually shows they have less understanding s to motivate them to purchase in store and 21% of consumers about their products and brand culture (Appendix SWOT). er need to improve its staff training (Appendix Questionnaire). Poor Customers might be satisfied and would like to pay much more ning might disappoint consumers and even break t he c onsumers’ cost of obtaining the items when they believe the value of the benefits getting form the brand ( David jobber and John fahy, uture. 2009 ). 57% customers think the service is one of the key factors to motivate them to purchase in store and 21% of consumers think Ted Baker need to improve its staff training (Appendix Questionnaire). Poor level staff training might disappoint consumers and even break the consumers’ loyalty in the future.

Integrated IT systems

Figure 13 Staff of Ted Baker

IT systems

In 2011, QlikView Partner dbg started to work with Ted Baker in marketing database to motivate sales assistants to collect data of customers in store. This program is flexible and mobile to increase collaborations between colleagues and allow users to make decisions in time to satisfy consumers’ need. According to Craig Smith, Brand Communication Director of Ted Baker, QlikView has helped to increase in-store customer data collecting by over 60 per cent (DBG Case Study, 2014).In October 2011, Ted Baker generated 980 entries resulting in 959 new customer profiles for its marketing database in Halloween competition (DBG Case Study, 2014).

Applying new technology helps Ted Baker to measure its brands impact identifying trends and analyzing customer behavior such as sales by date, gender and product category and to map customers and sales through different ways and bring customers’ data from multiple sources such as email, in-store, historic sales to swiftly analyze information and customers’ behavior. However, with the increasingly heated competition between fashion retailers (Appendix PESTLE), applying IT system just help Ted Baker has a single customer view and the ability to perform comprehensive analysis and reporting customers’ data. What Ted Baker need is how to make a differentiation and stand out from its competitors (Appendix SWOT). Nowadays, developing a strong digital presence to support creating unique shopping experience to satisfy consumers’ need is a vial way to achieve successful business (David Walters and Jack Hanrahan, 2000).

Figure 14: SS14 Prints- Roses On Canvas

Ted Baker Brand Report 2014 118

In-store marketing

To communicate effectively with target consumers, retailers must plan and organize promotional activities to reach customers’ mind and build unique brand images to achieve successful business (Nancy J. R and Judy K. M., 2009). Ted Baker is targeting young fashionable customers with a colorful fashion sense and a desire for good quality products to support building a strong brand personality (Ted Baker Website, 2014).At the same time, it is also organizing different events in special occasions such as Valentine’s Day, Father’s Day, Mother’s Day etc. and suggesting perfect gifts for the special person.These are good approaches to create perfect shopping environment and appropriate communications with customers to increase sales. However, most public holidays and special occasions are well known and commonly used by most of fashion retailers in the similar occasions to promote. To better engage with its consumers, creating innovational activities to attract more attention from consumers compared with competitors are desired (Michael Levy etc., 2004). Also, Ted Baker chooses to use an unconventional way by marketing the brand by word of mouth. It is one of the only brands to be built into an international designer label without an advertising campaign (Appendix SWOT). Word of mouth is probably the most effective promotional tool, 41% consumers of Ted Baker get information of Ted Baker from friends (Appendix Questionnaire). But it is difficult to control and based on

Figure 15 :Mother’s Day Poster

In the fashion industry, there is a strong competition. For brands, with the growth of TV Advertising, it is a powerful way to encourage consumers to purchase products and attract more potential consumers (Appendix PESTLE). 43% of consumers prefer to purchase on well-known brands when they are shopping (Appendix Questionnaire). T h e re f o re , d e v e l o p i n g T V a d v e r t i s i n g s t r a t e g y f o r successful fashion business is necessar y in modern society ( Mi c h a e l L e v y e t c . , 2 0 0 4 ) . Wi t h o u t T V a d ve r t i s i n g , Te d Baker might lose some opportunities to widely broadcast its brand information and lose the chance to communicate with

Loyalty schemes

Ted Baker is offering customers digital fashion portraits to support its new collections. Its Facebook has over 67,000 fans and more than 89,00 followers on Twitter (Fashion.Marketing.Secrets, 2014). It is more expensive to attract new customers than to hold on to existing consumers, therefore customer loyalty is increasingly being seen as key factor to the success of retailer (David Walters and Jack Hanrahan, 2000).Retailers would like to invest resources to build strong relationships with the most valuable shoppers. Good relationships are established by during interactions between customers and suppliers (Malcolm Sullivan and Dennis Adcock, 2002). In modern society, targeting consumers by using new technology is a creative way to get loyalty (Appendix PESTLE). With a variety of distractions for consumers, the winners will be the one who provides simple solutions that tap into consumer desires and enable a hasslefree experience (WGSN, 2013). To impress on its consumers and get their loyalty, 'Teds Sweet Shoppe' has opened at London. The zesty colors of the products stand out and have been nicely displayed to create an exciting retail experience (Design4retail, 2014). Being a fan of Ted Baker brand, consumers are interested to explore what they are up to. Ted Baker is famous for creating amazing retail experiences and cool environments (Appendix Questionnaire).

Figure 16: Brand Image of Ted Baker

Ted Baker launches a temporary pop-up-shop in-store which provides a digital fashion portrait service to its customers. The initiative allows shoppers to have the opportunity to try on pieces from the new collection and pose for a photo in one of Ted’s ‘Exhibitionist’ photo booths (Sarah Shearman, campaignlive.co.uk, 2012). This helps to enhance the brand awareness of Ted Baker and to deliver a more engaging and personal retail experience. However, with increasingly international expansion of Ted Baker (Appendix SWOT), according to Hofstede’s Cultural Dimensions Theory, as a typical British lifestyle brand, Ted Baker has a low tolerance and heritage culture (Appendix SWOT), how to overcome the culture difference and globally market its brand to get loyalty from its consumers in the future is a problem need to be noted.

Ted Baker Brand Report 2014 120

Loyalty schemes

Figure 17: Brand image of Ted Baker in Instagram

Uncertainty Avoidance Low tolerance for uncertainty, British, lifestyle, prints.

Long/Short Term Orientation

Long term orientation, life style positioning.

Individualism & Collectivism Explore each personality.

Ted Baker

Power Distance High power distance culture, heritage culture.

Figure 18

Masculinity vs Femininity Both feminine masculine culture.

and

Figure 18 Hofstede’s Cultural Dimensions Theory

Hofstede’s Cultural Dimensions Theory

Ted Baker Brand Report 2014 122

As a British lifestyle brand, Ted Baker offers a wide range of good quality collections. It is also famous for getting fans by creating amazing visual shopping environment and a wide of marketing activities to build a unique brand personality (Appendix SWOT). According to Loyalty Strategy Matrix, it is clearly to see that Ted Baker gets a good balance for profitability and loyalty. However, to become a world leading designer brand, how to make a high profitability and catch up consumers’ increasing needs by creating great shopping experiences is a key for Ted Baker in the future. Zeynep Taskıran (2012) states that ‘central to a store’s success is the merchandise selection that matches the tastes, preferences and expectations of its target customers’. Also, lifestyle retailers’ success is depending on satisfying the shopping experience of customers. Positioning has famously been described as the ‘battle for a customer’s mind (Zeynep Taskıran, 2012 ). Shopper behavior is influenced by both internal and external factors ( Rosemary varley and Mohammed rafiq, 2004 ). With the rapidly developing of social media, according to the eMarketer report, the number of Social Network user globally rise from 1.47 billion to 1.73 billion from 2012 to 2014 and the global social network audience will continue to rise to 2.55 billion by 2017 (eMarketer, 2013). This obviously shows that more and more Network users prefer to flexibly purchase products online (Appendix PESTLE). For internal factors, according to the Stimulus, Organism, Response Model of buying behavior which states that Ted Baker is exposed to a variety of environmental stimuli by creating visual image and shopping environment to attract more attention from consumers and offers a positive shopping experience to motivate them to purchase. - In today’s competitive retail environment, to increase sales and to widely broadcast brands’ culture, fashion retailers consider the significance of visual merchandising as a good way and Ted Baker is good at this strategy (Appendix SWOT ). - For the future success business in retailing of Ted Baker, catching up fashion trends by using popular elements to create a strong brand visual shopping environment. In 2014, using element of mounted animal heads and antlers could bring a whimsical feel to rustic looks. Framed objects are popular to build a residential feel to retail floors, either mounted to a wall, hung, displayed on shelves or clustered together (Aria Hughes, 2013). - To improve the simple window display, using popular elements such as moving neons, little vintage objects and metallic colors update the look to create a moving brand story depending on different themes is a good way (Aria Hughes, 2013). Ser vice reimagined, loyalty disr upted and shoppable content are three of the key retail trends in 2014 (Angela Rumsey, 2014). To face consumers' desires, speed, flexibility, service levels and customer experiences are the core competitive advantages which need to put more efforts in the future by applying new technologies to create amazing shopping experience (Andrew J, 2013). As smartphones and tablets increase across the UK, mobile shopping activities are rapidly developing (Appendix PESTLE ), according to a new eMarketer report, mobile Usage is one of the key digital trends for 2014. Mobile’s share of UK retail website visits rose from 24.0% to 45.0% between 2012 and 2013 (eMarketer, 2014). For Ted Baker, putting a mobile strategy to check price, present opportunities by providing information could attract more consumers who is fond of network. Also, more technology focused on elevating the static fitting room experience into an engaging and interactive one could easily connects store associates to customers and create a digital shopping experience to increase conversions (Rachel A., and Aria H., 2014).

Shopper behavior is influenced by both internal and external factors ( Rosemary Profitability varley and Mohammed rafiq, 2004 ). Strangers Barnacles

With the rapidly developing of social media, according to the eMarketer report, the number of Social Network user globally rise from 1.47 billion to 1.73 billion from 2012 to 2014 and the global social network audience will continue to rise to 2.55 billion by 2017 (eMarketer, 2013). This obviously shows that more and more Network users prefer to flexibly purchase products online (Appendix PESTLE). Low For internal factors, according to the Stimulus, Organism, Response Model of buying behavior which states that Ted Baker is exposed to a variety of Loyalty environmental stimuli by creating and shopping High environment to Low visual image attract more attention from consumers and offers a positive shopping experience Figure 19: High Loyalty Strategy Matrix to motivate them to purchase.

Figure 19

Loyalty Strategy Matrix

Visual merchandising strategy and a wide of marketing activities to create a amazing shopping experience.

Ted Baker Attracting more potential consumers, getting more loyalty, achieving high profits, be outstanding compared with competitors. Figure 20: The Stimulus, Organism, Response Model of buying behavior

Figure 20 The Stimulus, Organism, Response Model of buying behavior

Ted Baker Brand Report 2014 124

Tirtha Patil

Image 1: Swanlake Print “© Ted Baker (2011)

Introduction Global online retail is one of the fastest growing industries in the world. According to Marketline (2013) in 2012, the industry generated revenues of $631.7 billion. The compound annual growth rate for the period between 2008 and 2012 is 18.6 %. Apparel, accessories and footwear form 14.6 % of the total market share in 2012. The huge growth potential of the industry can be identified from the projected growth of the industry of 97.7 % in 2017 when compared with the 2012 value (Marketline, 2013). Ted baker is a British clothing retail company that came into existence in 1988. Since then, the company has gone public, opened a number of stores in UK and all over the world, and celebrated its 25th anniversary in 2013. This paper aims to evaluate Ted baker’s E-commerce activities, its new business ventures, its global online retailing methods, website services and social media interaction. The paper goes into depth to understand how Ted Baker maintains and communicates the brand’s visual identity and brand values via its online presence. The paper submits recommendations, based on evaluation of the material obtained, that will help the company make changes in the areas that the paper has recognized as a problem.

Methodology This study has made an observation Ted Baker’s website (Ted baker, 2014). This has then further been evaluated considering its design and conceptual work. The study has made use of customer review websites such as Trust Pilot and Review centre to analyse and evaluate the customer’s view on the brand. A PESTLE analysis of the international fashion industry was conducted to understand the factors influencing the industry, and thus influencing Ted Baker. Understanding this, an evaluation of Ted Baker’s online presence has been made. This has been done to understand the strategic aims and activities that the brand involves itself into via its website. A framework suggested by various researchers (Kim and Stoel, 2004; Ha and Stoel, 2012; O’Cass and Carlson, 2012; Kim et al. 2011) has then been used to make evaluation of the company’s website and its reliability. This study focuses on secondary data mainly through literature review, customer reviews and personal observation to undertake the analysis.

Ted Baker Brand Report 2014 128

Ted Baker’s online presence and its significance to the strategy In order to understand the significance of the activities carried out by Ted Baker it is important to understand the Political, Economical, Social, Technological, Environmental and Legal factors that influence the international fashion industry. It is only through evaluation of this factors can one evaluate the steps undertaken by a brand to keep these factors in control (Peng and Nunes, 2007). Chapman (2006) argues that the framework fails to provide an insight into the company the way a SWOT analysis can Peng and Nunes (2007) explain that a PESTLE analysis helps in giving an insight into the factors that the brand uses as strengths and the ones that treat the brand as a threat while considering only the external influences. This is why a PESTLE analysis of the brand has been carried out It can be argued that e- marketing of an established brand need not be drastically different from its other initiatives as far as commitment is concerned. This is because if the company fails in e- retailing, for example, it can have a detrimental effect on brand reputation and brand in general. Considering these influences, the company has taken various steps to improve and maintain its web presence in the market. The PESTLE analysis of the international fashion industry has been linked with the framework suggested in figure (1). This has been done to link the influences with the web activity carried out my Ted Baker, making the evaluation more understandable Linking the influences on the international fashion industry and the frameworks suggested in Figure (1), Ted Baker has been able to establish a strong brand name and Ted Baker Annual Reports (2013) of the company shows that Ted Baker has been able to make substantial growth of 18 % when compared with the previous year. However the report does not reveal details regarding online sales achieved over the period.

The United Kingdom online retail has a market value of $52.5 billion in 2012. Compared with the global online retail, apparel, accessories and footwear only form 11.5 % of the total market value (Marketline, 2013). Ted Baker has taken grasp of the opportunity of the economic growth in the country as well as the immense significance of having an online presence in evident from the findings of Mintel (2013) that sales of clothing online grew faster than in store. The Annual Reports of 2012/13 states that “underlying our strategy is an emphasis on design, product quality and attention”. It is important to identify whether the website delivers on these promises. In order to achieve this task, it is important to see what aspects make the website a successful fashion retailer. As far as website’s effectiveness is concerned, most of the studies mention that quality is vital (Kim and Stoel, 2004; Ha and Stoel, 2012). However, the information and interaction that a customer expects varies depending on the kind of transaction they intend to make (Kim and Stoel, 2004). Thus the multi- dimensional nature of information and interaction is evident here. An analysis of the literature on Ted Bakers website reveals a number of factors such as availability of adequate information to make transactions ease of use, entertainment, trust, transaction consistent image, customer service, good quality etc. (Kim and Stoel, 2004; Ha and Stoel, 2012; O’Cass and Carlson, 2012; Kim et al. 2011). This helps the brand keep in control the economic and social influences that internet causes with rapid development. Here, the company fulfils aspect one and two of the framework in figure (1), it provides its customers with proper information, making the website understandable. It is important to note that Ted Baker is in close competition with online retail specialists like ASOS as well as other established retailers like Next (Mintel, 2013). This kind of competition with such established brands demands that Ted Baker has to be in a position to perform in a manner to keep in mind its brand

Image 2: North Yorkshire Moors Railway - Cision

image which it created over the years. In order to tackle this kind of competitive pressures and improve its competitiveness, the company works closely with NeoSolutions which is a software solutions company (Shenker and Luo, 2004). Thus in order for the website to be considered successful, it should be able to meet the expectations of the customers in a number of areas of website design quality The website was relaunched in 2009 and a dedicated US website was launched in 2010 (Taylor, 2012) and then the website was relaunched again in 2013 (Retail Technology, 2013). An analysis of Ted Bakers online activities before 2013 and after that shows the website with its primary objective of creating a global appeal and reach (Retail Technology, 2013). The Ted Baker’s website is much more responsive now because there were initial complaints about it being slow (Ted Baker, 2014). The website enhances the company’s ability to serve the different needs of people in a specific and targeted manner based on age, location and gender (Baloglu and Pekcan, 2006). The presence of 27 screens makes it easier to adapt to different regions and seasons based on the development of the brand (Hine, 2006). This inevitably helps in the expansion of the brand in other parts of the world (Rowley, 2004). Thus the company’s online presence in Australia and US enhances its brand development and the websites quality meets the demands and expectations of people there (Internet retailing, 2014). Thus, the brand provides its customers a consistent image while making sure that the transaction is smooth.

Ted Baker’s plan to provide a centralised platform across all regions and also specific attention is being paid to online management systems and customer relationship management further helps the company in providing a tailor made experience to each customer, very much part of a successful customer relationship management (Kotler, 2004). Thus the company is committed to provide an omni- channel experience and presence of detailed information makes the website quite engaging (Trust pilot, 2014). With the well-established commitment of the company towards customer service (Levy and Weitz, 2003), it can be said that the presence of e-commerce is just a step ahead in incorporating the experience already obtained during in- store customer service (Zhang and Von Dran, 2000).

Ted Baker Brand Report 2014 130

3. Ted Baker’s online presence and its significance to the strategy: In order to understand the significance of the activities carried out by Ted Baker it is important to understand the Political, Economical, Social, Technological, Environmental and Legal factors that influence the international fashion industry. It is only through evaluation of this factors can one evaluate the steps undertaken by a brand to keep these factors in control (Peng and Nunes, 2007). Chapman (2006) argues that the framework fails to provide an insight into the company the way a SWOT analysis can Peng and Nunes (2007) explain that a PESTLE analysis helps in giving an insight into the factors that the brand uses as strengths and the ones that treat the brand as a threat while considering only the external influences. This is why a PESTLE analysis of the brand has been carried out Political Economical

Social

Technological

Environmental Legal

-‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐

Part of a deep British culture (Ted baker, 2014) Increasing importance of fashion in politics (Keynote, 2013) Growth in Fashion industry (Retail week, 2014) No discounts during Christmas (Retail week, 2014) Expansion in online market increasing competition(Keynote, 2013) Increase in men customers (Keynote, 2013) Customers are willing to spend more money on brand names (Ted Baker annual report, 2013) Innovation of internet is increasing online sales (Retail week, 2014) Customers rapidly moving to internet to shop (Keynote, 2013) Online branding has become a must (Rowley, 2004) Season changes demand new fashion trends and products (Keynote, 2013) Property and copyright laws Copies of famous brands are an issue

It can be a rgued that e-‐ marketing of an established brand need not be drastically different from its other initiatives as far as commitment is concerned. This is because if the company fails in e-‐ retailing, for example, it Figure (1) can have a detrimental effect on brand reputation and brand in general. Considering these influences, the company has taken various steps to improve and maintain its web presence in the market. The PESTLE analysis of the international fashion industry has been linked with the framework suggested in figure (1). This has been done to link the influences with the web activity carried out my Ted Baker, making the evaluation more understandable

Figure 1: Source: Kim and Stoel, 2004; Ha and Stoel, 2012; O’Cass and Carlson, 2012; Kim et al. 2011

Source: Kim and Stoel, 2004; Ha and Stoel, 2012; O’Cass and Carlson, 2012; Kim et al. 2011

Linking the influences on the international fashion industry and the frameworks suggested in Figure (1), Ted Baker has been able to establish a strong brand name and Ted Baker Annual Reports (2013) of the company shows that Ted Baker has been able to make substantial growth of 18 % when compared with the previous y However the report does not reveal details regarding online sales achieved over the period.

The United Kingdom online retail has a market value of $52.5 billion in 2012. Compared with the global onlin

The use of social media The company’s communication does not really differentiate between online and offline aspects. This means they are given equal importance. This could be why the Annual report did not mention specifically about online presence. However online customers with certain behaviours are encouraged by the company and the running of Merry Christmas campaign can be considered as a much targeted effort in this direction (Ted Baker, 2014). The company has prominent Facebook presence with 178 thousand supporters (Ted baker Facebook, 2014). The Facebook page provides information on latest product additions and events. It has an instagram account with 62 thousand followers which is updated with the latest products of the brand by posting latest pictures and promotional videos of the brand to keep their followers intact and engaged with them (Ted Baker Instagram, 2014). With 47.1 thousand followers in Twitter, the presence is fairly competitive (Ted Baker Twitter, 2014).

Figure 3: Ted Baker Holiday selfie

(Adapted from Ted Baker Instagram, 2014)

Figure (2)-‐ Twitter and Facebook home pages The brand also fulfils the also ‘Entertainment’ aspect of the framework suggested in figure (1). T The brand fulfils the ‘Entertainment’ aspect of the framework suggested This keeps the customers been brand that m customers engaged. It hinas figure been (1). seen that customers tend engaged. to buy aIt nd has support seen that customers tend to buy and support brand that make them feel and the ones that value their insights (Rosen and Purington, 2014). The company encourag wanted, and the ones that value their insights (Rosen and Purington, people in general of aThe ll the major encourages cities like Lthe ondon to share heir photos and experience. T 2014). company customers and tpeople in general company in engaging ith the customers (Hberberg and photos Rieple, 2006). The use of social vis of all thewmajor cities like London to share their and experience. This can help the company in engaging with the customers (Hberberg company to generate recommendable echo online (Groucott, 2005). The physical barriers b and Rieple, 2006). The use of social visualizer enables the company to different locations as such are eliminated because of use of social media and internet since generate recommendable echo online (Groucott, 2005). The physical over the world barriers making it easier for them to connect with asone between people in different locations suchanother. are eliminated because of use of social media and internet since it connects people all

over the world making it easier for them to connect with one another. 5. Promotions

As seen in figure (3), The use of the holiday “selfies” makes use of crowd sourced instagram animation on huge digital screens that were displayed outside or inside of the Ted Baker st location (Daft, 2005). With the help of smartphones, several customers post on instagram a #KissTed. Thus it can be stated that the company successfully incorporates the online and p activities while designing campaigns. This can not only save substantial costs, but also help of online presence (Berry, 2002). Digital installation aids in incorporating various campaign elements with the comments from the customers through twitter and instagram (Ted bake Figure 2: Twitter and Facebook home pages also makes best use of the seasonal changes to grab attention, this is considered as one of Ted Baker Brand Report 2014 132 strategies by Hofstede and Hofstede (2005). The presence of open fashion blog can be see

Promotions

As seen in figure (3), The use of the holiday â&#x20AC;&#x153;selfiesâ&#x20AC;? makes use of crowd sourced instagrams and tweets via animation on huge digital screens that were displayed outside or inside of the Ted Baker store depending on its location (Daft, 2005). With the help of smartphones, several customers post on instagram and tweets using #KissTed. Thus it can be stated that the company successfully incorporates the online and physical promotional activities while designing campaigns. This can not only save substantial costs, but also help in creating awareness of online presence (Berry, 2002). Digital installation aids in incorporating various campaigns wide and branding elements with the comments from the customers through twitter and instagram (Ted baker, 2014). The brand also makes best use of the seasonal changes to grab attention, this is considered as one of the most effective strategies by Hofstede and Hofstede (2005). The presence of open fashion blog can be seen on its various blogs with the intent of promoting the relaunched online store. The presence of categories such as style, culture, food drink etc. and discussions pertaining the fashion blog engages customers of the company. The company provides 15 minutes for every blogger to help style the look of the company using 450 items from the company store (Madura and Fox, 2007). These products range from male to female products. With the presence of makeup artists, hair stylists and runners, high quality designs are produced. The finished products are photographed in a well-managed studio and it appears on the social media of the company. These actions are also streamlined live on the website of the company (Ted Baker, 2014). The public are also allowed to give their comments on the finished products and tweet back. The outfits are also sent on Facebook and those who earn the most likes achieve ÂŁ310 and a card for online shopping (Ted Baker, 2014). This is another effective way of understanding the customer pulse and encouraging them to be more open with their fashion concepts (Eiteman and Miffett, 2007).

Online Promotion

An analysis of the competition with regard to Ted Bakerâ&#x20AC;&#x2122;s strategy of engaging the customer through social media reveals that the company is competitive (Ted Baker Facebook, 2014). In addition to this, there is no need for the company to indulge in too many promotions as a brand; rather providing great experience is what is needed (Atwal and Williams, 2009). Students are entitled to a 15 % discount. Some selected women wear get 30 % discount. These discounts are available online and only for click and collect now from store as well (Ted Baker, 2014). Thus two kinds of discounts are present, one with the intention of encouraging shopping behaviour of a specific class of people and the other based on stock movement. This strategy is in fact followed by most of the competitors in the industry (Tom et al, 2000). The presence of live chat promotes that the company cares for its customers (Berry, 2002). The live chat is implemented by working with a customer service agent. Inc. which helps improve customer intentions of making purchases through the store. Through the live chat, the company is in a position to establish personal connections with the customer. The chat also provides opportunity for customers to make recommendations and advice ( Ted baker annual repor ts, 2013).

Image 3: North Yorkshire Moors Railway - Cision

Ted Baker Brand Report 2014 134

Marketing Mix In order to further understand the e- commerce capabilities of Ted Baker, the first four elements of marketing mix can be applied. Marketing mix is the formal presentation of the four elements that make up the marketing of a brand. This includes product, price, place and promotion. Each of these element is related to one another in such a way that one part of the mix will result into another making sure that the balance of both is right (The chartered institute of marketing, 2014) Product: A product that satisfies the customerâ&#x20AC;&#x2122;s demand is a product worth spending on (Gronroos, 1997). Ted Baker became 25 years old in 2013. Being a company primarily established as a shirt specialist for men, the company has changed drastically over the years. The journey has been very creative as evident from the time line of the company. Its collection includes menswear, women wear, global, endurance, fashion, Langley, accessories, fragrance, skin wear, footwear, eye wear and watches. Most significantly it has been able to establish as a life style brand with high levels of differentiation fuelling its growth (Ted baker, 2014). The brand has provided the customers with satisfactory prices (Retail week, 2014), good online and offline services and a chance to communicate with the brand making it a worthy product (Armstrong and Kotler, 2000) Place : Refers the where part of the mix. It includes the places or stores or sites from where the brand is available to buy (Armstrong and Kotler, 2000). For Ted baker, Own store retailing and selling through departmental stores are very important part of any life style brand ( De o n a n d A r n o u l d , 2 0 1 1 ) . T h e f o l l ow i n g f i g u re gives an understanding of Ted Bakerâ&#x20AC;&#x2122;s strategy here: Price: Price is the most sensitive of all elements (Gronroos, 1997). Even though not the most priced brand, Ted Baker can be considered as a life style. The pricing strategy of the company reflects this. The company does not provide discounts on festive seasons like Christmas and these are some of the main driving forces of the consistent growth (Holland, 2013). Discounts are provided online on goods that have less movement as mentioned. Armstrong and Kotler (2000) explain that the value of a brand is created when the customers start recognizing it for the image that the company wants to put forth. Price plays a big role in this because a premium prices product is recognized as a premium product. When the price of the product is less than its value, the brand loses its identity. This is why the price of Ted Bakerâ&#x20AC;&#x2122;s price is premium and not ordinary (Ted Baker, 2014) Promotion: Promotion is the communication between the brand and its target market (The chartered institute of marketing). The brand does not run any serious promotions online like any other premium brand especially which are discount oriented. The blogs and social media cover a number of promotions which help in engaging customers which are in fact very inexpensive, as already discussed. Promotional strategy of customer engagement is adopted by Ted Baker. This keeps the customer involved and informed at the same time (Kotler, 2011). The brand promotions are fun and full of colours, exactly what the brand design stands for. This helps making a better brand salience (Van der Lans et al, 2008)

Place : Refers the where part of the mix. It includes the places or stores or sites from where the brand is availab to buy (Armstrong and Kotler, 2000). For Ted baker, Own store retailing and selling through departmental stores are very important part of any life style brand (Deon and Arnould, 2011). The following figure gives an understanding of Ted Baker’s strategy here: Figure: 3-‐ Retail Strategy

Source: Ted Baker annual report (2013)

Price: Price is the most sensitive of all elements (Gronroos, 1997). Even though not the most priced brand, Ted Baker can be considered as a life style. The pricing strategy of the company reflects this. The company does not provide discounts on festive seasons like Christmas and these are some of the main driving forces of the consistent growth (Holland, 2013). Discounts are provided online on goods that have less movement as mentioned. Armstrong and Kotler (2000) explain that the value of a brand is created when the customers start recognizing it for the image that the company wants to put forth. Price plays a big role in this because a premium prices product is recognized as a premium product. When the price of the product is less than its value, the bran loses its identity. This is why the price of Ted Baker’s price is premium and not ordinary (Ted Baker, 2014)

Promotion: Promotion is the communication between the brand and its target market (The chartered institute o marketing). The brand does not run any serious promotions online like any other premium brand especially whic are discount oriented. The blogs and social media cover a number of promotions which help in engaging customers which are in fact very inexpensive, as already discussed. Promotional strategy of customer engagement is adopted by Ted Baker. This keeps the customer involved and informed at the same time (Kotler, 2011). The brand promotions are fun and full of colours, exactly what the brand design stands for. This helps making a better brand salience (Van der Lans et al, 2008)

Ted Baker Brand Report 2014 136

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Recommendations

This study analysed the customer review website Trust Pilot to see how customers perceive the online service of Ted Baker. On the basis on the 133 customer reviews, based on a score of 1- 10, the company score a low 4.8. Many customers are really not satisfied with the delivery and customer service (Trust pilot, 2014). Anoth er review site, Review Centre has very different customer perceptions and many urge not to shop with Ted Baker online. The result is a customer score of 1.5 out of 5. One customer review was that he/she decided not to buy with Ted after reading the reviews (Review Centr e, 2014). While the authenticity of the reviews cannot be completely traced, the comments on both sites mention of appalling customer service and delivery standards. This can have a detrimental effect on the confidence of customers who read the reviews. However what can be noted is that none of the reviews mentioned of the difficulty in navigating through the site as well as any sort security issues. Personal observation reveals that the siteâ&#x20AC;&#x2122;s design is lively and simple with light, bright colours, enabling the customers to shop for hours without strain ing their eyes. This also makes sure that the pictures of the products remains highlighted. Navigation is fast and responsive. The blogs, Facebook and twitter serve an entertainment purpose. Thus, when analysing the website quality with the help of literature and customer review s reveals that after sales service is the main issue which the company should tackle. The new three Ps of marketing, process, people and physical (virtual) environment are covered in this analysis. In that process in terms of after sales delivery and service demands immediate attention and corrective action. Based on the analysis undertaken, the following are the recom mendations made by this study: It is known that delivery and after sales service forms one of the crucial elements of online retailing (Cohen et al, 2006). This is because the customers go online to save time. They do not get any significant discounts with a company like Ted Baker unlike some other sites (Ted baker annual accounts, 2013). This boils down to their expectation of excellent customer service and customers are payin g heavily for Ted Baker products. It is the respo nsibil ity of Ted Baker there fore to take extrem e care of the custo mer service. Analysis of customer reviews revealed that custom ers are unhappy with the way customer service executives manage complaints. This can spoil the entire online shopping experience of a customer leading to bad word of mout h and tarnishing brand image. Getti ng the produ cts deliv ered to the house is one of the attrac tions of onlin e retail ing. Cust omer s are tryin g to save some time here and they are payin g for that. How ever if the deliv er y is delay ed or mana ged in a haph azard mann er, then this leads to custo mer dissa tisfa ction (Coh en et al, 2006 ) As far as Ted Baker is concerned, its websiteâ&#x20AC;&#x2122;s quality is excellent. However the back end process of complaint handling and delivery seems to need attention. With increasing online prominence, if the company could tackle issues with customer service and delivery, it can fuel its growth. Improved geographical presen ce can open up oppor tunities for increased online presence as well. With centralised platfo rm, the company should be circumspect of delivery and customer service issues. This demands that IT system planning should be thorough to include all scenarios of onlin e purchase, delivery and excellent custo mer servic e. It dema nds specia lised traini ng to custo mer suppo rt staff as well. Conclusions In conclusion, it can be seen that Ted Baker has a very high and lively online presence which has resulted in the brand achieving the image it has today. The sales growth of the company is higher showing the communication with customers is at its best. However, there are areas that the company needs to improve on. The company needs impro vement in the area of customer service and product delivery. This can be done by improving the recruitment system along with the IT system making sure a lively message in accordance with the brand has been put through.

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Maitreyee Dasgupta

Executive Summary

Introduction The Ted Baker distribution strategy includes a combination of wholesale, retailing and licensing. This section gives an overview of the distribution strategy and the performance of the brand. Merchandise distribution through categories has been discussed to understand the performance of menswear and womenswear. Also, the ecommerce and information technology strategy of the brand has been discussed and analysed.

This chapter tries to get an insight into the distribution channels and strategies of the brand Ted Baker. As no insight was available of the actual working of the brand, research has been done through secondary and primary resources by using the grounded theory methodology. Through the financial data it has been observed that though the revenue has increased, the margins and the growth rate is decreasing. This may result in Ted Baker becoming a high volume-low margin retailer which is detrimental to the brandâ&#x20AC;&#x2122;s image if compared to the market segment occupied by it. The brand needs to strategize to increase its margin. This can be done through return-oninvestment analysis by category across different

Image 1: Spring Summer 2014 Look Book - Ted Baker

channels to optimize the purchasing strategy for each; leading to increased profit realization. Also, the brand generates revenue which is only 50% of its estimated sales worldwide. This opportunity loss can be decreased through increased developmental investment to increase the territorial retailing portfolio of Ted Baker. The brand also has licensed operations for many of its products. However, the intellectual property of the brand is not limited to its products but also the brand semiotics and human capital. By licensing the human capital and service models, the brand can enhance the consumer experience resulting in increased consumer loyalty. This will also result in better royalty generation from the licensed

operators which cover Asia, Australasia and middle-east presently. The brand has also invested in new enterprise resource planning technology Microsoft Dyanamics AX. The software provides good value for money and an excellent CRM module. However, in the long run, it may prove to be expensive due to limited cross-platform compatibility, limited cloud support and absence of social compliance module. Also due to a nonrewarding user experience, the training cost may be higher and actual usage of the software may be limited leading to data redundancy. Since very limited information is available regarding the operational working of the brand, no recommendations could be provided regarding the supply chain strategies.

Ted Baker Brand Report 2014 142

Research Methodology

The ‘Grounded Theory’ approach has been adopted as a methodology for the critical evaluation of the available data. Through a combination of induction and deduction, this methodology helps to research to predict and explain behaviour (Saunders, Lewis and Thornhill 2012). The data sources used are mostly secondary. The figure below summarizes the various data sources which have been used to analyse the distribution strategy of Ted Baker.

Research Methodology

ounded Theory’ approach has been adopted as a methodology for the critical evaluation of the available hrough a combination of induction and deduction, this methodology helps to research to predict and explain ur (Saunders, Lewis and Thornhill 2012). The data sources used are mostly secondary. The figure below rizes the various data sources which have been used to analyse the distribution strategy of Ted Baker.

Secondary Data

Documentary

Text

Snapshot

Non-‐Text

Journals

Longitudinal

Books on research methodology

Ethical business report of Ted Baker of 2013

PresentaZons from slideshare Annual reports of Ted Baker

Websites

Images from Ted Baker Pinterest page Figure 1: Data sources for secondary research (Saunders, Lewis and Thornhill 2012)

Academic ArZcles

The purpose of the research is to critically evaluate the distribution strategies of the brand Ted Baker. The grounded methodology is used as this enables the emergence of theory through data collection and analysis and does not require a pre-determined theoretical Books work. This method facilitates to identify relationships between the data and questions developed to test the propositions. In the grounded the2012) disaggregation of data into units is called ‘Open : Data sources for secondary research (Saunders, Lewis and Ttheory, hornhill Coding’. Following the concept, the chapter has been divided into separate sections. The grounded the Tprocedure of pose of the research is to critically evaluate the distribution strategies of the btheory rand Tfollows ed Baker. he grounded constantly comparing the data with the concepts so as to aid the ology is used as this enables the emergence of theory through data collection and analysis and does not process of developing an emergency theory that will be thoroughly a pre-‐determined theoretical work. This method facilitates to identify relationships between the data and grounded in the data. In this section, the data represented in the ns developed to test the propositions. In the grounded theory, the disaggregation of data into units is called Ted Baker annual report has been referred time and again to draw Coding’. Following the concept, the chapter has been divided into separate sections. The build grounded theory comparisons with the industry practices and thus conclusions. Ho w e v e r, d e p e n d i n g s o l e l y o n s e c o n d a r y d a t a the procedure of constantly comparing the data with the concepts so as to aid the process of developing an s t hdata. e f o lIn l othis w i n section, g a d v a nthe t a gdata e s a represented n d d i s a d v ain n tthe a g e Ted s: ncy theory that will be thoroughly grounded hin a the

nnual report has been referred time and again to draw comparisons with the industry practices and thus nclusions.

To eliminate the disadvantages, primary research has been used to support the data wherever possible. The Primary research includes store obser vations, consumer opinion polls and questionnaires as referenced and evidenced in the appendix.

Limitations:

The research may have the following limitations: • The secondary research literature and primary store o b s e r va t i o n s c h a n g e re a l t i m e . So t h e re s e a rc h w h i c h i s valid at this point of time may not be valid for very long. • There is complete dependence on the data interpretation of the presenter which could be misaligned. In the absence of any other source of data, there is no method for triangulation.

Advantages

Disadvantages

May have fewer resource requirements • This was the case with Ted Baker as there were no inputs from the brand to triangulate data

Unobtrusive

The data may be collected for a purpose that does not match the need

Access may be diﬃcult

• The data is available quicker and is of higher quality.

No real control over data quality

Longitudinal studies may be feasible • The report can be taken further from here for comparison

• The data available has to be trusted blindly with no other data available for triangulaZon

Permanence of data

IniZal purpose may aﬀect how the data are presented

• secondary data provide a source of data that is both permanent and available in a form that may be checked relaZvely easily by others

• The culture, predisposiZons and ideals of the origina; collector of data will have inﬂuenced the nature of the data to certain extent.

Figure 2: Advantages and disadvantages of secondary data Figure 2: Advantages and disadvantages of secondary data (Saunders, Lewis and Thornhill 2012) 2012) (Saunders, Lewis and Thornhill

To eliminate the disadvantages, primary research has been used to support the data wherever possible. The Primary research includes store observations, consumer opinion polls and questionnaires as referenced and evidenced in the appendix.

Limitations:

• The data capturing for primary research may

The research may have the following limitations: b e b i a s e d d u e t o t h e p e r c e p t i o n o f t h e r e s e a r c h e r. • • • • • •

• Biases may be built into the analysis due to

The secondary research literature and t hperimary i n t e rsptore r e t aotbservations i o n e r r o r schange m a d ereal b y time. t h e Sr o e stehe a rrcesearch h e r . which is valid at this point of time may not be •valid very long. The for recommendations in the report are highly theoretical a n d m a y f a c e c o m p l i c a t pi oresenter ns whiw l ehich i m pcould l e m ebne t amt isaligned. ion. There is complete dependence on the data interpretation of the In the • The brand financial data used in this section are completely absence of any other source of data, based there is method for report triangulation. by the group. Due onno the annual published The data capturing for primary research may of be information biased due to ofthe perception f the researcher. to lack the internal oworking process of the group, no insight could be provided on its licensing Biases may be built into the analysis due to the interpretation errors made by the researcher. model, supply chain, logistics and manufacturing processes. The recommendations in the report are highly theoretical and may face complications while implementation. The brand financial data used in this section are completely based on the annual report published by the group. Due to lack of information of the internal working process of the group, no insight could be provided Ted Baker Brand Report 2014 144 on its licensing model, supply chain, logistics and manufacturing processes.

4. Discussions Channels of distribution

Ted Baker choses to distribute its merchandise through three distribution channels: Discussions

•

Retailing

Channels of distribution Wholesale Ted •Baker choses to distribute its merchandise through three distribution channels: • Licensing • Retailing • Wholesale The table below gives a snapshot of the present scenario of the three distribution channels as published in the • Licensing The table aboveof gives snapshot of the opresent scenario of the three distribution annual report Ted Ba aker published n 20th M arch, 2014 covering data for 52 weeks from January 2013 to January channels as published in the annual report of Ted Baker published on 20th 2014. March, 2014 covering data for 52 weeks from January 2013 to January 2014. Table 1: Distribution channel performance of Ted Baker in Financial Year 2014

Retail

Wholesale

Licensing

Areas

North America, UK, Europe and Asia

Revenue: £259.1m

24.6% growth.

Gross margin: 66.1%

0.1% Decrease

Average retail square

303,951 sq. j., increase by 10.7%

Retail sales per sq. j.

£780, 11% increase

E-‐commerce sales: £23.2m,

Increased by 55.7% (Growth percentage decreseased by 8%)

Areas

UK, Europe and North America

Revenue

£62.8m, 19.5% of total revenue, 35.0% growth (1.2% growth in percentage contribbuZon to revenue)

Gross Margin

43.4%, 0.8% decrease

Product

Lingerie, sleepwear, fragrance, watches, footwear, eyewear, neckwear, skinwear, childrenswear.

Territorial:

Middle East, Asia and Australasia

Revenue

£8.9m , Increase by 18.4%

Table Distribution channel performance of tTed Baker As is 1: evident from the table above, here is iinncrease in revenue in all the three channels of distribution. However, if Financial Year 2014 we compare the revenue and the margin throughout the channels, while revenues are increasing, the profit margins are decreasing.

As is evident from the table above, there is increase in revenue in all the three channels of distribution. However, if we compare the revenue and the margin throughout Retail the channels, while revenues are increasing, the profit margins are decreasing.

Although the sales are up by 24.6% with the retail sales square footage increasing by 11%, the gross margin declined by 0.1%. Retail operating costs as a percentage of retail sales decreased to 47.1% reporting a decrease of 1% as Retail compared o last year. This that the group as done well square in controlling Although tthe sales are upshows by 24.6% with the hretail sales footagethe operating costs and increasing increasing by 11%, thefootage. gross margin declined by t0.1%. Retail operating costs cost and increase in revenue, the sales per retail square However, despite he controlling of operational as a percentage of retail sales decreased to 47.1% reporting a decrease of 1% margin has still slightly declined. This indicates that the group needs to work as on profit realization. compared to last year. This shows that the group has done well in controlling the operating costs and increasing sales per retail square footage. However, despite the controlling of operational cost and increase in revenue, the margin has still slightly declined. This indicates that the group needs to work on profit realization.

covered by the territorial license partners. The percentage of wholesale contributio increased from 18% in FY 2012-‐13 to 20% in the present year. It can be thus, conclu overall margin as illustrated in figure 3 can be qualified as the result of increase in lowe

43.4% (0.8%)

Whol esale

Over all

66.1% (0.1)

Contribu9on to revenue

61.65% (0.7)

Wholes ale 20%

Retail

Retail 80%

Figure 3: Channel wise Gross margin and Revenue (Ted Baker PLC 2014) regardless of the strong performance, there is a 1.8% decline in the

The product mix of the wholesale offerhas lower margin(Ted margin as compared to last channel year. The brand attributed this decreaseBaker might result into brand valueofgetting as licensed the business model m to “athe greater proportion wholesale diluted sales to our stores, which value- low volume highmargin volume-low margin model. carry to a lower and a slight reduction in the underlying wholesale

margin due to the product mix”. A large portion of the global market is covered by the territorial license partners. The percentage of wholesale Cost controlling and mto argin improvement contribution the overall revenue has increased from 18% in FY The cost control c2012-13 an be achieved by the balanced purchasing. ccording to Hines pu to 20% in present year. It can beAthus, concluded that(2003), the in pthe overall margin as illustrated in figure 3 can be qualified as • There are reduction short run rice fluctuations the result increase in lower margin wholesale business. • When fashion and ofinnovation are involved requiring good judgement

• Wholesale Wholesale

Market for finished good is highly competitive.

For Ted Baker, all of these reasons are valid and thus, the purchasing decision is one o

The wholesale revenue increased by the argin. The wholesale revenue increased by m 35%. According to the Ted Baker annual report (2014), the increase was due to 35%. According to the Ted Baker “a strong performance from our UK wholesale business, which includes the supply of goods to our licensed stores annual report (2014), the increase The 6was R’s Purchasing and our edue xport business nd a very gfrom ood performance from our US wholesale business”. However, regardless of the to “a strong a performance According to Hines (2003), the six R’s of purchasing helps us to analyse the comp our UK wholesale business, which strong performance, there is a 1.8% decline in the margin as compared to last year. The brand has attributed this decision resulting in margin enhancement. the supply of goods to decrease includes to “a greater proportion of our wholesale sales to our licensed stores, which carry a lower margin and a licensed stores and our export w business slight reduction in the underlying margin due to the product mix”. A large portion of the global market is holesale and a very good performance from covered our by the territorial license partners. The percentage of wholesale contribution to the overall revenue has US wholesale business”. However,

increased from 18% in FY 2012-‐13 to 20% in the present year. It can be thus, concluded that the reduction in the The in Slix R's of Pwurchasing overall margin as illustrated in figure 3 can be qualified as the result of increase ower margin holesale business.

Right Goods

43.4% (0.8%) Over all

66.1% (0.1)

Whol esale

Right Place

Right Price

Right Time

Right

Figure 4: The Six R's Contribu9on of Purchasing t(o Hines 2003) revenue

61.65% (0.7)

Wholes ale 20% Image 2: Ted Baker SS2013 cat walk show

Retail

The Retail product mix of the wholesale channel offer lower 80% margin(Ted Baker PLC 2014). This might result into Figure 3: Channel wise Gross margin and the brand value getting diluted as the business model Revenue (Ted Baker PLC 2014) moves from high value- low volume to high volumeFigure 3: Channel wise Gross margin and Revenue (Ted Baker PLC 2014) low margin model. The product mix of the wholesale channel offer lower margin(Ted Baker PLC 2014). This might result into the brand value getting diluted as the business model moves from high Ted Baker Brand Report 2014 value- low volume to high volume-low margin model.

146

For Ted Baker, all of these reasons are valid and thus, the purchasing decision is one of the core factors in deciding the margin. The 6 R’s Purchasing According to Hines (2003), the six R’s of purchasing helps us to analyse the competitiveness in the purchasing decision resulting in margin enhancement.

The Six R's of Purchasing Right Goods

Right Place

Right Price

Figure 4: The Six R's of Purchasing (Hines 2003) Figure 4: The Six R's of Purchasing (Hines 2003)

Right Time

Right QuanZty

Right Goods Ted Baker has a well-defined consumer base and a much targeted product mix in the flagship stores. This, however, differs in the concessions (Refer to Appendix – Primary research Liverpool). Being a design led brand, the brand has a well-defined semiotics. However, the product variety is not innovative and the collection may require revision of core design elements by reinventing the same (refer to chapters on product (Menswear, Womenswear), (Hanford 2014)). Right Place The Ted Baker flagship stores and concessions are located very strategically with well-defined adjacencies and large concessional floor areas (Refer to Appendix – primary research, Liverpool).

Cost controlling and margin improvement The cost control can be achieved by balanced purchasing. According to Hines (2003), purchasing is important where: • There are short run price fluctuations • When fashion and innovation are involved requiring good judgement • Market for finished good is highly competitive.

Right Price This is an important factor as it decides on the margin of the brand. While details like lead times logistics, quality, volume etc. decide upon the price of the garment (Hines 2003), the material cost also play a very important role.

For Ted Baker, all of these reasons are valid and thus, the purchasing decision is one of the core factors in deciding the margin.

Image 3: Erin Fee for Ted Baker Ad campaign (SpringSummer 2013) photo shoot

The 6 R’s Purchasing According to Hines (2003), the six R’s of purchasing helps us to analyse the competitiveness in the purchasing decision resulting in margin enhancement.

Right Quality

The Ted Baker flagship stores and concessions are located very strategically with well-‐defined adjacencies and large The Ted Baker flagship stores and concessions are located very strategically with well-‐defined adjacencies and large concessional concessional floor areas (Refer floor tao reas Appendix (Refer t–o pArimary ppendix research, – primary Liverpool). research, Liverpool). Right Price Right Price This is an important factor as it decides on the margin of the brand. While details like lead times logistics, quality, This is an important factor as it decides on the margin of the brand. While details like lead times logistics, quality, volume etc. dvolume ecide uepon tc. dthe ecide price upon of tthe he gparment rice of t(he Hines garment 2003), (Hines the m2aterial 003), tche ost maaterial lso play cost a very also important play a very role. important role.

Proﬁt 20%

Labour and overhea ds 30%

Case II Case II

Decrease iDecrease n cost by i5n % cost by 5%

Proﬁt 20% Material Labour 50% and overhea ds 30%

Figure 5: Cost comparison and its effect on profit margin

Case I Case I

Proﬁt 30%

Material 50% Labour and overhea ds 25%

Proﬁt 30% Material 45%

Labour and overhea ds 25%

Figure 5: Cost Figure comparison 5: Cost and comparison its effect oan nd profit its effect margin on profit margin

Material 45%

Right Time The brand is not a fast fashion brand and Right Time Right Time does not update every The brand is The not b a rand fast fiashion s not a bfast rand fashion aits nd collection does brand not aund pdate does its n15 ot collection udays. pdate its every collection 15 days. every While 15 odnline ays. W channel hile online delivers channel delivers While online channel delivers within 5-6 days within 5-‐6 days (Corporate 2014b), there is no interconnectivity of stores to make sizes available to the consumer within 5-‐6 days (Corporate 2014b), there is no interconnectivity of stores to make sizes available to the consumer (Corporate 2014b),store there is nostore interconnectivity which might which be available might be in another available in another (Primary research (Primary observation research observation in Liverpool in and Liverpool Nottingham and Nottingham Ted Baker Ted Baker of sm stores make sizes flagship stores). flagship This tores). ight rto esult This m in ight losing result cavailable ustomer in losing ato s cothe ustomer ften consumer the caonsumer s often the does consumer not go tdo oes other not sgtore o to oor ther channels store too r channels to buy the product buy itn he case product it imight s niot n caase vailable is niot n tahat vailable particular in that store. particular A typical store. consumer A typical on consumer non-‐availability on non-‐availability of an option of an option which beit available in another store looks for another looks o(Primary fne or another t the aresearch djacencies one at the wadjacencies hich in Ted hich aker’s in cTase ed and Bare aker’s its ccompetitors. ase are its c ompetitors. observation inwBLiverpool Nottingham Ted Baker flagship stores). This Right Quality Right Quality might result in losing customer as often the According to According the chapter to itn he consumer chapter ibn ehaviour, consumer Ted behaviour, Baker consumer Ted Baker is scelf-‐esteem onsumer is ssensitive elf-‐esteem and slensitive ooks for aqnd uality looks for quality consumer does not go to other store or channels and design innovations. and design iAnnovations. lso, in the cA hapter lso, in ctompetition he chapter caompetition nalysis, it has analysis, been indicated it has been that indicated the Ted tBhat aker the consumer Ted Baker consumer to theand product into case is not available looks for quality looks and for pbuy qerceives uality Ted perceives Baker Tbed e aB itbaker rand to providing be a brand high pinroviding quality. h igh quality. that particular store. A typical consumer on nonRight Quantity Right availability Quantity of an option looks for another one at While the revenue While the the has revenue increased, has the increased, inventory of inventory the brand has the brand increased has also by increased 18.88% as by indicated 18.88% as in indicated the in the adjacencies which in Tedthe Baker’s case of are itsalso chapter financials. chapter The financials. brand holds The brand around holds 25% around of inventory. 25% of Though inventory. inventory Though is inventory considered is as considered an asset in as the an asset in the competitors. balance sheet, a large inventory may lead to additional costs of storage and may even lead to obsolescence due to balance sheet, a large inventory may lead to additional costs of storage and may even lead to obsolescence due to shifts in demands shifts aRight in nd demands style changes, and style especially changes, in ethe specially market in segment the market Ted sBegment aker caters Ted Bto. aker caters to. Quality

According to the chapter in consumer behaviour,

As shown in fAigure s shown 5, a i5n % figure reduction 5, a 5i% n p reduction rocurement in pcrocurement ost can lead cuost p tco an 10% lead increment up to 10% in increment the profit m in argin. the profit The kmey argin. The key Ted consumer andare ain drivers of sales drivers margin of sgBaker ales ains m as argin discussed gains ais bs y self-esteem dHiscussed ines (2003) by sensitive Haines re as (2003) described s d Table escribed 2 in Table 2

looks for quality and design innovations. Also, in the chapter competition analysis, it has been indicated that the Ted Baker consumer looks for quality and perceives Ted Baker to be a brand providing high quality.

As shown in figure 5, a 5% reduction in procurement cost can lead up to 10% increment in the profit margin. The key drivers of sales margin gains as discussed by Hines (2003) are as described in Table 2

Image 4: Erin Fee for Ted Baker Ad campaign (SpringSummer 2013) photo shoot

Right Quantity While the revenue has increased, the inventory of the brand has also increased by 18.88% as indicated in the chapter financials. The brand holds around 25% of inventory. Though inventory is considered as an asset in the balance sheet, a large inventory may lead to additional costs of storage and may even lead to obsolescence due to shifts in demands and style changes, especially in the market segment Ted Baker caters to.

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Table 2: Sales Margin Gain Drivers (Hines, T., 2003)

Store Speciﬁc categories

Ted Baker does this efficiently as the collecZons of the flagships and concessions are quite different Also, only specific concessions contain certain product ranges

Timely space adjustment by uptrending and Down trending

As seen during primary research of store observaZon of Ted Baker in London, Liverpool and Notngham (refer Appendix), the concessions and the flagship brands have different product offers reflecZng at Zmes a Zme lag between the merchandise of the two.

EﬀecZve transiZon to seasonal categories

Ted Baker has seasonal collecZons and visual merchandising reﬂecZng season change

Emphasis on High volume or High Margin

While being a premium brand, goal of Ted Baker is to be a high margin brand, but the margin has been consistently going down due to sales of product higher in volume but with lower margin.

Improved Pricing strategy to enhance ROI

While the Return On Investment(ROI) on stocks has increased, the margin remains in a declining mode

Broader or new category

Being a lifestyle barnd, Ted Baker is conZnuously looking for new opportuniZtes, the latest being home collecZon with Debenhams Table 2: Sales Margin Gain Drivers (Hines, T., 2003)

The categories need to be segregated on the basis of margin yielded and operational channels to realise the full margin.

Category Management

While Ted Baker considers itself as a lifestyle brand, the annual report segregates the collections as menswear and The categories need to be segregated on the basis of womenswear as most of the product offer is under licensing. Though started as a men’s shirt brand, the menswear margin yielded and be operational realise percentage have gone down. However, it might noteworthy channels that while to womenswear sales increased by 30.5%, the full margin. menswear performance increased by 21.9%. This is a noteworthy increase compared to the marginal increase of 8.4% of menswear last year. Though womenswear benefitted from the greater share of space added to it, the share of revenue contribution of menswear dropped from 46.1% to 44.4%. As discussed in Appendix Pestle, menswear market is a growing opportunity and the brand needs to focus more on this segment. According to Mintel (2014), “While men are still much more interested in branded clothes than women, there has been a notable change in male attitudes towards brands in fashion over the last year. Males aged 25-‐44 are no longer as willing to pay more for a brand they like.” (Sender 2014). This is an opportunity for a premium brand like Ted Baker to provide its male consumers value for money in terms of innovative design and product.

Collec9ons Menswear

Womenswear

56%

Figure 6: Menswear v/s Womeswear revenue contribution (Ted Baker PLC 2014)

44%

Menswear collection of Ted Baker needs to perform better. Figure 6: Menswear v/s Womeswear revenue contribution (Ted Baker PLC 2014) Menswear collection of Ted Baker needs to perform better. According to Hines (2003), category management requires new performance measures. While the traditional; approach emphasized on the margin, the new approach should look at the different categories and their ROI. While the actual management strategy for is not known and is out of scope for this report, it can be said that with the product ranges offered under the label, there is a lot of scope for category management. While the core collections are done by the brand, most of the sub categories are licensed. Depending upon the ROI generated, the categories can be ranked and collections can be eCategory volved. Management

Accounting for profit

While Ted Baker considersCategory itself as a lifestyle Traditional approach management approach

brand, the annual report segregates the collections as menswear and womenswear as most of the product offer is under licensing. Though started as a men’s shirt brand, the menswear percentage have down. However, it might be noteworthy that while SKU Gross Mgone argin ROI Category womenswear sales increased by 30.5%, menswear performance increased by 21.9%. This is a noteworthy increase compared to the marginal increase of 8.4% of menswear last year. Though womenswear benefitted from the greater share of Vendor Gross space added to it, the share of revenue contribution of menswear dropped from Sub-‐category Margin 46.1% to 44.4%. As discussed in Appendix Pestle, menswear market is a growing opportunity and the brand needs to focus more on this segment. According to Mintel (2014), “While men are still much more interested in branded clothes than women, Sub-‐ there has been a notable change in male attitudes towards Vendor brands in fashion ROI over the category last year. Males aged 25-44 are no longer as willing to pay more for a brand they like.” (Sender 2014). This is an opportunity for a premium brand like Ted Baker to provide its male consumers value for money in terms of innovative design and product.

SKU ROI Category Accordingmargin to Hines (2003), category management requires new performance

measures. While the traditional; approach emphasized on the margin, the new approach should look at the different categories and their ROI. Figure 7: category management pproach 2003) strategy for is not known and is out of While athe actual(Hines, management scope for this report, it can be said that with the product ranges offered under the label, there is a lot of scope for category management. While the core collections are done by the brand, most of the sub categories are licensed. Depending upon the ROI generated, the categories can be ranked and collections can be evolved.

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Collec9ons Menswear

Womenswear

44%

56%

Figure 6: Menswear v/s Womeswear revenue contribution (Ted Baker PLC 2014) Menswear collection of Ted Baker needs to perform better. According to Hines (2003), category management requires new performance measures. While the traditional; approach emphasized on the margin, the new approach should look at the different categories and their ROI. While the actual management strategy for is not known and is out of scope for this report, it can be said that with the product ranges offered under the label, there is a lot of scope for category management. While the core collections are done by the brand, most of the sub categories are licensed. Depending upon the ROI generated, the categories can be ranked and collections can be evolved.

Accounting for profit

Traditional approach

Category management approach

SKU Gross Margin

ROI Category

Vendor Gross Margin

Sub-‐category

Sub-‐ category

Vendor ROI

Category margin

SKU ROI Figure 7: category management approach (Hines, 2003)

Figure 7: category management approach (Hines, 2003)

Traditional Approach: • Focus on product performance • Push from Supply chain

Category Management Approach: •Focus on customer through performance of categories • Pull from customer demand

Image 5: Ted Baker Footwear

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152

Licensing Model

Territorial Licensing

The group operates at Australia, Middle East and some parts of Asia with license partners. The income from licensing is ÂŁ8.9m, an increase of 18.4%. It is to be noted that the areas covered under the territorial licensing are all growing markets with growing demography and GDP as discussed in the section of consumer behavior and global expansion. While the exact licensing model is not known, the overall contribution of revenue from these areas is quite insignificant. To gain a stronghold in these markets and exploit the same financially, the brand needs to consider a business model yielding higher profits to the group. Scope of Increased Revenue Realization In the present annual report, Ted Baker reports an estimated global sale of brand Ted Baker to be ÂŁ637.9m which is twice the present revenue generated by the brand Ted Baker. As shown in figure 6, this states that the brand has a potential of increasing its sales revenue by 100%. This opportunity loss include loss of margin in wholesale, licensing and from discounted merchandise.

potential of increasing its sales revenue by 100%. This opportunity loss include loss of margin in whole and from discounted merchandise.

Opportunity Loss 700

637.9

600

50%

500 400

321.9

300 200 100 0

EsZmated

Retail

Figure 8: Opportunity Loss(Ted Baker PLC 2014)

The use of intellectual property to generate revenue is quite a common practice in the market segmen The use of intellectual property to generate revenue is quite a common Ted Baker. Prominent competitors like FCUK, Hugo Boss and brands like Ralph Lauren practice licensin practice in the market segment occupied by Ted Baker. Prominent The following diagram gives t he e volution f strategic views the ulike se oRalph f intellectual competitors like oFCUK, Hugo Bosstoward and brands Lauren capital. practice licensing of products. The following diagram gives the evolution of strategic views toward the use of intellectual capital.

Image 6: Erin Fee for Ted Baker Ad campaign (SpringSummer 2013) photo shoot

TradiZonal View

Intellectual Property (IP) assets enhance the company’s compeZZve advantage and strengthen its ability to defend its compeZZve posiZon in the marketplace (IP as a barrier to entry and as a shield to protect market share)

Current View

IP assets should not be used merely for defensive purposes but should also be viewed as an important asset and proﬁt center that is capable of being moneZzed and generaZng value through licensing fees and other channels and strategies, provided that Zme and resources are devoted to uncovering these opportuniZes (especially dormant IP assets, which do not currently serve at the heart of the company’s current core competencies or focus)

ProacZve/ Systemic approach

Future View

Encompass human capital, structural/organizaZonal capital, and customer/relaZonship capital. Systems need to be built and conZnuously improved to ensure that IP assets are used to protect and defend the company’s strategic posiZon in domesZc and global markets and to create new markets, distribuZon channels, and revenue streams in a capital-‐eﬃcient manner to maximize shareholder value

Core focus / Strategic Approach

ReacZve and passive approach

Figure 9: Evolution of Strategic views towards use of Intellectual property (Sherman 2004)

Ted Baker needs to strategize carefully regarding its licensing model.

Ted Baker needs to strategize carefully regarding its licensing model. While the model is less margin generating, by While the model is less margin generating, by improvising through improvising through the licensing of services and human capital, more revenue can be generated while creating a theexperience licensing human more can on begeographical better shopping for of the services Ted Baker and consumer. Also, capital, the brand needs revenue to concentrate generated while creating a better shopping experience for the Ted territories which have a better potential for growth (Refer Appendix PESTLE). The expansion of retailing in strategic territories needs to be consumer. thought to increase argin through better to profit realization. on geographical Baker Also, mthe brand needs concentrate

have a better potential for growth (Refer Appendix Enterprise territories Resource which Planning (ERP):

PESTLE). The expansion of retailing in strategic territories needs The brand has chosen Microsoft Dynamics AX business systems to be implemented globally as the ERP software for unifying and cto entralizing the operations. The total margin rollout is pthrough rojected to better be complete in the coming two years with a be thought to increase profit realization. total cost of £8.9m. The brand has spent £2.6m to date and the rolling out phase is expected to happen in early 2015. Presently, the brand is running on dual systems which are added cost (Ted Baker PLC 2014). Ted Baker Brand Report 2014

154

The Dyanamics AX business systems are window based with DOS based algorithms and supports both SQL and

Enterprise Resource Planning (ERP): The brand has chosen Microsoft Dynamics AX business systems to be implemented globally as the ERP software for unifying and centralizing the operations. The total rollout is projected to be complete in the coming two years with a total cost of ÂŁ8.9m. The brand has spent ÂŁ2.6m to date and the rolling out phase is expected to happen in early 2015. Presently, the brand is running on dual systems which are added cost (Ted Baker PLC 2014). The Dyanamics AX business systems are window based with DOS based algorithms and supports both SQL and Oracle databases. It is appropriate for small to medium sized organizations and supports multi-language and multi-currency facilities. It includes modules like bank management and ledger, customer relationship management (CRM), accounts, inventory management, planning, production, product builder, human resources etc. The extended and per license modules contain shop floor control, cost accounting, balanced scorecards, service and expense management, payroll management and environmental management(Microsoft 2014). The Dynamics ERP supports multi-layer architecture providing restricted usage and offers integration with Microsoft Office package. The production module offers upstream and downstream information sharing in the supply chain. An array of complementary tools like data warehousing, dashboards, balance scorecards, kanban functions etc provide strong business intelligence information. The Dyanamics package is specially noted for its strong CRM module (Rouse 2013, Microsoft 2014). It may be noted that presently there are no provisions for social compliance and product lifecycle management. With the increasing consumer awareness and demand on ethical tracking (refer appendix Pestel), it may prove to be costly for the brand to provide separate monitoring system for the same and its integration to the existing system. Also, the ERP does not cover product lifecycle management or PLM. PLM is very helpful for the fashion organizations to keep control of the research and development and performance of each stock keeping unit or SKU. Though the reviews suggest Dyamanics to be a very good value for money package, the cross platform compatibility is a weak area. The cloud compatibility and partner hosting capabilities are limited. operating costs and complicate the networking across countries. The user interface is not rewarding and does not offer a satisfying experience. This is an impeding factor as this might lead to lesser usage and non-updation of the ERP resulting data redundancy. Also, it does not support vertical market integration. For Ted Baker, this may be a potential loophole as the integration of suppliers will require additional software support which might hinder the ROI and actually prove to be a costly affair (Rouse 2013, Microsoft 2014).

Image 7: One Giant Leap For Ted Baker 2013

Ted Baker Brand Report 2014 156

to keep control of the research and development and performance of each stock keeping unit or SKU. Though the reviews suggest Dyamanics to be a very good value for money package, the cross platform compatibility is a weak area. The cloud compatibility and partner hosting capabilities are limited. This may result in higher operating costs and complicate the networking across countries. The user interface is not rewarding and does not offer a satisfying experience. This is an impeding factor as this might lead to lesser usage and non-‐updation of the ERP resulting data redundancy. Also, it does not support vertical market integration. For Ted Baker, this may be a potential loophole as the integration of suppliers will require additional software support which might hinder the ROI and actually prove E-supply chain to be avery costly (Rouse 2013, the Microsoft 2014). of Ted Baker, Since, lessaffair is known about supply chain it can be only assumed that the brand is using internet to E-‐supply strengthen itschain supply chain. Since Ted Baker is quite sensitive to Since, v ery l ess known about the be supply chain of they Ted Bmanage aker, it can be only assumed that the brand is using internet the technologicalis innovations, it can assumed that their product lifecycle through TedBaker Bakeris uses CMS for to the technological innovations, it can be assumed to strengthen its supply chain. software. Since Ted quite sensitive merchandising and is already under the process of ERP integration. that they manage their product lifecycle through software. Ted Baker uses CMS for merchandising and is already Following are the benefits and opportunities under the process of ERP integration. o f u s i n g e - s u p p l y c h a i n s t r a t e g i e s :

Following are the benefits and opportunities of using e-‐supply chain strategies:

Design

Supplier

Technical consideraZons

Retail

• Saves Zme and cost • Easy integraZon into the supply chain • Improves process lead Zmes • easier market integraZon • custromers' input/mass customisaZon

• Reduce Errors • Improves cost and speed • Focus on Business to Business (B2B) • Develop new capabiliZes • Increase service

• Open systems • With cloud hardware costs minimised • Easy interchange of visuals and colors • Bandwidth and considerable experZse required

• Increased ﬂexibility • Transparent and faster communicaZon • Reduce data entry and thus reduce transacZonal costs • B2B and business to customer (B2C) • Enhanced customer service

Figure 10: Benefits opportunities from e-supply chain strategies (Hineschain 2003)strategies (Hines 2003) Figure 10: Band enefits and opportunities from e-‐supply

Business to Business

Intergrated ERP

Procurement card

• InvesZng in • No informaZon Microsoj available Dyanamics • ImplementaZon to be completed y 2015

e-‐ procurement

B2B market place

e-‐ synchronised supply chain

• Integrated • 15% of material costs and 65% of transacZonal cost can be eliminated through e-‐ procurement (Corporate 2014).

• Using e-‐plaworms in US and UK • However, these two plaworms are not integrated with each other

• Uses CMX system for merchandising • No other informaZon available

e-‐fulﬁllment • Invested in e-‐ commerce plaworm • Available in UK, Us etc. • Markets like Australia and Asia are not covered

Figure 11: Business to Business e-commerce evolution (Hines 2003, Corporate 2014a)

Figure 11: Business to Business e-‐commerce evolution (Hines 2003, Corporate 2014a)

Business to Business

5. Recommendations

B2B e-commerce offers benefits like integration of logistics and less transactional cost leading to a faster and price effective business Ted Baker has a well-‐defined distribution model. Looking at the present status of the business, the following environment. Ted Baker benefits from it being a wholesaler as well recommendations can be considered: as a buyer from manufacturers. Figure 11 illustrates the stages of B2B evolution and Ted Baker’s positioning related to the same.

•

While the revenue is increasing, the margin realization of the products is decreasing. This is due to the increase of the percentage of wholesale business which essentially has a lower margin than retail. The brand Ted Baker Brand Report 2014 158 needs to carefully deliberate this situation and enhance the profit realization of the wholesale business.

: ge 9 Ima

ook ok b

er lo Bak Ted

Recommendations Ted Bake r has a well- defin ed distr ibuti on mode l. Look ing at the prese nt statu s of the busin ess, the follo wing recom mend ation s can be consi dered : • While the revenue is increasing, the margin realization of the products is decreasing. This is due to the increase of the percentage of wholesale business which essentially has a lower margin than retail. The brand needs to carefully delibe rate this situation and enhance the profit realization of the wholesale business. Also, the retail portfolio needs to be strengthened to enable the brand to operate its own retail in areas presently under territorial licensing to capture the full margin. Otherwise the brand value might get diluted as the business model moves from high value- low volume to high volume-low margin model. • The brand need s to conc entra te on its prici ng strate gy to incre ase profi t enha ncem ent. Also , it shou ld cons ider cross chan nel avail abili ty to the cons umer to main tain custo mer loyal ty and avoid any oppo rtuni ty loss. • The brand needs to concentrate on its menswear collection and evaluate the results through category management approach if it is already not being done. Such analysis is also applicable in Ted Baker’s case in all the separate channels i.e. retail, whole sale and e-commerce. This will enable the brand to understand the merchandise movem ent separately in the three channels and thus, enable to strategize the purchasing plan for each channel optimizing margins. • The Intell ectua l prope rty needs to be consi dered not only in produ cts, but also in custo mer servic es and other intan gible assets . Ted Baker needs to enhan ce its strate gies for custo mer servic e and the exper tise can be licens ed along with the product to create a better consumer experience and better revenue generation model. Presently, no information is available on copyrights or design rights held by Ted Baker. • The brand has invested in Microsoft Dyanamics as the ERP system which is well suited for medium sized company and is value for money. However, limited cross platform compatibility and limited support for cloud technology might be an inhibi ting factor for long run. Also, as the user experience is not rewarding, the usage of the softwa re may be limited and may result in data redundancy. The software also does not provide any module on social compliance. To integrate social compliance into the operations and monitor the same may lead to additional cost for the brand in future. There might be also cross-platform compatibility issues. The brand needs to deliberate the same during the development stage itself and take appropriate measures to ensure smooth working and generate the ROI expected.

Ted Baker Brand Report 2014

160

Maitreyee Dasgupta

Image 1: Ray Kelvin

eing a public limited company, the financial statements of the brand

are available in the annual report. This section reports a compilation and analysis of the financials as published by the brand. Executive Summary This chapter concentrates upon the financial performance of the brand Ted Baker. Being a public limited company, the financial statements of the brand enable us to compare its performance and do an analysis of its financial health. The grounded theory methodology has been used to refer to the annual reports and inductively examine the data presented by the brand. The brand has reported an excellent growth in revenue and is presently occupying a very rapidly growing market segment. It is one of the best options in the industry to invest in stocks; however the profit margin is on a decline. Though this can be partially attributed to escalating operating costs, the major reason for this decline is shift from a high profit low volume model to a low profit high volume business model. This model has been primarily achieved due to the expansion through licensing, which is a common norm in the given market segment. However, as the brand moves towards globalization, it becomes essential to maintain a balanced portfolio to ensure maximum profit generation. This can be achieved through tight inventory control, optimum currency hedging and investment in brand administration. Presently, the brand is paying a high interest rate and is in a correct position to expand its administrative capabilities as well as in foreign territories. Though the market share has increased in the domestic market of UK, the brand needs to concentrate on foreign markets as well. The operational capabilities of the brand need to be enhanced by understanding the local regulations to create a global brand which is locally profitable. Research Methodology The research methodology used in the chapter is solely based on secondary research. The sources of the analyses can be found in Table 1.

Ted Baker Brand Report 2014 164

Image 2: Ted Baker Footwear

The Financials

T h e research conducted is exploratory in nature and majorly literature review has been used by searching the various secondary sources Being a public limited company, the financial statements of the brand are available in the annual report. This section as indicated above. This kind of study has enabled to broadly reports a compilation and afocus nalysis of the on financials s published by the brand. initially all the atopics and progressively narrow down to the problem areas with the progress of the research. The research strategy 2. Executive Summary used is ‘Grounded Theory’. The approach for this is to ‘build theory’ through a combination of inductions and deductions. This approach has been chosen as “according to Gouldling (2002), it is particularly helpful for research to predict and This chapter concentrates upon the financial performance of the brand Ted Baker. Being a public limited company, explain behavior, the emphasis being upon developing and building theory” (Saunders, the financial statements of the brand enable us to compare its performance and do an analysis of its financial health. Lewis and Thornhill 2012).As in the grounded theory, data collection was done without The grounded theory methodology has been used to refer to the annual reports and inductively examine the data the formation of an initial theoretical framework through the brand annual reports. The presented by the brand. The brand has reported an excellent growth in revenue and is presently occupying a very theory was then developed from the data generated by the series of observations which in this case are the brand annual reports of the previous years and other market reports of the rapidly growing market segment. It is one of the best options in the industry to invest in stocks; however the profit relevant segments. These data then lead to the predictions or projected trend lines that were then margin is on a decline. Though this can be partially attributed to escalating operating costs, the major reason for this validated through secondary research which included journal articles and other research papers. decline is shift fInductively-based rom a high profit analytical low volume model to were a low profit high volume business m odel. This model has been procedures used to analyse the qualitative data collected. primarily achieved due to the expansion through licensing, which is a common norm in the given market segment. The data display and analysis approach was used that includes data reduction, data display drawing of tconclusions on the basisit ofbecomes the samee(Saunders, and Thornhill 2012). However, as the and brand moves owards globalization, ssential to Lewis maintain a balanced portfolio to ensure H o w e v e r , t h e f o l l o w i n g l i m i t a t i o n s m a y i n h i b i t t h e a c t u a l hedging and maximum profit generation. This can be achieved through tight inventory control, optimum currency research process and may be a source of bias and/or errors: investment in brand administration. Presently, the brand is paying a high interest rate and is in a correct position to

1. Introduction

expand its administrative capabilities as well as in foreign territories. Though the market share has increased in the • The secondary research literature is often outdated especially in the field of fashion where the data is changing in real time. Also, the focus of presenting the domestic market of UK, the brand needs to concentrate on foreign markets as well. The operational capabilities of data not be very the suitable forregulations drawing theto relevant the brand need to be secondary enhanced by may understanding local create conclusions. a global brand which is locally • There is complete dependence on the data interpretation of profitable. the presenter which could be misaligned. In the absence of any other source of data, there is no method for triangulation. • Biases may be built into the analysis due to the 3. Research Methodology interpretation errors made by the researcher. The research methodology used in the chapter is solely based on secondary research. The sources of the analyses can be found in Table 1. Table 1: Financial Analyses data sources

S. No

Sections

Method

Source

Revenue, Operating expenses Net assets and equity

Data compilation for the last 10 years, trend analysis Data analysis and comparison with the last Financial year Market share comparison Comparison with competitors Secondary Research

Ted Baker annual report 2007-‐ 2008, 2012-‐2013, 2013-‐14

2 3 4 5

Competition analysis Share market Financial Management

Type of secondary data (Saunders, Lewis and Thornhill 2012) Longitudinal data

Ted baker annual report, 2013-‐ Documentary evidence from 2014, To be compared with the website data of other brands Euro monitor Secondary data snapshots of the annual reports Financial times Documentary evidence from websites Internet Text from Website Table 1: Financial Analyses data sources

The research conducted is exploratory in nature and majorly literature review has been used by searching Ted Baker Brandthe Report 2014

166

Image 3: Erin Fee for Ted Baker Ad campaign (SpringSummer 2013) photo shoot

, The group needs to focus on profit realisation as being in the premium market segment; better profit margins are expected in the present economic scenario.

Discussion and Analysis 4.1. Revenue and a Gross Margin 4. Discussion nd Analysis With a 13% rise in brand value of the apparel category and the UK market showing recovery since June 4.1.Revenue and Gross Margin 2012 (refer Appendix Pestel), the market sector occupied by Ted Baker is very appropriate for growth. The company has been growing strong with a reported increase in revenue and profit margin. The group With a 13% rise in brand value of the apparel category and the UK market showing recovery since June 2012 (refer revenue has reportedly increased by 26.5% with a gross margin of 61.6%. Increase in revenue can be Appendix Pestel), the market sector occupied by Ted Baker is very appropriate for growth. The company has been attributed to increase in floor area and geographical expansion. The gross margin has decreased by 0.7% asgrowing strong with a reported increase in revenue and profit margin. The group revenue has reportedly increased compared to the last year. The decrease is attributed to the increase in percentage of wholesale business by 26.5% with a gross margin this of 61.6%. in revenue can for be the attributed in by floor area and with a lower margin. Though shows Increase a decrease, the profit period to hasincrease increased 0.5%. geographical expansion. The gross margin has decreased by 0.7% as compared to the last year. The decrease is attributed to the increase in percentage of wholesale business with a lower margin. Though this shows a decrease, the profit for the period has increased by 0.5%.

Revenue v/s proﬁt 14.0%

£350,000,000

£321,900,000

£300,000,000

10.8% 10.7% 11.0%

12.0%

11.5% £254,466,000

10.7%

£250,000,000

10.0%

£215,625,000 9.2% 8.2% 8.3%

£200,000,000

8.1%

8.5%

9.0% 8.0%

£163,586,000 £142,231,000

£150,000,000

6.0%

£117,832,000 £88,842,000 £100,000,000

£50,000,000

4.0%

2.0% £12,568,000 £17,280,000 £21,597,000 £28,852,000 £11,368,000 £14,416,000 £17,557,000 £ 15,242,000 £ 13,527,000 £ 12,919,000 £9,579,000 0.0%

£-‐

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Revenue

proﬁt for the period

Percentage

Linear (Percentage)

Figure 1: Profit percentage comparison (Ted Baker PLC 2008, Ted Figure 1: Profit percentage comparison (Ted Baker PLC 2008, Ted Baker PLC 2PLC 013) 2013) Baker

This percentage also reflects that lesser budgeting on promotion has been done. The analysis above shows that

Tthough h i s p the e r c business e n t a g e has a l sincreased o r e f l e in c t terms s t h aof t size l e s sand e r volume, b u d g e tthe i n gprofit o n margin p r o m is o tshrinking i o n h a and s b ereports en a ddecreasing o n e . T htrend. e analysis above shows that though the business has increased in terms of size and volume, the profit margin is shrinking and reports a decreasing trend. The reasons for this decline can be multiple. With more and more multilateral agreements coming into place (refer The reasons for this decline can be multiple. With more and more multilateral agreements coming place (refer Appendix domain Pestel),of while the geographical domainhas of also the worsened business(refer Appendix into Pestel), while the geographical the business is increasing, inflation i sAppendix i n c re a sPestel). This may result in the earnings going up in terms of numbers but not showing improvements in i n g , i n f l a t i o n h a s a l s o w o r s e n e d ( re f e r Ap p e n d i x Pe s t e l ) . T h i s m a y re s u l t i n t h e e apercentages. r n i n g s g o i n g u p i n t e r m s o f n u m b e r s b u t n o t s h o w i n g i m p r o v e m e n t s i n p e r c e n t a g e s . The industry net profit margin is pegged at 8.80% average (Corporate 2014a); however Ted Baker is being positioned at a market level which is rapidly growing. According to Mintel (2012), “M&S, department stores and higher-priced fashion stores such as Ted Baker and Reiss all have an upmarket slant and are best poised to profit from continued upward mobility”. Thus, in such scenario, Ted baker needs to aim at a higher goal.

Ted Baker Brand Report 2014 168

4.2.Operating Expenses Present operating and administrative costs have increased in Ted Baker due to the growth of size. The operational cost was calculated by deducting the operating profit from the total revenue. The annual report reflects an increase of administration expense 24.5%. Figure 2 gives the operational profit comparison of the last the 10 years. The trend line shows a steady decrease of the operating profit as a percentage of revenue. The operating costs of the brand have increased as the distribution and administration costs have increased. Though the distribution cost has increased in terms of value, it actually is 38.3% of sales as compared to 39.8% of sales in 2013. This reflects that the distribution costs are well under control. As most of the expansion of the brand has occurred through the licensing model as evidenced in the global expansion and distribution sections and the licensing model being less capital intensive as an overseas licensee may well save a lot of expense in terms of research and development (Corporate 2011). Thus, the controlled expenses can be attributed to the global expansion strategy.

The administrative expenses of the brand have increased from £33.0m to £43.4m i.e. an increase of 31.5%. This contributes to 13.4% of the expenses. It is important to note that £3.9m out of this has been attributed to employee bonuses in US which were nil in 2013. The administration expenses also reflect heavy investment i n i n f o r m a t i o n t e c h n o l o g y. The increase in the operating expenses reflects the brand’s plans for expansion. Also, the cost reflects spending on interest on increased borrowings. The brand has invested considerably in manpower and tangible assets. The brand has expanded to the new territories mostly through licensing. This alleviates the direct risk of the brand but also results in opportunity loss through retail sales. This has been further discussed in the next section. It also needs to be noted that the increase in the costs is after deducting the licensee fees paid by the various license holders. This decreasing trend of operating profits is definitely alarming and if continued can prove to be detrimental to the financial health of the group.

The industry net profit margin is pegged at 8.80% average (Corporate 2014a); however Ted Baker is being positioned at a market level which is rapidly growing. According to Mintel (2012), “M&S, department stores and higher-‐priced fashion stores such as Ted Baker and Reiss all have an upmarket slant and are best poised to profit from continued upward mobility”. Thus, in such scenario, Ted baker needs to aim at a higher goal. The group needs to focus on profit realisation as being in the premium market segment; better profit margins are expected in the present economic scenario.

Revenue v/s OperaTng Proﬁt 18.0% £321,900,000

£350,000,000 16.1%

15.6%

£300,000,000 15.5%

16.0%

15.6% £254,466,000 12.9%

£250,000,000

12.1% £215,625,000

11.2% £187,700,000

£200,000,000

£150,000,000

14.0% 12.3% 12.0%

11.3% 11.6%

£163,586,000 £152,661,000 £142,231,000 £125,648,000 £117,832,000 £105,753,000

10.0% 8.0% 6.0%

£100,000,000 £88,842,000

4.0% £29,514,000 £20,049,000 £17,161,000 £24,132,000 £39,588,000 £50,000,000 £16,405,000 2.0% £ 24,269,000 £22,142,000 £19,782,000 £14,260,000 £18,334,000 £-‐

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Revenue

Operakng proﬁt

Operakng proﬁt as % of revenue

Linear (Operakng proﬁt as % of revenue)

0.0%

Figure 2: Comparison of revenue and Operating expenses for the last Figure 2: Comparison of revenue and Operating expenses for the last 10 years 10(Ted aker Baker PLC 2PLC 008, Ted Ted Baker PLC 2013) yearsB(Ted 2008, Baker PLC 2013)

Image 4: Erin Fee for Ted Baker Ad campaign (Spring The operating costs of the brand have increased as the distribution and administration costs have Summer 2013) photo shoot increased. Though the distribution cost has increased in terms of value, it actually is 38.3% of sales as compared to 39.8% of sales in 2013. This reflects that the distribution costs are well under control. As most of the expansion of the brand has occurred through the licensing model as evidenced in the global expansion and distribution sections and the licensing model being less capital intensive as an overseas licensee may well save a lot of expense in terms of Baker the Brand Report 2014 170 research and development (Corporate 2011). Thus, the controlled expenses can be attributed Tedto global

Though hedging is to mitigate risk, over-‐ or under-‐hedging of unknown future foreign currency cash flows induces further volatility for the underlying strategy returns for currency investors, and can generate potential losses due to adverse foreign exchange rate moves. According to (Yilmaz ) (2011), the optimum hedging ratio is at 0.74. From the buyer perspective, Figure 3 shows the various cases of hedging which can result in profit or loss: • • • •

Over-‐hedging cash flow and exchange rate upwards movement (GBP appreciation) generates loss. Over-‐hedging cash flow and exchange rate downwards movement (GBP depreciation) generates profit. Under-‐hedging cash flow and exchange rate downwards movement (GBP depreciation) generates loss. Under-‐hedging cash flow and exchange rate movement (GBP appreciation) generates profit.

Image 5: Erin Fee for Ted Baker Ad campaign (SpringSummer 2013) photo shoot

Figure 3 : Over and under hedging (Yilmaz 2011) Figure 4: Minimum variance Hedge ratio (Yilmaz 2011)

Figure 5 shows the various stages of hedging and how the same can be reflected in Ted Baker portfolio: Idenkfy Exposure • Idenkfy the potenkal areas of Risk -‐ Areas where currencies show ﬂuctuakons (refer Apppendix Pestel)

Evaluate Results and Adjust • Review the strategies periodically to adjust for any ankcipated changes

Execute hedging strategy

Determine Budget Rates and Goals

Formulate Hedging Strategy

• Determine the budget keeping in mind the taxes and local operakonal expenses

• Formulate the hedging strategy by deciding upon the rako and striking a balance between tangible assets and currency

Figure 5: Stages of Hedging and its applicability to Ted Baker

Formulate Currency Risk Policy • Understand the risk involved in the parkcular area according to the amount of capital investment commioed

The group needs to analyse the various factors leading to the escalation of the operating costs and balance its strategies to control the operating costs as a percentage of the revenue.

4.3.Foreign Currency Hedging Expenses increase with the increase in number of currencies to be dealt with. As discussed in appendix SWOT, foreign currency dealing can lead to losses if optimal hedging is not done. Hedging means “reducing or controlling risk. This is done by taking a position in the future market that is opposite to the one in the physical market with the objective of reducing or limiting risks associated with price changes” (Chakrabarty 2007). Currency hedging is the act of entering into a financial contract in order to protect against unexpected, expected or anticipated changes in currency exchange rates. It is used by financial investors and businesses to eliminate risks they encounter when conducting business internationally. Hedging can be likened to an insurance policy that limits the impact of foreign exchange risk (Corporate 2013). The fashion industry is especially vulnerable to global currency exchanges. Thousands of international businesses in the fashion industry are exposed to currency risk with every transaction their companies make with foreign buyers (Corporate 2013). Ted Baker hedges in Euro and USD for 12 months period. In the fashion industry, the following areas can be identified which can risk the bottom line and can e controlled through currency hedging: Risk of Delay through Purchase Orders Order placement in the industry is through advanced purchase orders. These purchase orders can be received months before the actual shipping date of the products. In the time elapsed, the currency and their exchange rates may have changed. Ultimately, this will cause the order to change too, possibly altering quantity as well as profit gained. The same is applicable while buying raw material also. Prices of these materials, along with transportation costs, will affect the buying cost of the end product. In many cases a purchase order will be received months before the season the product is due for delivery. In this period between the order and delivery date, foreign and domestic currencies will fluctuate, ultimately altering expected revenue.

Operational Cost Control by Diffusing Currency Risk Like materials, even services and operations are distributed internationally. International currencies fluctuations make transactional costs of materials much more expensive and debilitating for a fashion company. Currency hedging can offset the risks of movement in the value of target currencies, with locked-rates to protect first and create profit later (Corporate 2013). Business Profit Expansion There are multiple risks within the supply chain including foreign currency exchange risk, production disruption risk, quality risk, and supplier default risk. For example, the retail value of the merchandise in India may have been fixed at an amount but the brand might end up making losses due to the depreciation of GBP. Thus, to protect the profit and reduce the losses due to remonetisation, hedging currency is the best option. Though hedging is to mitigate risk, over- or underhedging of unknown future foreign currency cash flows induces further volatility for the underlying strategy returns for currency investors, and can generate potential losses due to adverse foreign exchange rate moves. According to (Yilmaz ) (2011), the optimum hedging ratio is at 0.74. From the buyer perspective, Figure 3 shows the various cases of hedging which can result in profit or loss: • Over-hedging cash flow and exchange rate upwards movement (GBP appreciation) generates loss. • Over-hedging cash flow and exchange rate downwards movement (GBP depreciation) generates profit. • Under-hedging cash flow and exchange rate downwards movement (GBP depreciation) generates loss. • Under-hedging cash flow and exchange rate movement (GBP appreciation) generates profit. According to Financial Times, “Research conducted by Andrew Smithers of Smithers & Co suggests that, historically, hedged equity portfolios have offered no better long-term returns than unhedged portfolios, in that the collective losses and gains from hedging have almost precisely offset each other”. It further highlighted that in case of higher inflation, hedging currency at the domestic market can also reap profits (Plender 2011). Ted Baker Brand Report 2014

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Image 6: Erin Fee for Ted Baker Ad campaign (SpringSummer 2013) photo shoot

Net Assets and Equity T h e n e t i n c re a s e i n c a s h a n d c a s h equivalents was £1.7m (2013: £11.9m decrease). An increase in net cash generated from operating activities of £14.1m (2013: £6.2m) was balanced by an increase in financing and investing activities. Total working capital increased by £8.9m to £69.9m (2013: £61.0m), which when analysed actually reflects the increase in inventory levels.Group capital expenditure amounted to £18.1m (2013: £19.8m) and reflected the opening and refurbishment of stores, concessions and outlets, investment in business wide systems to support the future growth and a new e-commerce platform for the UK site.

This it was a decrease on value terms and the brand has not increased investment in expansion. However £1.0m were spent for closing down and exiting areas indicating that the group wants to consolidate its present business now.

hedged equity portfolios have offered no better long-‐term return losses and gains from hedging have almost precisely offset each o inflation, hedging currency at the domestic market can also reap pr

The group needs to analyse the various factors leading costs and balance its strategies to control the operating

4.4.Net Assets and Equity

The net increase in cash and cash equivalents was £1.7m (20 generated from operating activities of £14.1m (2013: £6.2m) was activities. Total working capital increased by £8.9m to £69.9m (201 the increase in inventory levels.

Group capital expenditure amounted to £18.1m (2013: £19.8m) stores, concessions and outlets, investment in business wide sys commerce platform for the UK site. This it was a decrease on investment in expansion. However £1.0m were spent for closing wants to consolidate its present business now. Inventories* • £ 80 m (18.85% increase) Bank Overdra[ • 87.79% increase

Property, plant and Equipments • £ 45 m (decrease by 0.7%) Tax Charges • 2.5% higher than UK

Inventories

There has been an 18.85% to the expansion of the revenue, there is a decre 25.0% in terms of value.

It has been claimed that health of a fast fashion retailer (hayes, S.G., Jon concluded, that high inven

While increased invento functioning of a high fashi prove to be a dead asset look at tighter inventory c

Net assets • 13.31% increase

Figure 6: Major changes in Net assets from 2013 to 2014 FY (Source: Ted Baker Annual Report 2014)

Figure 6: Major changes in 2013 to 2014 FY (Source: T Report 2014)

Figures for Net assets and eq

Bank Overdraft Though the group has eliminated its deferred tax liabilities by a co overdraft facility has been increased due to the restructuring deb There has been an 18.85% increase in the a high fashion brand like Ted Baker, this inventory which can be attributed to the might at the long run prove to be a dead cash flow to ensure that the debts can be paid off by the end of t expansion of the brand. However, when asset that needs to go to clearance. The The debt to capital ratio of the group in 2012 was 28.85% (For FY 2 compared to the total revenue, there is a group needs to look at tighter inventory Inventories

decrease of 1.6% resulting in an inventory control procedures to avoid an inventory Net build-up. interest payable during the year was £1.133m (2013: £612,0 hold-up of 25.0% in terms of value.

reflects higher Group borrowing compared to the prior year as a

It has been claimed that reduced inventory capital expenditure and increased working capital to support the contributes to the financial health of a fast fashion retailer when compared to a nonfast fashion retailer (hayes, S.G., Jones, Nicola 2011). Thus, it can be definitely concluded, that high inventory buildup needs to be avoided. While increased inventory is expected with expansion, for a smooth functioning of Ted Baker Brand Report 2014

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Image 7: insight and analysis on Ted Baker

Bank Overdraft Though the group has eliminated its deferred tax liabilities by a considerable amount, it needs to be noted that the overdraft facility has been increased due to the restructuring debt from the bank. The group needs to control the cash flow to ensure that the debts can be paid off by the end of the loan period which ends by financial year 2015. The debt to capital ratio of the group in 2012 was 28.85% (For FY 2013, the information is not yet available). Net interest payable during the year was £1.133m (2013: £612,000) reporting an increase of 87.8%. This increase reflects higher Group borrowing compared to the prior year as a result of the on-going significant investment in capital expenditure and increased working capital to support the Group’s expansion. It can be thus, concluded that this is the correct time window for the brand to invest in expansions and develop administrative expertise by investing in the right kind of administrative framework. However, if we look at the amount spent on tangible assets like plants, property and equipment, there is actually a decrease of investment as compared to last year. It can be thus concluded that the brand is not investing in tangible assets with the borrowing. However, there is an increase of 13.31% in the net assets which is majorly due to the increase in inventory. The group needs to be cautious about the financial effects of the debt which is supposed to lapse by the end of financial year 2015. While this is the correct opportunity for the brand to invest in its expansion and strengthen the operations, the decrease in the tangible assets suggest otherwise. Also the increase in inventory suggests a high inventory buildup which might be difficult for Ted baker to clear up in the present market scenario. Tax Charges The Group tax charge for the year was £10.1m (2013: £7.3m), an effective tax rate of 25.9% which is an increase of 0.6% as compared to last year. The effective tax rate was 23.16% which is higher than the UK tax rate. This is due to the high tax rate of overseas. The tax rate is to reduce to 21% from April 2014 and is projected to drop at 20% by 2015 in the UK. The brand projects further increase in the effective tax rate. As discussed in Appendix PESTLE and Appendix SWOT, different countries have different protectionist policies and thus, the brand needs to reevaluate its strategy and devise alternative methods to invest in the overseas business. Outsourcing financial strategies With the growth in the revenue, Ted Baker group invested in the financial management software to enable tight budget controlling and accuracy of data by preventing wrong data logging. The cloud based technology (www.financialdriver.com) enables the brand to maintain consistency throughout different geographical locations and claims to have shortened the budgeting lead time from 16 weeks to 10 weeks. The UK based solution providers claim to be able to integrate multiple currencies into one, however, the brand is not yet using it to report the data online (Financial Driver 2013). This does seem a right step towards the global integration of the brand, however, the brand needs to ensure cross platform compatibility of the programme. Also, such platforms require training and integration of data with other possible Enterprise Resource Planning software which might be a potential bottleneck. Ted Baker Brand Report 2014

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6.Share Market (Corporate 2014b) The share market performance of Ted baker has been very strong with an annual increase of 73.85%. The last 5 years performance shows a resilient growth as can be seen in Figure 7.Both dividends per share and earnings per share have increased to 13.68% and 22.80% respectively which is a very strong performance specially when considering the market sector of apparel retail. The company exhibits excellent dividend growth rate of 10.16% and a Return on investment ratio of 26.11%.The forecasts for the brand are also very strong with an average growth of 2.5% (estimated) witha dividend growth of 13.68% and an average annual revenue growth rate of 13.70% Image 8: Ted blows into the Windy City

7.Competition

''The group is doing very well in the stock market and is presently a hot stock to invest in.''

Analysis

It is difficult to get the exact market share of the private players, which is generally the norm for the Ted Baker competitors. Though the market share of Ted Baker has increased in 2013, compared to Hugo Boss, Ted Baker still has a long way to go. However, no information is available about the international market share of the brand. The market shares of the available brands in the United Kingdom have been listed below:

a dividend growth of 13.68% and an average annual revenue growth rate of 13.70% The group is doing very well in the stock market and is presently a hot stock to invest in.

7. Competition Analysis It is difficult to get the exact market share of the private players, which is generally the norm for the Ted Baker competitors. Though the market share of Ted Baker has increased in 2013, compared to Hugo Boss, Ted Baker still has a long way to go. However, no information is available about the international market share of the brand. Figure 7: Share market Trend (FT 2014)

The market shares of the available brands in the United Kingdom have been listed below: Table 2: Market Share of the Competitors (Euromonitor 2014)

Brand French Connection Group PLC Hugo Boss Next PLC Ted Baker PLC

2008 0.2 0.5 5.7 0.2

2009 0.2 0.5 5.0 0.2

2010 0.2 0.5 5.2 0.2

2011 0.2 0.5 5.5 0.2

2012 0.2 0.6 5.6 0.2

2013 0.2 0.5 5.5 0.3

Table 2: Market Share of the Competitors (Euromonitor 2014)

8. Recommendations: Though Ted Baker is positioned at a very favourable market level, the financial status of the company shows decline Ted Baker Brand Report 2014 in margin. The following recommendations need to be deliberated upon:

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8.Recommendations: Though Ted Baker is positioned at a very favourable market level, the financial status of the company shows decline in margin. The following recommendations need to be deliberated upon: • The brand should focus on profit realization through the right combination of higher margin yielding product mix and correct distribution channel. The brand has operating margin which is just above the industry average. Being in a premium category which is fast growing, the brand needs to aim for a higher profit and concentrate upon increasing the margin. • The escalation of operating costs reflects the expansion of the brand. However, the major costs include inventory buildup. The group needs to turnaround its inventories faster and to optimize inventory level. Though fashion brands have higher inventory value, lower inventory with faster turnaround time helps in generating better cash flow. Also, as the brand occupies the premium market sector, there is a constant chance of the merchandise being obsolete. • Presently, the brand is on a loan and paying quite a high interest rate on the same. This is a perfect time for the brand to invest in its infrastructure and expansion services. Developmental investment in administrative technology and assets needs to be done with the increased bank loan facility. • A detailed analysis of the hedging ratios needs to be done to optimize foreign currency losses. Also, the brand needs to look at individual countries to augment the return as presently the brand is paying more than tax percentage required by the UK government. Careful hedging with planned investment will help the brand to realize better return on investment and thus ensure better returns to the stock holders. For this, the brand needs an international team dealing with regional currency regulations to make local profits.

Image 9: Erin Fee for Ted Baker Ad campaign (SpringSummer 2013) photo shoot

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Rachel Lu

Figure 1: Ted’s Journey Of A Lifetime

Carefully managed development of “existing and new international markets Source: Ted Baker Annual Report and Accounts, 2012/2013. Ted Baker PLC

”

2014 January Sales £m

2013 January Sales £m 43.8, 20%

98, 30%

171.8, 80%

223.9, 70%

OVERVIEW

UK Overseas UK Overseas ed Baker (2013) stated in Interim Results Report that their strategy is to become “a leading global designer brand” and one of the important element is “carefully managed development of existing Figure 2: The 2013-2014 UK and Overseas sales revenue Source: Ted Baker Annual Report and Accounts, 2012/2013. Ted Baker PLC and new international markets”. The oversea sale revenue percentages of Ted Baker is growing gradually, which is from 20% in 2013 to 30% in 2014 (Figure 2). Ted Baker started with a shirting specialist in Glasgow in 1988 and entered the first oversea territory with wholesale business in USA in 1996 (Ted Baker, 2013). Now their presences in global market are more than 22 countries with 341 stores by the August 2013. Global expansion is a viable strategy for Ted Baker to achieve growth and they are at the stage of adapting and consolidating a sustainable strategic advantage through international expansion activities. However, plenty of risks and challenges in different oversea market are still existing. This chapter is going to evaluate how Ted Baker expand globally and examine the oversea market selections and product lines.

METHODOLOGY

he international strategy framework (Figure 2) has been applied here to analyse how Ted Baker’s international strategy depends on both the external environment as the internationalisation drivers and the organisational capabilities as the sources of competitive advantage, which shapes the market country selections and market entry modes. The analytical models follows by using a wide range of both quantitative and qualitative secondary data. Those doing national or international comparisons, the secondary data would be the main resource including documentary, survey-based and multiple-source secondary data (Saunders, 2012). PESTLE and SWOT analysis provide the context of external business environment and current organization role within it. Ted Baker Brand Report 2014

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INTERNATIONAL DRIVERS

Cost Drivers Global scale economies Steep experience curve effect Sourcing efficiencies Favorable logistics Differences in country costs High product development Fast-changing technology

Goverment Drivers Favorable trade policies Compatible technical standards Common marketing regulations Governmnet-owned competitors and customers Host government concerns

Industry Globalization Potential Market Drivers Common customer needs and tastes Global customers Global channels Transferable marketing Lead countries

Competitive Drivers High exports and imports Competitors from different continents Interdependence of countries Competitoes globalised Transferable competitive advantag

Figure 4: Drivers of internationalisation

Source: Yip, G.S., 2003. Total global strategy II: updated for the internet and service era. Pearson Education, Inc., Upper Saddle River, New Jersey

arket drivers. The developed societies with a continuing flux of migrant workers, travellers and foreign students produce multicultural consumers (EUROMONITOR, 2014). There are more global consumers within the homogenous and globalised world provide opportunities for international retailers as well as Ted Baker. In addition, there is a changing attitude toward luxury goods and value-conscious shopping in some emerging market like China, which has created new opportunities for premium and contemporary brand (Chu, 2014).

ost drivers. Operating internationally could increase the volume of product so that it reduces the costs both on the production and in purchasing of supplies (Johnson, 2008). In many cases, the economies of scope would be the push rather than economies of scale to internationalise business (Yip, 2003). Ted Baker not only achieves the gains from spreading activities across multiple licensed product lines, but also may achieve WKH VDYLQJV LQ WKH FRVW RI SURGXFWLRQ DQG LQFUHDVH WKH VRXUFLQJ HIĂ&#x20AC;FLHQFLHV E\ HQWHULQJ WKH suppliersâ&#x20AC;&#x2122; market.

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overnment drivers. There are many continued efforts to make business easier around the world as 114 economies implemented 238 regulatory reforms making, which is about 18% more than the previous year (The World Bank, 2013).

ompetitive drivers. British fashion retailers including Ted Baker, Jack wills, All Saints, Karen Millen and Topshop have built up store networks around the world in recent years by taking advantage of British fashion, especially for the mid-market which is perceived as offering the most opportunities (Deloitte, 2013). Most of the direct competitors of Ted Baker in UK are looking for growth potential by oversea expansion (Figure5).

REISS

FRENCH CONNECTION

In 2005, “REISS step into the global arena with its first international store in New York, followed by Dubai” (REISS, 2014).

“The brand has a global reach, operating in over 30 countries through more than 1,000 stockists and with over £400 million of branded retail sales worldwide, either directly through our own retail chain, through wholesale channels or generated from licensed arrangements” (French Connection, 2014).

Reiss French Connection All Saints Aurora Ted Baker 0

100 UK sales

200

300

400

500

International sales

Figure 5: The percentage of British fashion retailers’ international revenue Source: Retail Week, 2013. International Report 2013 [online]. Available via: retailweek.com. Manhattan Associates [Access: 6 March 2014].

KAREN MILLEN

ALL SAINTS

Karen Millen operates “over 350 stores and concessions in 45 countries worldwide, with over 250 stores internationally. The last five years has seen the brand truly emerge globally with international turnover increasing by over 400%” (Karen Millen, 2014).

All Saints offer free international shipping to 40 countries on orders over £250 (All Saints, 2014).

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Figure 6: Ted Baker Adelaide

PUSH Factors

Saturation of the domestic market Limited opportunities to diversify Legislative constraints within domestic market International appeal of brand

PULL Factors

Growth potential in emerging markets Underdeveloped competition Response to offers from foreign markets Attractive business environment Opportunities arising from economic conditions Follow the leader mentality Converging consumerism in mass markets Differing cultures becoming increasingly linked

FACILITATING Factors

Technology: no barriers 24/7 Support agencies assisting international set up Lowering of trade barriers Better infrastructure Mass media

Figure 7: Why Global?

Source: Davidson, J., 2013. Internationalisation & Individuality. [Lecture to International Fashion Business, Nottingham Trent University]. 15 October.

ush Factors. The revenue year g rowth of Ted Baker in UK & Europe, US & Canada and Asia & Rest of the world from 2012 to 2013, which is 10.9%, 58.6% and 67.6% respectively (Ted Baker, 2013). By comparing the growth rate, it indicates the most important driver for Ted Baker to internationalise business is the saturation of domestic and Europe market contrast to the growth potential of emerging markets.

ull Factors. The world economy is projected to have a global growth from 2.4% in 2013 to 3.2% this year, and 3.4% in 2015 (World Bank, 2013). Growth acceleration may muted in emerging and developing market, it still grow at 2.5 times the rate of developed economies (EUROMONITOR, 2014). The economic power shift from developed markets to developing markets and the rapid urbanisation contributing to the growth of middle classes which has more discretionary income to spend (EUROMONITOR, 2014).

acilitating Factors. UK retailers attracted a large number of interest from oversea online shoppers with a 64% year-on-year increase in the number of searches via smartphone (WGSN, 2014). The technology development facilitates retailers to go global in respects of online sales, marketing and consumer service. The parallel of devices, content and distribution s y s t e m s, a n d t h e o m n i p r e s e n t a r e indispensable for winning brands (BrandZ, 2013). Ted Baker currently operate UK site to serve UK and European consumers, US site and Japan site to provide local content for oversea consumers (Ted Baker, 2014). The 2014 Doing Business reported that â&#x20AC;&#x153;Singapore topped the global rankings for the ease of doing business, followed by Hong Kong, China; New Zealand; the USA; Denmark; Malaysia; South Korea; Georgia; Norway; and the UK. Meanwhile, Ukraine, Rwanda, Russia and the Philippines were amongst the top improversâ&#x20AC;? (World Bank, 2013).

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SOURCES OF COMPETITIVE ADVANTAGE

Firm strategy, structure and rivalry

Factor conditions

The value of Porter’s Diamond in the case of Ted Baker is to “identify the extent to which they can build on home-based advantages to create competitive advantage in relation to others on a global front” (Johnson, 2008, p.302).

Demand conditions

Related and supporting industries

Figure 9: Porter’s Diamond – the determinants of national advantage Source: : Johnson, G., 2008. Exploring corporate strategy: text & cases. Harlow: Financial Times Prentice Hall.

actor conditions. The UK fashion industry is experiencing the de-industrialisation trend which outsources lower value-added activities such as manufacturing whilst specialises higher value-added activities relate to design and marketing (British Fashion Council, 2010). As stated, Ted Baker manufacture all the products out of UK and 45% of total made in China (Made-By, 2012), ZKLFK DOORZV WKHP WR DFKLHYH EHWWHU EXVLQHVV HIÀFLHQF\ DQG SURÀWDELOLW\

ome demand conditions. The UK consumers are relatively cautious about right value and price (Jobling, 2013) while also demand excellent brand experience (BrandZ, 2013), which become a source of competitive advantage for Ted Baker to dealing with sophisticated global consumers.

elated and supporting industries. The UK based design services, materials, equipment, expertise and information could be a source of competitive advantage which underpin Ted Baker’s British fashion.

ir m strategy, industr y structure and rivalr y. From the fashion influences of historical eras such as the “Swinging Sixties” and the Cool Britannia image to the rise of modern designer labels as Vivienne Westwood, Paul Smith and Burberry (British Fashion Council, 2010), the British fashion heritages provided a national advantage to their fashion brands as well as Ted Baker.

Figure 8: Tedâ&#x20AC;&#x2122;s 25 Year Celebration Ted Baker Brand Report 2014

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hen it comes to the side of organisationâ&#x20AC;&#x2122;s individual source of advantage, more often UHIHUV WR WKH FDSDELOLWLHV )LJXUH ZKLFK Ă&#x20AC;UP specific abilities to use resources to achieve organizational objective (Peng, 2011). Ted Baker established as a shirting VSHFLDOLVW DQG WKHQ GLYHUVLĂ&#x20AC;HG WR D ZLGH SURGXFW UDQJH ZLWK TXLUN\ yet commercial detailing and pattern which based on British culture (Ted Baker, 2013). Beyond that, there seems no particular innovative capability could be identified for Ted baker to achieve relevant differentiation or competitive advantage in terms of design, costs and customer responsiveness. For example, UNIQLO has innovation capabilities in product development; ZARA uses just-in-time approach to bring latest fashion trends and response consumer needs; designer brands like Paul Smith has their irreplaceable brand reputation; Nike establishes a strong distribution network across owned-store, franchised store, Nike town chains of retail store, department store, specialist retailers and other fashion retailers; Italian accessories brand Furla succeeded in China by using the capabilities of their partner )XQJ &DSLWDO $VLD ZKR KDV SODQQHG WR RSHQ QHZ VWRUHV LQ WKH QH[W Ă&#x20AC;YH \HDUV &KX 2014). Instead, the particular Ted Baker culture is based on the British background and existing consumer perception that is not easy to be transferred to foreign market. Ted Baker try to use alternative ways like creative window displays instead of marketing, PR or advertising, ZKLFK LV GLIĂ&#x20AC;FXOW WR EXLOG EUDQG DZDUHQHVV DURXQG WKH ZRUOG %DOPIRUG

Figure 11: Ted Baker Spring 2013

Capabilities in Innovation

Research Innovation new product development Fast-cycle new product development Design capability

Capabilities in Operations

Flexibility and speed of response Continuous quality improvement in manufacturing Efficiency in volume manufacturing Low cost delivery of customer service

Capabilities in Marketing

Brand management Reputation for quality Responsiveness to market trends

Capabilities in Sales and Distribution

Capabilities in Corporate functions

Efficiency of order processing and distribution Efficiency distribution management Quality and effectiveness of customer service Ability to Strategic Strategic Ability to

attract and manage financial resources management of multiple business innovation interact with governments

Figure 10: Functional Capabilities

Source: : Peng, M.W., 2011. International business. London: Cengage Learning

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KH QDWLRQDO UHVRXUFHV DQG FOHDUO\ GHĂ&#x20AC;QHG SHUVRQDOLW\ RI EUDQG FUHDWH value for Ted Baker. However, it might lead to a competitive parity but not to an advantage. This added value is not rare and easy to imitate or already exist in other brands from different level of markets. The similar brand personality could be found at different market level with different prices (Figure13). Moreover, the British culture based personalities tend to be more dominated by high-profile brand such as Paul Smith. Imitability

Value Creating Does the resource or capabilities add value?

Rare How rare is the resource or capabilities?

Figure 12: The VRIO framework

How difficult is it for others to imitate the resource or capabilities?

Source: : Peng, M.W., 2011. International business. London: Cengage Learning

Organization Are other policies and procedures organized to support the exploitation of this resource or capabilities?

Figure 14: Ted Baker's design in Tokyo

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1 1988

First store in Glasgow, UK

1 1996

Began wholesale trading in the US

1 1998

First standalone store in New York, US

2 2000

Signed the US licence with Hartmarx Corp

2 2002 2004 2 2005 2 2006 2 2008 2 2012 2 2013 2 2015

Opened stores in Paris, San Jose and Miami Took first steps into Australia, New Zealand as well as opening new stores in San Francisco, Las Vegas Singed three licence agreements for Asia and the Middle East Export partners for Spain, Portugal and Andorra

First store in Athens, Greece

Store in Japan, China, Indonesia, Malaysia and Canada

Two new stores and an outlet in Shanghai Further concessions in US and Europe

Plans to open stores in South America Panama could be first target Figure 27: Ted Baker global expansion timeline Source: Compiled from www.tedbaker.com

MARKET SELECTION AND ENTRY

arket selection should be determined by three sets of overall factors which are stand-along attractiveness, global strategic importance and synergy (Yip, 2003). Yip (2003) described that a global strategy view of market participation:

To have a global level of market participation requires significant global market share, a reasonable balance between the business’s geographic spread and the market’s spread, and presence in globally strategic country-markets

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urope: UK, Belgium, France, Germany, Ireland, Netherlands, Portugal, Spain. The high level of economic integration in Europe provide a business environment with least trade barriers as the European Union establish the single market about free movement of goods, capital, people and service (Peng and Meyer, 2011). Even Europe have been through hard years due to the ongoing crisis, it is still the most attractive FDI destination and second attractive investment region (EY, 2013). The retail division of Ted Baker in this region were only up 11.1% while there are 16 stores or concessions more from 2012 to 2013 (Ted Baker,2013), which implicate that the Europe region is about market share rather than market growth.

Figure 16: World’s most attractive regions to establish operations

Figure 17: Ted Baker flagship store on Floral Street in London’s Covent Garden

Source: http://www.drapersonline.com/news/ womenswear/news/thats-entertainment-at-tedbaker/5012027.article#.U0_JF_ldWgw

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iddle East: United Arab Emirates, Lebanon, Kuwait, Turkey. The United Arab Emirates (UAE), which is ranked among the wealthiest nations in term of GDP per capita, composed of seven independent city states including Dubai, Abu Dhabi and Dubai has world's highest number of shopping malls per capita (Retail Week, 2013). The prosperous tourism industry and the least demanding tax system in this area (World %DQN SURYLGH PRUH SURĂ&#x20AC;WDELOLW\ IRU IDVKLRQ UHWDLOHUV The local regulations stipulate that any international retailer have to enter market with a local partner (Retail Week, 2013), which decides the entry mode of Ted Baker with licensing.

Figure 18: Rank shift in GDP 2010 vs 2020 Source: Euromonitor

orth America: United States, Canada. Peng and Meyer (2011) suggests that firms normally enter first where the cost of entry and the perceived risks are lowest, which is in culturally similar countries. The same language and similar economy system, ZKLFK ERWK RI WKHP DUH LGHQWLĂ&#x20AC;HV DV PDUNHW HFRQRP\ 3HQJ DQG 0H\HU SDYH WKH ZD\ IRU WKH 86 EHFRPH WKH Ă&#x20AC;UVW oversea destination of Ted Baker. In recent years, Ted Baker continued its expansion to the US and Canada by further concession with leading department store and opened Fifth Avenue flagship store in New York (Ted Baker, 2013). However, there were relatively few British success stories in this attractive top destination of British retailers (Retail Week, 2013).

Figure 21: Ted Baker, Turkey, 08 January 2014 Source: http://workhousecollection.co.uk/index.php/articles/cat/ journal/post/tedbaker_turkey/

Figure 19: Ted Baker store in New York Fifth Avenue 6RXUFH 5HWDLO :HHN 7HG %DNHU RSHQV )LIWK $YHQXH Ă DJVKLS store [online]. Available via: http://www.retail-week.com/stores/ in-pictures-ted-baker-opens-fifth-avenue-flagship-store/5039569. article [Access: 13 March 2014]

Figure 22

sia: China, Indonesia, Japan, Korea, Malaysia, Singapore, Thailand, Australia, New Zealand. The market size and strong growth in clothing sales remain China at the top of Market attractiveness (Figure 20). Countries in the Association of Southeast Asian Nation (ASEAN) also have a decade of robust growth due to the domestic consumption and urbanization (AT Kearney, 2013). Some countries or cities in this area rank the most easies to do business like Singapore, Hong Kong (World Bank, 2013). Moreover, this region are both market VHHNLQJ DQG HIĂ&#x20AC;FLHQF\ VHHNLQJ IRU 7HG %DNHU WR DFKLHYH PRUH UHVRXUFH DGYDQWDJHV DV there are strong supplier networks and distribution (Figure 22).

)LJXUH 7HG %DNHU Ă&#x20AC;UVW VWRUH LQ 6KDQJKDL Source: www.tedbakerblog.com

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Figure 24: Ted Baker Dubai Marina Mall Menswear Source: Ted Baker 2013 Annual Report

n t r y m o d e s a r e ch o s e n a c c o r d i n g t o t h e s t a g e s o f internationalisation processes which organization gradually increases their commitment in new market from contractual agreement such as licensing, then joint ventures, finally owned subsidiaries (Johnson, 2008). In the Middle East, Asia and Australasia, Ted Baker operates territorial licences for retail stores and wholesale business (Ted Baker, 2013), which are the mutually beneficial for both licensor and licensee at the early stage of global expansion. Ted Baker provide their property right whilst take the advantages of the expertise from licensees in particular product or territory (Cioletti, 2014). However, Ted Baker may loss control of manufacturing and marketing their products through licensing and it is DOVR OHVV SURĂ&#x20AC;WDEOH DV UHWXUQV VKDUHG E\ WZR SDUWLHV &LROHWWL

Market Knowledge

Commitment Decisions

Market Commitment

Current Activities

Figure 25: the Basic Mechanism of Internationalisation - State and Change Aspects

Source: Yip, G.S., 2003. Total global strategy II: updated for the internet and service era. Pearson Education, Inc., Upper Saddle River, New Jersey

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North America: Suiting business with licence partner Jack Victor Central America: Licensed partner plans to open one new store in Panama

RECOMMENDATIONS A basis of improvement would be to build an international team to accumulate experiential learning and knowledge acquisition from new market to accelerate the process of internationalisation. This international team at early stage including key members such as: 0HUFKDQGLVHU WR ORFDOLVH WKH SURGXFW RIIHU IRU different markets. %X\HU WR H[SORLW DQG EXLOG JOREDO VXSSO\ QHWZRUN 5HWDLO 0DQDJHU WR JDWKHU LQIRUPDWLRQ DQG OHDUQLQJV from different markets and to adapt different marketing strategy. %XVLQHVV 3DUWQHU WR PDLQWDLQ D ORQJ WHUP EXVLQHVV relationship. The different characteristics, competitiveness, resources and costs of countries around the world should be systematically conducted and exploited to build a

strategic global network. The current marketing strategy of Ted Baker may not fit for all countries. There are some countries need conspicuous advertising methods to raising brand awareness, for example, China. The quintessential of British culture cannot be transferred simply through the detailing and pattern of clothing as well as store interior. It should consider PRUH GLIIHUHQW IDFWRUV LQÁXHQFH FRQVXPHU SHUFHSWLRQ LQ different countries which requires deeper engagement with foreign markets.

UK: Head office UK: Footwear collection with our licenced partner Pentland Group Turkey: 29% of product manufacture; Territorial license partner Demsa Portugal: 9% of product manufacture

UAE: Territorial license partners RSH Middle East Kuwait: Territorial license partners AI-Mutawa and AI-Khatib Retail Company

China: 45% of product manufacture Singapore, Malaysia, Indonesia & Thailand: Territorial license partners RSH Far East Australasian: Joint venture with Territorial license partners Flair Pty Ltd

Figure 26: Ted Baker global network Source: compiled from Ted Baker Annual 2013 Report

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Katherine Chen

Ted Baker has no doubt achieved tremendous success in past few years. Its global expansion strategy itself states about its customers’ likeness and preference throughout the globe. And even today, the company is focusing on continuing its expansion strategies and opening its retail outlets in other parts of the globe where the potential lies and where do they have their target market needing the lifestyle that Ted Baker has to offer. The way, this brand has been able to keep its customers loyal and attached to the brand is because of its high quality and innovative designs that are highly luxurious and are trendsetters for the society. Few of the reasons why the brand was able to make its mark so strong is that they kept pace with the changing trends of fashion, mainly through having research both secondary and primary, as an important tool for not merely, meeting customer expectations but also to delight them far more than they expect. Ted Baker has not only concentrated to keep its core product right but has also given attention to keep the actual and augmented product right on the track and making it greatly competitive. This is another cause that even in the presence of numerous global competitors, Ted Baker has only managed to survive but playing in the same league in world’s top most lifestyle brands and moreover to remain profitable even in the times when the world was witnessing recessions. In a nutshell, the strategies followed by the brand to make itself differentiated from others, meeting customer expectations, sticking to the brand identity which were comprehensively accompanied by the brand’s distribution and retailing strategies that complemented the whole strategy framework of Ted Baker Brand. It is no wrong to say, that it is genuinely because of the brand’s integrated marketing strategy that provided an overall compelling lifestyle brand for the premium upper class who wanted luxury in their attire, well complemented by glamour, class and style. It was the Ted Baker, who realized this want of their target market and introduced a brand that best-fitted this gap in global market and played its part for the good. Still today, the work is not over yet but has just begin as Ted Baker has high ambitions to explore more places and cater more people through its aggressive expansion strategies.

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LIST OF REPORT ILLUSTRATIONS: Executive Summary divide page: Ted Baker PENNII ARTISTIC PALETTE PRINT DRESS IN BLUE (2012) [Online] At: http:// www.excelclothing.com/ted-baker-pennii-artistic-palette-print-dress-in-blue-108186-7.html [Accessed on 19.04.14] Image 1: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photoshoot/ [Accessed on 19.04.14] Image 2: Swanlake Print “© Ted Baker (2011), Emily Humphrey” [Online] At: http://www. emilyhumphrey.co.uk/aw-prints/ [Accessed on 19.04.14] Introduction divide page: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 1: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photoshoot/ [Accessed on 19.04.14] Branding divide page: Swanlake Print “© Ted Baker (2011), Emily Humphrey” [Online] At: http://www.emilyhumphrey. co.uk/aw-prints/ [Accessed on 19.04.14] Image 1: Ted Baker look book AW 2013 [Online] At: http://alexloves.com/2013/07/ted-bakeraw13/[Accessed on 19.04.14] Image 2: Ted Baker look book AW 2013 [Online] At: http://alexloves.com/2013/07/ted-bakeraw13/[Accessed on 19.04.14] Image 3: Swanlake Print “© Ted Baker (2011), Emily Humphrey” [Online] At: http://www. emilyhumphrey.co.uk/aw-prints/ [Accessed on 19.04.14] Competitor Analysis Divide Image: Swanlake Print “© Ted Baker (2011), Emily Humphrey” [Online] At: http://www.emilyhumphrey. co.uk/aw-prints/ [Accessed on 19.04.14] Image 1: FASHION – IT’S ALL ABOUT THE BOWS (2013) [Online] At: http://www. catwoods.co.uk/category/fashion [Accessed on 19.04.14] Image 2: Ted Baker SS14 (2014) [Online] At: https://www.blueberries-online.com/blog/ [Accessed on 19.04.14]

Image 3: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 4: Cotswold location for Ted Baker Spring Summer 2014 campaign (2014) [Online] At: http://www. swindonlink.com/swindon_scene/cotswold-location-for-ted-baker-spring-summer-2014-campaign [Accessed on 19.04.14] Image 5: Ted Baker Take the scenic route, Soulla Petrou [Online] At: http://www.soullapetrou.com/a1.html [Accessed on 19.04.14] Image 6: Ted Baker Autum/Winter (2012) [Online] At: https://blog.davidjones.com.au/Fashion/2013/03/ tedbakerwinter [Accessed on 19.04.14]

Consumer Behavior divide page: Ted Baker look book [Online] At: http://adrenalinmanagement.com/photos/christian-couzens/ [Accessed on 19.04.14] Products: Menswear divide page: Ted Baker Footwear Autumn Winter 2013 campaign [Online] At: http://emiliechen.com/ tedbaker_aw13.php [Accessed on 19.04.14] Image 1: Ted Baker look book [Online] At: http://adrenalinmanagement.com/photos/christian-couzens/ [Accessed on 19.04.14] Image 2: Ted Baker look book [Online] At: http://adrenalinmanagement.com/photos/christian-couzens/ [Accessed on 19.04.14] Image 3: Ted Baker Image + Own image [Online] At: http://www.thesar torialscout.com/ springsummer-14/2014/2/20/ted-baker-springsummer-14-menswear-lookbook [Accessed on 19.04.14] Image 4: One Giant Leap For Ted Baker 2013 [Online] At: http://jennieclare.blogspot.co.uk/2013/03/onegiant-leap-for-ted-baker.html [Accessed on 19.04.14]

Image 5: One Giant Leap For Ted Baker 2013 [Online] At: http://jennieclare.blogspot.co.uk/2013/03/onegiant-leap-for-ted-baker.html [Accessed on 19.04.14] Image 6: Swanlake Print “© Ted Baker (2011), Emily Humphrey” [Online] At: http://www.emilyhumphrey. co.uk/aw-prints/ [Accessed on 19.04.14] Image 7: Ted Baker Footwear [Online] At: http://schonmagazine.com/category/news/page/13/ [Accessed on 19.04.14] Image 8: Watch our AW13 Show Here! 2013 [Online] At: http://tedbakerblog.com/2013/07/10367/ [Accessed on 19.04.14]

Products: Women’s wear divide page: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 1: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 2: Ted Baker 'Autumny' Exotic Metal Squares Tote Bag - Polyvore [Online] At: http://www. polyvore.com/ted_baker_autumny_exotic_metal/thing?id=93461610 [Accessed on 19.04.14] Image 3: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 4: Ted Baker Autum/Winter (2012) [Online] At: https://blog.davidjones.com.au/Fashion/2013/03/ tedbakerwinter [Accessed on 19.04.14] Image 5: Spring Summer 2014 Look Book - Ted Baker [Online] At: http://www.tedbakerpromotions.co.uk/ lookbooks/us/ss14_web/ [Accessed on 19.04.14]

Retail divide page: The Official Images from the Ted Baker Fashion Show! 2012 ) [Online] At: http://anniebyamy. wordpress.com/tag/ted-baker/ [Accessed on 19.04.14] E-commerce divide page: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 1: Swanlake Print “© Ted Baker (2011), Emily Humphrey” [Online] At: http://www.emilyhumphrey. co.uk/aw-prints/ [Accessed on 19.04.14] Image 2: North Yorkshire Moors Railway - Cision [Online] At: http://news.cision.com/north-yorkshiremoors-railway [Accessed on 19.04.14] Image 3: North Yorkshire Moors Railway - Cision [Online] At: http://news.cision.com/north-yorkshiremoors-railway [Accessed on 19.04.14] Image 4: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Distribution divide page: Ted Baker Opens First Standalone Men’s Store in Dubai, 2013 [Online] At: http://hauteliving. com/2013/08/ted-baker-opens-first-standalone-mens-store-in-dubai/383704/[Accessed on 19.04.14] Image 1: Spring Summer 2014 Look Book - Ted Baker [Online] At: http://www.tedbakerpromotions. co.uk/lookbooks/us/ss14_web/ [Accessed on 19.04.14] Image 2: Ted Baker SS2013 cat walk show [Online] At: http://alexloves.com/2013/01/ted-baker-ss13show/ [Accessed on 19.04.14] Image 3: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 4: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14]

Image 5: Ted Baker Footwear [Online] At: http://schonmagazine.com/category/news/page/13/ [Accessed on 19.04.14] Image 6: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 7: One Giant Leap For Ted Baker 2013 [Online] At: http://jennieclare.blogspot.co.uk/2013/03/onegiant-leap-for-ted-baker.html [Accessed on 19.04.14] Image 8: Swanlake Print “© Ted Baker (2011), Emily Humphrey” [Online] At: http://www.emilyhumphrey. co.uk/aw-prints/ [Accessed on 19.04.14] Image 9: Ted Baker look book [Online] At: http://adrenalinmanagement.com/photos/christian-couzens/ [Accessed on 19.04.14] Financials divide page: San Diego Store Opening [Online] At: http://tedbakerblog.com/2011/11/san-diego-storeopening/ [Accessed on 19.04.14] Image 1: Ray Kelvin: Would the real Ted Baker please stand up? [Online] At: http://fashion.telegraph. co.uk/news-features/TMG9541067/Ray-Kelvin-Would-the-real-Ted-Baker-please-stand-up.html [Accessed on 19.04.14]

Image 2: Ted Baker Footwear [Online] At: http://schonmagazine.com/category/news/page/13/ [Accessed on 19.04.14] Image 3-6: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Image 7: insight and analysis on Ted Baker [Online] At: http://www.retail-week.com/companies/ted-baker [Accessed on 19.04.14] Image 8: Ted blows into the Windy City [Online] At: http://tedbakerblog.com/2010/12/ted-blows-intothe-windy-city/ [Accessed on 19.04.14]

Image 9: Erin Fee for Ted Baker Ad campaign (Spring-Summer 2013) photo shoot (2013) [Online] At: http://celebsvenue.com/erin-fee-for-ted-baker-ad-campaign-spring-summer-2013-photo-shoot/ [Accessed on 19.04.14] Conclusion divide page: COLLABORATIVE BRIEF//TED BAKER 2013 [Online] At: http://k-brooks1114-dp.blogspot. co.uk/2013/03/collaborative-briefted-bakerfinal-look.html [Accessed on 19.04.14] Bibliography divide page: Ted Baker 2014 look book cover 2014 [Online] At: http://tedbakerblog.com/tag/summer/page/2/ [Accessed on 19.04.14]

LIST OF INDIVIDUAL ILLUSTRATIONS: Branding: Fig 1: Ted Baker Aaker Model [Own Diagram] Fig 2: Ted Baker Brand Identity Model [Own Diagram] Fig 3: TedBaker.com2013 [Online] At: http://www.pokelondon.com/portfolio/tedbakercom/ [Accessed on 19.04.14] Fig 4: Social Media Icons [Own Diagram] Fig 5: TED BAKER S/S13 2013 [Online] At: http://www.tedbakerpromotions.co.uk/lookbooks/ uk/ss13_pr/about/ [Accessed on 19.04.14] Fig 6: Ansoff Matrix Model [Own Diagram] Fig 7: Social Media Followers Diagram [Own Diagram] Competition Analysis: Figure 1: Michael Porter’s 5 forces Author’s own Figure 2: Steps in Analysis Competitors Author’s own Figure 3: Positioning Map: Fashion And Price Author’s own Figure 4: Which brand has provided fashionable clothes? Author’s own Figure 5: Positioning Map: Product Quality And Price Author’s own Figure 6: Which brand has provided high quality product? Author’s own Consumer Behaviour: Within the report. Products: Menswear: N/A

Product: Women's wear: Figure 1: What do you like about Ted Baker women’s product? Author’s own Figure 2: Ted Baker Amilia Shearling collar leather jacket [online]. Available from: http://www. tedbaker.com/uk/Womens/Clothing/Jackets-Coats/AMILIA-Shearling-collar-leather-jacketBrown/p/104528-25-BROWN Figure 3: Ted Baker Jaylyn Suede panel sweater [online]. Available from: http://www.tedbaker. com/uk/Womens/Clothing/Knitwear/JAYLYN-Suede-panel-sweater-Pale-Pink/p/110124-59PALE-PINK Figure 4: Ted Baker Nolana Cubist floral print maxi dress [online]. Available from: http://www. tedbaker.com/uk/Womens/Clothing/Dresses/NOLANA-Cubist-floral-print-maxi-dress-PowderBlue/p/109763-19-POWDER-BLUE Figure 5: Ted Baker Preva Photo pansy print top [online]. Available from: http://www.tedbaker. com/uk/Womens/Clothing/Tops-T-shirts/PREVA-Natural-Kingdom-printed-top-Baby-Blue/ p/111407-18-BABY-BLUE Figure 6: Ted Baker Ambros Jungle orchid iPad case [online]. Available from: http://www. tedbaker.com/uk/Womens/Accessories/Gift-Accessories/AMBROS-Jungle-orchid-iPad-case-Shell/ p/110764-96-SHELL Figure 7: Price Point Comparison, Author’s own Figure 8: What do you dislike about Ted Baker women’s products? Author’s own Figure 9: Ted Baker Tannah Exotic leather tote bag [online]. Available from: http://www.tedbaker. com/uk/Womens/Accessories/Bags/TANNAH-Exotic-leather-tote-bag-Nude-Pink/p/108274-57NUDE-PINK Figure 10: Product Life-Cycle Strategies, Author’s own Figure 11: How long do you buy a new dress？Author’s own Figure 12: Ted Baker Leween Printed large wash bag [online]. Available from: http://www. tedbaker.com/uk/Womens/Accessories/Gift-Accessories/WELLIN-Printed-small-washbag-LightGrey/p/108759-09-LIGHT-GREY Figure 13 :Score of Ted Baker product, Author’s own Figure 14 :Three Level Of Product, Author’s own Figure 15: What kind of product (for women) would you like to buy in Ted Baker? Author’s own Figure 16: Boston matrix, Author’s own Figure 17: Ansoff matrix, Author’s own

Retailing: Figure 1 SS14 Prints- Sugar Sweet Floral [online]. Available at: http://www.tedbaker.com/uk/ Womens_Prints_Sugar_Sweet Figure 2 Essential Elements of Visual Merchandising Map (Made by author’s Own) Figure (3-9) The Ted Baker concession in Bullring of Birmingham (Taken by author’s Own) Figure 10 Windows display of Ted Baker in Birmingham (Taken by author’s Own) Figure 10 Popular elements in the visual merchandising of White Staff (Made by author’s Own) Figure 11 The window display of Jack Wills in Birmingham (Taken by author’s Own) Figure 12 Product life cycle model (Made by author’s Own) Figure 13 Staff of Ted Baker (Taken by author’s Own) Figure 14 SS14 Prints- Roses On Canvas [online].Available at: http://www.tedbaker.com/uk/Womens_Prints_Roses_On_Canvas Figure 15 Mother’s Day Poster [online].Available at: http://www.shopstyle.co.uk/notes/MotherDay-Gift-Guide-34330036 Figure 16 Brand Image of Ted Baker [online]. Available at: file:///Users/mujie/Desktop/ted_ baker%20on%20Instagram.html Figure 17 Brand image of Ted Baker in Instagram [online]. Available at: file:///Users/mujie/ Desktop/ted_baker%20on%20Instagram.html Figure 18 Hofstede’s Cultural Dimensions Theory (Made by author’s Own) Figure 19 Loyalty Strategy Matrix (Made by author’s Own) Figure 20 The Stimulus, Organism, Response Model of buying behavior (Made by author’s Own) Figure 21- 23 Popular elements in the visual merchandising of Jack will (Made by author’s Own) Figure 24- 26 Popular elements in the visual merchandising of White Staff Figure 27 Smartphonetrends [online]. Available at: http://www.engadget.com/2012/04/02/ smartphone-buyers-guide-spring-201 2/ Figure 28 “MemoryMirror” created by MemoMi [online]. Available at: http://fashionandmash. com/2014/01/24/memomi-memorymirror-captures-att ention-in-retail-tech-space/

E-commerce: N/A Distribution: Figure 1: Data sources for secondary research (Saunders, Lewis and Thornhill 2012)

Figure 2: Advantages and disadvantages of secondary data (Saunders, Lewis and Thornhill 2012) 3 Figure 3: Channel wise Gross margin and Revenue (Ted Baker PLC 2014) Figure 4: The Six R's of Purchasing (Hines 2003)

Figure 5: Cost comparison and its effect on profit margin

Figure 6: Menswear v/s Womeswear revenue contribution (Ted Baker PLC 2014) Figure 7: category management approach (Hines, 2003) Figure 8: Opportunity Loss(Ted Baker PLC 2014)

Figure 9: Evolution of Strategic views towards use of Intellectual property (Sherman 2004) 10 Figure 10: Benefits and opportunities from e-supply chain strategies (Hines 2003)

Figure 11: Business to Business e-commerce evolution (Hines 2003, Corporate 2014) 12 List of Tables Table 1: Distribution channel performance of Ted Baker in Financial Year 2014 Table 2: Sales Margin Gain Drivers (Hines, T., 2003) 7

Financials: Figure 1: Profit percentage comparison (Ted Baker PLC 2008, Ted Baker PLC 2013) 3 Figure 2: Comparison of revenue and Operating expenses for the last 10 years (Ted Baker PLC 2008, Ted Baker PLC 2013) 4 Figure 3 : Over and under hedging (Yilmaz 2011) ratio (Yilmaz 2011) 6

Figure 4: Minimum variance Hedge

Figure 5: Stages of Hedging and its applicability to Ted Baker 6 Figure 6: Major changes in Net assets from 2013 to 2014 FY (Source: Ted Baker Annual Report 2014) 7 Figure 7: Share market Trend (FT 2014)

List of Tables: Table 1: Financial Analyses data sources

Table 2: Market Share of the Competitors (Euromonitor 2014)

Global Expansion: Figure 1: Ted's Journey of a Lifetime Figure 2: The 2013-2014 UK and Overseas Sales Revenue Figure 3: International Strategy Framework Figure 4: Drivers of Internationalistion Figure 5: The percentage of British Fashion Retailers' International Revenue Figure 6: Ted Baker Adelaide Figure 7: Why Global? Figure 8: Ted's 25 Year Celebration Figure 9: Porter's Diamond - The Determinants of National Advantage Figure 10: Funtional Capabilities Figure 11: Ted Baker Spring 2013

Figure 12: The VRIO Framework Figure 13: Similar Products with Ted Baker Figure 14: Ted Baker's Design in Tokyo Figure 15: 2012 FDI inflows Figure 16: Worldâ&#x20AC;&#x2122;s Most Attractive Regions to Establish Operations Figure 17: Ted Baker Flagship Store on Floral Street in Londonâ&#x20AC;&#x2122;s Covent Garden Figure 18: Rank Shift In GDP 2010 vs 2020 Figure 19: Ted Baker Store in New York Fifth Avenue Figure 20: The 2013 Retail Apparel Index Figure 21: Ted Baker, Turkey, 08 January 2014 Figure 22: AEC Impact on Company Areas Figure 23: Ted Baker First Store in Shanghai Figure 24: Ted Baker Dubai Marina Mall Menswear Figure 25: The Basic Mechanism of Internationalisation - State and Change Aspects Figure 26: Ted Baker Global Network Figure 27: Ted Baker global expansion timeline

LIST OF REFERENCES: INTRODUCTION: Marketline (2013) Ted Baker Plc. Marketline Advantage (Online) No Ordinary Label (2014) Our time line. Available at:< http://www.tedbaker.com/uk/about-ted/our-timeline> [Accessed: 13th March 2014] No Ordinary Label (2014) Ted’s aim and strategy. Available at:< http://www.tedbakerplc.com/ted/en/aboutus/strategy> [Accessed: 13th March 2014] BRANDING: BELLE KWAN . (2011). Gen X catches up with digital habits. Available: http://www.marketingmag.com.au/news/gen-x-catchesup-with-digital-habits-6983/. Last accessed 21th March 2014. Bheta, 2014. Your Voices in the Industry. [Online] Available from <http://bheta.co.uk/ted-bakerinterim-management-statement/.> [Accessed on 13 March 2014]. Chang, C., Hu, T., Hsieh, W., Chuang, S. And Tin, L., 2009. A Study on Brand Strategy, Channel Strategy and Channel Performance - An Empirical Investigation of the BareSystems. International Journal of Organizational Innovation (Online), 2(2), pp. 232-244. Davoudi, S., 2005. Ted Baker signs Asian licence Small Cap Briefing. Financial Times, 33. Delgado-Ballester, E., Navarro, A., & Sicilia, M., 2012. Revitalising brands through communication messages: The role of brand familiarity. European Journal of Marketing, 46(1), pp. 31-51. Michelle, D. T. (2005). Ted Baker Arrives In L.A. WWD, 189(125), p.16. Minton, A., 2000. US licence deal for Ted Baker. Financial Times, p. 28. Marshall-Johnson, R, 2011. Future Consumer Forecast 2013. Available at: http://wgsn.com/content.report/Think_Tank/2011/ June/ consumer_forecast20130.html [Accessed on 13 March 2014]. Paul Smith, 204. Find out What Colors The world of the British Designer. [Online] Available from <http://www.madebyoriginals.com/stories/paul-smith> [Accessed on 13 March 2014]. Sagar, M., Khandelwal, R., Mittal, A. And Singh, D., 2011. Ethical Positioning Index (EPI): an innovative tool for differential brand positioning. Corporate Communications, 16(2), pp.124-138. Sengupta, S., 2005. Brand positioning: strategies for competitive advantage. New Delhi [u.a.], McGraw-Hill. Shields, R., 2011. Ted baker plans m-commerce launch ahead of renewed digital push. New Media Age, p. 1 Shirazi, A., Lorestani, H.Z. And Mazidi, A.K., 2013. Investigating the Effects of Brand Identity on Customer Loyalty from Social Identity Perspective. Iranian Journal of ManagementStylesight.com (2012) Available: http://blog.stylesight.com/?s=internet&offset =72&count=8. Last accessed 20th march 2014. Ted Baker., 2014. Ted’s Aim and Strategy. [Online] Available from <http://www.tedbakerplc.com/ted/en/aboutus/strategy.> [Accessed on 12 March 2014]. Ted Baker London, 2014. The ‘No Ordinary Designer Label’ Story. [Online] Available from <http://www.tedbaker.com/uk/about-ted.> [Accesses on 12 March 2014]. Tseng, J., Lin, H. And Lin, C., 2012. A Study on the Effect of Enterprise Brand Strategy on Purchase Intention. International Journal of Organizational Innovation (Online), 4(3), pp. 24-42.

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