1
MATS34531 Strategic Marketing Report Melissa Farquhar 10274457
2
CONTENTS 1.0 2.0
Executive Summary Internal Analysis
3 4
5.0
Strategic Implementation
21
5.1
Product
22
5.2
Price
24
5.3
Place (Distribution)
25
2.1
Analysis of Stella McCartney
5
5.4
Integration of Tech
30
2.5
Sustainability
9
5.5
Promotion
31
5.6
People, Processes & Physical Evidence
6.0
Conclusion
35
7.0
References
36
8.0
Appendix
41
3.0
External Brand Analysis
10
3.1
Analysis of New Zealand
11
3.2
Economic Impacts of Covid
12
3.3
Microenvironmental Attractions
13
3.6
SWOT Analysis
16
4.0
Market Entry Method
17
4.1
Strategic Plan
18
4.2
Strategic Objectives
19
4.3
Market Entry Method
20
3
EXECUTIVE SUMMARY The following report seeks to outline a coherent strategic marketing plan for expansion of the British founded luxury brand, Stella McCartney into the New Zealand (NZ) market. It will evaluate the current brand in their existing markets and will analyse and map the method of entry into NZ. Models, including SWOT (section 3.6 ) and PESTLE (Appendix 5), have assisted with the analysis of the brand and both internal and external forces influencing this growth strategy. This marketing plan is based upon Malcom McDonald’s planning tool (1999) which provides a well-defined tool for generating the business mission to implementing and controlling the expansion of a business into a new market (McDonald, 1999). This logical plan takes into consideration the dynamic environmental forces within the internal and external business environment to develop implementable strategies for organizational growth (McDonald, 1999)
1.0 EXECUTIVE SUMMARY
The planning process for expansion into the international market will assist Stella to achieve their current and future strategic aims and objectives. In doing so we must evaluate the market opportunities and capabilities and predict whether these external changes will hinder or assist them towards reaching their objectives (Doole & Lowe, 2008) Stella McCartney is the leading sustainable designer of circular fashion; influencing other in the industry to educate consumers and reduce their impact on the environment (McCartney, 2020). Stella has yet to maximize her potential worldwide, especially with the rising trends and demand for sustainable goods. The brand intends to capture growth opportunities in the long term such as exploiting the importance for sustainability in NZ.
1.0 INTERNAL BRAND ANALYSIS BRAND PERFORMANCE AND INTERNAL EVALUATION
5
INTRODUCTION TO STELLA MCCARTNEY Stella McCartney is a luxury fashion brand with a sustainable philosophy at the core of the business. They are known for their clothing being tailored and chic, with both ready to wear collections and high fashion. Founded in 2001 they have a ‘goal of bringing a conscience to the fashion industry’, believing heavily in ‘reducing and reserving the environmental degradation’ (McCartney, 2020). Part daughter of the Beatle, Paul McCartney, and Linda McCartney who was a pioneer of animal rights, environmental protection, causes that Stella, too, is focused on
headquarters located in London (McCartney, 2020). Stella has proven to the industry and set an exceptional example that it is possible to be a profitable, successful and desirable brand.
TA I L O R E D
55 freestanding stores in fashion cities including New York and Paris, with
CLEAN
Stella has a presence worldwide distributing to 77 countries and operating in over
TIMELESS
2.1 INTERNAL ANALYSIS
materials that mimic those of real fur and leather (McCartney, 2020).
FUNCTIONAL
(McCartney, 2020). Innovation is at the core of her brand as she strives to pioneer
BRAND AESTHETIC
of the business’ edge arises from Stella being a high-profile individual and the
6 BRAND VALUES
MISSION AND VALUES
1. HIGH QUALITY LUXURY: Stella sells contemporary fashion using innovative techniques to achieve superior quality, providing pleasure and emotional value (Kapferer, 2012). They have a focus on functionality and durability (McCartney, 2020). Use of innovation, paired with sustainability, raises brand awareness and improves the position in the
”We are agents of change. We challenge and push boundaries to make luxurious products in a way that is fit for the world we live in today and the future;
2.2 INTERNAL ANALYSIS
beautiful and sustainable” (McCartney, 2020)
mind of consumers (Guedes, 2018). 2. ENVIRONMENTALLY & ANIMAL FRIENDLY: Leather, fur and feather free since 2001, responsible throughout the supply chain, partnering with foundations/charities to enforce their commitment to the environment (Wolfe, 2018). 3. SUSTAINABLE LUXURY: Aims for a circular model where product and material are kept within the subsystem; initiatives outlined in Section 2.5 and within the Ethical sphere (Appendix 1). Working with expert suppliers worldwide producing materials that mimic the properties of real materials (Wolfe, 2018).
7
RESOURCE BASED VIEW (BARENY, 2007)
The Resource Based View (RBV) is an internal analysis tool used to evaluate Stella’s resources and core capabilities which enable them to flourish and sustain their competitive advantage (Barney, 2007). Stella constantly looks to utilize the firm’s resources to create value for customers for example sourcing or developing new innovative materials unique to the industry (Barney, 1991) . Stella emphasizes the importance of re-using resources within her business where possible to maximise their potential
2.3 INTERNAL ANALYSIS
and prevent waste (McCartney, 2020). The resources they possess are heterogeneous and their competitive superiority are outlined through Barney’s VIRO framework: Value, Rare, Imitable and Organisation (Appendix 2)
RESOURCES • Strong presence worldwide: Stella can standardize her brand globally since developing a worldwide following and enforcing her mission and values for sustainability (McCartney, 2020). Even though stores are located in on 55 cities including New York and Shanghai, they ship worldwide via the website online. • Sustainable since 2001 - the worlds first global fashion brand rooted in sustainability (Amed, 2015). Invaluable customer perception of the brand and their portfolio which is difficult (time and costly) to imitate (Danziger, 2020) • Reputation and brand awareness (product and corporate) : built upon chic contemporary tailoring, environmentally friendly practices and successful collaborations. This valuable resource which cannot be perfectly replicated and is the reason for her wide customer base and loyalty. Consumers will communicate the brand through WOM and social media if the brand has a memorable reputation, attracting new customers, especially when entering the NZmarket • Strong financial resources: finance innovation to keep up with the dynamic environment, from constant development of raw materials and to campaigns e.g. to educate consumer on the end life of products (RealReal Programme) (Figure 2). Processing and manufacturing are the most capital intensive. Stella remains financially confident even when when she brought out the brand from Kering Group in 2018, showing an operating loss of £10 million (McCartney, 2018)
8
COMPETITIVE STRATEGY Based on the Resource Based View (Section 2.3) and analysis of Stella’s business model including Figure 1, it is apparent that brand operate using a differentiation
-
strategy (Porter, 1985). They have huge competitive scope, being one of the leading examples for sustainability and innovation in the industry (Lewittes, 2018), with an ability to constantly deliver unique products; two features of differentiation strategy (Porter, 1985). Furthermore, Stella McCartney’s own personal profile gives them a competitive edge.
-
RELATIONSHIP Long standing relationships with global suppliers Exclusive Passion for sustainability
2.4 INTERNAL ANALYSIS
Figure 1 outlines Stella’s core characteristics that set her apart from competitors. The consistency and seamless integration of these six elements have developed strong
-
customer loyalty and memorable brand culture
-
(Kapferer, 2012).
-
PHYSIQUE: Sharp tailoring Modern femininity Ethical and sustainable Innovative products Creative
BRAND PERSONALITY Sustainable Stylish Responsible towards the environment and animal welfare Responsibility to educate consumers and fashion brands Unique and Trustworthy -
REFLECTION Style orientated Mature and conscious individuals Economically stable
-
CULTURE Brijsh Collaborajve with ethical charijes/fashion brands Experts in durable tailoring McCartney family name
SELF IMAGE Feminine Confident
Mature Middle class Mindful for their impact Expressive through fashion
Figure 1:The Kapferer Brand Identity Prism for Stella McCartney (Authors own, 2021)
9
SUSTAINABILITY Sustainability was a taboo subject when Stella launched in 2001, however the risky decision to be the first luxury sustainable brand to market has delivered high reward, especially since it is now a
Area of Sustainability The
Stella McCartney’s Current Activities Tool used to calculate the impact of their business on the environment (McCartney,
Environmental
2020). Enabling that innovation of new alternative materials, phasing out higher
Profit & Loss tool
impact materials or processes e.g., replacing the use of viscose from endangered
[EP&L]
forests for viscose from certified forests in (McCartney, 2020). Value created through constant improved efficiency of operations
‘megatrend’ (Hale, 2018). Since the Covid pandemic, the industry has seen
CleverCare
catastrophic disruption to its operations and has
programme 2017
Campaign educating people on the impact of washing, drying and taking care of garments on the environment
faced a reset to create a more transparent industry, accelerating sustainably focused business goals (Kent, 2020). Consumers’ concern for
2.5 INTERNAL ANALYSIS
sustainability has increased to the point that 56% of consumer say that sustainability is important when buying fashion items (Mintel, 2020)
The value of
After becoming an independent company in 2019 they launched new policies and
people: believe in
guidelines to their suppliers outlining requirements relating to social sustainability.
treating people
These include ‘our Code of Conduct, Responsible Sourcing Guide, Modern Slavery
fairly, with respect
Policy and Subcontracting Policy’ (McCartney, 2020). They became member of the
and dignity
of gender equality and rights for migrant workers (McCartney, 2020) (section 5.6).
therefore putting Stella in a good position to capitalize on and exploit this demand. Figure 2 : Stella McCartney’s Sustainable à acjvijes, (Eco Impact Report, 2020)
Ethical Trading Initiative [ETI] promoting workers rights and emphasis the importance
RealReal Programme Animal Welfare
Encourages resale and second life of clothing to prevent clothing contributing to landfill. Striving for long-term vision of a circular fashion industry (McCarteny, 2020) Strictly against animal testing and vegetarian. 2020 launched a faux fur containing 37% plant-based content therefore reducing use of petroleum-based materials, which contribute to GHG (McCartney, 2020)
10
2.0 EXTERNAL BRAND ANALYSIS
COUNTRY ANALYSIS – MACRO AND MICRO ECONOMIC CONSUMER PROFILE COMPETITVE SCOPE OVERVIEW OF SWOT AND PESTLE
11
ANALYSIS OF NEW ZEALAND MACROECONOMIC ATTRACTIONS NZ is commonly recognized for its ‘business-friendly environment’ (Appendix 5)
1st
Currency
out of 190 countries (World Bank,
2020).
2019)
New Zealand dollar
Macroeconomic attractions of New Zealand
Business language
GDP per capita
English
$41, 205
and political, social and economic stability (Department for International Trade,
• NZ has implemented desirable trading agreements encouraging economic growth and strong trading relationships with countries including Australia and China (DIT, 2020) • NZ has been ranked 1st for ease of doing business due to their strong
3.1 MACROECONMIC ANALYSIS
Ease of doing business
insights into investment environment and compassion for ethical trading whilst having a welcoming attitude for new business (World Bank, 2017). • Advances in technology (including digital) and logistics enabling efficient operations (Gov.nz,2019) • High consumption growth - Consumption per capita grew faster that other developed economies over the past decade (Auckland, 2016). • Tourism growth: Wealthy migrants and tourists make NZ an attractive destination for foreign brands (Section 3.6 ).
Economic growth
(Countryeconomy, 2019)
2.2%
Competitive ranking
(IMF, 2019)
19
Population
4.9 million (WorldBank, 2019)
(Countryeconomy, 2019)
12
ECONOMIC IMPACTS OF COVID Further to the pestle analysis, the economic outlook has obviously been impacted by Covid-19. The PESTLE analysis (Appendix 5) will ensure the expansion into NZ is aligned
Volatile consumer confidence: Globally consumers are cautious which
with the external forces affecting the business landscape, with Stella reacting
has caused a general shift to slower growth rate this year for the fashion
appropriately to achieve their brand objectives (Vignali, 2006).
industry.
The Economic impacts of Covid: •
In 2019, actual GDP per capita was NZD $38, 993 (World Bank, 2020). GDP shrunk by 12.2% between April and June 2020 as Covid closed borders and country went into lockdown (Jones, 2020).
3.2 MACROECONMIC ANALYSIS MACROENVIRONMENT
•
Fall in GDP saw household income fall and therefore spending reduced by 12.1%. Tourism fell by 96.8% due to the closure of borders, a significant impact on the economy as tourism contributes 5.5% to GDP.
•
Unemployment rate increased to 5.3% in Q3 of 2020 (highest jobless rate since 2016), from 4% before the pandemic (World Bank, 2020)
•
Inflation rates fell to 1.4% in Q3 of 2020 amid the pandemic, below market
POST COVID OUTLOOK New Zealand was announced Covid free on the 9th July; early closure of borders and lock down controlled the pandemic and prevented it from spreading (Jones, 2020). This was assisted by effective communication and public compliance. New Zealand's economy grew by 14% between July and September as a result, reflecting their stable, transparent and durable economy (Wilthers, 2020). Since recovering from Covid, economic confidence and consumer sentiment has improved, and business demand increased (IBISWorld, 2020). Consumer spending has remained constant since September since border restrictions are still in place.
expectations of 1.7% increase. Consumer Price Index (CPI) increased by 0.7% quarterly (World Bank, 2020). See Appendix 5 for extended PESTLE Analysis
13
ATTRACTION OF NEW ZEALAND – MICROECONOMIC, LUXURY FASHION
Greater transparency about sustainability: New Zealand consumers are demanding greater transparency with 41% expecting retailers to be more responsible (Sylvester, 2020).
NZ retail market performing well with an average
They are using their purchasing power to shop with brands that
growth rate of 4.4% – the market not yet saturated
reflect their values and deliver responsible environmental and
(Appendix 6) (JPMorgan, 2020) . Predicted growth of
social practices (Accenture, 2020).
womenswear market by 2.3% by 2024 reaching NZD 8.1bn (Section 3.6) (GlobalData, 2020).
3.3 MICROECONOMIC ATTRACTIONS
Sustainably focused country: Aim to be the first country to be truly sustainable (Sustainable
Accelerated digitalization: Online
Business Council SBC, 2019). NZ ranked 25th in the Global
shopping grew by 14.6%in 2020
Sustainability Index, which considers a country’s environmental
despite falling income and negative
policies and actions (Mulhen, 2020)
sentiment (Covid) (IBISWorld, 2020)
• Sustainability is a concern for 87% of NZ consumers and is the 3rd most important factor after quality and price (SBC, 2019) • NZ are welcoming sustainable brands & will contribute to Net Zero carbon emissions mission (2050) (Department of
Booming economy for luxury international fashion (Babin, MD of Bulgari, 2020) (Van, 2020)
Growing middle class sociographic (40% of the country) (Rashbrooke, 2020)
International Trade, 2020)
VALS Lifestyle: (Secjon 3.4) See Appendix 5 for PESTLE See Appendix 6 for GE McKinsey Matrix
14
STELLA’S NZ CONSUMER PROFILE Stella targets a wide age range of consumers ranging from from 22-45+
According to the VALS lifestyle system (Jackson and Shaw, 2009), the NZ
globally (Jackson & Shaw, 2010). Their target consumer appreciates high
customer is likely to be Actualizers; consumers of luxury with high wealth
quality, durable clothing that does not contribute negatively to the
and conscience for their impact, or experiencers; young consumers,
environment. Average price of clothing sold is £302.92 with prices ranging
enthusiastic about new possibilities (Jackson and Shaw, 2010).
up to £2,650 therefore typically attracting consumer with a higher budget (Edited, 2021). Stella’s emotional connection and personal relation to the target consumer has help her develop such a loyal following (Chen, 2017)
‘Mindful and responsible women that are modern and
3.4 EXTERNAL ANALYSIS
chic” (McCartney, 2020) The consumer profile of those in NZ will be very similar to those in the UK (Stella’s home market) due to similarities in culture (Appendix 4 Hofstede's Cultural Dimension), drivers of demand and fashion sense.
CONCERN FOR SOCIAL WELFARE AND GREATER ENVIRONMENTAL PROTECTION (SBC, 2019) 22-45+ YEARS OLD WOMEN (growing luxury market segment in NZ) ASPIRE FOR QUALITY OVER QUANTITY DEMAND FOR LOCAL PRODUCE (Sylvester, 2020)
15
COMPETITOR ANALYSIS AND MARKET POSITION On reflection from section 3.3 and analysis of the macroenvironment (Section 12, Appendix 4), NZ is an attractive market for Stella. Their global presence and relatable values to NZ consumers significantly
High Price
reduces threats in the new market (Figure 3). However, this may increase as foreign competitors may be inclined to enter the market due to NZ’s wide range of Free Trade Agreements with major economies and pro-competitive regulations (World Bank, 2020). With significant focus on ethics and a mid-price point, Stella will generate a competitive advantage with its unique position in the NZ market (Figure 4) (Porter, 1985).
PORTERS FIVE FORCES FRAMEWORK à (Figure 3) is used to analyse how atracjve NZ microenvironment is to
3.5 EXTERNAL ANALYSIS
Stella and to establish their main compejtors in this market (Figure 4)(Port, 1979). The model will help Stella to understand the atracjveness
• Competitive rivalry MEDIUM • Threat of new entrants of new competitors MEDIUM
Sustainable
• The bargaining power of suppliers LOW
of the industry and potenjal threats
• The bargaining power of buyers LOW
other than just compejtors (Johnson &
• Threat of substitute products
Scholes, 2010)
Unsustainable
MEDIUM Figure 3: Porters Five Forces Framework (adapted from Porter, 1985)
Low Price Figure 4: Sustainability vs. price positioning map of Stella McCartney's competitors New Zealand (Sharp, 2018) (Lee, 2017)
16
SWOT ANALYSIS When launching into NZ, Stella must play to their strengths, understand their weaknesses, capitalize on the opportunities and manage the threats. STRENGTHS - Dedication to Sustainability and Innovation (Figure 2)
WEAKNESSES
- Strong financial position – 50% partnership with LVMH
- High price point due to ethical standards, limiting consumer reach – can be hard
3.6 EXTERNAL ANALYSIS : SWOT ANALYSIS
- Market positioning (Luxury, Sustainable) (Figure 4)
to distinguish between mid – high fashion with broad price range (Edited, 2020)
- Strong, long lasting supplier relationship (McCartney, 2020)
- Stella admits to not being 100% sustainable or perfect (McCartney, 2020)
- Collaborations and partnerships with well regarded brands and
- Stella has been associated with brands that are not regarded sustainable which
organisations e.g. The Ellen MacArthur Foundation
may diminish their brand image e.g., Adidas
OPPORTUNITIES
THREATS
- Kiwis increasingly connected through e-commerce (Appendix 6)- increase by 14.6%
- Decrease in consumer demand due to the fall in disposable income and confidence as a
in 2021 despite declining incomes and nega\ve consumer sen\ment (IBISWorld, 2020) - Exploring new markets - Sourcing local materials to improve and innovate products (Jin & Cedrola, 2017) - Collabora\on with sustainable founda\ons e.g. Mindful Fashion New Zealand (MFNZ) who aim to build a full-circle tex\le industry (Sylvester, 2020) (Sec\on __ POES). - Accelera\on in sustainability in NZ - Aim to be the first country to be truly sustainable (Clark 2006) - Household disposable income annual growth rate (%) 2.6% higher than UK (OECD, 2020)
result of Covid-19 - As sustainability becomes a more important global trend, Stella USP may become less unique - Steep increase in prices of raw materials which may then be passed onto consumers – threat of falling demand due to higher prices and increased competition from low-priced retailers (Ezhova, 2018) - Business model could be replicated by existing and new competitors - Fall in tourism since borders closed due to Coivd-19, tourism feeds high end retail in NZ (decline in luxury sales by 23% in Q1 of 2020). Threat of low demand as tourism falls and local consumer attempt to protect local designer (Global Data, 2020).
4.0 MARKET ENTRY METHOD STRATEGIC PLAN STRATEGIC OBJECTIVES STANDARDIZE VS. ADAPTATION
17
STRATEGIC PLAN Having concluded that New Zealand is a strong economy, a safe business environment and a market where there is a scope for a new luxury fashion player, particularly one with a focus on sustainability and social responsibility, there is a potential gap in the market for Stella. Stella’s global presence and values will resonate with the target consumers in New Zealand. Stella will take a market development strategy (Ansoff, 1965) through the direct investment of a flagship store; a popular MEM used to build relationships and promote a more engaging experience of the brand’s essence (Kozinets & Sherry, 2002). With pressure on retail sales, due to an increase in online sales exacerbated by Covid, an experiential flagship store will generate status and engagement through all angles of The Experience Economy (Pine & Gilmore, 1999). The integration of technology in store
4.1 MARKET ENTRY METHOD
will be a particular focus since consumers are technologically savvy and the tech eco-system is thriving (Pine & Gilmore, 1999) (Great.gov, 2021) Flagships are an integral element to the internationalisation of a luxury retailer that intend to build awareness through their brand image and with less focus on profit (Moore & Christopher, 2010) (Kozinets & Sherry, 200). Set up costs are particularly high for this MEM due to bespoke design and high operating costs however the investment will support the marketing of this launch and increase the perception of the brand (Moore & Christopher, 2010). The strategic implementation of this store (Section 5.0) will become an attraction to local neighborhoods and tourists, once borders are re-opened and will be supported by online sales (45% growth in domestic spend) and promotional methods (Section 5.5) (NZ e-commerce Review, 2019).
STRATEGIC OBJECTIVES Objectives To ensure Stella achieves their organizational mission and successful
Primary
expand into NZ, SMART objectives must be set (specific, measurable, assignable,
Measure of Success
Timeline
Key Performance Indicators
Increase Brand Awareness through Flagship store
Increase the brand awareness amongst their target segment by 50%
By 2021
Increase instore customer acquisition
Increase purchasing instore by New Zealand consumers by 15%
Within the 12 months after the launch in New Zealand
• •
% increase in footfall % visitor to purchase conversion
Improve longterm customer relationships
Enhance consumers knowledge on sustainability
Within the 12 months after the launch in New Zealand
• •
Value satisfaction Customer retention rate
Increase Market Share
Increase market share in New Zealand by 10%
By 2023
• % total of new sales coming from the New Zealand market (customer acquisitions)
• • •
Number of site visits Number of social media interactions Increase in footfall in-store
realistic and timely) (Figure 5) (Johnson
4.2 MARKET ENTRY METHOD
and Scholes, 2010).
2
3
4
Figure 5: Internationalisation Objectives
MARKET ENTRY METHOD STANDARDIZE VS. ADAPT Retailers are faced with the GLOBAL-LOCAL DILEMMA as their international diversity (Vignali, 2001). The adaptation and standardization of the marketing mix will be critical to the success
PRICE STANDARDIZE
PROCESS ADAPT
PLACE STANDARDIZE/ ADAPT
PEOPLE STANDARDIZE
PRODUCT STANDARDIZE
PROMOTION ADAPT
of Stella McCartney’s MEM. The similarities in culture between the UK (Stella’s home country) and NZ (Appendix 4) indicate parallel purchasing behaviors which highlight the opportunity to standardize aspects of the marketing mix (Figure 6). Stella’s product and price strategy will be standardized as 46% of Kiwis are seeking more ethical products (Statz.NZ, 2020) and annual household
4.3 MARKET ENTRY METHOD
disposable income growing by 4.4% (OECD, 2021). Inevitably aspect of the mix will be adapted to maximise awareness in the new market (primary objective). Standardization is an attractive force to brands as it allows them to exploit economies of scale in production, R&D and promotion therefore reducing costs of the marketing mix whilst creating a sense of global uniformity (Vrontis, 2001). Although adaptation is a costly process (time and capital) it takes into consideration the macroenvironmental factors (Appendix 5) with a deeper consideration for culture and customer perceptions (Vrontis, 2001) With this is mind, Stella will adopt a balanced approach to the mix, towards the achievement of their strategic objectives (Section 4.2).
PHYSICAL EVIDENCE STANDARDIZE Figure 6: Stella McCartney’s 7P’S Marketing Mix (Authors own, 2020)
5.0 STRATEGIC IMPLEMENTATION 7Ps MARKETING MIX PRODUCT PRICE PLACE PROMOTION PEOPLE / PROCESSES / PHYSICAL EVIDENCE
PRODUCT
5.1.1 STRATEGIC IMPLEMENTATION: PRODUCT
Based on (Figure 8), Stella McCartney’s product assortment is dominated by Tops and Footwear along with a significant proportion of outwear (Edited, 2020) (Figure ___). According to Ansoff, the Market development strategy involves entering a new market with an existing, standardized product assortment (Ansoff, 1965). This is appropriate to the NZ environment since the consumer profile analysis reflect the compatibility of Stella’s current products with the NZ culture in terms of similar demographic and style interest (Section 3.4) (Onkvisit & Shaw, 2004). Standardizing products allows Stella to maintain their superior quality and see cost benefits through economies of scale (Meyer & Bernier, 2010). With outwear dominating the womenswear market sales in NZ, Stella could focus promotion on the outwear collection (Globaldata, 2020). This does not mean adapting their product assortment as outwear is already offered in existing markets, however this particular focus could drive local interest. Recognizing the needs of local customers will be crucial to success (Brown, 2014).
Figure 9: Wool and Yarn Production: source (Stella McCartney Eco Impact Report, 2020) Stella’s relationships with global suppliers and use of innovative materials to produce industry leading sustainable products will remain their core competency. The sourcing of their wool from NZ farmers based on their ‘commitments to animal welfare and environmental stewardship’ (McCartney, 2020) will increase product value with Kiwis as they care for the support of locals (Jin & Cedrola, 2017) (W1 + O3 TOWS Matrix). Stella could continue to develop strong relationships with other suppliers in NZ (outline in
Figure 8: Product Assortment of Stella McCartney (Edited, 2020)
figure ___ (TOWS S3 + O4) to improve brand resonance.
PRODUCT Figure 10 highlights aspects of Stella’s product range that are successful and those that should be divested including their fragrance line, due to low market share are growth rate (Vignali, 2001). • Penetrate market with Falabella Bag (Star) as world famous Stella product and true reflection of
High
functionality of the bag e.g. waterproofing (Akgun, 2014) • Expansion of Adidas range as a reliable product range. Adidas well known/popular in NZ therefore will boost brand awareness • Menswear collection is still relatively new but attracting a new consumer group, opportunities to develop a small, staple menswear range – significant investment needed
Market Growth Rate
5.1.2 STRETEGY IMPLEMENTATION: PRODUCT
ethical values. Further product development to maintain customer interest and improve STAR: The Falabella bag
QUESTION MARKS Menswear
CASH COWS Stella X Adidas
DOGS Fragrance line
Low High
Low Market Share
Figure 10: BGC Matrix Stella McCartney (Authors own, 2020)
Source: (Resort Stella McCartney, 2020)
PRICE Stella should both adapt then standardize her pricing to achieve the most success from this
LOWER Quality
HIGH Quality
Economic Pricing
Price Penetration
Price Skimming
Premium Pricing
price will be the most beneficial in New Zealand to achieving objectives (especially market share in the long-term) (section 4.2) and maximizing growth (Figure 11).
LOWER Price
international expansion. Setting a low price (penetration pricing) before slowly standardizing
STRATEGY 5.2 STRATEGY IMPLEMENTATION: IMPLEMENTATION: PRICE PRICE
• Engage customer and develop an understanding for the competitive environment (Kapferer, 2012) (Pwc, 2020). • Lower price to meet economic constraints: recovering consumer confidence since Covid
HIGH Price
Adapt: Price Penetration
and a social spending slightly lower (19.4% of GDP) than OECD countries (OECD, 2021) Figure 11: Price Positioning Matrix (Authors own, 2020) Standardization: Premium Pricing once established in the market (8-12 months) • Stella can increase brand globalization and improve communication flow • Economy expected to rebound fully in 2021 (Smyth, 2020), Stella can capture increased spending with higher price point. • Premium pricing solidifies Stella’s position in the luxury market; Communicate value creation, superior brand performance & ethical practice (Kapferer, 2012)
Lowering price before progressively increasing price and the volume sold until demand ceases to grow, will help Stella to establish the NZ consumers ‘symbolic value’ (Kapferer, 2012). Once standardized, the price territory becomes fixed and becomes a global price strategy (Kapferer, 2020). Increasing prices however is risky as new customers may switch to competitors and may result in a decrease in demand since luxury fashion is price elastic (Kapferer, 2020).
PLACE (DISTRIBUTION) Considering the market opportunities (Section 3.6) and the strategic objectives (section 4.2) this report recommends that Stella should enter the NZ market through a flagship store with a high level of technological integration (Section 5.4) The store will explore the concept of experiential retail (Upside Down retail) to meet the shift in consumer needs since the acceleration of phy-gital stores following Covid (McKinsey, 2020). The store will encompass the brand’s identity
5.3.1 STRATEGY IMPLEMENTATION: PLACE
through the design, location and digital elements (Chen, 2020) The location of the freestanding flagship store will be in Auckland which will efficiently capture demand in the new market (Section 5.3.2) (Figure 12). Auckland has become the largest contributor to NZ’s GDP and highly attractive retail destination for luxury (Pwc, 2020). Opening a freestanding store near NZ’s largest shopping mall (Sylvia Park, Auckland) will allow Stella to capitalize on the district’s reputation as an iconic shopping destination (Wilkinson, 2020). A longterm strategy, once the store thrives in Auckland may be to expand into other cities, such as the capital, Wellington. The flagship store will effectively reflect the world of Stella with a green and modern atmosphere and will strategically complement the brand’s portfolio of stores worldwide. Figure 12:: New Zealand Map (Google Images, 2021)
FLAGSHIP STORE OPENING The location of a flagship store within iconic cities is the most powerful MEM, adding value to the brand through enhancing their luxury status (Moore & Doherty, 2010). Stella will have full control over activities through a flagship store, allowing Stella to create an experiential showroom (Moore et al, 2010). Marketing activities through social media and the launch of the e-commerce website will support with
5.3.2 STRATEGY IMPLEMENTATION: PLACE
building awareness and enhance the effect of the flagship store opening.
GALWAY STREET ATTRACTIONS: •
Recent $350 million development, central Galway Street in Britomart; transformed into a pedestrian friendly space; attractive and accessible for the growing population in central Auckland. Since being revamped, it has become a destination spot for Kiwis to visit (Britomart, 2020)
•
Greener space in-line with Stella McCartney’s brand articulation Boutiques to rent that are the ideal creative space for sculptural designs, neutral tones and a green environment
•
Close proximity to Queens Wharf Port: tourist trap
•
Hub of high-end designer fashion stores Figure 13 & 14: Flagship store location Galway Street (Google Images, 2021)
PLACE (STORE) The decision to adapt or standardize place is dependent on factors including culture, nature of the new market and customer characteristics (Akgun, 2012).
“43% of shoppers more likely to spend more with retailers offering a meaningful in-store shopping experience” (Pine and Gilmore, 1999)
The physical presence of the store will be standardized with a free-standing flagship store and parallel design concepts to stores worldwide to maintain a consistent brand image. The online presence will be standardized to ensure global
5.3.3 STRATEGY IMPLEMENTATION: PLACE
communication is fluid and consistent across their e-commerce site (Keegan & Green, 1999). The design of the store begins with outlining its purpose which aids the opportunity to develop relationships with customers (Jackson and Shaw, 2009). Stella should aim to create an experiential and holistic experience through the enhancement of in-store technologies (Roggeveen, Nordfalt and Grewal, 2016) (Pine and Gilmore, 1999). Taking inspiration from their London store, 23 Old Bond Street, the NZ store will be a brandscape which integrates both physical and digital stimuli. The SOR framework (Section 5.3.5) and section 5.3.4 summarizes the design of the store (environmental and social stimuli) that encourage consumer response in store (Mehrabian and Russel, 1974). The investment to creating a digital and unique store experience in turn ‘reduces consumer’s price sensitivity’ and increases demand of luxury goods (Roggeveen, 2015).
Figure 15, 16 & 17: Flagship Store Design (Source: Stella McCartney, 2020)
PLACE (ASETHETIC) STIMULI (SOR FRAMWORK: SECTION 5.3.5)
Auditory atmospherics: Standardized Affects consumer's level of stimulation, mood and emotions (Konecni, 2008), which manipulates their response. Slow music tempo of abstract sounds to elevate the senses creates a relaxing environment which in turn should lead to increase in sales as shoppers browse for longer (Spence
5.3.4 STRATEGY IMPLEMENTATION: PLACE
2014) (Krishna, 2012). Visual atmospherics: Standardized Architectural Design
Multi-sensory experience
Natural lighting through large glass windows, with artificial
Standardized architectural
Bringing personal emotion into the
lights enhances the architecture and product features
atmosphere constructed from
space through sound, smell and light.
(McCartney, 2020). Conveys a sense of the outdoors through
reclaimed materials including
A congruent atmosphere achieves
natural sunlight and tonal, woodland colours (Spence, 2014).
timber flooring and brass
higher satisfaction levels and optimal
staircases. Contemporary interior
stimulation (Spence, 2014). Parsons
Olfactory stimulation: Standardized
dressed with recycled pine,
(2011) found that interactions
Scent is influential in luxury retailing, which should be
sourced from sustainable forests in
between sensory stimuli in NZ retail
congruent with the store aesthetic and brand identity
the Southland region. Store will
environments have a significant effect
(Bosmans, 2006, Parsons, 2009). Immerse the consumer in
exhibit Maori cultural artefacts and
on their behaviour in-store (Parsons,
their signature ‘STELLA’ fragrance that complements the
local art to embrace the NZ culture
2012).
clean air experience, a floral scent with sultry amber notes (McCartney, 2020)
5.3.5 STRATEGIC IMPLEMENTATION : SOR FRAMEWORK
PLACE – S-O-R Framework (Mehrabian and Russel, 1974)
STIMULUS INPUTS
ORGANISM COGNITIVE/EMOTION OF CONSUMER
Retail environmental characteristics
Multi-sensory experience
- Ambience
- Digital screens displaying fashion
- White and green colour scheme - Clean air system filtering 95% of
film (section ___) - AR mobile app scanning displays
pollutants and harmful gases Sustainability and nature - Materials: reclaimed & re-used including locally sourced - BNATURAL mannequins (bioplastic) - Recycled wood shelving - Green plants and trees capturing the outdoors
OUTPUTS Positive emotional response:
Consumer behavioral response
- Pleasure
- Impulse purchase (objective 1)
- Desirability
- Strengthen long term customer
Symbolic environment
- Excitement
- Communal space for consumers to
- Exclusivity
interact with the brand – Increased customer loyalty (Mehrabian and Russel, 1974) - Place as a brandscape that represents online presents and brand itself
RESPONSE
- Social buying
relationships (objective 3) - Word-of-Mouth building brand awareness - Share content on social media (UGC)
Figure 18: Stimulus-Organism-Response Framework: Store experience (Authors own, 2021) (Mehrabian and Russel, 1974)
INTEGRATION OF TECHNOLOGY 5.4 STRATEGY IMPLEMENTATION: INTEGRATION OF TECH
Stella is committed to integrating disruptive innovations along the supply chain which includes in store to attract customers and improve their experience (McCartney, 2020). Visual cues such as video graphics e.g. a Fashion Film (Section 5.5.3) and dynamic displays should be installed to ‘mentally transport customers into the experience’ creating ‘strong emotional connections’ (Roggeveen, Nordfalt and Grewal, 2016). As brick and mortar still dominate the NZ retail market, Kiwis are expecting the immersion of tech in-store since reopening after Covid (Visa, 2021). This digital narrative will enable Stella to deliver the objectives, in particular market share.
AUGUMENTED REALITY: Improved customer experience through personalization and immersion (McKinsey, 2019) • Stella AR app: used by scanning displays to see models wearing the products, displaying fit and how to style. Interactive experience reported to increase in-store footfall by 30% (Section 4.2, objective 2) (McKinsey, 2020). - Capitalize on the 42% of shoppers who use mobiles phones to research products when in-store (Visa, 2020) • Fashion Film displayed on large screens in-store (Section 5.5.3) also viewed over scommerce platforms (before launch of the store to build awareness).
(Google images, 2020)
PROMOTION With internet usage increasing by 2.4% annually, with social media usage increasing by 3.5% since 2019 in NZ, Stella should capture this growth through multiple channels
5.5.1 STRATEGY IMPLEMENTATION: PROMOTION
(Kemp, 2020). Similar to the UK, promotional methods must be innovative and communicated through multiple digital platforms in order to maximise its reach. Digital adoption has been accelerated by Covid-19 (McKinsey, 2020). The promotional mix will be standardized to ensure a consistent brand image is communicated worldwide, reducing costs and resources whilst aspects will be adapted to the cultural level to stimulate interest (Kapferer, 2012). The main purpose of promotion for Stella in NZ is to raise awareness prior to the opening of the store (Primary objective - Section 4.2) Gen Z and millennial consumers in NZ may be aware of Stella because of their global presence and social media platform however may be unaware of the extent to which they operate sustainably and their efforts to protect the environment. Once awareness is built, demand through their website and through the store can be a focus.
RAISE AWARENESS
CHANGE PERCEPTIONS
STIMULATE DEMAND
Figure 21: Stella McCartney Instagram feed (2021)
PROMOTION: POES MARKETING MODEL (Dietrich, 2014) TOWS: Appendix 3
Earned: Collaborate with charities and
S2 + O1 Use social media heavily throughout launch
organisations that are aligned with Stella’s mission and
W3 + O4 Collaborate with Mindful Fashion New Zealand (MFNZ)
5.5.2 STRATEGY IMPLEMENTATION: PROMOTION
S1 + O1 Communicate sustainable value though social media
brand principles e.g., Mindful Fashion New Zealand (Section 3.6). (MFNZ) (W3 +O4). 84% of consumers
Paid: Brand ambassador strategy using well-known NZ model, Stella
believe it is important for companies to support
Maxwell whose image and morals are inline with those of Stella’s. Using
earned awareness through the design of Meghan
her platform (5.4million Instagram followers) to deliver an inspiring
Markle’s wedding dress which obtained high coverage.
experience on social media and create engaging content to
This form of promotion could be used as a marketing
generate a larger following in NZ (Kapferer, 2020).
strategy that could be used in NZ.
Owned: Brand website (88.9% internet penetration) and social media (76% smartphone penetration) (JPMorgan, 2020) are crucial to connecting with consumers and leveraging the presence of the store (S2 +O1). Create visual and auditory content through mainly YouTube, Facebook and Instagram, delivering contextual information including personality, heritage and values (Kapferer, 2020). Offer rewards and memberships that can be used in-store to encourage footfall. Must continue to communicate their transparency online by addressing global and local issues that will resonate with NZ consumers (S1 + O1).
charitable causes (Mintel, 2019). Stella successfully
Shared: Use social media platforms to encourage consumers to share content in response to a purchase which creates a sense of community. Use trending hashtags e.g., as #StellaStore and #StellaStudio or invite ways of styling a particular product, helps to spread awareness through word of mouth and creates a testimonial for customers they are aiming to attract (Chaffey, 2019).
PROMOTIONAL METHOD Fashion Film
BRAND EXPOSURE Fashion film released on You tube, Facebook, Instagram and display in-store to draw a consumer’s attention to Stella McCartney’s brand identity and the launch of the store.
Fashion films are a form of experiential marketing
5.5.3 STRATEGY IMPLEMENTATION: PROMOTION
and can be displayed across multiple media channels, providing digital content to the target demographic. Digital promotion will communicate Stella’s luxury appeal therefore justifying their premium price (Soloaga & Guerrero, 2016). Capturing their attention and imagination should lead to higher conversions therefore deeper customer loyalty (Soloaga & Guerrero, 2016). This form of promotion responds to both the Entertainment and Educational aspect of the Experience Economy (Pine & Gilmore, 1999). Stella will benefit from capturing the awareness of customers and increasing sales whilst consumer’s gaining an insightful view of the brands commitments, feeling inspired by the film.
PROMOTION OF CLOTHING The purpose of the film is to promote both their sustainable practices, core values whilst promoting their in-store collections to attract consumers in-store and therefore generate sales. Focus on Stella’s A to Z manifesto (Appendix 1) to highlight prominent aspects of the brand
ATTRACTING NEW CUSTOMERS Digital films establish closer and more intimate relationships with customers due to their creativity to display their clothing and opportunities for interaction (Business of Fashion, 2020). Creates opportunities to create further promotional content in response from both Stella and consumers, creating a desirable community. Details of the new store in Auckland should encourage viewers to visit the store
EDUCATE CONSUMERS The purpose of the film is to build awareness (Primary objective- Section 4.2) amongst the new market and to project Stella McCartney’s ethical and sustainable principles through storytelling and emotional context. With Kiwi’s interested in Sustainability, the film will resonate with them and therefore increase their perceived value of the brand, creating a sense of personalization.
PEOPLE A standardized work environment, operating as one business, one team based internationally. The network of people behind Stella are indulged and passionate about the values and ethics which effects the behaviour of consumers (section 2.5) (McCartney, 2020). They foster
PEOPLE, PROCESS & PHYSICAL EVIDENCE
5.6 STRATEGY IMPLEMENTATION:
skills and look for constant improvement which is supported by the ‘Supplier improvement programme’ developed to provide training and support to challenges they face (McCartney, 2020). The new expansion into NZ may encourage the sourcing of local craftsman or partnerships to bring about long-term change and innovation (TOWS: S3 + O4). New employees in the Galway Street store will endure extensive training to improve their knowledge and skills of marketing personnel in order to nurture the customer experience (Kolter & Keller 2016).
PROCESSES
PHYSICAL EVIDENCE
Improved operations: Adapt
Tangible cues reflecting quality of the experience
- Develop loyalty programs (Frequency
or brand values: Standardize
Programs FPs) designed to reward customers,
- Memorable store ambience (section 5.3.4),
improving the relationship between Stella and
encouraging consumers to stay longer which
the consumer whilst creating cross-selling
increases chance of a transaction (Chaffey,
opportunities in the process.
2019). The use of sustainable materials used in a modern way will transform the notion of
- Offer free in-store styling consultations instore to new customers as a form of PR and
luxury whilst ensuring Stella communicates her sustainable values (Imms, 2019).
personalization, improving both functional (quicker, ease) and symbolic (confidence in
- Sustainable packaging using TIPA plastic film, a
purchase) (Radclyffe-Thomas and Natascha,
bio-based, fully compostable solution. This will
2018). Processes encourages people into the
assist NZ towards achieving their aim of all
new store, leading to an increase in
packaging being 100% sustainable by 2025
acquisition (objective 2). This acts as a form of
whilst standing out from competitor’s
promotion is customers value their experience
(McCartney, 2020).
and are leave feeling satisfied with the service (Radclyffe-Thomas and Natascha, 2018).
6.0 CONCLUSION This report details why, how and where Stella McCartney could expand their business into the New Zealand market. New Zealand is a market with real potential for Stella and with the right marketing plan and strategic implementation this could be an exciting opportunity for the business to develop in a new territory
7.0 REFERENCES • Arnold, Chris. Ethical Marketing and the New Consumer . Chichester, U.K: Wiley, 2009. Print. • Amed, I., 2015. Stella McCartney: Change Agent. [online] The Business of Fashion. Available at: <https://www.businessoffashion.com/articles/sustainability/stella-mccartney-change-agent> [Accessed 4 December 2020]. • Ansoff, H Igor. Corporate Strategy : an Analytic Approach to Business Policy for Growth and Expansion . New York: McGraw-Hill, 1965. Print. • Akgün, Keskin. “Standardization and Adaptation of International Marketing Mix Activities: A Case Study.” Procedia, social and behavioral sciences 150 (2014): 609–618. Web. • Barney, Jay B., and Delwyn N. Clark. Resource-Based Theory : Creating and Sustaining Competitive Advantage . Oxford: Oxford University Press, 2007. Print. • Barry Hill, R., 2019. Get Up To Speed On The Latest Way To Buy Conscious Clothing In New Zealand - Viva. [online] Viva.co.nz. Available at: <https://www.viva.co.nz/article/fashion/get-up-tospeed-on-the-latest-way-to-buy-conscious-clothing-in-new-zealand/> [Accessed 9 December 2020]. • BOF Team (2017). Fashion Films. [online] The Business of Fashion. Available at: https://www.businessoffashion.com/articles/fashion-films [Accessed 5 Jan. 2021]. • Collins, Roper. “Sustainability Practices: Trends in New Zealand Businesses.” Business strategy and the environment 19.8 (2010): 479–494. Web. • countryeconomy.com. 2019. Country Comparison New Zealand Vs United Kingdom 2021. [online] Available at: <https://countryeconomy.com/countries/compare/new-zealand/uk> [Accessed 4 January 2021]. • Chopdar, Balakrishnan. “Consumers Response Towards Mobile Commerce Applications: S-O-R Approach.” International journal of information management 53 (2020): 102106–. Web. • Cook, A., 2020. Augmented shopping: The quiet revolution. [online] Deloitte Insights. Available at: <https://www2.deloitte.com/uk/en/insights/topics/emerging-technologies/augmentedshopping-3d-technology-retail.html> [Accessed 20 January 2021]. • Chaffey, Dave, Fiona Ellis-Chadwick, and Fiona. Ellis-Chadwick. Digital Marketing . Seventh edition. Harlow, United Kingdom ;: Pearson Education Limited, 2020. Print • Chen, V., 2017. No Fur, No Foul: Stella Mccartney’S Eco-Friendly Fashion Proves That Tenacity Pays Off. [online] South China Morning Post. Available at: <https://www.scmp.com/magazines/style/fashion-beauty/article/2104776/stella-mccartneys-eco-friendly-fashion-fuelled-her> [Accessed 17 December 2020]. • Danziger, P., 2020. Coronavirus Will Force Fashion To A Sustainable Future. [online] Forbes. Available at: <https://www.forbes.com/sites/pamdanziger/2020/05/10/coronavirus-will-forcefashion-to-a-sustainable-future/?sh=dfa35dd52929> [Accessed 1 February 2021]. • Department for International Trade. (2020). New Zealand market guide - great.gov.uk. [online] Available at: https://www.great.gov.uk/markets/new-zealand/ [Accessed 10 Dec. 2020]. • Doole, Isobel, Robin Lowe, and Alexandra J. Kenyon. International Marketing Strategy : Analysis, Development and Implementation. 8th ed. / Isobel Doole, Robin Lowe and Alexandra Kenyon. Australia ;: Cengage, 2019. Print.
6.0 REFERENCES • DÍAZ SOLOAGA, Paloma. “Fashion Films as a New Communica\on Format to Build Fashion Brands.” CommunicaXon & Society 29.2 (2016): 45–61. Web. • Ezhova, K., 2018. New Threat to Retail: Rising Commodity Prices. [online] The Business of Fashion. Available at: <hwps://www.businessoffashion.com/ar\cles/retail/new-threat-to-retail-risingcommodity-prices> [Accessed 4 January 2021]. • Guedes, M., 2018. Sustainability as a key asset in establishing differen\a\on strategies for fashion brands. . [online] Core.ac.uk. Available at: <hwps://core.ac.uk/download/pdf/55616455.pdf> [Accessed 31 December 2020]. • Grewal, Roggeveen. “The Future of Retailing.” Journal of retailing 93.1 (2017): 1–6. Web. • Great.gov.uk. 2021. New Zealand market guide - great.gov.uk. [online] Available at: <hwps://www.great.gov.uk/markets/new-zealand/> [Accessed 22 January 2021]. • Hale, J., 2018. Sustainability as a Megatrend. [online] Morningstar, Inc. Available at: <hwps://www.morningstar.com/ar\cles/886933/sustainability-as-a-megatrend> [Accessed 28 January 2021]. • Hofstede (2020). Country Comparison - Hofstede Insights. [online] Hofstede Insights. Available at: hwps://www.hofstede-insights.com/country-comparison/new-zealand [Accessed 4 Dec. 2020]. • IBIS World, 2020. Online Shopping in New Zealand. Industry Research Reports. [online] Available at: <hwps://www.ibisworld.com/nz/industry/online-shopping/1905/> [Accessed 12 December 2020]. • Jackson, R., 2020. We Need To Talk About Fashion's Waste Problem. [online] The Spinoff. Available at: <hwps://thespinoff.co.nz/society/26-09-2020/we-need-to-talk-about-fashions-wasteproblem/> [Accessed 9 December 2020]. • Jones, A., 2020. How did New Zealand become Covid-19 free?. [online] BBC News. Available at: <hwps://www.bbc.com/news/world-asia-53274085> [Accessed 7 January 2021]. • Johnson, Gerry. et al. Exploring Strategy. . 9th ed. / Gerry Johnson, Richard Whiyngton, Kevan Scholes. Harlow: Financial Times Pren\ce Hall, 2010. Print. • Jin, Cedrola. Product InnovaXon in the Global Fashion Industry. New York: Palgrave Macmillan US, 2017. Print. • JPMorgan, 2020. 2019 Global Payments Trends Report. 2019 J.P. MORGAN GLOBAL PAYMENT TRENDS. [online] Available at: <hwps://www.jpmorgan.com/europe/merchantservices/insights/reports/new-zealand> [Accessed 1 January 2021]. • Kapferer, Jean-Noël., and Vincent. Bas\en. The Luxury Strategy : Break the Rules of MarkeXng to Build Luxury Brands . 2nd edi\on. London ;: Kogan Page, 2012. Print. • Kemp, S., 2020. Digital 2020: New Zealand. [online] DataReportal. Available at: <hwps://datareportal.com/reports/digital-2020-new-zealand> [Accessed 10 December 2020]. • Kent, S., 2020. Fashion's Sustainability Goals Threatened By the Crisis. [online] The Business of Fashion. Available at: <hwps://www.businessoffashion.com/ar\cles/sustainability/can-fashionssustainability-drive-survive-the-covid-19-crisis> [Accessed 3 December 2020]. •
Kozinets, Sherry. “Themed Flagship Brand Stores in the New Millennium.” Journal of retailing 78.1 (2002): 17–29. Web.
7.0 REFERENCES • Lewittes, E., 2018. 7 Luxury Brands That Let You Shop For A Cause. [online] Forbes. Available at: <https://www.forbes.com/sites/forbes-personal-shopper/2018/08/19/7-luxury-brands-that-let-youshop-for-a-cause/?sh=100e436e57a6> [Accessed 16 January 2021]. • Lee, J., 2017. 5 of New Zealand’s Best Ethical and Sustainable Fashion Labels. [online] Good On You. Available at: <https://goodonyou.eco/new-zealand-best-ethical-fashion-labels/> [Accessed 15 January 2021]. • McDonald, Malcolm. Marketing Plans : How to Prepare Them, How to Use Them . 6th ed. Amsterdam ;: Elsevier Butterworth-Heinemann, 2007. Print. • Moore, Doherty. “Flagship Stores as a Market Entry Method: The Perspective of Luxury Fashion Retailing.” European journal of marketing 44.1/2 (2010): 139–161. Web. • MBIE.Govt.nz. Copyright protection in New Zealand | Ministry of Business, Innovation & Employment. [online] Available at: https://www.mbie.govt.nz/business-andemployment/business/intellectual-property/copyright/copyright-protection-in-new-zealand/ [Accessed 2 Feb. 2021]. • Mindfulfashion.co.nz. 2020. Mindful Fashion NZ. [online] Available at: <https://mindfulfashion.co.nz/> [Accessed 9 December 2020]. • McCartney, S., 2021. Social sustainability | Stella McCartney. [online] Stella McCartney. Available at: <https://www.stellamccartney.com/experience/en/sustainability/themes/social-sustainability/> [Accessed 1 January 2021]. • McCartney, S., 2021. Stella McCartney. [online] Stella McCartney. Available at: <https://www.stellamccartney.com/experience/en/about-stella/> [Accessed 1 November 2020]. • Mowbray, J., 2020. NZ Report Suggests Way To Textile Circularity | Materials & Production News | News. [online] Ecotextile.com. Available at: <https://www.ecotextile.com/2020120827104/materials-production-news/nz-report-suggests-way-to-textile-circularity.html> [Accessed 9 December 2020] • Moore, Doherty. “Flagship Stores as a Market Entry Method: The Perspective of Luxury Fashion Retailing.” European journal of marketing 44.1/2 (2010): 139–161. Web. • Mkhize, N. and Ellis, D., 2018. Consumer Cooperation In Sustainability: The Green Gap In An Emerging Market. [ebook] Available at: <https://www.researchgate.net/publication/325478270_Consumer_Cooperation_in_Sustainability_The_Green_Gap_in_an_Emerging_Market> [Accessed 9 December 2020]. • McKinsey & Company. 2020. Elevating customer experience excellence in the next normal. [online] Available at: <https://www.mckinsey.com/business-functions/operations/our-insights/elevatingcustomer-experience-excellence-in-the-next-normal> [Accessed 22 January 2021]. • Mintel. 2020. Companies’ charitable work affects consumers' spending. [online] Available at: <https://www.mintel.com/press-centre/social-and-lifestyle/givingtuesday-73-of-americans-considercompanies-charitable-work-when-making-a-purchase> [Accessed 19 January 2021]. • McKinsey (2019). Enduring Ideas: The GE–McKinsey nine-box matrix. [online] McKinsey & Company. Available at: https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/ourinsights/enduring-ideas-the-ge-and-mckinsey-nine-box-matrix [Accessed 27 Nov. 2020].
7.0 REFERENCES • Mulhen, O., 2020. New Zealand - Ranked 25th in the Global Sustainability Index. [online] Earth.Org - Past | Present | Future. Available at: <https://earth.org/global_sustain/new-zealand-ranked25th-in-the-global-sustainability-index/> [Accessed 1 January 2021] • Nordea. (2020). Foreign direct investment (FDI) in New Zealand - Investing - Nordea Trade Portal. [online] Available at: https://www.nordeatrade.com/en/explore-new-market/newzealand/investment [Accessed 7 Jan. 2021]. • Onkvisit, Sak., and John J. Shaw. International Marketing : Analysis and Strategy . 4th ed. New York ;: Routledge, 2004. Print. • OECD. Social protection - Social spending - OECD Data. [online] Available at: <https://data.oecd.org/socialexp/social-spending.htm> [Accessed 1 January 2021]. • The OECD. 2021. Household accounts - Household disposable income - OECD Data. [online] Available at: <https://data.oecd.org/hha/household-disposable-income.htm> [Accessed 17 January 2021]. • Pwc, 2020. Rebuild: New Zealand Retail. [online] PWC. Available at: <https://www.pwc.co.nz/pdfs/2020pdfs/rebuild-nz-retail.pdf> [Accessed 10 January 2021]. • Pine, Gilmore. “Welcome to the Experience Economy.” Health Forum Journal 44.5 (2001): 10–. Print. • Porter, Michael E. Competitive Advantage : Creating and Sustaining Superior Performance . Export ed. New York ;: Free Press, 2005. Print • Pine, Gilmore. “Welcome to the Experience Economy.” Health Forum Journal 44.5 (2001): 10–. Print. • Porter, Michael E. Competitive Advantage : Creating and Sustaining Superior Performance . Export ed. New York ;: Free Press, 2005. Print. • Rashbrooke, m., 2020. New Zealand's astounding wealth gap challenges our 'fair go' identity | Max Rashbrooke. [online] the Guardian. Available at: <https://www.theguardian.com/world/2020/aug/31/new-zealands-astounding-wealth-gap-challenges-our-fair-go-identity> [Accessed 16 December 2020]. • Sbc.org.nz. 2019. The influence of sustainability on New Zealand consumers - SBC. [online] Available at: <https://www.sbc.org.nz/news/2019/the-influence-of-sustainability-on-new-zealandconsumers> [Accessed 8 January 2021]. • Sharp, R., 2018. 7 brilliant New Zealand fashion labels you need to know now. [online] Grazia. Available at: <https://graziamagazine.com/articles/7-brilliant-new-zealand-fashion-labels-you-need-toknow-now/> [Accessed 14 January 2020]. • Sirgy, Lee. “Setting Socially Responsible Marketing Objectives: A Quality-of-life Approach.” European journal of marketing 30.5 (1996): 20–34. Web. • Smyth, J., 2020. New Zealand Inc Reaps Benefit Of Hard And Fast Covid Lockdown. [online] Ft.com. Available at: <https://www.ft.com/content/912d28d1-b233-4e18-9af4-7fa84ea3b927> [Accessed 4 January 2021]. • Tmf-group.com. 2021. Top 10 challenges of doing business in New Zealand. [online] Available at: <https://www.tmf-group.com/en/news-insights/business-culture/top-challenges-new-zealand/> [Accessed 2 February 2021].
7.0 REFERENCES • Eco Impact Report 2020. (2020). [online] Stella McCartney. Stella McCartney. Available at: https://www.stellamccartney.com/cloud/smcwp/uploads/2020/09/EcoImpact_2020_03_EB_v9_FINAL.pdf [Accessed 2 Dec. 2020]. • Spence, Puccinelli. “Store Atmospherics: A Multisensory Perspective: STORE ATMOSPHERICS.” Psychology & marketing 31.7 (2014): 472–488. Web. • The Full Download, 2019. 2019 New Zealand eCommerce Review. [online] The full download. Available at: <https://thefulldownload.co.nz/sites/default/files/2019-06/full_download_2.pdf> [Accessed 6 January 2021]. • Vignali, Vrontis and Vranesevic, 2006. Marketing and Retailing Strategy [online] Available at: <https://online.manchester.ac.uk/bbcswebdav/pid-12070249-dt-content-rid53687608_1/courses/I3133-MATS-34531-1201-1SE-037907/Marketing%20Text.pdf> (Accessed: 14 January 2021). • Vrontis, Demetris. Integrating Adaptation and Standardisation in International Marketing : the AdaptStand Modelling Process. Manchester: Manchester Metropolitan University, Business School, 2001. Print. • Visa.co.nz. 2020. What's up with consumers in New Zealand?. [online] Available at: <https://www.visa.co.nz/partner-with-us/market-insights/whats-up-with-consumers.html> [Accessed 5 January 2021]. • Watts, Geoff, and Julia Fowler. Edited.com. London, England: EDITED, 2009. Print. • World Bank., 2021. New Zealand | Data. [online] Data.worldbank.org. Available at: <https://data.worldbank.org/country/NZ> [Accessed 1 February 2021]. • Wolfe, I., 2018. How Ethical Is Stella McCartney?. [online] Good On You. Available at: <https://goodonyou.eco/how-ethical-is-stella-mccartney/> [Accessed 1 January 2021]. • Google.com. (2019). Google Images. [online] Available at: https://images.google.com/?gws_rd=ssl [Accessed 2020].
4.0 APPENDIX
ETHICAL SPHERE MODEL An ethical sphere allows Stella McCartney to identify the key ethical values and
A TO Z MANIFESTO (McCartney, 2020)
their appropriateness for marketing purposes (Wolfe, 2018).
During the global pandemic, Stella developed the A to Z Manifesto; a guide on how
increasing the use of repurposed/innovation materials and creating solution to challenge environmental issues. Stella does not let her commitments to
C for Conscious: A constant awareness for current environmental issues
Clever Care Waste Compensajon
Biological: Viscose from Renewable CHARITIES / sustainable sources FOUNDATIONS forests (decompose) Education on Technical: ENVIROwaste and nonNMENTAL consumption renewable CARE BUT no loss Organic Cotton of quality e.g VEGAN Eco friendly Nylonà MATERIALS LABOUR stores ECONYL RIGHTS
Fur-Free-Fur
Vegetarian Leather
Sustainable Wool
consumers who this innovative algorithm (Thomas, 2020)
business and accepts that the brand is perfect
The Real Real Ellen MacArthur Foundation
empower her core values and enforce her sustainable message to the industry and
A for Accountable: Stella takes responsibility for every aspect of her
sustainability hinder the quality or sacrifice their luxury image.
INN O MA VATI TER VE IAL S
APPENDIX 1: ETHICAL SPHERE & A TO Z MANIFESTO
This model can conclude that the brand highly values the minimization of waste by
they stay accountable through mapping out their DNA and prospects. They aim to
Ethical Trading Initiative (ETI) Social Figure __: Stella Sustainability McCartney’s Ethical Sphere UK Modern Model, (Authors own, 2020) Slavery Act (Arnold, 2006)
and animal welfare. Stella and her team have a genuine care for such issues therefore constantly innovate to reduce their impact on the environment. Stella educates others to be more environmentally conscious (McCartney, 2020)
O is for Organic: The ‘use of organic cotton to create products in a way
that enriches the environment and improves conditions for farmers’ (McCartney, 2020). Organic cotton prevents the use of toxic pesticides, increases water conservation and improves soil health therefore promoting a healthy ecosystem (McCartney, 2020)
W is for Womanhood: champions of women’s rights especially in third
world, production heavy countries. Stella champions equality in the workplace and continues to campaign for equal pay in the workplace (O’Connor, 2017)
VRIO FRAMEWORK (Barney, 1991)
The key concepts within the VIRO Model are the analysis of the firm’s resources and the sustainable compejjve advantage. The resources outlined in secjon 2.3 are valuable, rare, hard to Imitate and internal organizajon (VIRO) (Barney, 1991)
VALUBLE
IMITABLE
1. Strong presence worldwide
1. Costly to imitate Stella’s powerful global presence and impressive eco-store; take commitment to the brands ethos, mission and customers (Arnold, 2009)
2. Sustainable since 2001 – ‘first mover advantage’ bosting customer perception of the brand and their portfolio
2. Hard to imitate level of sustainability since materials are expensive however higher demand (especially since Covid) therefore resources more accessible(Danziger, 2020)
3. Reputation + Brand awareness: Reputation identified as one of the top intangible resources for business success (Hall, 1992)
3. Stella’s brand reputation is imperfectly imitable as it has taken years to develop and
4. Strong financial resources creating opportunities to invest in external
APPENDIX 2: VIRO FRAMEOWRK
environments
generate brand loyalty à a source of competitive advantage 4. Stella’s long-lasting profitability and partnership with LVMH is hard to imitate
RARE
INTERNAL ORGANIZATION
1. Rare global presence in comparison to competitors with flagship stores in 55
1. Stella’s worldwide brand is strategically organized through a network of
fashion cities (McCartney, 2020). Stella were also the worlds first global fashion
suppliers, distributors and management systems who work synchronously
brand rooted in sustainability (Amed, 2015)
to ensure brand alignment worldwide.
2. Very rare position to be the leading sustainable brand in the market – transparency and values increase rarity (Newman, 2020) 3. The control over vegan materials through worldwide suppliers and sustainable practices created a sense of exclusivity and uniqueness 4. Rare financial position in the market; Few competitors in the industry possess such strong financial resources, increasing ability to exploit opportunities e.g. expansion into new market.
2. The sustainability of the brand is extremely well organized, with the ethics and morals at the heart of the brand – constant innovation to improve sustainable practices (McCartney, 2020) 3. Reputation runs through the brand and is important to all employees and shareholders - is organized and captures significant value 4. Financial resources of Stella can be used to strategically to invest in new opportunities and challenge threats, which creates value
STRENGTHS
TOWS MATRIX
APPENDIX 3: TOWS MATRIX
Appendix 1 : Developed using the findings SWOT analysis, see Section __
1.
Dedication to Sustainability (USP)
WEAKNESSES
2.
Strong financial position
1. Generating brand awareness
3.
Market positioning
2. Not 100% sustainable
4.
Strong, long lasting supplier relationship
3. Associations with unsustainable brands
5.
Collaborations and partnerships with well regarded
inc Adidas & H&M
brands and organisations
OPPORTUNITES
S+O
W+O
1. Kiwis increasingly connected through and social media
1 + 1 Communicate sustainable values though social media
1 + 3 Communicate sourcing on NZ wool for products
2. Exploring new markets
1 + 2 Communicate USP at launch
3 + 4 Collaborate with Mindful Fashion New Zealand
3. Demand for local produce from NZ consumers
2 + 1 Use social media heavily throughout launch
(MFNZ)
4. Partnership with sustainable foundation/communities
3 + 4 Develop new supplier relationships in NZ
1 + 2 High profile launch + PR
5. Huge importance for sustainability in NZ
6 + 5 Utilize sustainable influencers in NZ to enter new market
2 + 5 Build awareness of dedication to sustainability –
6. Annual growth in household disposable income 2.6%
2/1 + 2 Expand into new markets to increase share
not possible for fashion brand to be 100% sustainable
higher than UK
1 + 6 Target new consumers with iconic/focused products
THREATS
S+T
W+T
1. Decrease in consumer demand due to Covid
1 + 1 Communicate brand values at launch to attract demand
1 + 1 Drive demand through awareness of launch
2. Loss of USP as sustainability accelerate
2 + 2 Invest in innovation
3. Steep increase in prices of raw materials
4 + 3 Allow new customers to test products during launch
4. Business model could be replicated
3 + 4 Bargain supplier prices down to prevent increased cost
5. Fall in tourism since borders closed to NZ due to
transferred to consumers
Covid
2 + 2 communicate A to Z Manifesto to enforce mission and values 1 + 4 Use marke\ng tools to emphasize compe\\ve advantage and market share
“FRIENDLY but RESERVED” &
HOFSTEDEDS CULTURAL DIMENSION: NZ VS. UK
“OPEN but RESPECTFUL“
(Hofstede Insights, 2021)
(Govt.nz, 2021)
POWER DISTANCE: LOW • Hierarchy –convenience, superiors always accessible • Reliance on individual employees for
• Driven by competition/
• Willingness to realize impulses and desires
achievement and success
• Enjoyment in life
• Strive only for the best -
• 7.3 Happiness index 2020 (Global economy, 2020)
expertise
• Positivity and optimism
• Transparent and direct communication 58
22. 34
75.
66
69
NZ and the UK (Stella’s home country) share
INDIVIDUALISM: HIGH
muljple values and culture norms enabling LONG TERM ORIENTATION:NORMATIVE COUNTRY
• Self reliance and display inijajve
standardized communicajons . Stella is
• Respect for tradition
idenjfied by global cultures and is inoffensive
• Driven by concern for their environment
79 87
33. 51
UNITED KINGDOM
• Individualist society (lose knit)
NEW ZEALAND
APPENDIX 4: HOFSTEDES CULTURAL DIMENSION: NZ VS. UK
INDULGENCE: HIGH
MASCULINITY: HIGH
to most sociejes due to their values and passion for sustainability: Oyen behind latest global trends including fashion due to casual lifestyle and geographic isolajon (resourceful) (Govt.nz, 2020)
PESTLE ANALYSIS
POLITICAL
stability is an attractive force for international business for expansion • NZ is the first country to grant women unconditional right to vote: reflects their appreciation for kiwis and fair country (NZ.govt, 2020)
• Section ___: Economic impact of Covid: GDP, Inflation rate,
• Political stability Index; 1.51 in 2019); One of the worlds most stable democracies with a favorable leader, Jacinda Ardern (World Bank, 2020). Political
• Tax rate 10.5% up to $14, 000 (20% basic rate in UK) (Gov.nz, 2021) – increased sales in airports due to high tourism flow saw tax increase on luxury items
ECONOMIC
• International tourism contributing 4.4% to GDP in March 2019, with China dominating cross-boarder purchases (JPMorgan, 2019) (World Bank, 2020) Closure of borders since Covid saw significant decline to retail sales (Gov, 2020). Long term recovery plan is to invest in tourism flow
unemployment rate
• Consumer Price Index increased by 0.47% (Quarterly); inflation rate down to 0.58% 2021 from 1.71% 2020; low inflation rate contributes to economic stability, encouraging saving and maintaining international competitiveness (Howard, 1978) (World Bank, 2020) • 12 FTAs worldwide (economy greatly dependent on international trade) (Mfat.govt.nz, 2020). The most business-friendly country (World Bank, 2020)
SOCIAL
• Population 4.9m predicted to grow to 5.51m in next 25 years. Immense pressure on suppl chain/global infrastructure. Behavioral shift to sustainable consumption and increase price of materials to reduce impact of fashion • Consumer confidence – recovered since Covid from 84.8 (April 2020) to 114. Kiwis optimistic about the future (historical average of 120) (Morgan, 2020) • 87% of Kiwis concerned for sustainability + Covid accelerated importance (Whelan, 2020). Brands to become more CSR and transparent to reach demand
APPENDIZ 5: PESTLE ANALSIS
TECHNOLOGICAL
• Ranked 23rd for technological advancement (Gov.nz, 2020) –opportunity to advance tech to increase economy’s ability to adjust to changes in demand and global industry. Adoption of tech to survive e.g. AR, AI or RFID • Payment methods: e-commerce transactions 56% on card and 22% digital wallets. 49% growth in Buy Now, Pay Later services & 49% increase in customers (mainly millennials) (NZ e-commerce review, 2020)
LEGAL
• NZ received $5,4billion in FDI inflow in 2019, a $3.4b increase from 2018: due to business-friendly environment, low corruption levels and good political stability. Over half FDI is from Australia (Nordea, 2020). • Employment rights: strict regulations on working conditions, treatment of employee and wage • Under the NZ act, Automatic Copyright protection given to any original work; inclusion of copyright statement on business website (MBIE.Govt.nz, 2021)
ENVRONMENTAL
• Natural environment significant part of cultural identity: good air quality heightens quality of life, 80% of electricity from renewable sources (OECD, 2017). • Sustainably driven country/ethical consumers – mission of Net Zero carbon emissions by 2050 (DIT, 2020) • 380, 000 tonnes of textile waste imported to NZ every year, ending up in landfill (Mowbray, 2020). $124m scheme to reduce landfill (Jackson, 2020), NZ require improved data to enable better management of resource and investment into infrastructure/technologies to support circularity (Mowbray, 2020)
THE GE- MCKINSEY MATRIX (MCKINSEY, 1971)
This matrix supports the business decision towards investing its profits to continue strategic growth in the new market (McKinsey)
INDUSTRY ATTRACTIVENESS
BUSINESS UNIT STRENGTH
MEDIUM
MEDIUM
• Growth not yet saturated – strong growth potential with 8.1% of all retail through e-commerce (significant room for growth (JPMorgan, 2020)
SELECTIVE INVESTMENT
• Demand for sustainability with certifications inc NZGBC Green Star and
-
strong dedication to fair trade/living wage/transparency (Tearfund Ethical
APPENDIZ 6: GE MCKINSEY MATRIX
•
Differentiation – NZ consisting of independent, design-led labels:
Traditional, Heritage, independent àLow demand for mainstream high fashion in NZ (Lee, 2017)
BUSINESS UNIT STRENGTH MEDIUM • Assets and Capabilities – Sustainable / collaborations with wellknown brands & charities / Partnership with LVMH • Resource Based View Section 2.3 • Customer Loyalty – higher income consumers supporting brand values and ethics (Consumer profile Section 3.4)
transparent supply chain, innovative material. Long term:
INDUSTRY ATTRACTIVESS MEDIUM
Guide, 2020) – see page ___ NZ opportunities
Protect existing resources and products: sustainability, dominate womenswear market in NZ whilst expand in other cities.
-
Concentrate investments profitable elements and where risks are low. The launch of flagship store where high profit potential once captured the awareness and demand of Kiwis. Immersion of technology instore to encapsulate the four realms of the experience economy (Pine & Gilmore, 1999)
