FASHION ENTREPRENEURSHIP PROJECT FMMC 2015/16
MARKETING Pei-Yin Liu
INTRODUCTION METHODOLOGY 1. MARCO AND MICRO-ENVIRONMENT OF MARKETING 1.1 MARKETING COMPETITION 1.2 TARGET CONSUMER 2. MARKETING STRATEGY 2.1 COOPERATE WITH CHARITY 2.2 SEASON PROMOTION 2.3 SOCIAL MEDIA STRATEGY 2.4 FOCUS ON PERSONAL SALE 2.5 RISK 3. CHANNEL 3.1 PHYSICAL SHOP EXPERIENCE 3.2 MIXED ONLINE SHOP AND PHYSICAL SHOP 3.3 RISK OF ONLINE SHOP 4. LONG TERM STRATEGY 4.1 CRM SYSTEM MAKING 4.2 FUTURE TREND AND MARKET CONCLUSION BIBLIOGARPHY
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Introduction Within a company, the marketing department has a better understanding of consumer behaviour and marketing competition. The marketing department manager plays a significant role in helping the company to grow its revenue by increasing market share and contributing to the company’s growth and profitability. They also set the marketing strategy to coincide with the company’s main strategies, along with corporate aims and objectives. This includes increasing the market share, opening new channels of distribution, exploring a wider geographical market, and planning in-depth campaigns to achieve pre-set sale targets. The marketing department leads the other company departments in developing, producing, fulfilling and servicing products in order to meet the consumer’s demands (Small Business, 2016).
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Methodology In order to prove the research hypotheses, the research design uses multiple sources and investigates diverse data (Kumar, 2011). The proposed methodology utilises a range of observations from secondary and primary research. Also, this group project also incorporates an inductive and deductive approach to achieve the research target. The first stage of the research involved collecting secondary source information o b t a i n e d f ro m a c a d e m i c l i t e rat u re s , j o u r n a l s , a n d o n l i n e re s o u rc e s f ro m Nottingham Trent University library. This includes both qualitative and quantitative data, using descriptive and explanatory research (Saunders, 2009). Furthermore, t o u n d e r s t a n d t h e m a c ro a n d m i c ro environment analytical tools such as SWOT, PESTLE, 3c model and Porter’s Five Forces are applied. Maslow’s hierarchy of needs has been used to demonstrate how new brands can respond in detail to consumer needs. Also, with the use of Ansoff’s Matrix, future marketing plans can be made to fit in with an evolving market. These theories and models, combined with the secondary research, help to identify the main factors
in the chosen target market, enabling the research objectives of the company to be met (Saunder, 2009). Primary research was also undertaken with this project. Due to the limited timeframe and budget, this included going to two l o c at i o n s ( Ca m b r i d g e a n d Le e d s ) t o interview and observe various retailers by direct conversation and questionnaires. In order to generate a marketing strategy for the proposed new company, combined and compared with primary and secondary research by evaluating the existing marketing situation. A qualitative approach generally helps to solve complicated and sensitive issues in a study (Sekaran, 2003), usually involving i n t e r v i e w s o r o b s e r v at i o n ( S a u n d e r s , 2016). Thus, in this study the qualitative approach will be conducted by interviews with retailers and observation of shops. Also, questionnaires will be used to gain knowledge of consumer behaviour. Once research starts various difficulties may arise, such as limited budget and limited time. However, with thoughtful planning and a great survey, it could still be achieve an excellent project (Yin, 2003). The key focus
of this study is to provide market strategies for the new company. In the future, research can be conducted by observing more stores, interviewing more retailers, gaining more questionnaires from consumers and studying more international brands to gain further knowledge. By obtaining deeper information from these studies, it should become possible to make more efficiency market strategies.
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1. MARCO AND MICRO ENVIRONMENT OF MARKETING 1.1 Overview of position 1.2 Market competition The women’s market in the sportswear sector has grown significantly over the last halfdecade, with several retailers aiming to gain market share in recent years (Washington post, 2014). In addition, there is an issue of overconsumption of purchasing clothes and accessories in the UK. As consequence, this might damage the environment. Therefore, p e o p l e ’s a w a r e n e s s i s i n c r e a s e d b y purchasing clothes that are of better quality, with a longer life cycle causing people think about environment before buying one (BBC NEWS, 2015). Thus, applying Maslow’s hierarchy of needs, brand provides garments that keep consumer comfortable and support the health which match the basic needs in physiological level. Also material made from bioplastic, bamboo, and recycled fabrics can protect environment more efficiency as well as caring about employees. This fulfils a higher level of esteem, self-actualisation and belonging. This factor is clearly necessary for the brand USP (Unique Selling Point). It will become the vital element in developing the future fashion industry (Figure1).
According Anguelov (2015) the increase of fast fashion retail dominates the whole fashion industry, it has resulted in several negative impacts on the environment and society. For instance, ecological damage come from the high percentage of discarding old clothes, environment and labour problems. From observation in Cambridge shops, there are several walking jacket brands, including North Face, Berghaus and Jack Wolfsking (Appendix V). Although these brands provide technical advantages well as
Figure1 Maslow hierarchy of needs
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low price to gain market share, the proposed brand will develop products which are highly sustainable as the company’s key factor to gain a share of this niche market, as Figure 2 shows. Applying the 3C model developed by Dr. Kenichi Ohmae, the company offers a repair service as well as recycling of returned old jackets. The customer receives discount for a new item upon return. A sustainable product, the long-life outerwear jacket, which are an important expertise of brand that meet the demand of consumer need. By increasing awareness of ethical,
environmental and labour issues, people start to notice these factors, which will furthermore increase in future in fashion industry (Appendix I.3.2&3.4). In addition, the strength of the strongest competitor North Face is product design. On the other hand, the weakness is lacking sustainable (Appendix II.2.4). To take advantage of that, the proposed company provides products which match a sustainable concept, as shown in Figure3.
Figure 2 brand position map
Figure 3 3C model 70
1.3 Target consumer
2. Marketing strategy
The new brand market position is based on upper middle market, and according to ACRON structure the Loop meet D15 level (Appendix IX 1.3). The brand’s target consumers are women aged 25 and over. The main reason for targeting this age group is that compared with fast fashion, the proposed brand’s price is higher than those products. Thus, aiming the target consumer’s economic situation should be affordable to purchase jackets with high price. Also general they are more mature than youngest (Hustvedt, 2011). They are willing to buy the products which are long life as well as ecological rather than buying new clothes frequently, as shown in Figure4 Consumer profile.
2.1 Cooperate with charity
Figure 4 consumer profile
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As Greenwood (2013) states the majority of middle-market fashion brands do not have enough budget, in order to stand out in a competitive environment, there are some activities which can help the company increase sales for budgetary constraints. For example, link up with a charity, encourage bloggers to discuss the brand, upload website to include video
content. Therefore, the proposed brand will cooperate with charities in the UK, as shown in Figure 5. Particularity in the UK market people have high passion to donate to charities (Appendix I.3.3). For instance, making contract with voluntary and charities organisations, e.g. a consumer buys one jackets and 10% of the revenue will be donated to charities, also there are two examples as evidences to present it will be a great strategy (Figure6).
Figure5 Charities logos list in UK
Figure 6 Fashion brand cooperate with charities successful examples
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It is an essential way to build positive brand reputation. Thus, charities gain money from consumers to help people, brands also builds a reputation for social responsibility. Applying 3c framework, Loop core product is sustainable as purposed core brand’s skill, also to meet the future trend to take social responsibility that matches with customer’s expectations (Figure7).
According Gilbreath (2010) there are two main standards to evaluate the engagement of how deeply consumers are involved with marketing, which are meaning and marking. A l s o t h e b ra n d ’s m a r ke t i n g p ro v i d e s people’s conscious, positive experience is more valuable than advertising impression. Thus, through cooperating with charities consumers realize the brand’s message of
improving people’s live, on the other side, the proposed company can also increase revenue, shown as Figure8.
Figure 7 3C model
Figure 8 Engagement model 73
2.2 Season promotion As Appendix V shows, Rohan’s
manager said the market campaign normally just for season sale, such as winter and summer sale. However, company not only provide seasonal sale but also have cooperations with design schools and bloggers. Creating platforms for students to show their creativity based on sustainable female’s outwear topic. Furthermore, providing products for bloggers as well as students to wear and post on blogs, in order to catch c o n s u m e r ’s a t t e n t i o n , a l s o h e l p i n g p ro m o t e c o m p a n y seasonal sale event (Figure 9). Figure 9 Seasonal sale project proposal
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2.3 Social media strategy
Figure10 mix social media
Figure11 social media theory
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Figure 12 Social media plan
Gilbreath (2010) suggested interrupted m a r ke t i n g m a ke s t h e c o n s u m e r f e el annoyed and more inclined towards meaningful marketing. That is the main reason why social media has become more and more popular recently. There are five social media channels that will be the most popular ones in 2016, which are Facebook, Instagram, Periscope, Snapchat, You Tube (Startup fashion, 2015). Combining these channels, in the brand’s official website will be setting links. As a result the audience can more efficiently follow the latest news by surfing the brand’s website (as Figure 10 shown).
As Kelly (2013) reports there are three goals to evaluate social media for fashion brands, including increase brands reputation, retaining existing customers and leading generations, as shown in Figure11. Thus, the marketing department for the proposed company need to make some strategies in order to achieve targets (Figure12). Particularly compared with competitors North Face and Patagonia, these two brands post information focus on outdoor activities (Appendix IX 1.2), while Loop will also post healthy life styles to make information more attractive, also match Loop’s branding imagine.
Therefore, these strategies have adopted AIDA model, to meet audience d e m a n d a t t w o s t a g e s w h i c h a re awareness and interest; which means by holding events with charities as well as creating platforms to communicate with consumers. These marketing campaigns plan to catch people’s attentions and interests. As Greenwood (2013) stated discounts can encourage consumers to make a purchasing decision. At the stage of desire, quantities of product are limited as well as high quality of product. Furthermore, the regular event of winter and summer sales with sustainable products aimed at potential customers who really care about sustainable issue in fashion industry.
2.4 Focus on personal sale
2.5 Risk
As Appendix V shows, most outwear shops
As Postma (1999) stated consumer purchase
managers think the personal sale is the vital element to increase a store’s sales. Thus, the company will set standards of hiring employees, for example, people most have related working experience more than five years, also offer training every week after they become the employees. However, as Greenwood stated (2013) retail is not popular career choice in the UK, in order to ensure the quality of employee, as well as reduce employment costs, the company c a n c o l l a b o rat e b e t w e e n i n d u s t r i e s and universities. By offering students opportunities of internship to search for appropriate staff in the future.
behavior is not just about buying, the personal feedback will be more and more important. Thus, a new company should ensure every consumer will be offered the same service, also training and finding employees might make it hard to control the human resource budget. The plan have be made as shown Figure 13.
Figure 13 Staff training & Build consumer loyalty plan 76
3. Channel
According to Appendix VI most people chose to shop in the physical shop rather than online, which means the physical shop experience will influence a lot of consumers purchase decisions. Therefore, in order to ensure products are available in the right quantities in the right time in the right place, which means taking control of the brand’s image and quality. Also the company does not need to share profit margins with others. The company chooses direct distribution; distributes products directly from manufactures to consumers. As Greenwood (2013) stated one of advantages for companies is to set up Popup stores to test a location or trialling a new store in a low key way which will not damage the main stores. Thus, in order to save cost as well as gain more m a r ke t s h a re i n t h e future, company will set pop stores in various cities in the UK. 3.1Physical shop experience Over 50% of fashion consumers buy products in physical stores, which means the physical store
still plays a vital role in consumer’s buying process (KDMPOP, 2014). Moreover, there is little doubt that retailing experience plays a significant role as planning marketing strategy. According to Hines and Bruce (2007), the consumer stays longer and spends more than they had originally plan if the environment of the shops make them feel happy. As most flagship stores will be found in capital cities (Greenwood, 2013). However, due to budget issues the company will locate stores in second-tier cities, such as Leeds, Cambridge, Manchester, and Bath. These cities might be the first choice to establish a flagship store. Furthermore, before the shop open will make the advertising plan (Figure 14).
Figure 14 advertising plan 77
Additionally, retailers can create amazing experiences by focusing on several areas in-store, including visual merchandising, the decorations in the store window, music to create consumer’s mood, technology innovations, and provide a coffee or a bite to eat (KDMPOP, 2014). For example, the flagship store will create a real outdoor experience in-store, such as climbing, skiing, surfing. Through experience these activities let consumers have deep imagination or memory, as shown Figure 15. The proposed company will apply functional environment model, as shown Figure 16. By creating extraordinary atmospherics consumers can gain experience of doing exercise with friends, people inspire each other, also there are professional staff to explain how to
use products to help consumers gain more knowledge. Applying Maslow’s hierarchy of needs, customers have the experience that knowing the proposed brand provides jackets to keep them warm and support their health which fulfils the basic needs at the physiological level (Figure 17).
Figure 16 Functional environment model
3.2 Mixed online shop and physical shop Although as Appendix VI shows the majority of consumers think they will shop in physical shops rather than online stores, it is essential to save cost given that the budget for the proposed company will not be high to begin with. Furthermore, there are some significant changes in fashion retail industry in the past few years. For example, although some research indicates that consumers prefer physical stores, other studies show that online and mobile as shopping tools
Figure17Maslow’s hierarchy of needs
are also popular (KDMPOP, 2014). The online fashion market has significantly increased in UK, it forecast this market will be with high sale to reach £19 billion in 2019, particularly for woman, age group between 24 and 34 (MINTEL,2014). Thus, creating an online shop will be an essential channel in our business, there are some strategies of online shops. Firstly, to hire a professional photographer to edit the photos let the consumer get a better understanding of the product characteristics. Secondly, upload every product’s pictures with description of its stories. For example, the material is
Figure15 physical shop 78
recycled to save water and resources in order to achieve company’s mission to protect environment. Thirdly, combine with social media in one page, as result, consumers find surfing the internet convenient. Discount codes and coupons are women consumers’ favourite when shopping online (MINTEL, 2014). However, Loop will provide exclusives service instead of offering discounts, which means providing a returns service in order to ensure consumer trust in the proposed brand, they can have flexibility to return items if necessary. For instance, they can purchase online and return the order to the flag store. 3.3 Risk of online shop Although online shops are convenient for consumers and also save cost for the company, they sometimes cause some issues, for instance, the returns policy must be clear, price comparison should be available, people might consider quality of the online shop (wral, 2013). Thus, training employees to pay attention to this area is an essential strategy.
4.1 CRM system making 79
4. Long term strategy
One vital element of the loyalty programs focuses on building long-term relationships with the 20% of customers who drive 80% of profit (Gilbreath, 2010). Therefore, CRM system is the values strategy of relationship marketing, especial on the relationship between consumers and retailers (Gummesson, 2008). However, it seems this system have some disadvantages. For example, CRM system upgrading an older version which means employee require to learn the new systems, it might cause them sometimes to be unfamiliar with the new system, or fear to learn the system that they do not know (marketing weekly, 2014). Thus, the company will provide CRM classes to train employees to utilize CRM effectively, most importantly, to design this system customize to internal consumers, make the software easy to use for employees. As Gilbreath (2010) notes, consumers c o n s t a n t l y c h a n g e , i n o rd e r t o m e e t consumer’s demand, to build consumer loyalty also evaluate the new trend by consumer’s data. For example, to predict which trends will actually be worthy to attract audience’s attention and provide information to product development as resource, in order to manufacture products to meet consumer demands in the future.
According to Appendix V, shop’s managers think to contain consumer loyalty the best way is by sending e-mail and phone call as strategy to build friendship with consumer. By using this tool to collect consumer’s data, regularly sending information to consumer, make them feel emotionally engaged with the brand in daily life. For example, sending birthday e-mail offers special price during consumer’s birthday. 4.2 Word of mouth strategy I n o rd e r t o rea c h n i c h e m a r ke t s , t h e company offers two product core values: high quality and multi-functional. Thus, it is essential through word of mouth to promote the brand as company’s long-terms strategy. As Blythe (2008) stated in modern generation, word of mouth not just only through people face to face recommend, but also by social media, for example, people follower blogger’s opinion to purchase products. Therefore, as Blythe (2008) stated before purchasing items, people search information from the internet. The main reason why internet has become popular are to save time and money. As previously mentioned about social media strategy, in order to make purchasing more efficient, social media also connects with the online shop, as shown Figure18.
4 . 3 f u t u re t re n d and future market 4.3.1 Expand to men’s market The men’s market has grown faster than women’s market in recent years, the men’s market is worth £13.5bn in the UK (the i n d u s t r y. 2 0 1 6 ) . M o re o v e r, c o m p a re d with women, men are willing to pay even the clothes price is higher. The design differences between men’s and women’s styles are blurring (fashionista, 2015). Thus, our core product- jacket deign can be suitable for both women and men, which means it is easy to expand to men’s market. In terms of price strategy the proposed company will ensure that products remain high quality, the price can be higher than women’s wear, also it seems like the potential
market to grow in future. Young British males seem to have a higher interest in going to a gym, possibly finding a sense of belonging there, increasing their self-esteem (The Telegraph, 2014). This should be considered when developing the male market for the company, and maybe a collaboration developed with discounts for gym-goers, adding incentive to buy products from that specific company.
4.2.2 Expand to Europ ean market If the UK is no longer a member of the EU, this may impacts revenue for companies that operate within Europe, due to increased taxes (Appendix I.1.1 & 1.2). However, Europe shares similar weather and cultural background with the UK. Furthermore, the purpose of the brand’s product is functional outwear which is suitable in the
European market. Also, English is one of the most widely used languages in Europe. There are some benefits to remain within the EU including reduced paperwork, shared understanding of standards, and allowing a single currency to trade with, can reduced the currency considerations (NIBUSSINESSINFO, 2012). Thus, Statisa (2014) reported the top three ranked markets in the European fashion industry 2014 are Germany, the UK, and Italy. Therefore, for this project, Germany will be the first market the company tries to enter, selling existing products to the new market to expand company growth- linking with Ansoff’s Matrix model. Entering a new
Figure18 Perceived value of information model
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geographical market is a more risky strategy than market penetration, due to create new market (Figure 19). However, if company’s core competencies are related more to the specific product than to its experience with a specific market segment, then it will be an efficiency strategy to enter new market (Quick
MBA, 2010). The company provides the core product to ensure people keep warm, also emphasis sustainability of product made from recycled material, threat of substitute is low due to it being difficult for competitor to imitate. Thus, the company will set the European market as future target to enter.
Penetration
Product Development
Market Development
Diversification
Figure19 Perceived value of information model 81
Conclusion
In conclusion, the marketing d e p a rt m e n t s m o s t i m p o rt a n t t a s k is to improve sales, thus, in order to achieve the company’s goal, by cooperating with charities and holding seasonal promotions to increase sales. Fu r t h e r m o re , t h ro u g h m i x o n l i n e and physical shop, to increase brand awareness, particularly creating a unique retailing experience via a flagship store, and combining with social media to promote the brand. And last but not least, maintain consumer loyalty by using CRM system as well as word-of mouth as a long-term strategy. In the future the most important, strategy will be to develop the men’s market and also to expand into Europe. Both will be essential ways to increase the brand’s market share.
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LIST OF ILLUSTRATIONS Figure1: Maslow’s hierarchy of needs, author’s own Figure2: Brand position map, author’s own Figure3: 3C model, author’s own Figure4: Consumer profile, author’s own Figure5: Charities logos list in UK , [image online] available at: https://elenigemetriouapp.files.wordpress. com/2013/10/1pp.jpg [Accessed 26th March 2016] Figur e6: Fashion brand cooperate with charities successful examples, author’s own Fiugre7: 3C model, author’s own Figure8: Engagement model, author’s own Figure9: Seasonal sale project proposal, author’s own Figure10: Mix social media, author’s own Fiugre11: Social media theory, author’s own Figure12: Social media plan, author’s own Figure13: Staff training & build consumer loyalty plan, author’s own Figure14: Advertising plan, author’s own Figure15: Physical shop, [image online] available at: https://smartgiving.org.uk/page/donate-tocharity-the-smart-way?gclid=CMbHttq35MsCFR UW0wodo7kAqQ [Accessed 26th March 2016] Figure16: Functional environment model, author’s own
Figure17: Maslow’s hierarchy of needs, author’s own Figure18: Perceived value of information model, author’s own Figure19: Ansoff’s Matrix, author’s own
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