The Everpurse
Contents .Executive Summary .Introduction .The Consumer .Pestel .Swot Analysis .Porters Five Forces .Four Ps (Marketing Mix) .Communication Platform
Executive Summary The Everpurse is French fashion house Dior’s innovative look on today’s technological approach upon the fast pace technology industry. The designer purse will demonstrate both a high fashion and functional element with the ingenious use of an incorporated portable charger. This amalgamation is in response to the growth in smart phone use and how technology has incorporated itself into the consumer’s everyday lives.
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Introduction
Dior’s current target market is pro-
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The following report is going
These marketing methods will then help to supply the consumto be analysing the most effecer with an in depth knowledge tive ways in which to launch Dior’s revolutionary Everpurse. and personal understanding In order to do so a vast number of the product at hand in this case the Everpurse, hopefully of marketing techniques will leading to a greater success and be introduced these include; a secure platform to launch the SWOT, Porters five forces, PESTEL, and the Four P’s. handbag.
Consumer jected at a professional female audience ranging from the 25-34 with studies showing around seventy-one percent of Dior’s current consumer market are between this age (Levi Busmaite, March 2015). With the Everpurse being a breakthrough in modern technology Dior is hoping to expand this consumer profile.
PESTEL PESTEL- Political, Economic, Social, Technological, Environmental, and Legal factors. Also, referred to as “The Macro Environment” is used by businesses to analyse and monitor the external environment and the way in which the product/ company will be impacted. (Thomas Bush, 2014)
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Dior currently manufactures in all seven continents around the globe. The French fashion house is protected when it comes down to the legal political restrictions in place for importation and exportation, meaning the need to transport goods long distances is cut out. Taking into consideration the recent EU referendum voting in favour to leave Europe, now would be a good time to produce and ship the goods. Stated in article 50 of the Lisbon treaty Britain has a two-year window to discuss the framework of ‘exporting and importing goods plus the basis for continued service trade to and from the EU” (Dan Milmo, The Guardian, 2016) Economic factors will have a drastic effect on the success of the Everpurse, with recent statistics showing that the UK expected growth is likely to slow down to around 1.2% in 2017 a 0.8% decrease from 2016 GDP of 2.0% due to the uncertainty following Brexit. (Online, PWC, 2016). This then means that sooner rather than later would be a crucial time to start shipping out the Everpurse before inflation rates begin to increase. Social factors have a significant effect on the success rate of a product. With Dior being one of the most well-known luxury fashion houses they must take certain steps in considering that their brand image is kept in a positive light. To do this, they consider things such as the social behaviour of each country. Social Media is one of the most significant influences on the Everpurse because of the effect it has on the publics perceptive. With media attention, likely to be on the A/W and S/S fashion shows around February and September time it should consequently has a positive effect impact on the success rate of Dior’s Everpurse. The Everpurse is Dior’s revolutionary innovation into the tech industry. The creation process would not be possible without the use of technology in many different forms, from the machines that help produce the structure of the bag, to the Dior website that advertises new products, they all help to shape the creation of the Everpurse. The system integrated pocket allows you to charge your smart phone device while on the go- the aim of this is to allow people the freedom to go on with their busy schedules without having the worry of losing phone battery. Per new market research published by marketandmarkets the portable charging market is expected to reach $10.94 billion by 2020, showing there is a high demand for this product. Statistics have also shown that a staggering 2.16 billion people worldwide own a smart phone, almost doubling since 2014 and is expected to rise to 2.87 by 2020 therefor demand for portable charging Is quickly rising. Dior needs to ensure that they take the necessary precautionary steps into ensuring the Everpurse sells with the correct policies and workplace standards. To do so they need to consider employment and product regulations as well as legislation changes. Health and safety will be at the forefront of the legal procedures Dior must follow as they are creating wearable technology. During prototype stages Dior used highly modified off the shelf components which provided consistency in all testing. Located within the system are internal microprocessors which are constantly checking the flow of energy between both the Everpurse and smartphone, as well as keeping a cool temperature during the charging. process.
ology Enviro m e
SWOT Another important
key aspect of this marketing report would be SWOT. Used to identity internal strengths and weaknesses alongside external threats and opportunities that may affect the future performance of a business. A company is likely to use SWOT to determine how to allocate resources in a way that helps produce a higher revenue growth and probability (Fashion marketing, 2009).
Opportunity
Strength
A strength of Dior releasing their revolutionary Everpurse is the fact that portable charging is extremely in demand now with society dependant on their smart phones. Dior’s key strength is the lack of competition in the current market, with only two other portable charging purses within the Industry-Power purple and the mighty purse. The advantage Dior has over these companies
is the popularity ratings they have worked hard to build over the past 71 years and by doing so they have earned themselves a strong position in the market industry. The Everpurse is Dior’s first step into a new era of wearable technology, a market the company has yet to explore. This shows innovation and development in a fashion forward brand.
Weakness The strengths of the Everpurse could also be weakening factors. Lack of competition in the market industry could be a difficulty for the fashion house to gain a reputable consumer base, as only small companies have branded into the portable purse industry. This could lead to Dior having to spend a considerably higher amount of money when it comes to promotional factors, as previ-
ously stated in strengths wearable technology is a market they have yet to branch into. Secondly, the Everpurse is specifically aimed at a female consumer audience which is cutting out half of the consumer market. On the other hand, though this does give Dior the opportunity at a later stage to branch out if the Everpurse proves to be successful and have a high demand.
SWOT
Arising opportunities for the Everpurse will be the major fashion events happening through 2017. Previously stated in Pestel analysis there is both the Autumn/ Winter and the Spring/ Summer fashion weeks that take place in February and September. These events will advertise the tech purse to the direct audience Dior are aiming for. With fashion week
comes a broad range of free advertisement from other companies ranging from the use of social media, Magazines and TV, this will therefor increase the Ever purses popularity. If all is seen to go well with sales, and general consumer feedback Dior may be interested in broadening their wearable tech brand to other garments of clothing and accessories.
Threat A major threat to the general success of the Everpurse is the threat Dior are taking by branching into an unfamiliar market. Although wearable technology is quickly on the rise, portable chargers with fashion accessories are extremely limited.
It is hard to know how well Dior’s Everpurse will fend for itself with little market research. A possible other threat would be other fashion brands re-creating an alternative to the Everpurse and selling it for a lower price.
Porters Five Forces A framework that anal-
ysis the level of competition within the market industry, and business strategy development. It’s made up of five different competitive forces that help to shape the industry and identity its weaknesses and strengths. Porters Five Forces are: Supplier power, Buyer power, Competitive rivalry, Threat of substitution, and Threat of new entry (management and Introduction, 2014).
Porters Five Forces Dior is the largest fashion House in the world with a net value worth 35.1 billion US dollars (Forbes, 2015). To stay in this position Dior must ensure they maintain the loyalty of their consumers and stores that commission their products such as Selfridges. Although buying power will be a lot weaker as in the current market there is no other luxury brand creating an item such as the Everpurse, other future brands may introduce a similar alternative at a lower rate therefor giving the buyer more power. Brand loyalty shall remain high though as Dior will be known to of introduced the first portable purse.
The technology and fashion industry are moving at a faster rate than ever before, and new material is constantly being developed. For example, American brand Ralph Lauren recently introduced the ‘Polo Tech Shirt’ valued at $295 (Ralph Lauren, 2017). If a competitor such as Ralph Lauren were to introduce a similar product the threat of substitution will increase a significant amount, especially if they create a cheaper alternative which they are likely to do. Consumers will then be more likely to go to the cheaper option decreasing the Everpurses sales.
Buyer Power Supplier Power When it comes to supplier power, a unique business product is likely to equal fewer choices. This leads to suppliers having more control and power in driving up their prices whenever they desire. The Everpurse was created over a significant amount of time due to the complexity involved within the design process, leading to suppliers sometimes feeling the need to increase prices for the time and effort. Dior is a global fashion house and currently holds the highest percentage of net value when it comes to other designer brands, meaning Dior is a well-respected Company. It is likely that with Dior being a classic popular brand is likely to have built up strong relationships prior therefor meaning fewer suppliers are needed any time soon. However, as Dior is introducing technology into their designs, something that they haven’t done before it is likely new suppliers must be brought in and incorporated into the design process.
Threat of Substitution Competitive Rivalry The Everpurse introduces both the fashion and technological elements of an item, meaning the brand must address competition from both markets. Dior has more power as they have very little competition in the market except for Power purple and the mighty purse which sales show haven’t done very well. In high competition with Dior are brands Chanel and Louis Vuitton, who also belong to the same LVMH group. Known for being in close rivalry with Dior and for using public figures to advertise products it won’t be long until these designer houses introduce their own alternative to the Everpurse, causing a strong rivalry.
Threat of New Entry Dior’s level of power can be quickly effected by other brands entering the market. Dior are now at risk of this as they are one of the very first brands to create a portable charging purse. Therefor it is extremely likely other brands will want to follow in Dior’s footsteps if the Everpurse sales are significantly high. This could include a broad spectrum of competitors ranging from luxury brands such as Louis Vuitton, Chanel and Prada to High street stores like H&M, Zara and Topshop. Another threat may be that people don’t see a need in the Everpurse and could find a cheaper alternative like Amazons portable external battery. Valued at £15.99 it’s a fraction of the cost.w
Marketing Mix
P The marketing mix also known as the four Ps- Place, Product, Promotion, and Price. A critical tool used to help businesses understand what their products can offer and how to plan for a successful product launch. The “tools can be used both to development long-term strategies and short-term tactical programmes” (Principles of marketing, 2000).
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Marie-Frand Pochna described Dior as “A stell brand in the luxury universe”. This has been seen in all aspects of the brand since it was developed in 1947. Every individual product has five different levels to it these being: Core benefit, Generic product, expected product, augmented product and potential product (Kotler and Keller, 2012). The most noticeable for the handbag would be Core, tangible and augmented. The portable smart phone charger being the core product as it’s the key benefit of the Everpurse. The main aim is to allow consumers the freedom of travel when we live in a generation so dependent on their phones. The augmented level of the product is the customer care Dior provides with all purchases and the warranty if anything is likely to go wrong giving consumers peace of mind in purchasing. The design of the Everpurse is quite straight forward like most of Dior’s other handbags,
Product
Dior’s Everpurse will be priced at £2,850. To analyse and understand the reasoning’s behind the price tag a statistical analysis will be introduced. There are currently just short of ninety different handbags available through Dior’s website, where it is likely the Everpurse will reside when released. The average price of the bags are around £2,000-£3,000. This will therefor make the Everpurse one of Dior’s more expensive handbags on offer, perhaps making it unaffordable to some of the brands consumers. Dior is all about exclusivity and therefor clients do not
Price
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Within the marketing mix, the process of moving a product from the seller to the user is known as place. To do so a relationship needs to be built with the supplier, customer and the resellers within the supply chain. Dior uses indirect distributions, meaning a product will go from producer, wholesaler, retailer to then the consumer. Which ultimately raises the product cost as each intermediary will benefit from a percentage of the profits made (Cleverism, online, 2014). Dior’s Everpurse will be sold both Online through their website and in store.
Place
Promotion deals with the communication aspect that takes place between a business and the consumer. Some forms of promotion would be television, social media, and magazines. Dior tends to focus on social media and magazines as it is often found that their intended consumers are more likely to focus on these platforms. Dior’s Instagram has a staggering 13.6 million followers which makes it a strong platform for the brand to promote the Everpurse. Allowing companies to quick-
Promotion
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Communication Platform The Everpurse is currently in the introduction stages, and with wearable technology being new to the fashion industry it is essential Dior markets their product in a way that entices consumers. Celebrity endorsement will be an effective mean of promotion as people are living in a society focused on ce-
lebrities, therefor Dior may use this mean to create a safety net for the consumers into trusting the Everpurse. Jennifer Lawrence may be an ideal candidate to promote the Everpurse because she is a well-known public figure, and is also from a generation that is reliant on their smart phones.
Bibliography http://www.dior.com/home/en_gb https://www.google.co.uk http://www.cgma.org/Pages/default.aspx http://www.marketing91.com http://www.pwc.co.uk http://pestanalysis.com https://www.positiveluxury.com http://www.nielsen.com/uk/en.html http://www.apple.com http://www.samsung.com/uk/ http://www.investopedia.com https://www.forbes.com https://www.theguardian.com/uk http://www.ralphlauren.co.uk/home/index.jsp Fashion Marketing by Mike Easey Managament and Introduction by David Boddy Principles of Marketing by Philip Kotler Designing Brand Identity by Alina Wheeler Brand Identity Now by Julius Wiedemann
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