“Thanks to the democratisation and globalisation of innovation, brands and individuals from all corners of the world are now working around the clock to dream up and launch endless new products and services. Lower barriers to entry has gone from buzz phrase to reality, especially online.” (trendwatching,2013:online)
SUSIE HULL N0254475 FASH30077
CONTENTS 1. Introduction 2-3
2. Methodology
6-7
3. ASOS: The Company 11 3.1 Internal Analysis 12 3.2 Company Overview 13 3.3 ASOS International Business 13 3.4 Company Development and Financials 13
4. ASOS Branding 15 4.1 The ASOS Vision 16 4.2 ASOS Ambition 17 4.3 The ASOS Way 18-19
5. The Market 24-25 6. Aims and Objectives 28-29 7. Market entry 34 7.1 Entry strategy 35 7.2 Shipping, Returns and Distribution 35 7.3 Payment 37 7.4 Taxes & Import/Export Costs 37 7.5 Language 37 8. The Consumer 39 8.1 Target Market 40 8.2 Pen Profile 41 8.3 Consumer segmentation 44-45 8.4 Positioning 46-47
9. Marketing and Communication 51-53 9.1 Standardisation VS Localisation 54-55 9.2 Marketing Mix 56 9.2.1 Product 57 9.2.2 Place 67 9.2.3 Mobile and Apps 69 9.2.4 ASOS marketplace 70-71 9.2.5 Price 73 9.3 Promotion and Communication 74 9.3.1 Customer Service and Experience 75 9.3.2 Social Media 76-77 9.3.3 Marketing Campaign 82-83 9.4 Advertising 85-86 9.4.1 Online Advertising 87 9.4.2 Email Marketing 87 9.4.3 PR 87 9.5 The Launch 88-89 10.
Measuring Success 92-95
11. Risk Analysis 98-99 12. Finance 104-107 13. Conclusion 110 13.1 Timeline 112 13.2 Future recommendations 114-115 14.
References 118-119
15. Bibliography 122-128 16. Images 129-133 17. Appendix 133-146
MARKETING STRATEGY: ASOS BRAZIL
Fig 1
MARKETING STRATEGY: ASOS BRAZIL
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
01
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
INTRODUCTION
1
This report contains a marketing and communication strategy for the online retailer, ASOS, to expand and launch local operations in Brazil, increasing their international growth efforts and contributing to their ambition “To Become The World’s No.1 Fashion Destination For 20 Something’s” (asosplc,2012:online)
ASOS are visited by millions everyday and ship the latest trends to customers in 241 countries and territories and have 8 country specific sites. (asosplc,2012:online) They have 6 million active customers globally and are now focussing their energy on their international business with overseas sales worth 30-40% more than the domestic ones. (juststyle,2011:online) With solid company growth, availability of capital for investment and soaring predictions for future international sales, ASOS are poised for global expansion.
Research suggests, “thanks to the democratisation and globalisation of innovation, brands and individuals from all corners of the world are now working around the clock to dream up and launch endless new products and services. Lower barriers to entry has gone from buzz phrase to reality, especially online.” (trendwatching,2013:online) This suggests that the extensive accessibility of the internet allows for consumers to view a vast amount of information, products and services, assisting ASOS’s ambition “to become the world’s no.1 online fashion destination for 20 something’s”. (asosplc,2012:online) Nick Robertson CEO stated that, “the same girl living in the same town can effectively purchase from any brand in any country. It has opened up a whole new world,” (Thomson,R,2012:online) which is extremely beneficial for ASOS’s global expansion plans. Our domestic economy has therefore a ASOS would efforts into market and
Fig 2
MARKETING STRATEGY: ASOS BRAZIL 2
market has saturated and the weakened (Santi,A,2013:online) natural business decision for be to implement their growth the BRIC country, emerging Latin American hub, Brazil.
“Aim of winning the online global fashion race”
Furthermore, “Brazil has overtaken the UK to become the world’s sixth largest economy in the last couple of months, drawing the eyes of British marketers to Latin America. With a rapidly expanding middle class of about 90 million consumers, it is a market no brand can afford to ignore.” (Snoad,L,2012:online) This socio demographic shift in Brazil is extremely positive for ASOS as the distribution of wealth is changing. It also one of the youngest countries, with 65 million people aged 18 and under (rio2016,2012:online) giving ASOS a platform to target a new market.
To ensure a financial return on investment, consideration of budgets and performance measures have been made. A timeline and future recommendations have been considered to ensure longevity and success in the global market place as research suggests, “lack of market understanding or insufficient forward planning can blight a venture in years to come” (KPMG, 2010:online) Expansion into the Brazilian market is an integral part of their strategy to be a truly global retailer.
When taking into consideration ASOS’s positioning, evidence suggests, “the retail market presents a price gap effect. In Brazil most brands fall into either very low profile, or very high end brands.” (Anaya,S,2010:online) Brazil’s clothing market, which is worth £44bn, is dominated by domestic, mid-market, own-label multiples, but compared with the UK it remains incredibly fragmented, (Santi,A,2013:online) evidencing a gap which ASOS have the opportunity to fill. The strategy which has been devised, aims to deliver ASOS’s products and services through a country specific site as well as harness digital and future trends. It combines the balance of a standardised and localised approach in order to cater to the needs of the local market to consolidate and increase global market share and sales, generating greater revenue.
Fig 3
3
MARKETING STRATEGY: ASOS BRAZIL 4
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
02
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
METHODOLOGY
5
This strategy presents implementation of the previous research findings, which has been complimented by further primary and secondary research; this is to extend the discussion and debate on the recommendations presented throughout. Nick Robertson stated that, “when launching internationally, gaining an insight into the market is crucial and complex therefore in-depth customer research is vital. (draperssummit,2012:online)
Fig 4
MARKETING STRATEGY: ASOS BRAZIL 6
Fig 5
The qualitative primary research carried out in both the investigation and implementation projects has given an extremely valuable insight into the market from a first-hand perspective. A questionnaire was conducted for Brazilian consumers, mostly students living in Brazil, which gave valuable information into their fashion choices and these findings have been used as supporting evidence throughout. (please see appendix 1 for full primary research results) A short interview was also carried out with a Brazilian International Business Student at Nottingham Trent University who has lived in both Brazil and the UK, giving a well-rounded perspective on the fashion market and buying habits. Further primary research was conducted with various external industry experts, contributing to the validity of the report. Conversations via email with an associate from the UK Trade and Investment service also provided valuable information on the logistical and operational aspects of launching into Brazil as well as conversation, with an employee from a “not for profit� organisation, ABEST- international ambassadors for Brazilian fashion and experts in the market.
The report has been devised using marketing theory and business models which apply the practical principles of marketing and branding as well as the use of secondary contemporary sources such as trend forecasting websites, articles, reports and journals gave a further insight into the market, consumer and trends. The wide variety of sources used gave a variety of perspectives, ensuring the information was non-biased. To extend the research and awareness of the market, ASOS should visit relevant businesses in Brazil as well as gaining a first-hand insight into the consumer by conducting a series of focus groups. This was un-realistic to complete for scope of the project, however, Brazils increasing publicity from their economic and social growth, and as the hosts of the World Cup 2014 and the Olympics 2016, means that an extensive data has been published on the country; the convenience of modern technology allows for a large scope of instant information to be circulated as well as the accessibility of consumers. In conclusion, this report has been devised using the combination of a market led approach, based on consumer research and innovation, to a socially led approach based on social research and social innovation. (Green,J,2007:1)
7
MARKETING STRATEGY: ASOS BRAZIL 8
Fig 6
9
MARKETING STRATEGY: ASOS BRAZIL 10
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
03
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
ASOS: THE COMPANY 3.1 INTERNAL ANALYSIS
3.2 COMPANY OVERVIEW
3.3 ASOS INTERNATIONAL BUSINESS 3.4 COMPANY DEVELOPMENT
11
3.1 INTERNAL ANALYSIS The recommendations made have been contextualised against a SWOT analysis which was conducted in the previous research project on the internal environment, is presented in Appendix 2. The strengths, weaknesses, opportunities and threats of ASOS have been used to support the strategy throughout, as this will allow for them to replicate their strengths, reduce any risks and ensure the likelihood of a successful return on investment.
Fig 7
MARKETING STRATEGY: ASOS BRAZIL 12
3.2 COMPANY OVERVIEW ASOS.com is a global online fashion retailer offering more than 50,000 branded and own label product lines including petite, curve and maternity. It attracts 16.6m unique visitors a month, making it the second most visited apparel site on daily basis for 15-34 year olds in the world.(asosplc,2012:online) Fig 8
3.3 INTERNATIONAL BUSINESS Although over 241 countries can order on the global apparel site, ASOS are opening further country specific sites to cater to the local needs of the consumer. They are concentrating on removing barriers for their customers and improving their shipping proposition (asosplc,2012:online) If the UK business is ASOS’ cash cow, the overseas business is its emerging star. In mid-2012, overseas sales accounted for 65% of the business, compared with just 10% of overall turnover in 2007/08. (Hughes,2013:online)
Fig 9
3.4 COMPANY DEVELOPMENT With ASOS’s strong financial history and growth, evidence suggests they are in a position to invest globally and “Brazil presents great opportunity for UK businesses to test the waters of international trading”. (Kuschel,N,2012:online) They have a solid company history full of brand developments and extensions, therefore this launch will be a great innovative strategy to fuel their success further. Evidence from Fig 10 shows that their increasing growth.
Fig 10
13
MARKETING STRATEGY: ASOS BRAZIL 14
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
04
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
ASOS: BRANDING 4.1 THE ASOS VISION 4.2 ASOS AMBITION 4.3 THE ASOS WAY
15
The application of fashion branding concepts have been implemented within the expansion plan as one of the key objectives is to raise ASOS’s brand awareness globally and within the local market. It is vital that their DNA, core brand message and values are consistent throughout all markets and all channels of communication, even when adapting the content for the local market. This is to ensure the ASOS brand gets carried through the success of the global marketplace and are key to all stakeholders.
Fig 11
MARKETING STRATEGY: ASOS BRAZIL 16
4.1 THE ASOS VISION “ASOS is intently focussed on winning the online global fashion race. Understanding our customers and providing them with the most engaging experience is crucial to achieving that. The values comprising “the ASOS way” reflect our DNA and are at the heart of everything we do. They define who we are, what we do and how we do it.” (asosplc,2012:online) Fig 12
4.2 ASOS AMBITION “To Become The World’s No.1 Online Fashion Destination For 20 Something’s.”(asosplc,2012:online)
Fig 13
Fig 14
17
4.4 THE ASOS WAY ASOS’s core principles are stated within “The ASOS way” and are used throughout the marketing and communication strategy in order to keep brand alignment throughout.
Fig 15
MARKETING STRATEGY: ASOS BRAZIL 18
RESTLESSLY INNOVATIVE We don’t stand still Were brave We give it a go
PASSIONATE We are proud to be part of ASOS. We always give our best. We celebrate our success.
COLLABORATIVE AND RESPECTFUL We work together to get the job done. We grow ideas from within. We make things happen.
CUSTOMER OBSESSED We know our stuff inside out. We put our customers at the heart of everything we do. We know our customers love fashion and we understand what they want. Figs 16,17,18,19
19
MARKETING STRATEGY: ASOS BRAZIL 20
Fig 20
21
MARKETING STRATEGY: ASOS BRAZIL 22
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
05
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
THE MARKET
23
An analysis of the macro environment was conducted in the previous research project (see Appendix 3 for full PEST analysis) as there are many important external factors which will affect ASOS’s expansion into Brazil.
Brazil will become the world’s fifth largest economy by 2016. Fig 21
MARKETING STRATEGY: ASOS BRAZIL 24
Fig 22
Brazil has a stable political environment, with one of the largest democracies in the world (ciaworldfactbook,2012,onine) and World Bank projections suggest that Brazil will be the world’s fifth largest economy by 2016. (Rio,2012,online) Brazil has forward projections of inflation under 4% and current GDP annual growth rate of 5%(Jennings,H,2012:online), which is extremely positive for the online retailer. Brazil will show its strengths to the rest of the world as the host of the World Cup in 2014 and the Olympic Games in 2016, (Logue,A,2011:81) presenting a considerable amount of marketing opportunities for ASOS without being directly involved in the games. “Brazil is a country that should be on every marketer’s radar,”(Snoad,L,2012:online) and it is therefore important for ASOS to launch ahead of competitors. Positive evidence describes Brazil as being “the next hot tech market” as online shopping is becoming a habit to Brazil’s emerging middle class, of almost 100 million people, (Geromel,R,2012:online) putting ASOS’s digital proposition at an advantage. Furthermore e-commerce penetration is higher in Brazil than any other Latin American country, with 90.8% of internet users visiting retail websites, according to a report by consultancy comScore (Geromel,R,2012:online) and it is predicted that online retail growth will rise. (Galloway,S,2012: 8)
ASOS’s primary communication channel with consumers is via social media meaning that they can connect with their consumers as, “Brazil is revealed social media capital of the world” (Becker, P, 2013: online) Aforementioned in the research stage, Erica Messa, social media consultant, states “Social networks have become an important channel for relating to the Brazilian consumer.” It is important for companies to factor in this, not only using social media as a way to promote themselves, which is primarily as a branding channel where they can construct a relationship and build consumer loyalty.” (WGSN,2012:online) This has been taken consideration in the communication strategy. Although Brazil presents many opportunities it is still a very diverse, complex market and that according to research, takes time and effort to enter, (exportgov,2013:online) therefore the strategy suggests how ASOS can overcome any barriers they may encounter. When entering Brazil it does not only present the opportunity to target a new local market, but also to capture the attention of the global market. For ASOS it will be the chance to test the South American region to further their plans of becoming well and truly global. Overall with Brazil having a strong economic and social prosperity, the large online retailer has vast opportunities for growth.
25
MARKETING STRATEGY: ASOS BRAZIL 26
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
06
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
AIMS & OBJECTIVES
27
For effective implementation, measurability and control on the return on investment, key objectives have been set to aid a successful expansion into Brazil. “Brazil presents enormous potential for companies with persistence that are willing to invest time, money and effort. If you expect quick and easy results, you are likely to be disappointed” (UKTI,2012:10) The aims and objectives which have been set are specific to the new launch however are aligned with ASOS’s current objectives as to operate as a “global business” there needs to be unity throughout their global operations. Specific aims will be stated throughout the strategy and the measurement of success of each one is presented in section 10.
Objective
Branding
Market
Operational
Marketing
Creative Communication & Promotion
Financial 28
Embed and maintain ASOS’s brand DNA in the global and Brazilian marketplace to raise brand awareness in Brazil and South America.
• Network with Brazilian organisations and partnerships to gain the expertise and knowledge needed. • Enter the market with a strategic and financially viable plan •Increase global and local marketshare •Utilise the opportunities the country presents. •To ensure logistics and operational activity are cost beneficial. •Ensure the products reach the consumers on time with little complications.
To create innovative marketing strategies that connect with the consumer and result in a high return on investment
• Use creativity and innovation throughout the digital platforms to connect with the consumer. • Constantly update and stay ahead of the market.
To create brand awareness, interaction and increase sales by offering promotions, style advice and driving traffic to the website.
• To ensure the return on investment is beneficial from increased sales and the generation of revenue. • Increase global and local market share which will maintain or raise competitive advantage.
Aim
Measurability
Time
To ensure brand awareness among 10% of middle class 1535 year olds in Brazil after the first year.
Measure brand awareness through social media, media, PR, and campaigns.
Measured every week but a brand health check will be done every 6 months.
To contribute to ASOS’s aim of becoming global and ensure sales from 1% of the 15-35 middle market in the first year.
Seek advice and new partnerships when needed. Constantly review the logistics of launching into Brazil. Adopt strategies that will benefit the consumer as well as the company’s finances.
Market share will be monitored every month whilst the department will constantly seek out new opportunities.
•Constantly monitor the operations from the
Monitored every day.
To ensure beneficial and cost effective operations for all stakeholders.
manufacturing to the warehouse to the destination. •Ensure constant Research and Development.
Evolve from merely being an online shop to an engaging experience that permeates its customers’ fashion lives. (asosplc,2012:online)
Listen to the consumers wants and needs and constantly measure the success and growth of all marketing channels.
To be the first point of shopping destination for 1535 year olds.
Measure through brand awareness and activity via each channel.
To increase brand awareness and turn it into sales.
To gain competitive advantage through sales and ensure profitability.
Monitored everyday, reviewed after 6months/1year.
Constantly monitor the latest and future trends that consumers are or want to be interacting with.
Measure the success of all channels within communication and promotion and seek out new ways of communicating the brand message to increase awareness and sales.
Monitored everyday/weekly reports and goals set for 6 months/1 year
Measure sales and return on investment. Take the relevant actions depending on the progression of sales and whether they meet the targets.
Everyday/weekly reports and goals set and reviewed for 6 months and 1 year
29
30
Fig 23
31
MARKETING STRATEGY: ASOS BRAZIL 32
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
07
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
MARKET ENTRY 7.1 ENTRY STRATEGY
7.2 SHIPPING, RETURNS & DISTRIBUTION 7.3 PAYMENT
7.4 TAXES & IMPORT/EXPORT COSTS 7.5 LANGUAGE
33
A market entry plan has been devised using extensive research to ensure ASOS can establish a permanent presence in the Brazilian market effectively. ASOSs current international and operational activity has been taken into consideration as the aim is to deliver their products and services to the consumer whilst ensuring it is cost effective and coordinated. The Ansoff Matrix model determined that ASOS will launch through a market development strategy which increases sales of current products in new markets. The matrix can help in determining growth that can be implemented through marketing strategies.
Fig 24
MARKETING STRATEGY: ASOS BRAZIL 34
7.1 ENTRY STRATEGY
7.2 SHIPPING, RETURNS & DISTRIBUTION
Entering Brazil presents several complicated barriers to entry due to government restrictions. (UKTI, 2013:online) However, “e-commerce technology permits commercial transactions to cross cultural and national boundaries far more conveniently and cost-effectively than is true in traditional commerce”(Laudon & Traver, 2009, p. 14) reflecting the increased opportunity for an online, as opposed to a ‘brick and mortar’ launch. ASOS currently ship to Brazil from their global site, however a country specific site- in the local language of Portuguese, would allow them to drive traffic to the new website and encourage consumer engagement on a localised level. It allows for the content and communication channels to be adapted for the consumer (which has been discussed in section 9.2.4) furthering their international sales in opportunistic markets.
Primary and secondary research suggests that one of the main barriers for Brazilians purchasing from international brands is the cost of shipping. ASOS’s unique selling point (USP) is their “free global shipping” from their central distribution centre in Barnsley, UK. Products can also be returned back to the UK or to their satellite warehouses which they currently have in the USA and ASOS are looking to expand to other countries as 30% of ASOS’s products are currently returned. As ASOS grow globally, this will be extremely viable as it will decrease transportation costs and environmental impacts as well as enabling ASOS to resell the product in the country will bring major margin gains. The Brazilian returns system will be linked to the USA return hub as they are at a more reasonable distance. The USA accounts for 114% of their retail sales (asosplc,2012:online) and once sales develop from the Brazilian market, in the next ASOS control most of their international few years it would be viable for ASOS to open a operations in the head office in the UK however distribution centre in the USA, which will hold a have country managers in the markets that have percentage of South American products. specific websites to oversee key operations and monitor changes within the consumer and fashion environments. They also have an employee from each country in the head office, for localisation and language purposes. (Anon,2013:online) The UK Trade and Investment director John Doddrell warns, “You will certainly come up against business colleagues, that don’t speak English” (Snoad,L,2012:online), therefore ASOS will need to hire a Brazilian employee as part of their international team (fluent in Portuguese and English) in order for them to communicate with the country manager in Brazil and other relevant businesses. Fig 25
35
Fig 26
MARKETING STRATEGY: ASOS BRAZIL 36
7.3 PAYMENT
7.4 TAXES AND COSTS
Currently ASOS offer standardised pricing and payment methods for all countries, however are reviewing their payment plan as ASOS stated, “while credit and debit cards are the UK’s favourite payment method, other countries do things differently.”(asosplc,2012:online) In Italy for example, consumers prefer to pay for their garments once they have received them. ASOS state “we take fraud very seriously, so all debit and credit card holders are subject to validation and authorisation by both us and the card issuer, ”(ASOS, 2013:online) which is vital as Brazilian consumers have security worries when paying online.
When researching taxes, evidence suggested that, “due to the large amount of taxes that drives up the prices of imported products sold by national retailers, buying directly from foreign stores via the internet has become a viable option for many Brazilians,” (thebrazilbusiness,2013:online) which is positive for ASOS are their online proposition presents less complications than brick and mortar.
Most Brazilian internet shoppers use credit cards and 46% use a system called “ boletos bancários” which is an online payment voucher. (Kligin, S, 2012: online). These are slips that the buyer prints out from the merchant’s website and takes to their bank to physically make the payment for the item. The buyer can also use the “boleto bancário” to make a payment via online banking. This would be a viable option for ASOS to consider, as it’s a secure purchase method for buyers who don’t have credit cards. ASOS should consider adapting their payment methods for the Brazilian consumer as this will allow them to target a larger market, gain customer loyalty and automatically increase sales.
Furthermore, evidence suggests that “the Brazilian law is slowly working towards regulating internet commercial activities and providing specific rules that fit this particular vehicle,”(thebrazilbusiness,2013:online) which will affect the way ASOS operate. In regards to the customs and import charges which will affect the consumer, they will be charged once the parcel reaches their country therefore, “many websites that sell foreign products have installed programmes that indicate how much the consumer will pay on taxes when they withdraw the goods in Brazil,” (thebrazilbusiness,2013:online) for example Neta-Porter. This is an option for ASOS to consider putting their “customer obsessed” approach at the forefront and allowing the consumer great transparency.
7.5 LANGUAGE Evidence suggests “more than half of brands do not host Portuguese sites to cater to consumers in Brazil. Local content, product and pricing info is even more rare” (Scott,G,2012:15) Launching the site in Portuguese and adapting the marketing mix gives ASOS a USP when entering the market and recognises the consumer’s needs. The content and communication channels will be translated into Portuguese however for the purpose of this marketing report the communication strategy will be in English.
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MARKETING STRATEGY: ASOS BRAZIL 38
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
08
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
CONSUMER 8.1 TARGET MARKET 8.2 PEN PROFILE
8.3 CONSUMER SEGMENTATION 8.4 POSITIONING
39
8.2 TARGET MARKET ASOS’s target market globally mostly fall into Generation Y and in Brazil they are classed in the B/C1 socio demographic group. ASOS state that “We know that twentysomething’s are the most avid fashion enthusiasts, no matter what part of the world they are in. Our customers are part of a global fashion community and we’ll win by staying connected, listening and collaborating.’ (asosplc,2012,online)
Fig 27
MARKETING STRATEGY: ASOS BRAZIL 40
Fig 28
8.2 PEN PROFILE On the contrary when identifying the target market for Brazil, although they have similar traits to the international ASOS consumer, Brazilian’s have their unique buying habits and consumer interests, depending on what they are used to who influenced by. Furthermore, evidence suggests , “Britons aged between 1634 years old have five times lower spending confidence than their counterparts in emerging market countries showing Brazilian youths were most optimistic about their employment opportunities and the general economic situation.�(Box1824,2012:Online) This is extremely positive, specifically for the future, as higher job prospects means higher disposable income for the ASOS consumer. To be successful across all consumer segments a table has been devised to identify individual needs and which products and services would be of most relevance to each segment. It must also be noted that ASOS currently ship to Brazil from their global site therefore there is already a level of brand awareness and sales, meaning ASOS have an established consumer base which will aid them in furthering their brand awareness.
Flavia is a 23 year old student fashion blogger from Sao Paulo Brazil. She studies textile design and has recently started buying the majority of her clothes online. She loves to read blogs and engage on social media sites as well as listening to music and watching films. Flavia has spent most of her life in Brazil however has had the opportunity to visit a few countries on holiday, in Europe and Asia. In her spare time she goes out for dinner and drinks with her friends as well as visiting new concept stores and art galleries. Her friends go to her for style advice as she is aware of the latest trends and best places to buy clothes.
Fig 29
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MARKETING STRATEGY: ASOS BRAZIL 42
ASOSs target market is the global population of twenty-something’s who love fashion. They are digital natives and highly interested in fashion. “Our customers are part of a global fashion community. We’ll win by staying connected, listening and collaborating” (asosplc.2012:online)
Figs 30-36
43
8.3 CONSUMER SEGMENTATION
TARGET FEATURES/ PRODUCTS
ATTRIBUTES
TARGET MARKET
STUDENTS
YOUNG PROFFESIONALS
TRENT SETTERS
They connect and talk about the brand through social media.
Stay in touch with the brand conveniently and securely while on the go.
Constantly reading blogs and magazines.
Are more likely to take advice from friends.
Need to be able to access purchasing clothing anywhere in the world/country.
Age 16-24
Age 22-28
Are looking for casualwear for daytime, eveningwear for going out .
Look for business clothes and casual wear.
They know exactly what they are looking for when they shop on ASOS. They are fashion forward. They give advice to others.
Are constantly engaging through their ipads and smartphones.
-Social media -Campaign (O Brasil) -Student discount -Promotions -Music -Casualwear/shoes -Mobile site/apps
-Workwear/smart clothing -Mobile site/Ipad apps -Accessibility of ASOS worldwide. -Free delivery or faster options with fee. -Payment methods
MARKETING STRATEGY: ASOS BRAZIL 44
Age 17-24
-Broad range of brands -Fashion up-app -Marketplace -Social media -Campaign (O Brasil) -Blog
TREND FOLLOWERS Age 16-27
They seek out style advice from friends and the internet. They are more likely to buy it if they have seen someone wearing it before they buy. They look at trend and style options. They engage on social media channels and look out for promotional offers and sales
-Fashion- up app -Fashion finder -Social media -Engagement with trend setters -Choice -Fashion edits -Google hangouts/style advice
TRADITIONAL SHOPPERS Age 24-35
Traditional shoppers in Brazil who like to visit the mall and enjoy the social experience, they are very new to online retail. They like style, but tend to buy what they like rather than following trends.
-Fashion edits -Large choice of brands -Basics collection -Google hangouts -Launch event -Free shipping
CURVE, PETITE, MATERNITY Age 16-35
These consumers seek out clothing and brands that stock ranges that suit their body shapes. As not all brands do this, they will be loyal to brands and may find that they have less choice.
-Specialist ranges -Large choice -Free shipping -Launch event -Social media -Promotions
Figs 37-43
45
8.4 ASOS POSITIONING ASOS are entering a country which has experienced a phenomenal economic growth and the rise of a new middle class consumer. Furthermore, hosting the World Cup in 2014 and the Olympic Games in 2016, there is likely to be an influx of marketing activity. Forrester expects online retail sales will reach more than $25 billion in Brazil by 2017, more than doubling expected sales of $12.2 billion in 2012. (Heim,A,2012:online) With the increase in online activity ASOS’s competition will intensify therefore to be competitive in the online fashion market they must ensure brand alignment globally.
BRAND
PRODUCT OFFERING Mid to lower market brand Clothes and electronics
Lower price points
2nd largest Brazilian department store. Offer all product types
Mid-market brand, price point slightly higher than ASOS.
Biggest fashion company in Brazil. Clothes and home wear
Mid-market, similar pricing to ASOS
Womenswear, style advice
Similar price points to ASOS
Offer all product types including home
Similar price points to ASOS
Menswear/Womenswear
Menswear, Womenswear, Children
Figs 44-50
MARKETING STRATEGY: ASOS BRAZIL 46
PRICE POINT
Same price point
Similar price points to ASOS
ASOS’s large range of products and brands covering various price points will fill a gap in the market however research stated, “don’t underestimate established brands” (White,T,2012:3) especially as the market is dominated by the Brazilian retailers B2W and Magazine Luiza who own 30% of the Brazilian market. A competitor table has been devised which shows the product and price offering as well as the online and social media activity, so ASOS can differentiate their proposition against competitors as well as learning the successes of how they connect with their consumers. It is evident that there are some strong brands in the market that ASOS will face competition with as a primary source stated that consumers favour shopping in department stores, however ASOS’s positioning is unique to the current offering.
ONLINE ACTIVITY
SOCIAL MEDIA
COMPETITOR
Facebook 3,532,154 likes Twitter 49,395 followers Youtube 2412 subscribers Instagram 61,619 followers
Medium
Facebook 1,841,044 likes Twitter 38,268 followers
High
Facebook 2,854,177 likes Twitter 84,252, followers Youtube 1700 subscribers Instagram 34,929
Medium
Facebook 576,608 likes Twitter 291 following Instagram 4,240
Medium
Online only
Facebook 3,692,564 likes Twitter 1652 followers Blog
Medium
Have two stores in Brazil. Global website
Topshop Brazil twitter 626 followers
Medium
Stores in Brazil, global website
Zara Brazil twitter 444 followers
Medium
Stores only
Store and online store
Stores only
Online only
47
MARKETING STRATEGY: ASOS BRAZIL 48
Fig 51
49
MARKETING STRATEGY: ASOS BRAZIL 50
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
09
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
MARKETING & COMMUNICATION 9.1 STANDARDISATION VS LOCALISATION 9.2 MARKETING MIX:
9.2.1 PRODUCT
9.2.2 PLACE
9.2.3 MOBILE & APPS
9.2.4 MARKETPLACE
9.2.5 PRICE
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The proposed marketing and communication strategy contains a detailed marketing mix which has been combined using the relevant localisation and standardisation process influenced by consumer behaviour.
Fig 52
MARKETING STRATEGY: ASOS BRAZIL 52
Fig 53
OBJECTIVES Key contemporary and emerging trends have been taken into consideration as they are vital to the way brands are operating now and in the future. Research suggests, converging sociodemographic, technological, economic and environmental forces are transforming and transfiguring our world so that in the space of approximately 50 years from the 1970s to the 2020’s, the world will look and feel a very different place. (Green,J.2012:6) Even “smart marketers don’t know what changes the future will bring; but they do need to be aware that the industry is changing every day”. (Gardner,J,2012:online) As ASOS are a digital brand, they are at an advantage to responding to changing consumers’ needs efficiently, especially as “in the next 10 years, everything will be digital” (gemalto,2012:online); as ASOS need to plan ahead and enter opportunistic markets before competitors and gain new customers to increase sales.
•
To implement ASOS USP in the market. • Offer outstanding customer service, experience and product. • Combine a standardised and localised approach which recognises the local culture. • Unique marketing activity that will drive consumer traffic to the website. • Convey the ASOS brand message and implement the ASOS brand into their consumers lifestyle.
Fig
Fig 54
53
9.1 STANDARDISATION VS LOCALISATION The marketing mix contains a balance between a standardised (extension) approach and a localised (adaptation) approach (Meyer,L. Bernier,I,2010:10) that is very responsive to the country or regional differences as “scenarios that are happening in everyday life in the UK are not necessarily replicated throughout the world”. (Barnett, M, 2012:online)
Fig 55
MARKETING STRATEGY: ASOS BRAZIL 54
Fig 56
ASOS must be aware of the extremely strong Brazilian culture, therefore capturing the local essence is of more importance than in other countries. Research suggests, “brands that have tried to be successful with lots of hype but without having an adequate product or distribution, or without having a clearly defined reason for being here, have never worked well in Brazil. Global and international brands must acquire some “Brazilian flavour in their marketing communications to work well,” (Snoad,L,2012:online) therefore the Brazilian flavour is evident throughout, with the delivery of localisation.
Paradoxically, globalisation has resulted in the increase of global connectivity, merging consumer’s tastes and giving them access to a vast amount of products and services, which is beneficial strategically and financially for ASOS’s global expansion plan. In consideration to ASOS’s current global positioning, their 7 country specific sites all have a similar layout to keep site maintenance and development costs down. However the editorial content may differ between the sites to offer a local flavour, but the backbone and feel remains consistent which helps consolidate brand equity, which is extremely key throughout. (Griffith,I,2013:online)
Two case studies are presented reflecting how brands have localised for specific markets. ASOS launched an “In your World Capsule Collection” into the Australian market before the rest of the world. They wanted to give them the next season product before anyone else in the world had it and cater to their seasonality in that way. Farfetch Farfetch, which offers boutiques an online platform to trade internationally. Brazil is among its top five markets and the business has a team of 50 on the ground. They launched an “Ola Brasil” project, which was a unique pop up experience where they sold collections from 9 Brazilian designers.
55
9.2 MARKETING MIX A detailed marketing mix has been conducted which informs recommendations on how ASOS should enter the market for the initial launch and the first year of operations. Future recommendations have also been devised in section 13.2 in order to ensure the launch is financially and strategically viable now and in the future.
Fig 57
MARKETING STRATEGY: ASOS BRAZIL 56
Fig 58
9.2.1 PRODUCT ASOS uptake a product extension strategy as they will adapt the merchandising of their current products to suit the markets tastes however will not be changing the physical aesthetic. ASOS state, “our collections are desirable, accessible and seasonally relevant, wherever their customers are in the world. We make sure that when a customer in Australia visits the asos.com homepage, they will often see different clothes, models and editorial from our customers in Europe to make sure we stay on top of what customers want outside of the UK.” (asosplc,2012:online) As part of the research and development process, ASOS will constantly monitor trends and consumer choices within Brazil.
Furthermore, Brazil’s fashion seasons are opposite to the UK, therefore ASOS will launch their products prior to the UK market. As well as the opposite seasons ASOS have the opportunity to utilise key holidays and festivals for marketing activity, content and product adaption which will increase sales at these specific times.
Evidence from the product table shows that there is more of a gap in the Brazilian market for some of ASOS’s products and brands. For example there will be a main focus on their lower to mid-market prices rather than high-end. They will also focus their merchandising mix and brands within casual and streetwear rather than swimwear. This is because the swimwear market in Brazil is full of great brands therefore will gain ASOS’s own label continues to be highly sought more of a focus once established in the market. after both in the UK and internationally and accounted for 52.4% of the total sales during 2012. (asosplc,2013:online) To represent the breakdown of purchasing across the various brands ASOS stock, a product table has been devised; this helps identify which products and brands have a more prominent gap in the market for ASOS to utilise.
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PRODUCT SEGMENTATION SEGMENT MALE & FEMALE
EXAMPLES OF BRANDS
BUYING HABITS
Accessories/ Jewellery
American Apparel, cheap Monday, Nike, New Look, Vans, Ben Sherman River Island, ASOS
Brazilians like to wear jewellery, whether it be daily or for special occasions.(GMID,2012:online)
Watches/ Sunglasses
Armani Exchange, Casio, Ray- Ban, Marc by Marc Jacobs, ASOS
Sunglasses are worn often by a large proportion of the population. Initially bought for aesthetic reasons and for the visual comfort they provide, sunglasses have increasingly become important for the protection against the harmful effects of the sun. (GMID,2012:online)
Beauty/Hair
Benefit, Bourjious, Daniel Sandler, GHD, Models Own, Nars and Nails Inc, ASOS
Beauty is experiencing strong growth in interest, with the sector led by make-up and fragrance (wgsn,2013:online)
Sportswear
Nike, New Balance, Adidas, ASOS
With growing interest in health and well-being, many Brazilians are becoming very keen on outdoor activities.
Smart/ Workwear
Whistles,Mango, Oasis, Paul by Paul Smith, Warehouse, Barbour, ASOS
Brazilians wear smart work clothing to the office however most of the year need to keep cool.
Casual/ Daywear
American Apparel, River Island, Superdry, Diesel, ASOS
Due to the gap in the market for mid market brands which was aforementioned, daywear/streetwear is extremely popular in Brazil.
Evening/Party wear
Oasis, Coast, Motel, Caxton, Ted Baker, Ted Baker, ASOS
The Brazilian culture like to celebrate and go to parties. They also have a lot of festivals and holidays.
By Caprise, Freya, Gossard, ASOS
Large swimwear market in Brazil with choice of brands
Lingerie/ Nightwear
Curvy Kate, Emma Jane, Elle Macpherson, River Island, ASOS
The BRIC nations of Brazil, Russia, India and China are expected to be particular drivers of revenues for lingerie brands and just-style claims they “contain exciting opportunities” for businesses in the field.(fusionassociates,2012:online)
Shoes
Havaianas, Faith, Fred Perry, New Look, Nike, Superga, Vans, ASOS
There is a growing footwear market in Brazil and Brazil is the world’s third-largest shoe maker with a large choice of brands.
Swimwear
Curve&Inspire/ ASOS, New look, pretty polly In every market there is a need for plus size and petite ranges. curve ASOS offer a broad range of their own collection. Petite
Maternity
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ASOS, New Look
Need for maternity in all markets
TIME
All year round, more so for occasions (e.g. New Year’s Day, Christmas, parties) Watches all year round, sunglasses are seasonal therefore will be more prominent in the mix at certain times of the year Targeted at mostly women, & they use all year round. lighter products for summer. All year round, focus on World Cup and Olympics. Only certain periods of the day.
PRICE RANGE
FIT INTO THE MARKET
Large amount of products range The Accessories ASOS sell would fit well into the up to £35 however a couple of market, the winter hats and scarfs would have less of products get up to £165 a presence, however the high street accessories would work well in the fashion edits, acting as an up sale. Varied pricing from £10- £280
Mid market- £20-£50
Range from £5-£100
There is a prominent gap in the market for watches and sunglasses however it must be noted that products like this, consumers will be more inclined to try on in store. Evidence suggests Brazilians love their beauty products however do have strong brands in the market. Skin tone and way of life must be noted as well as the need to try make up on. Although ASOS’s main focus is not on sportswear, it would be a viable segment to invest in as football is the most important sport in Brazil.
£5- £200
Due to prices and product choice being reasonably high in Brazil ASOS could utilise this segment to offer affordable, smart work wear.
All year round, specifically for students, younger segment
£5- £150
Largest gap in the market for ASOS to utilise. Opportunities for collaborations.
All year round but there are key dates which can be utilised.
£5-£250
There is also a gap in the market for affordable eveningwear especially for the key holidays identified.
All year round but greater demand in summer months. certain times of the day/week
£20-£275
For primary launch less concentration on swimwear due to large competition
£5- £100
For the primary launch- less concentration on lingerie but reviewed once established in the market
All year round, change depending on season
£5-£250
Although there is a large choice of brands in Brazil, ASOS will concentrate on footwear when entering the market as it is also a chance to upsell.
All year round, all times of the day
£5- £100
All year round, all times of the day
£5- £100
All year round, adapted mix depending on season (lighter clothes)
All year round. all day and at night
There will be no visible adaption to this segment
There will be no visible adaption to this segment
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MARKETING STRATEGY: ASOS BRAZIL 60
Figs 59 Group 1
61
SPORTSWEAR
Fig 60- Group 2
MARKETING STRATEGY: ASOS BRAZIL 62
NEW YEARS DAY
Fig 61- group 3
New year’s day is an extremely popular festival in Brazil. It is a chance for people to celebrate and see their friends and family. The colour that they usually wear is white and silver, stated a primary research source. When ASOS enter the market, this is an opportunity for them to consider product lines, collaborations, collections and marketing activity.
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CARNIVAL
Fig 62- Group 4
MARKETING STRATEGY: ASOS BRAZIL 64
Fig 63
65
BRAZILIAN FASHION ASOS state that, “the branding buying teams are responsible for creating & sourcing the brand mix for their department, covering big commercial brands through to high end designers and emerging brands to offer our customer the most exciting fashion trends and create a point of difference in the global market.” (asoscareers,2013:online) This is not only reflective in the devised product table of their current brands but ASOS also need to recognise the growing recognition of local brands as evidence suggests in the next 12 months “emerging markets will proudly export and even flaunt their international and cultural heritage. In case you are not from one of these nations then it’s probably time to partner with a hot local brand from an emerging market and bring their flavour to your customers.” (trendwatching,2012:online) By stocking or collaborating with Brazilian brands means that ASOS have access to that brands current target market. Furthermore, the strategic business manager of ABEST stated that, “It is important to sell Brazilian brands as they are becoming more important each day, as well as invest in advertisement and partnerships.” At the time of the Olympics in 2016 it is likely that there will an increasing interest from the global audience in Brazilian culture and brands. This was evident in 2012 at the British Olympics therefore by ASOS collaborating or launching prior of this event allows them to utilise the benefits that may occur.
Fig 64
MARKETING STRATEGY: ASOS BRAZIL 66
9.2.2 PLACE ASOS believe that while a dotcom site has global appeal, consumers have more confidence purchasing from a local language version of the site and will embrace a brand that is tailored for their cultural and regional differences, (dmarket,2011:online) therefore they will sell through www.asos.br. ASOS’s online positioning allows them to be accessed from a digital devise, providing the customer has access to the internet and an established postal system. In Brazil, positive research states “the National Broadband Plan, was launched a year ago to provide millions of people in cities throughout Brazil with a 1Mb internet connection for a monthly fee of R$35 (around US$17)� (Tavener,B, 2013:online)
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9.2.3 MOBILE & APPS ASOS’s focus is on creating a unique multi-channel shopping experience where twentysomething fashion lovers can network, share ideas, create their own style and of course, shop, (asosplc,2012:online) therefore it is vital their mobile site and apps are utilised as source of market entry.
Fig 65
MARKETING STRATEGY: ASOS BRAZIL 68
Fig 66
ASOS’s mobile and tablets combined now account for almost 30% of ASOS traffic and this continues to grow rapidly (asosplc,2013:online) and evidence suggests that “brands wishing to conquer the Brazilian market need to connect with its 192 million population via the mobile internet. Communication through mobile, smartphones and tablets is essential to engaging and building relationships with this audience”. (Snoad,L,2012:online) Therefore is has been proposed that ASOS launch a country specific mobile site and their fashion-up app in Portuguese which provides style heavy inspiration. This will increase the accessibility of ASOS to consumers, as in 2013, consumers will look to their mobile devises to maximize absolutely every moment. (trendwatching,2012:online) Furthermore, the accesibility of more sales channels will contribute to their ambition of £1billion sales by 2015.
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9.2.4 ASOS MARKETPLACE ASOS currently also run “ASOS marketplace�, which is a platform for individuals to sell fashion to a global audience.It currently has more than 500 sellers including multiband indies, vintage specialists and independent labels, which allows ASOS to become a destination website through this platform. It is a great opportunity for these smaller businesses to leverage their traffic and investment through the bigger business asos. com.
Fig 67
MARKETING STRATEGY: ASOS BRAZIL 70
ASOS currently have no sellers from Brazil, however it is extremely important for ASOS‘s global expansion plans to increase the number of sellers as the “marketplace” platform connects consumers and fashion from all over the world. It also drives traffic to the website and allows for ASOS to gain further information on their consumer groups. “Marketplace” will be promoted through social media and local magazines, boutiques and bloggers will be informed. In Brazil, “with the broadening consumer taste, shopping “vintage” is also a growing niche” (Bezerra, L, 2012:online) which is the predominant product mix in“marketplace”. An introductory incentive could be for ASOS to half their commission for the first 3 months from the opening of the individual or boutique sellers account. Fig 68
71
Fig 69
MARKETING STRATEGY: ASOS BRAZIL 72
9.2.5 PRICE The proposed pricing strategy will directly translate into the Brazilian Real as ASOS have a standard global pricing system to keep their mid-market status. This is especially due to the Brazilian market as when the product reaches Brazil they pay tax on it therefore raising the price plus tax would put the brand into a higher price bracket. The current exchange rate is 1 British Pound Sterling equals 3.05 Brazilian Real. (11/05/2013) which is stable (heritageorg,2013:online) When measuring this against competitors, this was a comparative pricing option. Furthermore, a primary research source stated that, “I shop on ASOS because of the good prices”.
PROMOTION & DISCOUNTS
Fig 70
Seasonal Sales
Relevant seasonal sales, same as Australia
New entry
Entry campaign, 25% of 5 items of your choice 10% off for students-
When the products reach Brazil, consumers will have to pay a tax fee. Promotions and sales are a focal point for ASOS, but Brazil’s online shoppers value discount periods (66%) and free shipping (48%) therefore will be highlighted in order to stay an affordable mid-market brand. (Kligin, S, 2012: online) The discounts will be aligned with what they already offer and will not devalue the brand or affect the company’s return on investment.
Student
Outlet
Events: Carnival, New year and Sao Joao
Brazil’s expanding middle class is becoming more aspirational.
Always up to 70% off
Utilise these seasons for content and promotional offers on collections and specific products
73
9.3 PROMOTION & COMMUNICATION ASOS’s communication and promotion objectives are extremely vital to the launch as their core aims are to create brand awareness and offer experience and interaction with consumers, keeping their “consumer obsessed” (asosplc,2012:online) values at the core of each channel. It is also important to recognise how the local market are engaging with brands as ASOS connect with consumers using marketplace, fashion finder, mobile apps, the ASOS magazine which is shoppable, video, music and trend advice therefore they may not all directly translate.
OBJECTIVES • Create brand awareness • Drive traffic to the website and increase sales. • Goal is for 10% of 15-35 year olds in the market to be aware of ASOS • Create inspirational and innovative marketing and communication campaigns. • Offer an outstanding customer service experience Fig 71
MARKETING STRATEGY: ASOS BRAZIL 74
Fig 72
9.3.1 CUSTOMER SERVICE AND EXPERIENCE When communicating with the audience, customer service and experience is pivotal. The CEO Nick Robertson stated that “there is definitely an internal shift from the “sales is everything” attitude to it now being more about engagement with the consumer. Sale is just the output these days.” (Saunter, L,2012:online) Further evidence suggests, “e-commerce lacks browsing and discovery experiences that satisfy curiosity and the fashion mentality must be applied to online stores, improving on discovery, (Grunstdiel,A2012:online) which is extremely important for the online retailer to address. Paradoxically, one source stated that “e-tailers can now take advantage of the widespread adoption of social technologies to unlock innovative ways to replicate, if not enhance, these ways to serve online shoppers. There are endless online services that make it possible to find the perfect product.” (trendwatching,2012:online) It is therefore important that ASOS utilise these opportunities in the Brazilian market, to evolve from merely being an online shop to an engaging experience that permeates its customers’ fashion lives.”(Hughes,N,2013:online)
For the Brazilian consumer, the shopping experience is a social event. It does not necessarily mean buying, for the visit of the mall encompasses meeting people, going to the cinema and sharing meals. (Halepete,J,2011:38) A primary research source also stated that “Brazilians are looking for lifestyle brands, not just a product. The shopping experience needs to replicated online.” It is also extremely important in a country like Brazil, although it has experienced rapid growth, that clothing is luxury good, especially as the high taxes affects consumer disposable income levels, resulting in higher price elasticity of demand. Therefore the marketing strategy aims to replicate the exciting and sensory in store shopping experience online as well as enhance the customer service that ASOS currently offer, for ex-ample their free style sessions via Skype and their official customer service twitter page @ASOS_HeretoHelp, keeping customers constantly re-minded that ASOS’s brand gives them value for their money. (asosplc,2012:online) In conclusion the strategy takes into account how they can create a “discovery experience” and offer immediate customer service through email, a replicated Here to Help Portuguese twitter page and the goggle hangouts which are launched in the marketing campaign.
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9.3.2 SOCIAL MEDIA
OBJECTIVES • Create brand awareness and interaction • Maximise the potential of each channel • Return on investment through product sales • Increase global awareness of the launch Fig 73
MARKETING STRATEGY: ASOS BRAZIL 76
Fig 74
Brazilians are also voracious consumers of social media
Social media is the principal communication and promotion channel for ASOS as they use it to engage and listen to their consumer’s needs. Moreover, return on investment is also extremely high, as in 2012 about 40% of their sales were generated through social media content, (anon,2013) which is becoming more valuable for businesses. Research stated that, “ASOS experienced a 130 per cent increase in site sales, following a premium four week ad campaign on the social network, in comparison to ASOS shoppers that weren’t exposed to the promotional material.” (Terrelonge , Z, 2012 :online) thus reflecting the power of this platform.
Moreover, their social channels all have a clear direction and personality therefore a social media plan has been devised to underpin how these can translate into the market that was recently named, “the social media capital of the world” by the Wall Street Journal. Evidence suggests Brazilian users are among the world’s most engaged, spending an increasing amount of time on social media sites and (Arno,C,2013:online) and use it to swap opinions about purchases and online shopping experiences (gemalto,2012:online) allowing ASOS to circulate content and encourage engagement between friends.
ASOS tailor the content that they publish around The main social media channels which have been their 10 social networking sites to their gender; considered are, Twitter, Facebook, YouTube, region and topical things are going on, allowing Vine, Google plus and blogs. them to create the most engaging experience on a truly global level. (asosplc,2012:online) Although social media has many benefits that have contributed to the success of the brand and will carry them forward into the new market, there are also some drawbacks that need to be addressed. Please see Appendix 4.
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PLATFORM
PURPOSE
Sell through Facebook store.
ASOS ENGAGEMENT ASOS is one of the most popular UK retail brands on Facebook.
Generate likes, comments, sales.
BRAZIL ENGAGEMENT Brazil- 2nd largest country in terms of Facebook usage. (wgsn,2012:online) Largest age group 18-24 (wgsn,2012:online) 70, 926, 620. Monthly active users (social bakers,2013:online)
Offer style advice Promotions and Discounts
ASOS maintains separate Increasingly popular feeds for men’s and women’s fashion. Portuguese language version No.2 behind the US
Generate brand awareness and sales
Youtube
Music Shoppable videos
Vine
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Twitter app, Enables its users to create and post short video clips
Subscribe to the ASOS channel to see exclusive vids featuring their magazine cover stars, cool stuff we see on their travels and celebrity chats.
#ASOSUnbox. The retailer is offering prizes to customers who post clips of themselves unpacking a clothes order with the new hashtag. (marketingsociety)
According to comScore, Brazilians form the sixth biggest audience for Youtube worldwide and 79% of the country’s internet users regularly watch the channel. (Bezamat,B,2012,online:wgsn)
ADAPTATION
Portuguese New page and Content adaptation
Portuguese
URL
www.facebook.com/ Asos.Brazil
@ASOS_Br
New page and Content adaptation
Keep in English
EXAMPLES
Predominant communication channel to offer and inform everything from style advice, sales, music, festivals etc. Encourage sales and comments to gain an insight into consumer
You want up to 30% off fresh footwear? damn straight you do. come get it here...
Well hello sunshine. Get Short bursts of information and links, UK free next day from style to discounts delivery today. finishes at 3.30.
http://www.youtube. Gives ASOS a multi com/user/ASOSfashion channel dimension. Gives the brand life through videos
Portuguese Part of the Your Brazil campaign
OBJECTIVE
https://vine.co/
Engages the consumer as they can send short video clips. Will be part of the “O Brasil� campaign
ASOS meets...
Send us a clip of you opening your package
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PLATFORM
Google +
Blog
PURPOSE
Have chats, offer style advice and interact with the consumer
80
ASOS posts one or two updates every day and uses unique content rather than repurposing Facebook updates.
BRAZIL ENGAGEMENT
Top google + in Brazil is Sony Music Brasil with 766, 305 followers
Brazilians are keen blog readers and are more likely to visit blogs than any other nationality. • According to comScore, blogs reach 95.9% of Brazilian online users. • Typical Brazilian fashion blogs are based on daily looks, or short trend posts.
Style and music updates , more of a detailed read
ASOS update their blog. Discover the latest fashion trends, style updates, edits, street fashion and design with ASOS.
Pinning photos of inspirational product and images
ASOS regularly pin onto pinterest. They have 31,097 followers and 18 Boards.
It is early days for the Pinterest in the Brazilian market, but its huge and recent growth worldwide means it is only a matter of time before Brazilians catch on.
Official twitter from asos.com customer care, here to help with any questions you may have
Brazilians have high customer service standards
creates brand awareness and sales
Customer Service
ASOS ENGAGEMENT
‘Here to Help’ account takes the same strategy as many other retailers in that all queries are dealt with via direct message and a follow up call or email from customer services.
ADAPTATION
Translated Content
URL
https://plus.google. com/+ASOS/posts
OBJECTIVE
Offer a different dynamic to social media
Portuguese
Translated into Portuguese
Keep the same, be aware of posting relevant content for the Brazilian consumer
Translated into Portuguese, own page
www.asos.com/br/ blogs
To use the ASOS blog to integrate the ASOS brand into consumers lifestlye. Increase blog readers.
EXAMPLES
Every girl has a pair of skinny trousers they like to throw on in the morning. Why not get a bright pop of colour or a quirky printed pair as an instant wardrobe update?
music artists write up
http://pinterest.com/ asos/
To offer visual looks to encourage re-pins and sales
ASOS <3s: FESTIVALS
https://twitter.br/ ASOS_HeretoHelp
To ensure all customer service queries are dealt with to ensure high satisfaction rates
Were sorry the promo is now closed, high demand meant it crashed out site
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9.3.3 MARKETING CAMPAIGN A marketing campaign has been devised to capture the attention of the Brazilian audience.
OBJECTIVES • • • • • •
Establish a presence in the market Create awareness of ASOS, their products and services Localised approach Generate sales Increase social media engagement Encourage ASOS interaction between friends.
MARKETING STRATEGY: ASOS BRAZIL 82
Fig 75
Fig 76
When entering Brazil, the vast amount of research stating that brands need to “localise” more has been taken into consideration when devising the entry campaign “O Brasil” (Your Brazil). It will predominantly be launched through four of ASOS’s social media channels Facebook, Twitter, Vine and Google hangouts) to drive brand awareness and encourage consumer engagement; the campaign will run similarly to ASOS’s Christmas “Best Night Ever” campaign but on a smaller and local scale. Beatric Galloni, VP of marketing in Brazil for Mastercard, suggests, “The key to connect to consumers will be the relevance of your content. The successful cases I’m seeing are those who allow consumers to participate in the campaigns. They want to be able to participate, give their opinion, and be listened to.” (effie,2012:online)
The campaign celebrates the entry into a new market as well as recognising the positive social and economic changes Brazilian consumers are experiencing. It focusses on establishing a presence in Brazil with building long term relationships with customers, not just one off transactions. (Snoad,L,2013:online) ASOS recently launched a campaign for their ASOS Black x Puma collaboration, which was a short video delving into the world of “pixacao”, a politically driven graffiti movement in Sao Paulo Brazil. Furthermore when ASOS launched into Australia with their preview of their “In your world” collection, it was promoted through social media. Although the campaign is not endorsing one collection in particular it promotes the accessibility of new brands to Brazilian consumers whilst gaining an insight into their consumer which will enable future interactions and content personalisation. Please see next page for examples of how it works.
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The campaign will run through Facebook to the large access it provides to the social media savvy Brazilian consumer. It also has the capacity to write “comments” which gives ASOS a detailed insight into their consumers wants and needs. The campaign will promote the new launch into Brazil and offer content to encourage sharing, likes and comments which will increase ASOSs brand awareness and social media goals. The platform will also be used to update the consumer prior and during the digital launch event. Example posts are *In Brazil I like to wear…” (Enter a style competition and win £100 voucher) In Brazil ASOS likes to (offer 50% of our new summer collection) If we receive 500 likes you will all automatically be put into a prize draw.
The use of twitter will be similar to Facebook however you can gain information in shorter sentences and the use of images. This is encourage followers, retweets and the hashtag #OBrasil. The use of twitter is to encourage engagement between friends as research suggests Fashion is a means to show creativity and express sexuality and young adults rely on their friends for fashion trends (Halepete,J,2011:38) ASOS will also use twitter to offer style advice for example “check out our new tshirt collection #OBrasil.” Or what is your favourite outfit on ASOS today in #OBrasil. The campaign through social media acts as a mutually beneficial relationship between ASOS and the consumer because it encourages interaction but there are a lot of benefits for the consumer. It will also largely be used to promote “marketplace.” For example “check out our new #OBrasil halved commission cuts to sell your own clothing on #marketplace.
MARKETING STRATEGY: ASOS BRAZIL 84
The twitter video sharing app will be used in the Brazilian market as a follow on from a recent campaign ASOS launched. The app allows for the consumers to send a 6 second video clip using vine of them opening their box. This creates excitement to the online shopping experience and it encourages the consumers to share and interact via the other social media channels. This also allows for ASOS to gain an insight into what their consumers are buying. They will offer incentives and prizes. The app will also be used at the launch event as it allows for content to be uploaded in real time, which encourages the consumers to be part of the event even if they are not actually there as they can get updates through the internet. This was a large trend at fashion weeks in 2013 as you could see what was going on behind the scenes, giving a sense of VIP, which this campaign hopes to replicate.
loving #vine? We want to see you unbox your ASOS order #OBrasil #ASOS
ASOS use Google hangouts to offer style sessions for their consumers. These are extremely effective as you can shop along. This a viable marketing strategy as the Brazilian consumer enjoys shopping as a social event and appreciates style advice. Google hangouts will enable the consumer to click on an item and share it with their friend as well as two stylists offering their advice. There will be 2 Google hangouts leading up to the launch event where there will be live style advice sessions. There will also be two after the event as they would have generated greater awareness. This strategy is a great way for consumers to interact with the brand and for ASOS gaining an insight into how consumers shop, with the aim of replicating an instore experience.
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9.4 ADVERTISING When entering the market, it is important ASOS consider the most effective advertising methods when generating attention and awareness of the brand therefore online advertising, email marketing and PR have been explored.
OBJECTIVES • Inform • Persuade • Remind • Generate attention • Drive traffic to the ASOS website and social media channels Fig 77
MARKETING STRATEGY: ASOS BRAZIL 86
9.4.1 ONLINE ADVERTISING ASOS’s vast majority of their spending has been on online advertising which resulted in 1.65 million new international customers purchasing on one of their sites for the first time (asosplc,2012:online) ASOS will continue their online advertising in Brazil as “advertisers have clearly realised the power of Brazil’s huge online audience.” (Kiligin,2012:online) The main objective is to increase brand awareness and ‘click through’s’ to their site. On the contrary, “Brazil is about five years behind in terms of online marketing, but online is still booming. For a UK business, Brazil should be a key emerging market, but I wouldn’t over-invest.” (Santi,A,2013:online) Therefore, ASOS will invest in online advertising, however will be less prominent in the first 6 months of the launch until they are established in the market. They should also uptake behavioural remarketing which targets consumers depending on their previous internet actions.
9.4.2 EMAIL MARKETING An effective marketing strategy, follow up from sales and customer service is ASOS’s email marketing system which will be adapted in Portuguese. Email marketing recognises the Brazilian consumers appreciation for high customer service and research suggests that they are very open to receiving marketing emails and has a high rate of conversion. (Almeida,B,2012:online) The consumer will be updated on the status of their delivery, a follow up customer email and a direct link to their customer service twitter page. In terms of content they will be reminded of any products that they viewed but did not buy and trends to drive traffic to the website.
9.4.3 PUBLIC RELATIONS The primary objective of ASOS’s expansion strategy is to increase awareness and market share and as ASOS’s head office is in the UK, they have PR agencies in the markets where they operate a website, whilst investing significantly in marketing activity across the globe. Therefore ASOS will use an external PR agency in Brazil as they have experience and contacts in the market. Their main responsibilities will include.
•Raise ASOS’s profile and create brand awareness. •Communicate with local press. •Generate and monitor product coverage. •Actively build on new and existing press and media relationships. •Responsible for delivering the launch event. •Be responsible for managing crisis. •Keep a selection of ASOS new collection items and any new brands. •Liaise with the international marketing team, the country manager and the Brazilian employees in the ASOS head office. The PR activity will be constantly measured for success and compared to other mediums of communication and promotion.
87
9.5 THE LAUNCH When establishing a presence in Brazil a primary launch event has been devised to gain exposure and generate PR activity.
WHAT The digital pop up experience is a differentiated and viable way to launch ASOS in the Brazilian market to generate sales and increase brand awareness. The pop up experience combines ASOS’ multi-channel approach, as evidence suggests “the younger generations are connected with at least 6 devices at the same time”, as well importance of the social shopping event to the Brazilian consumer. In “Topshop” the shop’s personal shopping service, where customers are offered fashion advice and sometimes a glass of champagne in a special room, is also particularly popular. “It’s because of the nature of the shopping centre we’re in, but Brazilians on a whole also love to be spoiled and to be attended personally,” says Mr Dominguez. (Pearson,S,2012:online)
WHY “Etailers are recreating online experiences in bricks and mortar spaces using clever design, pop ups, technology, partnerships and great customer service” (Hughes,A,2013;online) (See figures) and although this is a concept that ASOS haven’t delivered previously, rather than showing physical products, the objective is to implement an experience that can then be replicated from the consumers device from home.
It celebrates the increasing amount of consumers being connected to their digital devices and the government are increasing the countries Wi-Fi access. (Gemalto:2012: 5) Furthermore, “The focus isn’t primarily on transactions, but providing shoppers with a complete brand experience, testing the market, collecting data and familiarising shoppers with the e-commerce The pop up experience will be made up of promo offering. Pop ups are a powerful tool for web-only material, offers and a mixture of large digital retailers if they provide an engaging experience screens, “Ipads” and other interactive channels for shoppers” (Hughes,A,2013;online) They are of communication, such as augmented reality. also becoming increasingly popular in Brazil Consumers can connect with their “I-phones” or (Bezamat,B,2013:1) use the touch screens to explore the site, get access to the social media channels and purchase items as well as interacting with the “O Brasil” campaign. When ASOS launched into Australia the focus was on their preview collection which they showcased the collections at three live events and they were able to shop using their “shop to scan app”. (Benton,J,2012:online) ASOS has never previously held events open to the consumer in any market and Robertson says he hopes this is only the beginning of an ongoing feature. (Benton,J,2012:online)
MARKETING STRATEGY: ASOS BRAZIL 88
WHERE
WHO
The event will be held at Sao Paulo fashion week in March as this exposes the brand to the footfall of fashionistas, the press, celebrities and the public. Evidence suggests, â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s no secret that a democratising tide of digital media has brought a radical new accessibility to the global fashion industry, giving rise to a wide range of new voices and transforming what were once closedindustry facing fashion weeks into large scale consumer spectacles.â&#x20AC;? (Kansara, V,2013:online) ASOS Brazil will gain natural exposure due to the publicity generated at fashion week, especially as the launch shows a unique advancement in the Brazilian retail e-commerce market, with the aim of driving significant PR coverage and create brand awareness.
Press/journalists, PR, bloggers, celebrities, general public, industry professionals. There will also be stylists there, offering style consultations and making transactions with the consumer there and then. Running up to the campaign there will be high social media activity and promotional deals, for example sign up to ASOS and receive a 20% off code to use at the event. A press pack has been devised for the launch which contains further information, a press release and an invitation, please see supporting material. The costing for this event has been calculated in the section 12.
WHEN Sao Paulo Fashion Week March 2014.
Fig, 78 and 79
89
MARKETING STRATEGY: ASOS BRAZIL 90
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
10
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION
MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
MEASURING SUCCESS
91
In order for the recommended strategy to be validated and realistic, identifying the key performance indicators to measure success is vital when analysing the growth of the launch. Future marketing activity will be decided depending on whether ASOS are under or over achieving against their targets. Forecasting, planning and analysing are all crucial to ASOS, Its very fast paced so itâ&#x20AC;&#x2122;s important to know whatâ&#x20AC;&#x2122;s due, when, how it important it is and what the impact is on the business (asoscareers,2013:online) The Key Performance Indicators of each business and marketing aspect will be measured against and in relation to each other.
Fig 80
MARKETING STRATEGY: ASOS BRAZIL 92
SALES PERFORMANCE ASOS measure their sales performance every day. They then review the week performance against the forecast. If the sales units have changed significantly, for example it may happen during a large sale, they will contact their logistics team so they can adjust their resources at the fulfilment centre. As ASOS will expect an increase in sales from the new market, this will be extremely important to monitor. As ASOS have such a large number of brands and products including their own, it is important they focus on brand profitability and look at the figures of their large portfolio of brands. This does not only impact the finances but also the merchandising and buying teams.
WEBSITE AND APPS ASOS’s website and mobile app offer the same service however will be measured individually and compared against each other to differentiate the figures between the two. The performance indicators will be monitored every week and compared against the company’s goals. If there is an event or promotional deal coming up, ASOS will plan for this and their goals will be higher as the units sold will increase. Key performance indicator (KPI)
Current stats
Measurability
6 month goals
1 year goals
Global Average- £63.58 Measure the average (2012) basket value against other markets Average units per Global Average Measure and improve basket 2.35 (2012) the average units Average selling price Global Average Measure average per unit £27.09 (2012) selling price against other markets, competitors and products Number of orders Global Average Utilise opportunities (000) 11,811(2012) to increase orders Unique visitors During march 2012 17,500 Total visits (000) Global Average 47,160 (march 2012) Active customers (000) 4375 (2012) Against people who viewed site Repeat visits
£50
£63
1
2
£20
£25
150,000
300,000
10,000,000
20,000,000
25% repeat visitors
50% repeat visitors
Browsing
25% of browing leads to sales
50% of browsing leads to a sale
Average basket value
Search engine optimisation (seo)
Measure the browsing experience Paid or organic
93
SOCIAL MEDIA Social media is key to ASOS’s marketing strategy as it not only allows for them to connect with their consumers at all times, but it also generates a high number of sales (40%) (anon,2012) ASOS will use various metric and analytical tools and run weekly reports on all social media channels to analyse their outcomes. The outcomes will influence future social media activity. Although the marketing campaign will run through ASOS’s social media channels, they will be measured individually. As the campaign will provide ASOS with a vast amount of qualitative data with the consumer, it is important they not only measure it through KPI’s but analyse it thoroughly. “chances are you’ve got the data, now use it” (Gardner,J,2012:online)
Key performance indicator (KPI)
Current stats
Measurability
6 month goals
1 year goals
Fan Growth
global.com has 2,387,391 likes on facebook
Measure through each channel
France have 2,380,765 likes on Facebook 3 years after launching, with Brazils avid social media population and the goal for 10% (3,000,000 people) of 15-25 year olds to be brand aware, it is possible for ASOS to reach at least 400,000 likes after 6 months
800,000- 1m likes after the first year.
After 6 months 2.5% of sales through social media.
After a year 5% of the total sales
486,762 on twitter
Engagement rate Sales
40% (global 2012)
Sales through social promotions Shareability
Interactions
Social customer service
34,143 people talking about us on facebook
Engagement with the brand and consumers Sales through social media Measure the increase of promotionals against other factors Measure how many people are sharing content ASOS’s response to consumers and consumers response to ASOS. Activity and response rate
MARKETING STRATEGY: ASOS BRAZIL 94
After 6 months at least After a year at least 10,000 talking about 20,000 ASOS through Twitter and Facebook
PR As ASOS will have a PR agency in the market, it will be there responsibility to drive as much PR and marketing activity as possible, which will be constantly measured and monitored.
Key Performance Indicator (KPI)
Measurability
Product coverage magazines
Measure product coverage in magazines, how often, how influential and how many. Did it have an impact of sales of that product Measure brand coverage in press, did it increase sales and social media success Measure the success of product coverage on blogs, what type of blogs, how many followers they have. Be aware of blogs transparency, could be damaging. How many bloggers are writing about ASOS, measure the effects Send out products. If celebrity is seen in product use this as social media content, measure brand awareness after and sales of that product.
Brand coverage- articles/write up- magazines Product coverage- blogs
Brand coverage-articles/write up- blogs Celebrity wearing ASOS
INTERNET ADVERTISING Key Performance Indicator (KPI)
Measurability
Click through rate
How many people clicked on the ad, depending on where it was did it have more impact than others? What was the click through rate and how many people purchased as a result. Did the adverts increase brand awareness through social media.
Sales Brand awareness
EMAIL MARKETING Key Performance Indicator (KPI)
Measurability
Customer service Click through rate Sales Repeat visits
Did they respond to customer service rate What was the click through rate to the website Did it result in a sale Measure how it impacted repeat visitors
THE LAUNCH: DIGITAL EXPERIENCE Key Performance Indicator (KPI) Measurability
Goals
Social Media
Increase in likes before and after event
5% increase in what they had before the event.
Sales PR content
Sales at the event press coverage before and after the event
A 5 % increase from day to day
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MARKETING STRATEGY: ASOS BRAZIL 96
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
11
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
RISK ANALYSIS
97
ASOS are expanding into a new market as well as having a prominent presence in their existing ones. It is vital to complete a risk analysis to reduce any factors that can have a negative effect on the brand or their consumers as this could result in decreasing sales, bad customer service, and a negative brand rapport.
Risk Economic and Political
-As a retailer ASOS is sensitive to the economic climate. Factors such as household disposable income, weather, seasonality of sales, and changing demographics affect demand for the Groupâ&#x20AC;&#x2122;s products. (asosplc,2012:online)
Competition
-Internet fashion retailing is global and highly competitive. Failure to compete effectively with high street retailers, other Internet retailers and threat of new entrants, may affect revenues. (asosplc,2012:online)
Market
-Quick changing needs of the consumer -Constant seeking of new products and interaction -Bad response to new brands
Communication
-Language barriers -Miscommunicated Content adaption and cultural sensitivities -Lack of media circulation
Technology
-IT infrastructure failures
Customer Service
-Poor customer service or experience could adversely impact the Groupâ&#x20AC;&#x2122;s reputation and brand -Transparency of social media and the accessibly of information and opinions/ experiences online
MARKETING STRATEGY: ASOS BRAZIL 98
Mitigating Activity - Regular review by the Company of the economic climate to ensure that any changes are factored into the businessâ&#x20AC;&#x2122;s requirements and actions ac-cordingly. (asosplc,2012:online) - Responding to changes quickly, for example if an Brazil suffered an economic downturn, ASOS would have to respond by increasing their promotional offers and enhancing certain price points as well as reducing costly marketing activity if return on investment drops.
- Adoption of a proactive approach to monitoring competitor activity and consumer trends, for example through increased comparison shopping. (asosplc,2012:online) - Adoption and implementation of a clear pricing positioning strategy versus the primary high street retailers and other Internet retailers, which is regularly reviewed by management and the Board. (asosplc,2012:online) - Responding to change quickly
- Constant monitoring of trends and consumers needs - Regular attendance of fashion weeks (asosplc,2012:online) - Experienced buyers and designers - The review of brands and products and whether they are financially viable.
- Ensure well established relationships with the relevant companies in Brazil - The PR team will constantly monitor and increase media circulation through their contacts - Constant review of language and relevant content.
- Ongoing investment made in IT systems to ensure that they are able to continue to respond to the needs of the business and do not become obsolete. (asosplc,2012:online) - Back-up facilities in place to ensure that business interruptions are minimised and internal and customer data is protected from corruption or unauthorised use. (asosplc,2012:online)
- Investment in training of customer facing teams to ensure high customer care standards for all customers. - Constant review of internet content/ reviews - Efficient response to customerâ&#x20AC;&#x2122;s needs, especially on social media
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MARKETING STRATEGY: ASOS BRAZIL 100
Fig 81
101
MARKETING STRATEGY: ASOS BRAZIL 102
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
12
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
FINANCE
103
FORECAST/BUDGET (JAN 14-17) When proposing to launch ASOS into Brazil, this study is attempting to replicate the success which the country has had globally. When analysing their finances it is important to recognise the difference between markets in terms of ASOS’s presence, the year of the launch and the size of them market. ASOS.com is a public limited company (plc) which means that the business is owned by shareholders and its shares can be purchased by the general public, therefore it is in the interest of ASOS to inform their shareholders of the long term benefits as “they share risk and reward through equity participation, ” (asosplc,2012:online) as well as the launch benefitting all stakeholders. ASOS has been in the USA since 2010 and in 2012 made a gross profit of £24,698,000 and £39,959,000 in retail sales. (asosplc.2012:online) The current population for Brazil is 200 779 900 (countrymeters,2013:online) More than half of Brazil is now made up of what is called “Class C”, more commonly known as their middle class. When devising a sales forecast, it has been aforementioned that the aim is for 10% of middle class 15-35 year olds in the first year. (3,000,000 people) BRAZIL’S POPULATION 15-24 year olds- 16% of the whole population (32,212,464) 25-54 years: 43% (86,335,357/3= 28,778,451) I have divided it by 3 as ASOSs target age group is up to 35 ASOS’s target age group= access to 60,990,915 people Half the population are middle class- potential customers of 30,000,000. If a mere 1% (300,000) purchase from ASOS, with the Average basket price about £40 their retail sales for the first year will be £12,000,000. The reasoning for average basket price being lower than the UK average basket price is due to average disposable income and the risk of entering a new market. In 2012 in the UK ASOS made approx. £198,000,000 in retail sales, (if you divide those sales by the average basket price (£40) = just over 3 million people (approx. 5%) of the UK population after being established for 10 years.
COST OF LAUNCH In terms of how much the launch will cost, ASOS are planning on launching into China and it was stated that it will cost £6 million to launch including a distribution hub with 10% of ASOS’s current stock.(guardian,2013:online) Taking into consideration the size of the market and launching the website, it is estimated that it will cost ASOS £4m to launch and operate for the first year.
MARKETING STRATEGY: ASOS BRAZIL 104
BUDGET In 2012 ASOS spent £210,186m on operating costs excluding exceptional items. They also stated what these costs were spent on therefore they have been divided into percentages and applied to the cost of the launch. For the year 2014-2015 • Launch 4m • Cost of sales 7m Costs
Percentage
Budget
Distribution costs
(30%)
1.2 m
Payroll and staff costs
(24%)
960,000
Warehousing
(14%)
560,000
Marketing
(10%)
400,000
Production
(3%)
120,000
Technology costs
(5%)
200,000
Other operating costs (including delivery costs) Depreciation
(10%)
400,000
(4%)
160,000
Revenue
12,000,000
+20% 14,400,000
-20% 9,600,000
Total cost of launch (1 year)
4,000,000
4,000,000
4,000,000
Cost of Sales (stock)
7,000,000
7,000,000
7,000,000
Profit before tax
1,000,000
3,400,000
-1,400,000
Tax Profit after tax
(1000)
(1200)
(800)
Profit after tax
£999,000
3,398,800
-1,400,800
105
CONCLUSION ASOS have the opportunity to make a profit of £999,000 in the first year, plus or minus 20% depending on whether they grow faster or slower than expected. It is extremely unlikely that they will make 20% less than what is predicted as the average basket price is considerably lower than the rest of world. This is a viable amount as in 2012 they globally made £22m profits. Please see Appendix 5 for ASOS plc accounts to view how these conclusions were made. It must also be noted that ASOS is growing company therefore invest large sums of money into the business. MARKETING BREAKDOWN The marketing budget for the year 2014-15 is 400,000. When making the recommendations it is important to indicate how much they cost to ensure ASOS are making a return on investment. In 2016-17 ASOS’s marketing budget may increase, depending on sales, which will allow them to introduce further marketing activity that will drive brand awareness, PR value and sales. If ASOS spend their money and succeed in the goal set within the key performance indicators they should see a substantial return on investment as all marketing activity is to raise brand awareness, drive traffic to the website and increase sales.
PR Launch Event Social media Marketing campaign Internet advertising
50,000 (full time operations) 30,000 40,000 (10% of marketing budget) 10,000 60,000
Promotions Email marketing
60,000 40,000
Website Development
70,000
Extra Total
40,000 400,000
MARKETING STRATEGY: ASOS BRAZIL 106
2015-2016 and 2016-2017 When taking into consideration ASOS’s financial and market growth over the last few years it is likely that the investment they make in Brazil will result in future profits. Brazil’s economy is set to be the 5th largest in the world and GDP is likely to increase which will result in increasing disposable income. In the second year it has been proposed that ASOS implement various future recommendations which although will increase their costs, they should lead to higher return on investments. In the third year it has been proposed that ASOS set up a distribution centre in America holding 20% of ASOS’s stock for the American and South American market combined. If brand awareness increases to 35% of the 15-35 year old market and 3% of the target consumer buy from ASOS , profits will be soaring which will allow for ASOS to constantly reinvest.
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MARKETING STRATEGY: ASOS BRAZIL 108
INTRODUCTION METHODOLOGY ASOS: THE COMPANY ASOS: BRANDING THE MARKET
13
AIMS&OBJECTIVES MARKET ENTRY CONSUMER MARKETING&COMMUNICATION MEASURING SUCCESS
RISK ANALYSIS FINANCE CONCLUSION
CONCLUSION
109
13.1 TIMELINE
Feb 14
March 14
-Launch site -Summer clothing/ sale -Launch social media -Social media campaign 2 weeks before pop up. -S/S fashion week -Digital pop up store for 1 week
April 14
-ABEST trade show (look out for Brazilian designers)
May 14
-Autumn collection
June 14
-FIFA World Cup (sportswear focus)
July 14
-Winter collection
Aug 14
-Winter Sale
Sept 14
-Early Spring collection
Oct 14
-Spring -A/W fashion week
November 14
Consider magazine advertising
December 14
Xmas Holidays Party/holiday collections Sale
Jan 15
-New years day edit/collection
110
Aforementioned throughout this report, ASOS are a globally established online retailer with experience in the international market. Launching into Brazil with a country specific website presents many opportunities for the companyto increase customer awareness, shopper frequency, average basket size and conversion rates, which will result in strong sales growth and increased market share. The marketing recommendations which have been made are both in keeping with the brand but suitably adapted to the local culture. As they are a digitally run company, ASOS can respond to trends and consumersâ&#x20AC;&#x2122; needs quickly, and continue to be the leaders of innovation within high street fashion. However it is also important that the recommendations are realistic to achieve in the first year of a new launch. Once established in the market, the future recommendations allow for further localisation and for ASOS to utilise the opportunities that this exciting market offers. This launch aims to contribute to ASOSâ&#x20AC;&#x2122;s aim of achieving sales of ÂŁ1 billion by 2015.
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13.2 FUTURE RECOMMENDATIONS RECOMMENDATION JOINT VENTURE
Once established in the market and reached their short term objectives, further investment plans can be made. ASOS currently have 50% interest in the ordinary shares of one joint venture, the online retailer Crooked Tongues Limited registered in the UK. (asosplc.2012:online)
COLLABORATION
Once ASOS are established in the market it has been proposed that they collaborate. ASOS seek out the opportunity to collaborate and by doing this in Brazil recognises the potential from local brands.
NEW BRANDS
In the report the importance of Brazilian brands was noted. As ASOS gain a substantial amount of customers, it may be a viable option for them to stock local brands.
MARKETPLACE
To increase the connectivity between consumers not just in Brazil but globally and encourage sales from all over the world, ASOS could introduce a “clothes miles” system. Depending on where you are located, every country will have a certain amount of “clothes miles”. Once you collected enough points you can receive money off or a free item. Although the increase of shipping clothes is harmful to the environment, a lot of the clothing is second hand or “vintage”.
DIGITAL EXPERIENCE
Depending on the success of the digital pop up store, as well as taking into consideration the major marketing and technology trends of 2016, it may be a viable option for ASOS to launch a series of them around the time of the World Cup in 2016 as there will be a large increase of domestic and international visitors. Another suggested way is incorporating the brand into the opportunities that the country presents, for example “sponsorship of Brazilian events, with a digital element. the marketing power of local events. With the Fifa World Cup coming to Brazil in 2014 and Rio de Janeiro hosting the 2016 Olympics, this is an area that looks set to grow” (Snoad,L,2012:online)
MARKETING STRATEGY: ASOS BRAZIL 112
IMPACT ASOS could seek out investing into a joint venture as they will gain a wider consumer group which could lead to increased sales as well as driving traffic to their website.
Evidence suggests, “collaborations are becoming more about the marketing opportunities, less about the sales. “I think the collaboration movement will only grow as our world becomes smaller through easy dissemination of information via the internet,’ said Lisa Salzer, designer of Lulu Frost (forbes,2012:online) which is extremely positive for ASOS as it will increase brand awareness and marketing potential. This will add a level of localisation as well as increase their customer base.
This will increase the awareness of global brands locally and increase ASOS’s presence in additional markets.
By launching them in prominent cities and places, for example airports, this will allow for the global brand ASOS to further expand their global brand awareness, increase sales and have act as a point of interaction for consumers.
TIME
Consider after two years
Consider after 6 months
Consider after a year, before the Olympics
Consider for their global operations after 8 months
After 6 months
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MARKETING STRATEGY: ASOS BRAZIL 114
14
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115
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BIBLIOGRAPHY
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BOOKS SCOTT, M. (2007) The New Rules of Marketing and PR: How to Use News Releases, Blogs, Podcasting, Viral Marketing and Online Media to Reach Buyers Directly. 3rd Edition. Wiley. DAVIDSON, J. (2012) Brazil is the New America: How Brazil Offers Upward Mobility in a Collapsing World. 1st edition. Wiley. HELEPETE,J. (2011) Retailing in Emerging Markets. 1 Edition. Fairchild Pubns. LAUNDON,K (2012) E-Commerce 2012. 8th revised. Pearson Education. LEE, K (2006) Global Marketing Management. Edition. Oxford University Press, USA. KOTLER, P., & ARMSTRONG, g. (2008). Principles of marketing. Upper Saddle River, N.J., Pearson/Prentice Hall. LOGUE, A. C. (2011). Emerging markets for dummies. Hoboken, NJ, Wiley Pub., Inc. MONTIEL, P (2011). Macroeconomics in Emerging Markets. 2nd edition. Cambridge press. QUALMAN, E (2010) Socialnomics: How Social Media Transforms the Way We Live and Do Business. Wiley. USUNIER, J. LEE, J (2009) Marketing across cultures. 5TH edition. Harlow. Pearson educations limited. RAYMOND, M (2003) The Tomorrow people: future consumers and how to read them. Harlow. Peason educations limited.
VIDEO Brazil with Michael Palin, 2012. (video) BBCONE . England. Rags To Riches, 2011 (Video) youtube. Journeymanpictures.
ARTICLES Almeida,B,2012. Email marketing (online) Available at http://latinlink.usmediaconsulting. com/2012/12/3-reasons-why-e-mail-marketing-may-be-the-best-way-to-reach-brazilians/ (Accessed on 08/03/2013) Amen,I,2012. The fashion trail. (online) Available at http://www.businessoffashion.com/2012/08/thefashion-trail-london-2012-olympics.html. Accessed on 20/04/13) Anon,2012. The women behind the scenes of Brazils fashion industry.(online) Available at www.businessoffashion.com/2012/04/three-women-behind-the-scenes-of-brazil.html (Accessed on 20/10/12)
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Anon,2012. Brazils changing fashion calendar (online) Available at http://www.businessoffashion. com/2012/07/global-briefing-mall-culture-rising-in-brazil.html. (Accessed on 20/04/13) Anon,2012. International trade (online) Available at https://www.gov.uk/international-trade-in-services-import-and-export-regulations. (accessed on 10/04/13) Anon,2012. Five opportunities for ASOS (online) Available at http://www.retail-week.com/multichannel/five-opportunities-for-asos/5037047.article (accessed on 12/04/13) Anon, 2012. ASOS social media. (online) Available at https://www.marketingsociety.co.uk/the-library/2012-asos-social-media-case-study-highly-commended (accessed on 14/04/13) Antunes,A,2011. Selling luxury goods in brazil: lessons from an insider(online) Available at www. forbes.com/sites/andersonantunes/2011/10/11/selling-luxury-goods-in-brazil.html (Accessed on 18/10/12) Anaya,S,2010.Inside Brazils booming fashion industry. (online) Available from http://www.businessoffashion.com/2010/08/inside-brazils-booming-fashion-industry.html.( Accessed on 02/11/12) Arthur,R,2012. Brazilian youth: driving social change (online).Available at www.wgsn.com/content/ report/marketing/conusmer_insight/2012/April. (Accessed on 02/11/12) Arno, C,2013. Brazil: A social media marketers gold mine (online) Available at http://socialmediatoday.com/christian-arno/1337541/brazil-social-media-marketing-gold-mine (Accessed on 10/04/13) Barnett,M,2012. Why brands must be part of local cultures. Available from http://www.marketingweek.co.uk/trends/why-global-brands-must-be-part-of-local-cultures/4001088.article (Accessed on 01/02/13) Becker, P, 2013. Brazil is revealed social media capital of the world. (online) Available from http:// wallblog.co.uk/2013/02/06/brazil-is-revealed-as-the-social-media-capital-of-the-world/ (Accessed on 12/04/13) Benton,J,2012. ASOS in Australia (online) Available from http://www.powerretail.com.au/pureplay/ asos-in-australia/ (Accessed on 18/03/2013) Bevins,V,2012. Custo Brasil takes it toll on textiles (online) Available at www.ft.com/cms/s/2/3e569f880c 8a-11e2-a73c-00144feabdb0.html. (Accessed on 19/10/12) Bezerra, L, 2012. Shopping for vintage style in rio (online) available at http://riotimesonline.com/brazil-news/rio-travel/shopping-for-vintage-style-in-rio/# (accessed on 29/04/13) Box1824,2012 Brazilian youth report (online) Available from http://pesquisa.osonhobrasileiro.com.br/ indexn.php (Accessed on 25/11/12) Bruyckere,P,2012. The demographic truth behind gen y (online) Available at http://www.howcoolbrandsstayhot.com/2012/06/14/the-demographic-truth-behind-gen-y/ (Accessed on 20/01/12) Burgoyne,P,2007 To the city that said no to advertising (online) Available from http://www.businessweek.com/stories/2007-06-18/s-o-paulo-the-city-that-said-no-to-advertisingbusinessweek-businessnews-stock-market-and-financial-advice (Accessed on 20/01/12)
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Deer, R, 2012 ASOS drives social media engagement (online) Available at http://marketingnews. insideonline.co.uk/asos-com-drives-social-media-engagement-as-uks-top-fashion-retailer-online (Accessed on 01/11/12) Drell,L,2012. Five Innovations In Travel (online) Available at http://mashable.com/2012/12/07/innovation-index-travel/ (Accessed on 20/01/13) Dmarket, 2011. Webtrends data helps fuels ASOS international growth. (online) available at http:// www.dmarket.co.uk/a/asos-webtrends-international-growth (accessed on 30/04/13) Farfetch, 2013. Ola Brasil (online) Available from http://www.farfetch.com/projects/olabrazil/expertview.aspx (accessed on 30/04/13) Gardner,J,2012. Digtial marketing 2013 (online)Available at http://mashable.com/2012/12/13/digital-marketing-2013/ (Accessed on 20/01/13) Geromel, R, 2012, Brazil e-commerce 101 or The Basics About e-business in Brazil.(online) Available at http://www.forbes.com/sites/ricardogeromel/2012/06/11/brazil-e-commerce-101-or-the-basicsabout-e-business-in-brazil/. (Accessed on 17/11/12) Geromel, R, 2012. What is Brazils most promising sector. (online) Available at http://www.forbes. com/sites/ricardogeromel/2012/03/29/what-is-brazils-most-promising-sector/ (Accessed on 17/11/12) Geromel, R, 2012. Brazils e-commerce is booming (online) Available at http://www.forbes.com/sites/ ricardogeromel/2012/03/23/brazils-e-commerce-is-booming-record-breaking-figures-in-2011-growthof-26-earnings-of-11-bi/ (Accessed on 20/12/12) Germomel, R, 2012 Key Ingredient to Tech Success in Brazil Is In The Silicon Valley. Available from http://www.forbes.com/sites/ricardogeromel/2012/05/18/brazil-sillicon-valey/ (Accessed on 20/11/12) Geromel, R, 2012, Brazil e-commerce 101 or The Basics About e-business in Brazil.(online) Available at http://www.forbes.com/sites/ricardogeromel/2012/06/11/brazil-e-commerce-101-or-the-basicsabout-e-business-in-brazil/. (Accessed on 17/11/12) Gortan, R, 2012, ASOS exclusive for Australia (online) Available from http://www.news.com.au/lifestyle/fashion-beauty/asos-exclusive-for-australia/story-fnet01u7-1226490490398#ixzz2DFJzUIm9 (Accessed on 21/11/12) Grimberg, J, 2012. Brazils changing fashion calendar (online) Available at http://www.businessoffashion.com/2012/10/global-briefing-brazils-changing-fashion-calendar.html (Accessed on 20/01/13) Grunstdiel,A, 2012, FastCo Design (online) Available from http://www.fastcodesign.com/1662269/four-keys-to-surviving-the-future-of-retail (Accessed on 20/11/12) Hall, J, 2011. Brazilians flock to UK (online). Available at www.telegraph.co.uk/news/ uknews/8813590/Brazilians-flock-to-UK.html (Accessed on 20/10/11) Heim, A, 2012. Forrester: Brazil set to remain the leading e-commerce market in Latin America. (online) Available at http://thenextweb.com/la/2012/07/24/forrester-brazil-set-to-remain-the-leadinge-commerce-market-in-latin-america/. (Accessed on 17/11/12)
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Hughes, N, 2013. Retail awards. (online) available from http://www.retail-week.com/home/oracle-retail-week-awards-asos-appeal-makes-it-a-global-star/5047262.article (accessed on 20/04/13) Jobling,A, 2013. CES: Consumer technology spending. Available from www.wgsn.com (accessed on 10/04/13) Jennings, H, 2012. How Brazil’s homegrown fashion grew up.(online) Available at http://www.guardian.co.uk/fashion/fashion-blog/2012/nov/22/brazil-fashion-rio-sau-paulo. (Accessed on 25/11/12) Kansara, V, 2013. In the glare of fashions growing circus a double standard. Available at http://www. businessoffashion.com/2013/02/in-the-glare-of-fashions-growing-circus-a-double-standard.html. (Accessed on 17/04/13) Kent, M, The five mega-trends shaping tomorrow’s customers. (online) Available at http://www.bbc. co.uk/news/business-18503627. (Accessed on 21/11/12) Kuschel,N,2012. A guide to trading with Brazil (online) Available at http://www.startups.co.uk/aguide-to-trading-with-brazil.html (Accessed on 12/01/13) Koike, T, 2012. Brazil online ad spend to grow. (online) available from http://latinlink.usmediaconsulting.com/2012/05/brazil-online-ad-spend-to-grow-by-40-percent-in-2012/ (Accessed on 15/04/13) Kligin,S, 2012. What Brazilian consumers want (online) Available from (http://latinlink.usmediaconsulting.com/2012/07/what-brazilian-consumers-want/ (Accessed on 12/04/13) Macalister,T,2012. Brazilian designers (online) Available at http://www.vogue.co.uk/ news/2012/06/26/brazilian-designers-london-pop-up-shop-bluebird-sao-paulo (Accessed on 01/02/13) Marian, P, 2011, Asos focuses on more lucrative international sales. (Online) Available at http://www. just-style.com/analysis/asos-focuses-on-more-lucrative-international-sales_id112648.aspx (Accessed on 18/11/12) Moronta, S, 2011. Brand building in Brazil. (online) Available from http://wheresthesausage.typepad.com/my_weblog/2011/04/brand-building-in-brazil.html (Accessed on 01/02/03) Morris,A,2010. Multichannel retailing (online) Available at http://www.fibre2fashion.com/industry-article/31/3067/multichannel-retailing-its-here-to-stay1.asp (Accessed on 14/04/13) Newman, D, 2011, Demographic changes to boost Brazil’s investment appeal,(online) available at http://www.iii.co.uk/articles/15049/demographic-changes-boost-brazils-investment-appeal. Accessed on 11/12/2012 Nunes, J, 2012. How Brazilian fashion is taking over the world (online) Available from http://www. huffingtonpost.co.uk/joao-paulo-nunes/how-brazilian-fashion-is-_b_2176059.html. (Accessed on 20/11/12) Oever, K, 2012 (online) International strategy: where next for e-commerce? Available from http://internetretailing.net/2012/11/international-strategy-where-next-for-ecommerce/ (accessed on 12/04/13) Parker,S, 2012. Retail Marketing Trends: The Future of eCommerce(online) Available at http://www.business2community.com/marketing/retail-marketing-trends-the-future-of-ecommerce-0347195#K62fLJppPFLqjtZo.99 (Accessed on 12/01/13) 123
Pearson,S,2012. The Brazilian retail riddle (online) Available at http://www.ft.com/cms/s/0/2395e3f8026b-11e2-8cf8-00144feabdc0.html#axzz2Ryo9cPaz (Accessed on 04/04/13) Rio,2012. Rio de Janeiro (online) Available at http://rio2016.com/sites/default/files/parceiros/candidature_file_v1.pdf (accessed on 18/10/12) Rio carnival, 2013. Rio (online) Available at http://www.rio-carnival.net/ (accessed on 18/04/13) Santos,A,2012. Lifes a beach:how Brazilian brands went global (online). Available at www.marketingblogged.marketingmagazine.co.uk (Accessed on 20/10/12) Santi, A 2013. Global Report: Why global expansion is top of the agenda Available at http://www. drapersonline.com/in-business/global-issue/global-report-why-global-expansion-is-top-of-the-agenda/5048343.article. (Accessed on 19/04/13) Santi,A, 2013: Global report: Brazil (online) Available from http://www.drapersonline.com/in-business/ global-issue/global-report-brazil/5048351.article(accessed on 05/05/13) Scott,G,2012. Digital IQ Index (online) available at http://www.l2thinktank.com/research/digital-iq-brazil-russia-india/ (accessed on 05/04/13) Snoad,L, 2012. Breaking into Brazil (online) Available at www.marketingweek.co.uk/breaking-into-brazil/3033886.article. (Accessed on 19/10/12) Social bakers, 2012. Facebook Statistics Brazil. Available at http://www.socialbakers.com/facebook-statistics/brazil (Accessed on 02/01/13) Tavener, B, 2013. Brazil broadband access (online) Available at http://riotimesonline.com/brazil-news/ rio-business/brazil-broadband-access-slowly-increasing/# (Accessed on 16/04/13) Terrelonge , Z, 2012. Premium facebook ads (online) available from http://www.mobile-ent.biz/news/ read/premium-facebook-ads-boost-asos-sales-by-130-per-cent/018680. (Accessed on 12/04/13) Thompson, R, 2012. Why have so few retailers entered Brazil. Available at http://www.retail-week.com/ analysis-why-have-so-few-retailers-entered-brazil/5040089.article (Accessed on 25/04/13) The Economist. Ideas innovation. Brazil 2012 (online). Available from http://www.economist.com/ events-conferences/americas/brazil-innovation-2012. (Accessed 04/11/12) Trend watching, 2012. 10 trends for 2013. Available at http://www.trendwatching.com/ trends/10trends2013/ (Accessed on 20/01/13) Trend watching, 2012. Etailevolution. Available at http://www.trendwatching.com/trends/etailevolution/?metail (Accessed on 19/04/13) Thompson, R, 2012. Why have so few retailers entered Brazil. Available at http://www.retail-week.com/ analysis-why-have-so-few-retailers-entered-brazil/5040089.article (Accessed on 20/01/13) Thompson, R. 2012. The changing face of fashion retail. Available at http://www.retail-week.com/thechanging-face-of-fashion-retail/5037465.article (Accessed on 04/04/13)
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WGSN,2012. Brazilian youth: driving social change (online). Available at www.wgsn.com/content/report/marketing/consumer_insight_2012/aprol/brazilian (Accessed on 16/10/12) WGSN, 2012. Social Media in Brazil: behaviours,platforms and brands (online) Available at www. wgsn.com (Accessed on 15/11/12) WGSN,2012. Branding: the Olympic journey (online). Available at www.wgsn.com (Accessed on 20/10/12)
REPORTS GMID. 2012. Apparel in Brazil (online) Available at http://www.portal.euromonitor.com/Portal/Pages/ Search/SearchResultsList.aspx. (Accessed on 20/10/11) GMID.2012. Consumer lifestyles in Brazil (online) available at http://www.portal.euromonitor.com/ Portal/Pages/Magazine/TopicPage.aspx. Accessed on 06/11/12) GMID,2012, Travel and tourism in Brazil (online) Available at https://www.portal.euromonitor.com/ Portal/Pages/Search/SearchResultsList.aspx (Accessed on 04/01/13) GMID, 2012, Asos PLC in apparel (online) Available at http://www.portal.euromonitor.com/Portal/ Handlers/accessPDF.ashx?c=69\PDF\&f=F-212679-21991669.pdf&code=BMK%2b%2bEaIk5IuSZHFwq4mp63cBjg%3d (Accessed on 12/11/2012) Mintel, 2012. Clothing retailing. (Online). Available from http://academic.mintel.com/display/642274/?highlight=true#hit1. (Accessed on 4/11/12) Mintel, 2012, Fashion online (online) Available from http://academic.mintel.com/display/616153/?highlight=true#hit1 (Accessed on 20/11/12)
PUBLICATION ASOS, 2012. Annual report (pdf) Available at http://asos.annualreport2012.com/ (Accessed on 01/11/12) Drapers, 2012, Innovation in fashion (pdf) Available at http://www.drapersonline.com/innovation-in-fashion/5042206.article (Accessed on 20/01/12) London,2012. A guide to the London 2012 Olympic Games and Paralympic Games (online) Available at http://www.london2012.com/mm%5CDocument%5CPublications%5CJoinin%5C01%5C24%5C08%5C88%5Ceveryones-games.pdf. (accessed on 20/10/12)
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White, T, 2012, Bric spotlight report (pdf) Available from http://www.thomaswhite.com/explore-theworld/bric-spotlight/overview.aspx (Accessed on 20/01/12) Kjaer, A, 2012. Macro trends 2015 (pdf) Available from http://kmhassociates.ca/resources/6/ MACRO%20TRENDS%202015+.pdf (Accessed on 20/11/12) Meyer,L. Bernier,I,2010. Standardizing or Adapting the Marketing Mix across Culture(pdf) Available from hh.diva-portal.org/smash/get/diva2:326017/FULLTEXT01 (Accessed on 25/03/13) KPMG, 2010. Developing a market entry strategy for brazil (pdf) Available from http://www.kpmg.de/ docs/Folder_Market_Entry_ing-Final.pdf) accessed on 27/04/13) (UKTI,2012. Doing business gudie.(pdf) Available from http://www.brazil.doingbusinessguide.co.uk/ the-guide.aspx (Accessed on 20/04/13)
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Fig 1- ASOS model. 2013. (online image) Available from www.prshots.com (Accessed on 04/04/13) Fig 2- ASOS model. 2013. (online image) Available from www.prshots.com (Accessed on 04/04/13) Fig 3- brazil beach. 2013 (online image) Available from http://pinterest.com/pin/482870391266903643/ (Accessed on 20/12/12) Fig 4- brazil consumer (girl) (online image) Available from http://pinterest.com/ pin/482870391267040270/ (Accessed on 11/11/12) Fig 5- ASOS models (online image) Available from www.asosplc.com (Accessed on 15/04/13) Fig 6- street style male (online image) Available from styleguy.tumblr.com (accessed on 13/05/13) Fig 7- ASOS model male (online image) Available from www.asos.com (Accessed on 20/04/13) Fig 8- ASOS models (online image) Available from www.prshots.com (Accessed on 11/11/12) Fig 9- financials (online image) Available from www.asosplc.com (Accessed on 12/03/13) Fig 10- international growth (online image) Available from www.asosplc.com (Accessed on 12/03/13) Fig 11- ASOS model (online image) Available from www.prshots.com (accessed on 13/03/13) Fig 12- globe (online image) Available from http://pinterest.com/pin/482870391266855934/ (Accessed on 12/11/12) Fig 13- ASOS models (online image) Available from www.pinterest.com (Accessed on 15/03/13) Fig 14- ASOS model female (online image) Available from http://www.fabsugar.com.au/First-LookASOS-Australian-Exclusive-Your-World-Collection-Campaign-Look-Book-25177830 (Accessed on 25/04/13) Fig 15- ASOS model (online image) Available from www.prshots.com (Accessed on 12/04/13) Fig 16- camera (online image) Available from www.asosplc.com (Accessed on 30/04/13) Fig 17- ASOS models (online image) Available from http://stylehostess.blogspot.co.uk/2013/02/ asos-summer.htm l (Accessed on 12/04/13) Fig 18- ASOS campaign (online image) Available from http://www.campaignlive.co.uk/news/1105787/ (Accessed on 12/04/13) Fig 19 â&#x20AC;&#x201C; ASOS models (online image) Available from asosplc.com (Accessed on 12/04/13) Fig 20- male street style (online image) Available from www.pinterest .com (Accessed on 13/05/13) Fig 21- brazil women beach (online image) Available from www.pinterest.com (Accessed on 05/05/13)
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Fig 22- brazil flag (online image) Available from http://blogs-images.forbes.com/kenrapoza/ files/2011/11/brazil_flag.jpg (Accessed on 11/12/12) Fig 23- ASOS model (online image) Available from www.prshots.com (Accessed on 22/03/13) Fig 24- ASOS model in your world collection (online image) Available from http://pinterest.com/ offsite/?url=http%3A%2F%2Fwww.ashkastyle.com%2F&shatoken=7a9014ed925dd9a470c82cb937f8e2e470809cce (Accessed on 01/05/13) Fig 25- ASOS package (online image)Available from http://www.google.co.uk/imgres?q=asos+package (Accessed on 01/05/13) Fig 26- ASOS male model (online image) Available from www.asos.com (Accessed on 05/05/13) Fig 27- Brazil girl (online image) Available from www.nymag.com (Accessed on 05/05/13) Fig 28- Brazilian youth (online image) Available from www.wgsn.com (Accessed on 06/03/13) Fig 29- Brazil blogger (online image) Available from www.lookbook.nu (Accessed on 20/03/13) Fig 30-26- Consumers (online image) Available from www.wgsn.com (Accessed on 20/03/13) Fig 37-43- ASOS models (online image) Available from www.asos.com (Accessed on 20/03/13) Fig 44- C&A logo (online image) Available from http://www.cea.com.br/ (Accessed on 23/04/13) Fig 45- Renner logo (online image) Available from http://lojavirtual.lojasrenner.com.br/ (Accessed on 23/04/13) Fig 46- Riacheulo (online image) Available from http://www.riachuelo.com.br/ (Accessed on 23/04/13) Fig 47- O look logo (online image) Available from http://www.olook.com.br/ (Accessed on 12/04/13) Fig 48- Dafiti- (online image) Available from http://www.dafiti.com.br/ (Accessed on 12/04/13) Fig 49- Topshop logo (online image) Available from www.topshop.com (Accessed on 12/04/13) Fig 50- Zara logo (online image) Available from www.zara.com (Accessed on 12/04/13) Fig 51- ASOS model (online image) Available from www.prshots.com (Accessed on 12/04/13)
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Fig 52- ASOS campaign (online image) Available from http://brandads.blogspot.co.uk/2011/02/initial-brand-research.html (Accessed on 12/04/12) Fig 53- ASOS models (online image) Available from http://brandads.blogspot.co.uk/2011/02/initial-brand-research.html (Accessed on 12/04/12) Fig 54-ASOS model in your world (online image) http://pinterest.com/pin/535646949399961106/ (Available from 22/03/13) Fig 55- ASOS model (online image) Available from www.prshots.com (Accessed on 23/03/13) Fig 56- ASOS campaign (online image) Available from www.pinterest.com (Accessed on 20/04/13) Fig 57- ASOS clothes (online image) Available from thecherryblossomgirl.com (Accessed on 20/03/13) Fig 58- ASOS clothes (online image) Available from www.asosplc.com (Accessed on 04/03/13) Fig 59- group 1 (online image) Available from www.asos.com (Accessed on 12/04/13) Fig 60- group 2 (online image) Available from www.asos.com (Accessed on 12/04/13) Fig 61- group 3 (online image) Available from www.asos.com (Accessed on 12/04/13) Fig 62- group 4 (online image) Available from www.asos.com (Accessed on 12/04/13) Fig 63- Brazil consumer (online image) Available from http://pinterest.com/pin/482870391267232400/ (Accessed on 20/04/12) Fig 64- Brazil fashion (online image) Available from http://pinterest.com/pin/40954677831600910/ (Accessed on 13/05/13) Fig 65- Girl (online image) Available from www.asosplc.com (Accessed on 20/04/13) Fig 66- computer (online image) Available from www.asosplc.com (Accessed on 25/04/13) Fig 67- ASOS marketplace (online image) Available from https://marketplace.asos.com/listing/shirts/ mens-vintage-hawaiian-aztec-crazy-pattern-shirt/879872 (Accessed on 12/04/13) Fig 68- ASOS marketplace (online image) Available from https://marketplace.asos.com/women?WT. ac=Mktp_Head_Women (Accessed on 12/04/13) Fig 69- ASOS model (online image) Available from www.prshots.com (Accessed on 13/04/13)
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Fig 70- ASOS model (online image) Available from www.pinterest.com (Accessed on 13/04/13) Fig 71- ASOS magazine (online image) Available from awake-smile.blogspot (Accessed on 13/05/13) Fig 72- Customer Service (online image) Available from www.asosplc.com (Accessed on 13/05/13) Fig 73- ASOS model (online image) Available from www.prshots.com (Accessed on 08/04/13) Fig 74- ASOS model in your world (online image) Available from www.pagesdigital.com (Accessed on 03/03/13) Fig 75- Beach (online image) Available from www.wgsn.com (Accessed on 01/05/13) Fig 76- ASOS consumer (online image) Available from www.weheartit.com (Accessed on 01/05/13) Fig 77- ASOS campaign (online image) Available from www.pinterest.com (Accessed on 01/05/13) Fig 78- SPFW logo (online image) Available from http://www.fabulousblog.co/2012/11/brazilian-fashion-sao-paolo-fashion-week-2012/ (Accessed on 10/04/13) Fig 79- Net A Porter (online image) Available from http://www.5starweddingdirectory.com/blog/ the-karl-lagerfeld-celebrations/ (Accessed on 10/04/13) Fig 80- Street style male (online image) Available from http://iwishtocontinue.tumblr.com/image/44051227098 (Accessed on 20/04/13) Fig 81- ASOS model (online image) Available from www.prshots.com (Accessed on 05/13/13) Fig 82- ASOS model (online image) Available from www.prshots.com (Accessed on 05/13/13)
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APPENDIX
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01
PRIMARY RESEARCH
PRIMARY RESEARCH RESULTS 1 A short interview with co-owner of tricky hips a Brazilian clothing brand.
Question one: Do you and people you know ever shop at ASOS? Response one: I have shopped at ASOS loads of times and so have my friends. Question two: Have you found selling on ASOS marketplace has been positive? Response two: Marketplace hasn’t been positive for us so far because we haven’t sold a single piece but need to pay a monthly amount to ASOS. I think the cost of delivery from Brazil to Europe is too high so people prefer buying local brands. Question three: What sort of Brazilian designers do you buy from? Response three: We have a huge range of brands here, the thing is most of them are too expensive. Question four: Is there a lot of choice in Brazil (where you live) of high street/middle market brands? Response four: We don’t have anything like ASOS: cheap + cool stuff, or even high street brands like HM, Primark, Uniqlo, Pull&Bear...Topshop/Topman opened its first store in São Paulo this year but it’s still a bit more expensive than if you compare to prices in Europe and USA. That is our plan for Tricky Hips: have a strong brand + cheap prices!
MARKETING STRATEGY: ASOS BRAZIL 134
PRIMARY RESEARCH RESULTS 2 Questionnaire conducted on male and female Brazilians 1)
Are you male or female?
• •
Male- 27.3 % - 3 people Female- 71.2%- 8 people
2) • •
Have you purchased anything from ASOS before? Yes- 9.1 %- 1 person No- 90.9%- 10 people
3) •
If yes which brands? I person said ASOS, Diesel, Fred Perry, Calvin Klein
4) • • • • • • • • • • •
What is your favourite non Brazilian clothing brand? Tommy Hilfiger I don’t have any favourite non Brazilian clothing brand Tommy, GAP, Aero Tommy Daiane - Dopping - Morena Rosa Armani, Oakley, H&M Louis Vuitton Diesel, Polo Ralf Lauren, Adidas, Tommy Guess. Topman, Diesel, Fred Perry
5) • • • • • • • • • • •
What is your favourite Brazilian clothing brand? Hering I don’t have any favourite brazilian clothing brand Zara, Siberian, HOPE, Hering, TNG Hering Colcci (http://www.colcci.com.br/internacional/ Colcci, forum, havaianas Hering Ellus Colcci, Ellus, Forum Hering. Osklen, Redley, Tricky Hips
6) • • •
Do you buy the majority of your clothes in store or online? Instore 81.8%- 9 people Online- 0 people Both 18.2% - 2 people
7) • •
If online which website? ebay, mercado livre asos
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8) • • • • • •
What would encourage you to buy more clothes online? Cheaper delivery costs- 36.4%- 4 people Cheaper return costs- 45.5 %- 5 people Interactive website- 36.4 %- 4 people Style advice- 36.4%- 4 people Good choice of brands- 54.5%- 6 people Other- size of clothes clearly exposed and price
9) • • • • • • • •
Which type of clothing/accessory would you most likely buy online? Shoes – 45.5 %- 5 people Trousers- 9.1%- 1 person Tops- 9.1%- 1 person Shirts- 36.4 %- 4 people Jackets/coats- 9.1%- 1 person Underwear- 18.2%- 2 people Accessories e.g bags and watches- 81.8%- 9 people Sportswear- 27.3%- 3 people
10) • • •
Would you prefer to buy from an English or Portuguese site? English- 0% Portuguese- 36.4%- 4 people It doesn’t matter- 63.6%- 7 people
MARKETING STRATEGY: ASOS BRAZIL 136
PRIMARY RESEARCH RESULTS 3 1)
Are you male or female? Male- 0 Female- 3 people
2) What is your occupation? Student, designer and fashion blogger Student Fashion student 3) Do you purchase clothing online? Yes regularly- 2 Sometimes- 1 Once- 0 Never-0 4)
Depending on your answer, why do you/do you not shop online? It’s fast and I have access to shops that doesn’t exist in my city/country Usually a buy online because of the convenience, and for the lower price.
5)
Have you heard of the online fashion retailer ASOS, Yes- 3 No- 0
6)
If yes, do you think it would work well in the Brazilian market and why? Yes, because clothes aren’t expensive and there are a lot of options I think it will be amazing I know a lot of people that love the items from Asos. Brazil really need a market like this. I believe it would work well because Asos provides a wide range of brands at different prices level. The pieces are well selected and in general Brazilians love international brands.
7)
What would attract you to buying more clothes online? No taxes when shipping to Brazil The opportunity to get trendy clothes and the option to get a lot of styles The advantage of having clothing at a lower price compared to offline stores
8) Do you think its important to buy from Brazilian fashion brands and designers? Not really Yes It is No. I think there are excellent Brazilian designers but the the pieces are really overpriced. I think the Brazilian version of Asos can collaborate with some Brazilian designers but the main focus should be International brands. 9) What is your favourite brand? Shopbop ASOS, nasty gal, free people, renner and c&a BCBG, Maxazria
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02
SWOT ANALYSIS
STRENGTHS
• ASOS excel in their experience in the international marketplace with expected sales of £1 billion by 2015 •
They offer free shipping from their central warehouse to over 190 countries
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62% of sales are now coming from outside the UK.
•
They have the finance and logistics in place to set up a country specific site in Brazil
• They currently operate seven country specific sites, in UK, USA, Germany, France, Australia, Italy and Spain and there have been talks of China, Russia and Brazil. •
To internationalise their business they aim to remove any barriers for consumers.
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They have made significant improvements to their outbound shipping proposition.
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They offer fully tracked delivery services in their most important markets.
•
ASOS have a large variety of products and brands to offer as well as services.
• In the past 4 years they have invested over £35 million in ensuring that technology is of the highest standard and state of the art. • Their internet only proposition is ideally positioned for a key apparel market trend by strengthening the relationship with consumers through the use of online technology and social media (GMID,2012:online)
IMPACT:
The experience that ASOS have and the service that they provide will prove to be extremely beneficial. All the strengths contribute to the success of this launch.
MARKETING STRATEGY: ASOS BRAZIL 138
WEAKNESSES •
First launch in the South American region.
• They ship from the same destination point which could lead to extra delivery times and costs as well as pollution and environmental concerns. •
They have a large portfolio that has to be translated into a new market
IMPACT:
Although ASOS present some weaknesses, it is important they are used when planning the launch.
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OPPORTUNITIES •
Offering fully tracked delivery services in the most important markets
•
Their internet only proposition is more beneficial and cost effective than to open stores.
•
Online business model, not exclude any potential customers.
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E-marketing- ability to personalise and is cost effective
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The increase in travel and exposure to markets and cultures.
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The growth and changes that are happening within innovation and the digital revolution.
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“e-commerce is hotter than ever” (trendwatching.2012:Online)
IMPACT:
ASOS are at an advantage as they can target a large audience through the internet. They are also operating at a significant time in the digital world. They have the opportunity to excel in innovative techniques to connect with their consumer. The increase in travel will allow them to connect with their consumers all over the world.
THREATS •
More brands are moving online, increased competition
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Brazil is becoming a prominent market for brands, further increased competition
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Trends and consumers tastes are changing at a rapid pace
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Issues with security within online payments.
•
Import taxes
IMPACT:
Although the Brazilian market presents threats for ASOS, they are a large brand with the experience and logistics to plan and overcome as many as possible.
MARKETING STRATEGY: ASOS BRAZIL 140
03
PESTLE ANALYSIS
POLITICAL
• Brazil has a stable political environment, with one of the largest democracies in the world (ciaworldfactbook,2012,onine) • They are governed by strong, independent and coordinated institutions (ciaworldfactbook,2012,online)
ECONOMICAL • Brazil’s economy has been expanding steadily for years, as a result of a stable political and social climate. • World Bank projections show Brazil becoming the world’s fifth largest economy by 2016 (Rio,2012,online) and have forward projections of inflation under 4%. • The Olympic Games in Rio will place Brazil in the global spotlight, reinforcing its status as a major and growing economy and a unique visitor destination (Rio2016,2012,online) boosting the country’s infrastructure and consumer confidence. • The availability of credit was a big boost to the growth of the retail sector in the country. According to a 2011 McKinsey Quarterly report, Brazilian consumers are more open to using credit than other consumers in emerging markets and low income groups in particular require consumer finance products to purchase goods. (BRICspotlightreport.2012.online) • High import taxes mean many brands have had difficulties launching into Brazil. (businessinbrazil,2013:online) • The two major taxes on imports are import duty and the tax on the distribution of goods and services called ICMS which can make foreign goods approximately one third more expensive than domestically manufactured products. (retailweek,2012,onIine) • Brazil’s currency is the (real) which means the investment returns are affected by changes in the value of pounds the real currency. ASOS’s Treasury department takes responsibility for reducing exposure to these and other financial risks, to ensure that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.(asosplc,2012:online) 141
SOCIAL • The annual population growth in Brazil is forecast to slow down by 2020 but the high proportion of youth will ensure the growth of its labour and consumer market in the medium-term. (howcoolbrandstayhot,2012,online) • Due to the socio demographic shifts in Brazil, the distribution of wealth is changing and more than 30 million people have risen out of poverty since 2003 due to the welfare schemes launched by the government. (BRICspotlightreport.2012.Online) • This has created a new middle class, where even more have joined the upper-middle classes which is helping to drive the economy (Inside Brazils booming fashion industry.2010.Online.), representing 60% by 2014, (travelandtourisminbrazil,online,gmid,2012) because they are becoming more sophisticated boosting the demand for services and high quality products. • On the other hand high taxes means some consumers will have less discretionary income, having less money to spend on non- essential items. • It is one of youngest countries with 65 million people aged 18 and under (rio2012,2012,online) and the increase of about 88% between 2009 and 2011, of foreign students in Brazilian universities means Brazilians are integrating with a variety of nationalities, meaning more demand for travel inbound and outbound. • Brazil is a Portuguese speaking country when taking into consideration communication and although a majority of the young educated speak English, this may present barriers when communicating with businesses and consumers. • Geographically large and demographically diverse country means poverty rate is still considerably high and the educational systems low. • Gap in the market as Brazilian brands fall into two extremes: low profile brands where you can purchase low quality, cheap products, or on the other end are designer brands or independent small labels meaning ASOS can exploit the demand for a middle market fashion brand. (Inside Brazils booming fashion industry.2010.Online.)
MARKETING STRATEGY: ASOS BRAZIL 142
TECHNOLOGICAL •
Large amount of population are online and this is continuing to grow
• With technological advances being at the forefront of businesses operations and ASOS operating largely online, it is important to analyze the environment of Brazil. • The country is 5th largest globally in terms of digital users, with around 91 million online, according to Forrester research. (breakingintoBrazil2012,online) and stated to be the “next hot tech market”. • Due to such a large youth market, this also contributes to their enthusiastic use of social media, with 85 & of online users visiting social networking sites. (wgsn.2012,online) • The billions of people in emerging markets are putting their brand to work coming up with new ideas for products and technologies for use at home and abroad.
LEGAL • There are restrictions when it comes to advertising laws in Brazil. An example is no outdoor advertising. • When shipping to Brazil and returning to the American hub there are legal considerations and import and export taxes.
ENVIRONMENTAL • ASOS’s international expansion will have an impact on the environment however they have an environmental policy to continuously improve their environmental performance. Whilst currently shipping from their central distribution center they are looking to open more return hubs and smaller distribution centers to lower cost and decrease the impact its having on the environment.
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04
SOCIAL MEDIA
Benefits
-The Brazilian consumer is highly engaged on social networks. -It removes communication barriers between the consumer and the brand -Customer service is high, therefore ASOS are able to respond quickly to their customers. -Allow for information and brand awareness to be circulated at a fast rate -Directly speak to the consumer and offer them personalised style advice and discounts etc
Drawbacks -It removes the effectiveness of other marketing activity. -Social media is extremely transparent therefore the brands reputation could be damaged -Consumers are open and aware of more brands and promotional offers. -Content may be lost in translation.
MARKETING STRATEGY: ASOS BRAZIL 144
05 FINANCE
(asosplc,2012:online)
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(asosplc,2012:online)
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TUTORIAL RECORD SHEETS
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CONSENT FORM & ETHICAL CHECKLIST
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