Eloise fox illustrated report by ucashow

MACKINTOSH ILLUSTRATED REPORT Eloise Fox

1100095

Executive Summary

2.4.1 Distribution Strategy

Appendices

154

Introduction

2.4.2 Omni-channel Retailing

Appendix 1:Mackintosh SS14 Price Band Chart

156

Appendix 2: Leading ten operatorsâ&#x20AC;&#x2122; share of global luxury fashion and leather goods market, 2012

157

Appendix 3: Range Plan

158

Appendix 4:Standard Distribution Curve

160

Appendix 5: Cash Flow

161

1. The Proposal

2.5 Position

1.1 Company Overview

2.5.1 Price/Style Matrix

1.2 Outline of new product

2.5.2 Competitor Evaluation

1.3 Unique Selling Point

2.6 Promotion

1.4 Ansoff Matrix

2.6.1 Branding

100

2. The Marketing Mix

2.6.2 Experiential Retailing

108

2.1 People

2.6.3 Integrated Marketing Strategy

112

2.1.1 Demographics

2.7 Persuasion

128

2.1.2 Spending Power

3. Business Planning

132

2.1.3 Marketing Typologies

3.1 Sales Revenue

134

2.2 Product

3.2 Expenditure

136

2.2.1 Product Overview

3.3 Capital Funding

138

2.2.2 CAD Range Plan

4. SWOT Analysis

140

2.2.3 Sourcing Strategy

4.1 Strengths

142

2.2.4 Sustainability

4.2 Weaknesses

143

2.3 Price

4.3 Opportunities

144

2.3.1 Pricing Policy and Architecture

4.4 Threats

145

2.3.2 Price Band Chart

5. Conclusions

146

2.4 Place

Bibliography

150

EXECUTIVE SUMMARY

International fashion houses saturate the fashion and leather goods segment of the luxury market, with Burberry being the only British brand to place in the leading ten operators (Mintel, 2013a). Within the macro market environment there is a drive towards localism (Carter, 2013) bringing production back to the UK and for brands to go forward with a focus on their core heritage rather than diversifying. Mackintosh, the luxury British outerwear brand, founded in 1823 has lost identity within the market due to the name becoming a generic reference point for any gabardine coat (Ryan, 2011). Brand efforts are also heavily focused on the Asian market; with the Japanese distributor Yagi Tsusho having full ownership of the company and where turnover is strongest (Companies House, 2013).

Executive Summary

Primary research highlighted that “people don’t tend to realise the word mac actually comes from Mackintosh” (Gwen, 12.03) with word-brand associations generating the words ‘raincoats’ and ‘practicality’ rather than luxury, heritage and craftsmanship – the desired brand identity. Mackintosh will develop their target market with the aspiration to fill the gap. To do so they will broaden their marketing activity via different mediums and platforms to raise awareness to a global consumer. They will also develop their collection of outerwear to reflect a more contemporary style combined with a traditional approach to manufacture to create a versatile and timeless product.

INTRODUCTION

SOURCES OF INFORMATION LIMITATIONS WHY? This report was composed to develop the British heritage brand Mackintosh in reaction to establishing a gap in the luxury market, where there is a severe lack of British key players. Mackintosh at present have lost identity, with the brand name itself spawning a whole genre of clothing leading to a lack of consumer recognition and affection. As a brand they need to develop presence within the market so that consumers are just as likely to buy a Mackintosh as they are a Burberry trench, forming the foundations of this report.

To access the luxury consumer, a questionnaire was conducted via the website Smart Survey where a targeted consumer panel was paid for of 55 people to ensure the correct spool of people. The respondents provided contact details for a further focus group to be conducted. Arranging this focus group proved challenging with many schedules clashing resulting in nothing. Conversations were therefore carried out over email and one on one interviews which limited the stimulation created in focus groups. All information collected on the Asia Pacific consumer was formed from secondary sources due to no access to primary sources. Sources providing information on business planning figures were limiting resulting in a certain amount of educated guesstimating and therefore a lack of realism to the report.

Introduction

1. THE PROPOSAL

1.1 COMPANY OVERVIEW

1. The Proposal

â&#x20AC;&#x153;There are very few fashion brands that can claim to have an entire genre of clothing named after them but Mackintosh is oneâ&#x20AC;? (Fletcher, 2012). Mackintosh is the British outerwear brand and curator of the original Mackintosh raincoat. Crafting handmade rain jackets within the UK, making functionality, fashionable.

MACKINTOSH TIMELINE

1823 Charles Macintosh, the Scottish Chemist invented the process of rubberising cotton thus creating the world’s first waterproof fabric (Wane, 2012) Macintosh sold this fabric to tailors who made it into waterproof versions of British riding coats (Wane, 2012)

1. The Proposal

1830 1895 Macintosh merged with Thomas Hancock, Many manufacturers were using the an inventor from Manchester to refine the rubberised cloth, one set up in 1895 went process of rubberising cotton (Wane, 2012) on to become the Mackintosh we know Charles Macintosh and Co. became the today using the fabric to create entirely official supplier of the British Army, railways handmade coats with glued instead of sewn and police department (Wane, 2012) seams (The Scotsman, 2011)

1900 Upon reaching the 20th century, the original patent’s had run out meaning any manufacturer could create the rubberised cloth and their own ‘mac’ coat (Wane, 2012)

1980 1990 The development of PVC caused Mackintosh was close to bankruptcy, being great trouble for the original bought and sold many times (Wane, 2012) Mackintosh coats as many were They began to rebrand as a high end making cheap imitations (The heritage brand, collaborating with the likes of Scotsman, 2011) Louis Vuitton and Gucci (Wane, 2012)

1995 2007 Daniel Dunko (joined the company as an Bought by Japanese distribution apprentice in 1983) was appointed sales company Yagi Tsusho (The Scotsman, director and within 5 years he had bought 2011) the brand. Dunko built up the brand by pushing it in 2011 Japan, where there was a greater market for Opened Mount Street flagship (Ryan, heritage (The Scotsman, 2011) 2011) Today Mackintosh operate a 2 stranded business - part manufacturer and part heritage brand. Running 2 factories in Cumbernauld and Nelson. Producing 12,500 coats a year, 35% of which are own designs (The Scotsman, 2011) 17

CURRENT PERFORMANCE

1. The Proposal

Mackintosh are currently owned by the Japanese distributor, Yagi Tsusho ltd who own all shares in the business. Geographically they are most successful in Asia, where turnover is ÂŁ176,3634 greater than the UK (Companies House, 2013). In the year 12/13 Mackintosh recorded their highest ever profits. Profits are limited by the production capacity at both factories and so their Nelson base is under redevelopment to handle greater demand. These factors suggest that it is a strong time for the company to begin expansion.

Fully owned by Yagi Tsusho ltd

120 staff in two factories Turnover for 12/13: ÂŁ8,134k Grown by 50.5%

Share Capital: 14882557 (Companies House, 2013)

(Companies House, 2013)

(The Scotsman, 2011)

35% of all coats made are own brand

(The Scotsman, 2011)

12,500 handmade coats a year (The Scotsman, 2011)

Profit for 12/13: ÂŁ1,367k Highest profit ever recorded (Companies House, 2013)

Coatmakers average 25 garments a week (Nitty Gritty, 2013) 19

CURRENT PRODUCT

1. The Proposal

Mackintosh offer a range of rainwear for men and women that combines utility and luxury. Each coat protects against the elements through the rubberised cotton outer and glued seams to provide a fully watertight seal. For their spring summer 2014 collection prices range from £700 to £1030, with the most common price point sitting at £770 (See Appendix 1). Sold in their two flagships - in London and Tokyo, luxury independent stockists throughout Asia, Europe and the USA and online via Country Attire and Mr Porter.

Farnell £815

Chryston £785

Dunoon £830

Dunkeld £700

Queensferry £780

Toft £950

Uags £850

Kemback £830

BRAND IDENTITY

1. The Proposal

Mackintosh have crafted a brand image to reflect heritage luxury. The logo uses a classic font which connotes a more mature identity. The horseguard conveys the Mackintosh history, established in the timeline. Using this symbol helps them to become more relevant globally as consumers connect to symbols (Burberry, 2013). Mackintosh ensure their products convey the same DNA, using de-bossed buttons on all coats with the brand name and swing tickets to highlight their prestigious position on Londonâ&#x20AC;&#x2122;s Mount Street.

1.2 OUTLINE OF NEW PRODUCT As established in the executive summary, Burberry is the only British brand to make it into the top ten leading operators of the global luxury fashion and leather goods market (Mintel, 2013a, see Appendix 2). The lack of British brands to place in the leading ten combined with the drive towards localism (Carter, 2013) and core heritage (WGSN, 3013) suggest that there is potential for a British heritage brand to infiltrate the market. Mackintosh currently focus their efforts on the Asian market where turnover is strongest and there is a greater consumer appreciation of stability, quality and heritage (Nodder, 2012).

1. The Proposal

Primary research has demonstrated, within the UK, the word Mackintosh has become strongly associated with ‘raincoats’ and ‘practicality’ highlighting the loss of brand identity through the synonominity with the genre of clothing named after the brand. Focus group findings demonstrated this: “I don’t think it is as well known as it could be, people don’t tend to realise that the word mac actually comes from Mackintosh”Gwen (12.03) Mackintosh therefore need to develop themselves as a brand to become a competitor within the market.

To do so they need to: Broaden their marketing activity to generate and develop consumer awareness rather than relying on PR exposure. Combine contemporary silhouettes with classic manufacture to create a product which the modern consumer desires. Expansion is limited by their production capacity, however their Nelson factory is under reconstruction to increase this (Companies House, 2013). This will be completed in 2015, therefore Mackintosh will begin their new marketing activity to coincide with their AW 15.16 collection.

1.3 UNIQUE SELLING POINT

1. The Proposal

Each Mackintosh raincoat is handmade by specialist craftsman in the UK who glue every seam using their fingers. The production of each coat has remained the same for 190 years, producing authentic luxurious rainwear with a 100% waterproof seal.

New

Diversification

Market Penetration

Product Development

Markets

Market Development

Existing

Products & Services

New

1.4 ANSOFF MATRIX The new activity for Mackintosh sits in the market development sector of the matrix. Using existing product offering and brand philosophy to broaden their consumer market, increasing brand awareness and positioning in the luxury market. To do this they will develop marketing campaigns and embrace more sales channels to help expansion and growth. 27

2. THE MARKETING MIX

2.1 PEOPLE

2.1.1 DEMOGRAPHICS The Mackintosh consumer is part of the â&#x20AC;&#x153;core affluentâ&#x20AC;? (Mintel, 2013a) and is equally likely to be male or female. This consumer has global impact with a focus on the UK, North America, Asia and Europe. Wealth and travel are principle drivers pushing Mackintosh into the international luxury market.

2.1 People

INQUISITIVE UK

• Inquisitive luxury consumers and users of new digital platforms (Walpole, 2014) • Over a quarter want to buy luxury brands that are manufactured in Britain (Mintel, 2013b) • 32% buy luxury items occasionally (Mintel, 2013a) • 17% are happy to buy luxury goods online (Mintel, 2013a) • Regular buying of luxury peaks in the 25-34 age group (Mintel, 2013a)

MASS AFFLUENT AMERICA’S

• Income producing assets between $250, 000 - $1,000,000 (Nielson, 2012) • Over 55 years old (Nielson, 2012) • Shop less frequently but spend more per trip (Nielson, 2012) • 11% buy luxury goods regularly (Mintel, 2013a) • Confident and buying more (Socha, 2014) • More and more sophisticated, meaning they have a “real understanding of the craftsmanship” (Socha, 2014)

OLD WORLD EUROPE

• Demographic built on culture, craftsmanship and creativity (Eccia, 2013) • Chinese tourists are “fueling luxury goods growth” (Conti, 2013) • The Old World consumer accounts for 25% of the market, wanting traditional elegance and formality (Warc, 2013) • 10% buy luxury goods regularly (Mintel, 2013a)

GENERATION AAA

• Aspirational, ambitious and affluent young Asians (Chow, 2013) • Over 900 million affluent consumers (Warc, 2013) • 300 million new middle-class consumers (Conti, 2013) • Mid-to-high level professionals (Chow, 2013) • 25% buy fashion and leather goods items worth over US$1,000 (Chow, 2013) • 63% gravitate to luxury brands that reflect status (Chow, 2013) • Driving tourist purchasing in western countries

2.1.2 SPENDING POWER The Mackintosh consumer has a high income meaning a strong purchasing power. Their attitude towards personal finances are positive and confidence is growing. The global economic crisis underlined for this consumer “how quickly money and status can disappear” (Tiltman, 2011) meaning a switch from the “debauchery to work and craftsmanship” (Tiltman, 2011).

2.1 People

PERCENTAGE OF REVENUE SPENT ON LUXURY GOODS

(Mintel, 2013a)

FRANCE 4.8%

9% shop for luxury goods regularly (Mintel, 2013a)

UK 5.2% 6% shop for luxury goods regularly (Mintel, 2013a)

GERMANY 11.3% 11% shop for luxury goods regularly (Mintel, 2013a)

J A PA N 24.1% 10% shop for luxury goods regularly (Mintel, 2013a)

US 25.8% 11% shop for luxury goods regularly (Mintel, 2013a)

2.1.3 TYPOLOGIES The core affluent that Mackintosh appeals to is not a homogenous group. Mackintosh understands this and therefore aims messages accordingly to each tribe. The members of each tribe are present globally, forming a high culture mass. The following pages will act as an introduction to each tribe, with them being explored further in the Consumer Tribe book.

2.1 People

THE TRADITIONALISTS

THE FABS

NEW LUXURY MILLENIALS

EMERGING LUXURY MILLENIALS 37

TRADITIONALISTS The Traditionalist cohort are opposing the pipe and slipper image and working into retirement with an ageless mindset and encore careers. They continue working to remain young and to fund their traditional tastes. They question ‘what’s in it for them’ which is why they are invested in traditional luxury brands, with the belief that the price tag reflects quality, authenticity and craftsmanship. Born into a time of ‘made do and mend’ the Traditionalists want things to last.

2.1 People

FA B S The Fabs are a group of 50 plus affluent businesswomen, with largest presence in Europe and North America. They were the first to pursue careers and therefore command power and money. They have adapted to technological change and have embraced the digital world becoming dependent on smart devices. Heritage brands hold strong appeal to them as they look for quality and durability. Wellbeing is key to their life and they spend big on luxury travel (LS:N Global, 2014)

NEW LUXURY MILLENIALS NLMâ&#x20AC;&#x2122;s are the high spending, creative arm of the Millenials defining the new wave of luxury spending. They are always online, keeping in touch with brands and each other digitally via emails, social media and video calls. They seek craftsmanship and tradition to create an eclectic look meaning brands such as Burberry and Mackintosh are highly valued. The heritage appeal is not only in fashion brands but locations that they socialise in, seeking that heritage luxury. (LS:N Global, 2011)

2.1 People

EMERGING LUXURY MILLENIALS The ELMs are the well travelled, big spenders, fueling both their own economies (in China, Japan and Brazil) and also the tourism economy, encouraging growth in the European luxury goods market. The ELMs have never seen a bad time meaning they are primed for spending, wanting established luxury brands to flaunt wealth and status. Due to their carefree attitude to spending they are heavily pampered and therefore body aware. (LS:N Global, 2012)

PSYCHOGRAPHIC PROFILE

LATE ADOPTERS

45%

25%

LAGGARDS

EARLY ADOPTERS

15%

LATE FEEDERS

INNOVATORS

PSYCHOGRAPHIC PROFILE

LAUNCH

New Luxury Millenials

2.1 People

Fabs Emerging Luxury Millenials

Traditionalists

13%

WITHDRAWAL

The key tribes that build up the Mackintosh consumer each adopt new trends at different times. The innovation curve demonstrates how fashions diffuse through the cohorts. Most of the tribes fall into the early adopters due to their high social status, financial power and level of education. The New Luxury Millenials are quickest to adopt new fashions as they are more willing to take risks due to their age and drive for collaboration. Emerging Luxury Millenials are big spenders which leads them to adopting quickly. They desire to show their wealth and status through the items they own and so having the ‘latest’ helps them as opinion leaders. The Fabs and Traditionalists are slightly more hesitant to adopt and are not controlled by the trends. They trust in traditional luxury brands to provide quality, over fashion fads. The Fabs consciously adopt trends to remain current and in opposition to their mother’s generation. Due to the trend adoption pattern, different coats from the Mackintosh collection appeal to the different tribes.

BUYING ATTITUDE PYRAMID

B U Y I N G AT T I T U D E TRIBE

PSYCHOLOGIC AL

PERSONAL

SOCIAL

C U LT U R A L

How and why each tribe buys and invests into Mackintosh and other brands is determined by internal and external factors. Each tribe has different characteristics which relate to each layer of the pyramid, explored in greater detail in the Consumer Tribe book. Traditionalists: Rational Buyers “We put a lot of thought and consideration into what we buy, when spending that amount of money you want to know the details” (John, 05.03) Fabs: Emotional Buyers “I like to feel that a coat I’ve chosen that I really loved will be worn for a good few years, hence why I tend to go for quality and classic clothing that carries you through the years” (Gwen, 12.03) New Luxury Millenials: Self Actualizers “I like to treat myself, if my agent sets up meetings and they go well I will buy myself a little well done present” (Chloe, 08.03) Emerging Luxury Millenals: Esteem Buyers Motivated by status and the perception others have of them

2.2 PRODUCT

2.2.1 OVERVIEW The Mackintosh AW 15.16 collection has been developed with the consumer in mind. Combining their product desires with outerwear trend forecasts and inspiration from the Mackintosh archives to create a collection of robust rainwear that responds to the weather, maintains the Mackintosh philosophy and blends new ideas with traditional manufacturing. The 12 line collection (6 shapes each for men and women) juxtaposes utility with luxury ensuring each piece defines craftsmanship, enduring style and authenticity. 46

2.2 Product

M A T E R I A L S

2.2 Product

In 1823, Charles Macintosh invented the process of rubberising cotton, and thus created the worlds first waterproof fabric (Wane, 2012). With the help of modern technology, the original process has been improved, with the cloth and rubber being vulcanised in an oven (Hollingshead, 2011). This material, that Macintosh invented nearly 200 years ago will be used in the collection, remaining true to brand heritage. To maintain brand authenticity the seams of each coat in the collection will be glued, rather than sewn in a hand drawn process. This creates a 100% watertight seal which defines a â&#x20AC;&#x2DC;trueâ&#x20AC;&#x2122; Mackintosh coat.

2.2 Product

The design essence of the collection has been developed from consumer desires, outerwear forecasts and the Mackintosh archives. In a survey conducted, compiling of 55 luxury respondents, 78% agreed with the statement ‘a coat should be classic’ and 56% of respondents buy a new coat ‘to replace’. This lead to the collection building on classic silhouettes that are ‘en vogue’ for a lifetime. The collection therefore uses Mackintosh shapes from the archives with modern design twists, keeping the brand active by juxtaposing new ideas with traditional manufacturing.

2.2.2 CAD RANGE PLAN The AW 15.16 range has 12 lines, 6 for men and 6 for women. A new coat silhouette has been added for both men and women, inspired by brand ambassadors Marcus Mumford and Carey Mulligan respectively. This collection focuses on keeping the brand active by blending modern ideas with traditional manufacturing. With each line becoming more slimline to appeal to the modern luxury consumer and compete with key players in the luxury outerwear market. 52

2.2 Product

MEN’S COLLECTION

Mumford £640

Dunoon £750

Dunkeld £495

MEN’S COLLECTION

Macduff £740

2.2 Product

Auchaven £850

Alness £795

WOMEN’S COLLECTION

Mulligan £770

Killin £700

Banton £725

WOMEN’S COLLECTION

Balone £625 56

2.2 Product

Queensferry £555

Grange £780

C O L L A B O R AT I O N Mackintosh have excellent expertise in robust waterproof fabric however they do not specialise in coat linings. Therefore with consumer focus on ‘knowing more, understanding where you’re coming from” (Tiltman, 2011) and a drive towards British craftsmanship Mackintosh are collaborating with the Scottish mill, Begg & Co. Begg & Co draws on ‘a long history of weaving expertise’ (Begg&Co, 2014) to handcraft ‘exquisite scarves, stoles and throws’ (Begg&Co, 2014). They will produce linings for every coat in the collection, blending both companies expertise to make a marriage of the two, supporting the British textile industry and manufacturing a product which is thoroughly Made in Britain. 57

a zes

u olo

Outerwear

SCOPE OF RANGE

2.2 Product

Mackintosh is focused on a niche segment outerwear. Therefore they stock in depth than width. The collection of coats offers different colour and size options which their consumers expect.

R A N G E

P L A N

See appendix 3 for further detail 59

M A C K I NT O S H MENSWEAR AW 15.16

Mumford

Dunoon

H M

S TO

Dunkeld H M

S TO

H M

Macduff

Auchaven

Alness

H M

S TO

RRP: £495 FABRIC: Outer 100% Cotton (Rubberised) Inner 100% Cashmere SIZE: 36 38 40 42 ACTUAL COST: £145 PROFIT MARGIN: 70.71%

S TO

RRP: £750 FABRIC: Outer 100% Cotton (Rubberised) Inner 75% Lambswool 25% Angora SIZE: 36 38 40 42 ACTUAL COST: £220 PROFIT MARGIN: 70.67%

H M

S TO

H M

RRP: £640 FABRIC: Outer 100% Cotton (Rubberised) Inner 75% Lambswool 25% Angora SIZE: 36 38 40 42 ACTUAL COST: £170 PROFIT MARGIN: 73.44%

S TO

M AC

S TO

H M

S TO

H M

S TO

M IN

H M

S TO

H M

M IN

TO H

H M

AC AC

H M

RRP: £740 FABRIC: Outer 100% Cotton (Rubberised) Inner 100% Cashmere SIZE: 36 38 40 42 ACTUAL COST: £232 PROFIT MARGIN: 68.65%

S K

S TO

H M

S TO

RRP: £850 FABRIC: Outer 100% Cotton (Rubberised) Inner 100% Cashmere SIZE: 36 38 40 42 ACTUAL COST: £210 PROFIT MARGIN: 75.29%

RRP: £795 FABRIC: Outer 100% Wool Inner 100% Cashmere SIZE: 36 38 40 42 ACTUAL COST: £240 PROFIT MARGIN: 69.81%

M A C K I NT O S H WOMENSWEAR AW 15.16

Mulligan

Killin

Banton AC

S TO

H M

S TO

H M

RRP: £770 FABRIC: Outer 100% Wool Inner 100% Cashmere SIZE: 32 34 36 38 ACTUAL COST: £210 PROFIT MARGIN: 72.73%

Balone

RRP: £700 FABRIC: Outer 100% Cotton (Rubberised) Inner 100% Cashmere SIZE: 32 34 36 38 ACTUAL COST: £220 PROFIT MARGIN: 68.57%

RRP: £725 FABRIC: Outer 100% Wool Inner 100% Cashmere SIZE: 32 34 36 38 ACTUAL COST: £190 PROFIT MARGIN: 73.79%

Queensferry

Grange IN

S TO

H M

S TO

H M

S TO

H M

AC AC

H M

S TO

H M

S TO

H M

H M K

S TO

H M

S TO

H M

S TO

H M

S TO

H M

S TO

H M

S TO

H M

S TO

H M

RRP: £625 FABRIC: Outer 100% Wool Inner 100% Cashmere SIZE: 32 34 36 38 ACTUAL COST: £189 PROFIT MARGIN: 69.76%

RRP: £555 FABRIC: Outer 100% Cotton (Rubberised) Inner 100% Cashmere SIZE: 32 34 36 38 ACTUAL COST: £150 PROFIT MARGIN: 72.97%

RRP: £780 FABRIC: Outer 100% Cotton (Rubberised) Inner 100% Cashmere SIZE: 32 34 36 38 ACTUAL COST: £240 PROFIT MARGIN: 69.23% 61

2.2.3 SOURCING The manufacturing process of each Mackintosh coat continues to be made in the UK at their two bases, Cumbernauld and Nelson by specialist craftsman. The fabric and components however are sourced outside of the UK to lower production costs. The cloth and trimmings of each coat is sourced from Switzerland (Hollingshead, 2011) a place known for its ‘quality and value added approach’ (Jackson and Shaw, 2001:118). The rubber used to make the cloth waterproof comes from Indonesia (Hollingshead, 2011). The two are then ‘vulcanised together in an oven in Manchester’ (Hollingshead, 2011) to create the rubberised cotton used for each mac. The lining is sourced by Begg & Co, similar to Mackintosh, the cloths are woven in their mill in Ayr, Scotland however the materials are sourced ‘from several of the world’s leading yarn spiners’ (Begg&Co, 2014). The pieces then arrive at one of the Mackintosh factories where they are seen through from start to finish by the craftsman, who piece together the ‘jigsaw’ (Rennie, 2011) to create a (hand)made in Britain coat. 62

2.2 Product

Switzerland: Cotton cloth and trimmings

Indonesia: Rubber

UK: Made in Britain Cumbernauld, Nelson, Ayr 63

2.2.4 SUSTAINABILITY

2.2 Product

The handmade manufacturing process of each Mackintosh remains resolutely in the UK. Mackintosh hire 120 craftsman (The Scotsman, 2011) over their two factories which is supporting employment within the UK and the British textile trade. The Nelson factory is being re-constructed to enable a greater production capacity, due for completion in 2015 (Companies House, 2013). This expansion will increase production creating more job roles which in turn supports the local economy. Mackintosh are also supporting the weaving industry within the UK by collaborating with Begg&Co.

2.3 PRICE

2.3.1 PRICING POLICY

2.3 Price

Mackintosh use a pricing policy which considers the three c’s: consumers, competitors and costs. In a primary research survey conducted, compiling of 55 luxury respondents, 60% said that they would spend between £500 and £700 on an item of luxury outerwear, and 22% said they would spend between £700 and £1000. Both the men’s and women’s collections sit within these pricing brackets therefore meeting customer demand. Competitor pricing, by the likes of Burberry have been taken into account, setting prices in line with the ‘going-rate’ to attract competitor consumers. Overall Mackintosh use a premium even pricing strategy, with all prices ending in a whole number helping consumers to quickly read the number.

EXIT

Auchaven £850

UNIQUE Auchaven £850

Grange £780 Mulligan £770

Alness £795

UNIQUE Banton £725

Dunoon £750

MEDIUM

Mumford £640 Dunkeld £495 ENTRY

Dunkeld £495

BASIC

Grange £780

Killin £700

Macduff £740

MEDIUM

EXIT

Balone £625

Queensferry £555

MENS OUTERWEAR

BASIC

Queensferry £555 ENTRY

WOMENS OUTERWEAR

PRICING ARCHITECTURE The pricing architecture above demonstrates the entry and exit level prices of the AW 15.16 collection. The parka coats have the highest price points of the collection as crafting them in the same process as the mac’s is more labour intensive.

MACKINTOSH AW 15.16 PRICE BAND CHART

Entry Mode Exit

Womens Outerwear

Queensferry £555

Mens Outerwear

Killin £700

Macduff £740

Dunkeld £495

£50

£100

£150

£200

£250

£300

£350

£400

£450

£500

Grange £780

£550

£600

£650

£700

£750

2.3.2 PRICE BAND CHART

2.3 Price

The chart above highlights the lead-in, mode, and exit prices for the Mackintosh AW 15.16 collection for both men and women. The menswear range has a greater pricing deviance due to the coats being historically more successful with men. The Dunkeld is the best seller which is why it is a lead-in price point. As mentioned before the price points meet customer demand with primary research showing that 60% would spend between £500 and £700 on an item of luxury outerwear, and 22% between £700 and £1000.

Auchaven £850

£800

£850

£900

£950

£1000

2.4 PLACE

2.4.1 DISTRIBUTION STRATEGY

Mackintosh have great control over the distribution of their products through their position as brand and manufacturer. Due to this 3 key distribution channels will be used, demonstrated diagrammatically on the page opposite. Mackintosh, representing the manufacturer will sell directly to consumers in their two flagship stores - London and Tokyo and via their own transactional website. The collection will also be distributed in luxury department stores worldwide, shown in channel 2. The final channel represents wholesale options, which will be explored singularly, allowing for smaller independents to stock the collection in the quantities that they desire. 74

2.4 Place

M M A C K I NT O S H

WHOLESALER

CONSUMER

RETAILER

CONSUMER

S T O C K I S T S

2.4 Place

The page opposite lists all physical store stockists for the AW 15.16 collection, comprising of flagships and luxury department stores. The number of stockists has been expanded, with new luxury stores being added to target emerging economies and develop new consumer markets. This is also in keeping with the expansion of the Nelson factory, which will enable a greater production capacity of the collection and therefore larger quantities to be distributed. Each stockist has been colour coded which refers to its grading, controlling the allocation of the collection by line and quantity, demonstrated over the page.

E U R O P E UK

ITA

Mackintosh Flagship 104 Mount Street London W1K 2TL +44 (0) 207 493 4678 Browns 24-27 South Molten Street London W1K 5RD +44 (0)20 7514 0016 Harrods 87-135 Brompton Road London SW1X 7XL +44 (0)20 7730 1234 Liberty Regent Street London W1B 5AH +44 (0)20 7734 1234 Matches 87 Marylebone High Street London W1U 4QU +44 (0)20 7487 5400 60-64 Ledbury Road Notting Hill W11 2AJ +44 (0)20 7221 0255 13 Hill Street Richmond TW9 1SX +44 (0)20 8332 9733 French Trotters 30 Rue de Charonne 75011 Paris France +33 (0) 1 47 00 84 35 128 rue Vieille du Temple 75003 Paris France + 33 (0) 1 44 61 00 14 Le Bon Marche 24 Rue de Sèvres 75007 Paris France +33 (0) 1 44 39 80 00 Coin Via Cola di Rienzo 173 Rome +39 (0) 6 36 00 42 98 La Rinascente Piazza Duomo 20121 Milan +39 (0) 2 88 521 Piazza Della Repubblica 50123 Florence +39 (0) 55 21 91 13 Dittrich Markt 6 32423 Minden Germany +49 (0)571 82 81 90 KaDeWe Tauentzienstraße 21–24 10789 Berlin +49 (0) 30 21 21 0

N O R T H

A M E R I C A

Holt Renfrew 50 Bloor Street West Toronto ON M4W 1A1 +1 416 922 2333 10180 101 Street Northwest Edmonton AB T5J 3S4 +1 780 425 5300 240 Sparks Street Ottawa ON K1P 6C9 +1 613 238 2200

USA

Barneys New York 9570 Wilshire Boulevard Beverly Hills CA 90212 +1 310 276 4400 15 East Oak Street Chicago IL 60611 +1 312 587 1700 660 Madison Avenue New York NY 10065 +1 212 826 8900 Bergdorf Goodman 5th Avenue at 58th Street New York NY 10019 +1 800 558 1855 Freemans Sporting Club 8 Rivington Street New York NY 10002 +1 212 673 3209 343 Bleecker Street New York NY 10014 +1 212 255 5509

A S I A

Mackintosh Flagship 5-3-20 Minamiaoyama Minato-ku Tokyo Japan +81 (0)3 6418 5711 Barneys New York 6-8-7 Ginza Tokyo +81 (0) 3 3289 1200 Beams 3-32-6 Shinjuku Shinjuku-ku Tokyo +81 (0) 3 5368 7300 1F/2F 3-25-14 Jingumae Shibuya-ku Tokyo +81 (0) 3 3470 3946 Takashimaya 4-1 Nihombashi 2-chome Chuo-ku Tokyo +81 (0) 103 8265 Tomorrowland Marunouchi - 2chome Building 2-5-1 Marunouchi Chiyoda-ku Tokyo +81 (0) 3 5220 2391

A S I A HK

Lane Crawford 3 Canton Road Tsim Sha Tsui +852 2118 3428 Sideframe IFC Mall Central HK +852 2167 7386 The Swank Shop B51-54 Landmark Central HK +852 2810 0769

China World Shopping Mall 1 Jianguomen wai Dajie Chaoyang District Beijing +86 (0)10 6505 2288 Lane Crawford Seasons Place 2 Jinchengfang Street Xicheng District Beijing +86 10 6622 0808

E T A I L Mackintosh www.mackintosh.com Mr Porter www.mrporter.com Net-A-Porter www.net-a-porter.com Country Attire www.countryattire.com

Turnover of Store Very Large Large Medium Small

Line Turnover of Store

Very Large Large Medium Small E-tail

Mumford

Dunoon Khaki

Dunoon Navy

Dunkeld Charcoal

Dunkeld Navy

Macduff Charcoal

16 12 8 0 174

20 12 8 4 205

20 8 4 4 196

24 16 12 8 164

32 24 16 12 187

16 12 4 0 172

Mulligan

Killin Fawn

Killin Navy

Banton Navy

Balone Rose

Balone Fawn

24 16 12 0 220

32 28 16 12 186

28 24 12 8 122

20 16 12 8 184

16 12 8 4 176

20 16 12 8 194

Line Turnover of Store

Very Large Large Medium Small E-tail 78

2.4 Place

Line

Macduff Fawn

Macduff Navy

Auchaven Khaki

Auchaven Navy

Alness Chocolate

Alness Fawn

Alness Navy

Total

20 16 8 4 186

28 16 12 8 172

16 12 8 4 282

20 16 8 0 118

20 8 0 0 148

20 16 12 8 121

16 12 8 4 177

268 180 108 56 2302

Line

INITIAL ALLOCATION

Queensferry Fawn

Queensferry Navy

Grange Chocolate

Grange Navy

Total

32 28 16 12 196

28 20 16 8 228

20 16 8 0 191

24 20 12 4 118

244 196 124 64 1907

The charts on this page demonstrate the initial allocation quantities of each line by units. This helps to plan what lines and how many of them will go to each individual stockist. The stockists are split into size groupings, which correspond to the colour coding on the previous page. This helps to ensure each stockist carries the right number of lines. It is important that small turnover stockists do see a full range and are not put at a disadvantage. This being said, e-tail options have the full range to complement if deliveries do run to plan. The allocation is based on a stock turn of 2.5 (20 weeks cover).

B U Y I N G R AT I O Within the initial allocation planning of the AW 15.16 collection, a further plan is made to decide how many of each size and colour to buy for each line. The charts above demonstrate the size ratio for each line. This has been based on the standard distribution curve (see appendix 4), historic sales and proposed initial allocation to create the best distribution ratio.

2.4 Place

Mens AW 15.16 Line Mumford Dunoon Khaki Dunoon Navy Dunkeld Charcoal Dunkeld Navy

Sizes 36 1 1 1 1 3

38 4 4 2 2 8

40 2 3 4 4 4

42 1 2 2 1 1

Macduff Charcoal Macduff Fawn Macduff Navy Auchaven Khaki Auchaven Navy Alness Chocolate Alness Fawn Alness Navy

1 2 1 1 1 1 1 1

4 4 2 4 3 3 4 3

2 3 3 2 4 4 4 2

1 1 1 1 2 2 1 2

Womens AW 15.16 Line Mulligan Killin Fawn Killin Navy Banton Navy Balone Rose Balone Fawn Queensferry Fawn Queensferry Navy Grange Chocolate Grange Navy

Sizes 32 4 3 1 2 2 2 3 1 1 1

34 5 6 6 4 3 4 6 3 3 3

36 2 4 6 3 2 3 6 2 4 3

38 1 3 1 1 1 1 1 1 2 1

AUG

SEP

OCT

NOV

DEC

JAN

AW Men Classic Mac (Mumford, Dunkeld) Parka (Dunoon, Auchaven) Pea Coat (Macduff) Overcoat (Alness) SS16 AW Women Classic Mac (Killin, Queensferry) Parka (Grange) Collarless Mac (Banton) Overcoat (Mulligan, Balone) SS16

SALES PHASING With a stock turn of 2.5, the AW 15.16 collection will be introduced in August, running through to January. Mackintosh will then begin to filter through the spring transitional collection. The core classic macs will feature throughout the 20 week phase, with larger winter coats, such as the Auchaven parka being phased in later.

2.4.2 OMNI CHANNEL RETAILING

2.4 Place

Mackintoshâ&#x20AC;&#x2122;s two flagships - in London and Tokyo, global luxury department stores and e-tail options will create an omni-channel experience. For the launch of the AW 15.16 collection www. mackintosh.com will be made fully transactional as well as smart device friendly allowing the connected consumer to have access to the brand when and how they want. A key feature for many of Mackintoshâ&#x20AC;&#x2122;s tribes.

F L A G S H I P S The Mackintosh flagships - on Londonâ&#x20AC;&#x2122;s prestigious Mount Street and Tokyoâ&#x20AC;&#x2122;s Aoyama will stock the full AW collection. Each store evokes brand DNA, educating consumers with displays of coats from the archives and story telling in the windows.

CONCESSIONS The collection will be stocked in the world’s leading luxury department stores. Primary research established that The Fabs ‘liked the personalised service’ of a department store, that mixes ‘heritage with trend-led pieces’ all in one place. Being in these department stores helps to raise awareness and become in-line with competitors who are also stocked in these locations. The concessions will also help to meet demands from tourism retail - the heritage shoppers who want to ‘experience the service and quality’ (LS:N Global, 2012) associated with these luxury stores. 84

2.4 Place

E - TA I L A key channel for the AW collection will be e-commerce. The Mackintosh website will be made fully transactional and mobile friendly, meaning the collection will be as active as the consumers. The Mackintosh site will ship globally, attracting the emerging economies. The collection will also be stocked on Net-A-Porter, Mr Porter and Country Attire, ensuring a wide capturing of consumers. 85

2.5 POSITION

2.5.1 PRICE/STYLE MATRIX The price/style matrix on the page opposite demonstrates Mackintoshâ&#x20AC;&#x2122;s positioning within the outerwear market as a whole. Mackintosh sit within the high end heritage quarter of the matrix, with the oval encapsulating key competitors. The key competitors all have an affinity to their heritage like Mackintosh, and pride themselves on craftsmanship. 88

2.5 Position

2.5.2 COMPETITOR EVALUATION

2.5 Position

When looking at Mackintosh as a luxury outerwear brand for men and women the key competitors are Burberry, Belstaff, Woolrich and Moncler. At an entry level Barbour is also a competitor.

2.5 Position

B U R B E R R Y

B E L S T A F F

Like Mackintosh, Burberry was founded on invention. In 1856, Thomas Burberry invented a method of weaving fabric to make it rainproof gabardine (Fletcher, 2011). This fabric went on to be used for the brands signature piece, the trench coat. Burberry is a key player in the luxury global market, ranking 8th in the leading ten operators of global luxury fashion and leather goods, with a 4.1% share (Mintel, 2013a).

Belstaff has a rich heritage to share, much like Mackintosh and Burberry. Founded in 1924, Belstaff lead â&#x20AC;&#x2DC;with the innovation of the first water resistant wax cottonâ&#x20AC;&#x2122; (Belstaff, 2013). This went on to be used for the signature belted 4-pocket jacket, which became a staple for the racing set throughout the 20th century (Belstaff, 2013). Belstaff are owned by the Labelux group and positioned as a luxury heritage outerwear brand.

W O O L R I C H

M O N C L E R

Woolrich, like Mackintosh ‘has been synonymous with quality outdoor clothing for over 180 years’ (Woolrich, 2014). John Rich ‘established his first factory in 1830... initially producing clothes to protect railroad workers against the elements’ (Mr Porter, 2014). The brand has since grown into a lifestyle brand that has an equal emphasis on ‘style and practicality’ (Mr Porter, 2014) and a strong sense of American heritage.

Moncler ‘has been making fashion statements in skiwear since it was founded by Rene Ramillon’ (Harrods, 2014) in 1952. It is an active player in the luxury market, consistently combining practicality with a fashion-forward edge to maintain success. Moncler pays ‘on going attention to uniqueness and quality’ which has ensured garments to be ‘versatile, timeless products that combine tradition with a contemporary approach’ (Moncler, 2014)

UNIQUE SELLING POINT Burberry: leading innovators in luxury digital marketing Belstaff: Racing set heritage, mixing sports with style Woolrich: Quality outerwear that mixes practicality and style with a strong American heritage Moncler: Timeless products that combine tradition with contemporary style

2.5 Position

P R O M O T I O N Each competitor uses a range of promotion mediums to ensure they are reaching out to their target markets in an innovative fashion. Burberry has lead innovations in digital luxury marketing, with campaigns such as Burberry Kisses resonating globally. Belstaff â&#x20AC;&#x2122;s main promotion activity is via brand ambassador David Beckham, using his traction to increase brand awareness and maintain the sporting heritage. Woolrich focus on their production heritage to increase brand affection. Educating consumers about the craftsmanship behind the coats. Moncler create seasonal print campaigns which are featured in high end editorials to evoke their fashion combined with utility appeal.

Competitor Price Band Chart

Mackintosh Men

£495

Women

£555

Moncler Men

£450

Women

Men

Exit

£780

£2,250 £5,625

£800

£550 £650 £750

Women

£450

Belstaff Men Women

Burberry

£550

£350

£550

£350

£550

Men Women

£850

£895 £545

Woolrich

Entry Mode

£750

£1,550 £24,00

£495

£1,295

£395 £200

£400

£1,595

£1,095 £600

£800

£1,000 £1,200 £1,400 £1,600

£3,995 £1,800 £2,000 £2,200

£2,400 £2,600 £2,800 £3,000

PRICE/BAND CHART The price/band chart above plots the current outerwear ranges of the competitors against the Mackintosh AW 15.16 collection. The dashed lines capture the price bracket where most of the outerwear is positioned reflecting how the Mackintosh range is priced competitively. 96

2.5 Position

£3,200 £3,400 £3,600 £3,800 £4,000

MACKINTOSHADVANTAGE Unlike competitors, Mackintosh can make claim to a production process that is fully in the UK. Each coat is handmade which creates a greater affection between the craftsman, brand and consumer that the others do not offer giving them a competitive edge.

2.6 PROMOTION

2.6.1 BRANDING

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2.6 Promotion

It is important for Mackintosh to maintain a coherent brand identity through internal and external activity to create a set of associations that the consumer will make with the brand and product. The brand DNA pyramid opposite demonstrates the key associations that validates the brand.

Who is the Mackintosh consumer? Who do they aspire to be like?

What the Mackintosh consumer believes in

What Mackintosh gives the consumer It makes them feel...

What Mackintosh does for the consumer It makes them...

Why the benefits are true What are the key ingredients?

What is the brands USP?

Luxurious Mature Inspiring Sophisticated

Personality

Authenticity Heritage British Manufacturing Craftsmanship Quality Affluent Confident Sophisticated Iconic Robust Powerful Unique

Values

Emotional Benefits

Physical Benefits

High quality Utility meets luxury Traditional Handmade Authentic

Attributes

Luxurious handmade outerwear, born and made to respond to the British weather, mixing utility with luxury, handmade in Britain using the same process since 1823 Traditional, Heritage, Iconic, Quality, Luxurious, and Enduring Outerwear

Positioning

Essence 101

101

LOGO DEVELOPMENT Primary research established consumers affiliate Mackintosh with tradition, practicality and protection. These are all strong attributes relating to brand DNA however they do not convey the true personality. The logo has therefore been developed to generate greater recognition, memorability and modernity. For Mackintosh to have a global appeal it is intrinsic for the brand to have trademark icons that make the brand â&#x20AC;&#x2DC;purer, more compelling and more relevant globally, across genders and generationsâ&#x20AC;&#x2122; (Burberry, 2013). Similar to Burberryâ&#x20AC;&#x2122;s Prorsum Knight, Mackintosh have the horseguard which remains a key feature of the new logo, acting as a symbol of heritage which resonates globally. The logo juxtaposes modern with tradition, with the modern font and the traditional horseguard, making the brand relevant to all consumers.

102

2.6 Promotion

M M A C K I NT O S H

103

This Mackintosh has been hand crafted by our specialist coatmakers in the UK. All seams are glued instead of sewn to provide a totally waterproof seal. Our coatmakers spread this glue with their fingers, using the same techniques and processes since 1823. MA C K I NT O S H

MADE IN BRITAIN

SWING TICKETS

104

2.6 Promotion

The swing tickets have been developed to coincide with the new logo. Each ticket has three parts to it including the horseguard tag, the heritage tag and the UPC.

Dunkeld Navy

M M A C K I NT O S H

P A C K A G I N G The packaging too has been developed to showcase the new logo, focusing on minimalism and sophistication - key traits of brand identity. The black and white colour scheme is robust and etches a powerful impression. The Mackintosh box for all online orders, like the bag evokes the luxury image and hones in on the made in Britain heritage that is important to emphasise to the consumer (primary research highlighted only 16% associate Mackintosh with made in Britain) Consumers are excited to receive a Mackintosh delivery, with many New Luxury Millenials, and Emerging Luxury Millenials sharing images on the social network platform Instagram.

105

L A B E L L I N G The labelling of each Mackintosh is centric to maintaining authenticity, using trademarks including the coat label, care label and buttons to highlight to the consumer that their coat is an original. Made in Britain is a focal point of each label, like the packaging, it is important to emphasise this point to the consumer. The buttons with the lettering Mackintosh debossed onto them appeal strongly to the Emerging Luxury Millenials who use their coat as a tool to show wealth and status. They are proud to wear the genuine article and pay a premium for the quality of the fabric and cut (Nodder, 2012)

106

2.6 Promotion

INNER: 75% LAMBSWOOL 25% ANGORA

OUTER: 100% COTTON (RUBBERISED)

This Mackintosh has been hand-made from the best materials and will afford complete protection from the heaviest downpour. To help you get the best wear the following are worth attention: 1. To dry it, or when not in use, it should be hung in a cool airy place 2. Avoid high temperatures i.e. radiators, fires or hot water pipes 3. Do not dry clean 4. Do not machine wash 5. Small stains can be removed with soap and water. Apply soap with soft brush only

M A C K I NT O S H MA D E I N B R ITA I N

CARE OF YOUR COAT

M A C K I NT O S H

MADE IN BRI TAIN

107

2.6.2 EXPERIENTIAL RETAILING With many consumers interacting with Mackintosh only through department stores, it is essential to create an experience that evokes brand identity and one that encourages the consumer to choose Mackintosh over a competitor within the department store.

108

2.6 Promotion

M A C K I NT O S H

AC K

I NT

OS H

AC K

I NT

OS H

AC K

MACKINTOSH is TRADITIONAL

M M A C K I NT O S H

CONCESSION DESIGN The concession space translates the experience created in the Mackintosh flagships enabling all consumers to feel a part of the Mackintosh heritage. Using herringbone wood and white light boxes to give a polished luxurious finish like the brand. The feature wall showcases brand heritage, with photographs from manufacture. Again this is important to the consumers - with Traditionalists wanting to know the story behind the brand, and an overall consumer switch â&#x20AC;&#x2DC;from debauchery to work and craftsmanshipâ&#x20AC;&#x2122; (Tiltman, 2011) where the craftsmanship justifies the expense.

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VISUAL MERCHANDISING The Mackintosh flagship on London’s Mount Street has ‘pride of place reserved for the women’s coat room’ (Ryan, 2011) where there is a circular glass case with a coat suspended in the middle, enhanced by the absence of a mannequin. This visual merchandising concept is reflected in the concession space where three umbrellas are suspended from the ceiling with a coat hanging on each handle. This concept reflects brand origins, providing protection from the weather and leaving a lasting impression on consumers within the department store.

110

2.6 Promotion

E - C O M M E R C E The transition from the non-commerce site to commerce is a key way to reach the potential global consumer. Internal factors such as production capacity limit revenue and therefore the number of stockists the brands can fund globally. Consequently, e-commerce becomes Mackintoshâ&#x20AC;&#x2122;s flagship store with global delivery options. The site also is a centre for brand heritage educating the consumer on history and the manufacturing process. With a luxury editorial aesthetic the website includes lookbook inspiration. Appealing to the consumers who love print media and are always online as highlighted in primary research.

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2.6.3 INTEGRATED MARKETING STRATEGY A new marketing strategy is centric to Mackintosh developing their market - raising brand awareness and educating existing and potential consumers to encourage sales. Different platforms will be targeted with unique campaigns appealing to the cohorts and individuals with in.

112

2.6 Promotion

P R

A C T I V I T Y

Exposure PR, the independent communications agency manages all of Mackintosh’s PR activity, ensuring that there is constant media engagement. Historically, Exposure have focused on regional activity in free supplements such as London’s Evening Standard. With the launch of the AW collection and rebranding, activity will expand to international luxury editorials and online e-zines that current and aspirational consumers actively engage with, established in primary research. “I would expect to hear about the coats in the magazines, particularly ones with a heritage aspect” (Gwen, 12.03)

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TA R G E T M E D I A The key print and online titles that Mackintosh will target via paid and press opportunities are displayed on this page. Featuring international luxury titles, Asia-Pacific (focusing on the Emerging Luxury Millenial cohort), regional supplements and online blogs and e-zines. â&#x20AC;&#x153;There is nothing better than to sit down with the FT after a day in the office staring at the screenâ&#x20AC;? (John, 05.03)

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2.6 Promotion

BRAND AMBASSADORS Famous couple, Marcus Mumford and Carey Mulligan will become Mackintosh brand ambassadors and feature in the ‘M is For’ campaign. The couple will have ‘a powerful amplifying and accelerating effect’ (Pringle, 2012) on consumer minds who are invested in their careers. Both Mumford and Mulligan are brands in their own right, with their image and fame helping to promote Mackintosh and draw in a wider audience through exposure gained by their own profile.

116

2.6 Promotion

DIGITAL C AMPAIGNS Mackintosh will have two digital film campaigns that will be streamed on Mackintosh.com, Mackintosh Elements and Youtube to gain ‘viral traction’ (Arthur, 2013). The ‘Kissing in the Rain’ campaign will consist of 3 short films using iconic movie kisses from Breakfast at Tiffany’s, The Notebook and Four Weddings and a Funeral evolving around the concept ‘if only they had a Mackintosh’ This campaign will help to humanise the brand, and evoke nostalgia in the audience, who will interact with the campaign via sharing, likes, and comments.

117

DIGITAL C AMPAIGNS The second video campaign coincides with the print campaign, ‘From Craftsman To Coat’. The video demonstrates the production of a Mackintosh coat, helping to educate the consumer. Craftsman are the stars of this video, highlighting how ‘work has become sexy’ (Tiltman, 2011).

118

2.6 Promotion

Let’s Talk About The Weather

MACKINTOSH Made in Britain

TRANSPORT CAMPAIGN www.mackintosh.com

www.mackintosh.com

On a local level, many consumers commute daily through the underground, placing a campaign accordingly will target that urban audience. That audience consists of ‘55% of Britain’s ABC1 workers’ and have ‘higher salaries’ than the national average ‘displaying wealthy urban spending patterns’ (Exterion Media, 2014). The weather campaign will take over escalator panels twice a year for two weeks, raising curiosity and brand awareness.

There Is No Such Thing As Bad Weather

Just Inappropriate Clothing

The campaign will also target tourism retail, with London being a hub of culture for the Emerging Luxury Millenials to explore (LS:N Global, 2012).

www.mackintosh.com

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P R I N T C A M PA I G N S Mackintosh will pay for advertising in key UK titles that have a wide readership of the targeted audience. The ‘M is For’ campaign, featuring the brand ambassadors will feature in Vogue and GQ. Research has shown ‘in the UK celebrity ads are, on average, a little bit more impactful’ (Pringle, 2012) generating engagement and therefore return on investment. Primary research has highlighted that the cohorts regularly interact with print media (and their digital counterparts) which is suggestive of success. The second print campaign ‘From Craftsman To Coat’ is the print counterpart of the video. Honing in on Mackintosh’s made in Britain heritage and educating the consumer.

120

2.6 Promotion

M is for

MULLIGAN

W W W.M ACK I N TO SH.CO M

M is for

M ACKINTOSH

W W W. M AC KINTOSH.CO M

M is for

M U M F O R D

W W W.M ACK I N TO SH.CO M

M is for

M ACKINTOSH

W W W. M AC KIN TO SH.CO M

From Craftsman

W W W. M AC KINTOSH.CO M

To Coat

M M A C K I NT O S H

SOCIAL MEDIA The Mackintosh consumer uses popular social media platforms to connect with friends rather than engage with brands, with the opinion that the sites are lacking a premium level. Often when luxury brands turn to social media, the engagement in heavily aspirational and does not generate return on investment (Pringle, 2012). Therefore Mackintosh are launching Mackintosh Elements in collaboration with the mega-system Google+ (LS:N Global, 2013). A crowdsourced platform that enables consumers to share street style photographs of their Mackintoshâ&#x20AC;&#x2122;s. Each look is shoppable, with direct links corresponding to the product pages on Mackintosh.com. Users can also share, comment and +1 looks to encourage engagement. The platform also has sections to educate the consumer on brand heritage increasing awareness.

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2.6 Promotion

S H O W C A S E The AW 15.16 showcase will present Mackintosh to the Press for the first time with the new image in February 2015, to coincide with LFW show schedule. Held at the Mount Street Flagship the event will feature a parade of the collection, acoustic performance from Mumford and Sons and whisky and chocolate orange apĂŠritifs. The showcase will hone in on the made in Britain heritage and engage the press so that Mackintosh gain greater traction in the media and therefore assist with market development.

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2.7 PERSUASION

MADE IN BRITAIN CRAFTSMANSHIP HERITAGE AUTHENTICITY Very few luxury brands can make claim Each Mackintosh coat is handmade by ‘Culture is the only secure wealth’ (Tiltman, Over the course of time, the word to ‘made in Britain’ which is a strong coatmakers who spend three years learning 2011) which Mackintosh have plenty of. Mackintosh has become ‘little more point of persuasion for Mackintosh. the process as apprentices. than a generic reference point’ Originating back to 1823 when Charles (Ryan, 2011) With many brands Consumers are more engaged with Consumers ‘want to see craftsmanship Macintosh invented the process of spawning the original Mackintosh the brand knowing that production is to justify the expense on luxury’ (Tiltman, rubberising cotton. Mackintosh then went on supporting the manufacturing trade 2011), with the handmade process to become the official suppliers to the British Authenticity is therefore a pulling within the UK. increasing affection. Army, Railways and Metropolitan Police point for consumers, who want to (Wane, 2012). use their Mackintosh as a tool to gain traction for image and status. Consumers are attracted to the charm of the brand which has become part of the countries DNA.

130

2.7 Persuasion

CELEBRITY QUALITY The use of brand ambassadors Centric to brand philosophy is maintaining a has a ‘powerful amplifying and quality garment that is firstly functional and accelerating effect’ (Pringle, 2012) secondly fashionable. Making coats which on consumer minds. protect from the elements via the fabric and watertight seal. Making the brand more covetable and impactful through traction With consumers investing money into the gained via celebrity exposure. coat, they want it to be built to last.

ENDURING STYLE MODERN SILHOUETTE Each Mackintosh has an enduring style Keeping the brand active to the modern meaning the coat can be passed down the consumers involves a slim line silhouette generations and coveted for an entire life. that emphasizes the figure. In particularly important to female consumers. It is a wardrobe staple like a ‘L1212 polo from Lacoste or 501 Levi’s’ (Matsuo, 2011) ‘I like to create the illusion of having a waist and so a belt is essential’ (Chloe, ‘I like to feel a coat that I have chosen that I 05.03) have really loved will last a good few years’ (Gwen, 12.03)

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3. BUSINESS PLANNING

3.1 SALES REVENUE

134

3. Business Planning

Mackintosh will generate sales from different revenue streams, shown diagrammatically on the opposite page. These streams are largely traditional, with a high proportion of revenue being generated from sales of the collection.

S H A R E C A P I TA L

M A N U FAC T U R E

Yagi Tsusho, 100% shareholder of Mackintosh LTD will sell 20% of shares to Mackintosh employees at a nominal value of ÂŁ0.01. This will generate revenue and also encourage staff morale through the stake they will gain in the business.

Mackintosh is part brand, part manufacturer and will continue to produce outerwear for prestigious brands such as Christopher Kane to help raise more revenue and support the development of its own brand.

A DV E RT I S I N G A N D P R

WHOLESALE

R E TA I L

Although all advertising and PR activity comes at a cost, the awareness risen will generate revenue. Targeting key media (established in 2.6.3) to attract the consumer and produce a return on investment.

Individual wholesalers will buy the merchandise from Mackintosh in bulk, which enables smaller independents to buy in smaller quantities than the retailers. Any revenue generated from this stream will be considered carefully to ensure the Mackintosh identity is not damaged by unsuitable independents. The highest percentage of sales revenue will be generated via retail streams including flagships, concessions and ecommerce channels established in 2.4. Revenue will deviate monthly according to seasonal sales patterns, whereby AW sales will generate greater revenue than SS, owing to the concentrated sales pattern of outerwear and Christmas gift trading. 135

135

3.2 EXPENDITURE

136

3. Business Planning

The key costs for the market development activities are listed in the diagram opposite, with a high amount being spent on production, promotion and distribution (See Appenix 5)

Promotion:

£1,744,926

Video Production: £30,31 Escalator Panels: £21,500 Digital: £12,000 Exposure PR: £18,000 Brand Ambassadors: £1,600,000 Vouge DPS Run of Pages: £50,630 GQ DPS Run of Pages: £29,505 Esquire DPS Run of Pages: £8,560 FT DPS Run of Pages: £1700

Distribution:

Cost of Distribution: £672,528 Cost of Sales (Stockists): £4,377,840

£5,050,368

Production:

Hire of Plant & Machinery: £4,989 Wages & Salaries: £2,526,660 Patents & Licences: £12,000 Admin Expenses: £1,651,788 Raw Materials: £2,749,613

£6,945,050

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3.3 CAPITAL FUNDING The rebranding, marketing and new collection acivity will be funded by different sources which are as follows:

138

3. Business Planning

• Bank Overdraft and Loan • Cash at bank • Share Capital (See appendix 5)

Share Capital: £1,488,260

Cash at Bank: £1,276,442

SHARE CAPTITAL: • At present, Yagi Tshusho is the sole shareholder of Mackintosh with a total of 14,882,600 allotted shares. • Tshusho will offer all employees the opportunity to buy shares in the company, giving them the chance to become stakeholders and encourage work morale with the knowledge that their productivity affects the dividend they will receive at the end of each year. • 20% of Tshusho shares will be sold at a nominal value of £0.50 to raise a total of £1,488,260.

Overdraft: £180,607

Bank Loan: £600,000

139

4. SWOT ANALYSIS

4.1 STRENGTHS • The rebranding work portrays brand identity in a more robust format meaning connotations are automatically made with luxury, sophistication and power. Maintaining the horseguard as a heritage icon helps to make the brand relevant globally, with the symbol compelling all consumers, no matter what language they speak. • The range evokes the Mackintosh image yet cuts a modern silhouette appealing to the consumer who desires tradition but also modern activity • The integrated marketing strategy spans a wide range of mediums - from digital to print, helping to raise awareness through education, curiosity and subtle humour • Maintaining hand made in Britain production is not a claim many luxury brands can make, making Mackintosh stand out against competitors.

142

4. SWOT Analysis

4.2 WEAKNESSES • Production capacity of both factories limit quantities and therefore total revenue • Sourcing materials from outside of the UK deflects brand image as the statement ‘made in Britain’ cannot be fully justified with varied country of origin • UK manufacture has far greater costs than that of abroad causing the retail price to rise so to maintain a strong margin • The showcase of the new collection and the paid advertising and press features are heavily focused on British titles and consumer neglecting potential for promotion worldwide. This however is limited by capital funding

143

4.3 OPPORTUNITIES • Expand current factories further so to increase production capacity and employment levels, supporting the British manufacturing trade • Increase the number of Mackintosh flagships globally to target each demographic individually, enabling greater representation of the brand • Expand the outerwear offering into Childrenswear to compete on a holistic level with key players in the market • Offering consumers factory tours to help them connect fully with the brand and grow affection

144

4. SWOT Analysis

4 . 4

T H R E AT S

• Employees may not be interested in investing into the company meaning not enough money would be raised via share capital to fund the market development • Paid advertising in target media may not generate the desired return on investment with consumers turning away from print media • Target markets may experience a dry and warm summer/winter meaning a drop in sales as consumers would not be thinking about outerwear for a rainy day. This would also affect proposed press features that are centric to the wet weather • If demand grows too quickly, supply will not be able to keep up resulting in low stocks and disappointed consumers. An increased production to maintain greater demand may see coats being made of a lesser quality as workers are under greater pressure, with less time to focus on the quality of each product.

145

5. CONCLUSIONS

Mackintoshâ&#x20AC;&#x2122;s integrated marketing strategy is centric to the development of the brand in the global market, increasing brand awareness among consumers and raising ideals. The constant activity comes at great cost to the business making it harder to generate a return on investment. This marketing activity may generate a surge in demand of which supply may not be able to contend with. Mackintosh is limited by the production capacity of both factories and an increase in demand may be unachievable.

148

5. Conclusions

The activity and rebrand is only achievable with the given investment, raised by share capital. If this share capital were not generated then the business would not be able to go forward with the large-scale activity, limiting their position within the market. Further expansion of the brand globally will have to be considered carefully so not to push current consumers away. Current consumers value the exclusivity of the brand and expanding too quickly may lead them to feeling neglected and not part of the unique club they once were.

If all activity is successful then Mackintosh could look into diversifying their product range to incorporate childrenswear, to begin the process of becoming a lifestyle brand. Both factories within the UK would then have the potential to expand so to increase production capacity. This will then further support the British manufacturing industry which in turn helps to create a sustainable world for the future.

149

BIBLIOGRAPHY

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153

APPENDICES

APPENDIX 1:

Mackintosh SS14 Pr ice Band Char t

Toft

£950

Uags Queensferry Linton

£780

£900

Kemback Chryston

£830

£770

Banton Killin

£725

Dunkeld Short Dunoon

£800

£700

£830

Dunkeld

£770

Longford

Womens Mens

Farnell Chryston

£50

156

£850

£100

£1030

£815 £785

£150

£200

£250

£300

£350

£400

£450

£500

£550

£600

£650

£700

£750

£800

£850

£900

£950

£1000 £1050

APPENDIX 2:

Leading ten operatorsâ&#x20AC;&#x2122; share of global luxury fashion and leather goods market, 2012 (%) (Mintel, 2013)

17.9 30.8 9.4

3.3

3.8

8.7 4.1

4.7

5.3

5.8

6.2

LVMH

Coach

Chanel

Polo Ralph Lauren

Hermes

Richemont

Kering

Prada

Burberry

Giorgio Armani All Others

157

APPENDIX 3:

Range Plan

Range Plan for Mackintosh Womanswear AW 15.16 STYLE

SKETCH

FABRIC

Mulligan

Outer: 100 % Wool Inner: 100% Cashmere

Outer: 100 % Cotton (Rubberised) Inner: 100% Cashmere

Killin

Banton

Outer: 100 % Wool

Inner: 100% Cashmere Balone

Outer: 100 % Wool S

AC AC

TO S

68.57%

878

£193,160.00

£614,600.00

68.57%

32 to 38

£700.00

£220.00

68.57%

678

£149,160.00

£474,600.00

68.57%

32 to 38

£725.00

£190.00

73.79%

628

£119,320.00

£455,300.00

73.79%

32 to 38

£625.00

£189.00

69.76%

484

£91,476.00

£302,500.00

69.76%

32 to 38

£625.00

£189.00

69.76%

638

£120,582.00

£398,750.00

69.76%

32 to 38

£555.00

£150.00

72.97%

888

£133,200.00

£492,840.00

72.97%

32 to 38

£555.00

£150.00

72.97%

788

£118,200.00

£437,340.00

72.97%

RRP Margin Total Total Total Retail £ Cost achieved quantity Cost £780.00 £240.00 69.23% 523 £125,520.00 £407,940.00

Total Margin 69.23%

Navy

Rose Fawn

M H

Grange

Navy SIZES 32 to 38 Chocolate

32 to 38

£780.00

£240.00

69.23%

£6,815.00 £1,998.00

70.73%

678

£162,720.00

£528,840.00

69.23%

6,795 £1,341,858.00 £4,583,950.00

70.73%

Navy

TO S

COLS

Outer: 100 % Cotton (Rubberised) Inner: 100% Cashmere

FABRIC

SKETCH

Fawn

M AC

Outer: 100 % Cotton (Rubberised) Inner: 100% Cashmere

M S

M K

£220.00

TOTAL

£700.00

158

Fawn

32 to 38

STYLE

Rose

Total Margin 72.73%

32 to 38

RRP Actual Margin Total Total £ Cost achieved quantity Cost Total Retail £770.00 £210.00 72.73% 612 £128,520.00 £471,240.00

Queensferry

SIZES

Inner: 100% Cashmere

COLS

APPENDIX 3:

Range Plan

Range Plan for Mackintosh Menswear AW 15.16 STYLE

SKETCH

FABRIC

Mumford M AC

M AC

Dunkeld M

TO H

Outer: 100 % Cotton (Rubberised) Inner: 100% Cashmere

Macduff

M AC

M M

Outer: 100 % Cotton (Rubberised) Inner: 100% Cashmere

Outer: 100 % Cotton (Rubberised) Inner: 75% Lambswool 25% Angora Outer: 100 % Cotton (Rubberised) Inner: 75% Lambswool 25% Angora

Dunoon

COLS

SIZES 36 to 42

RRP Actual Margin Total Total Total Retail £ Cost achieved quantity Cost £640.00 £170.00 73.44% 450 £76,500.00 £288,000.00

Total Margin 73.44%

Fawn

Khaki

36 to 42

£750.00

£220.00

70.67%

525

£115,500.00

£393,750.00

70.67%

36 to 42

£750.00

£220.00

70.67%

425

£93,500.00

£318,750.00

70.67%

36 to 42

£495.00

£145.00

70.71%

620

£89,900.00

£306,900.00

70.71%

36 to 42

£495.00

£145.00

70.71%

835

£121,075.00

£413,325.00

70.71%

36 to 42

£740.00

£232.00

68.65%

400

£92,800.00

£296,000.00

68.65%

36 to 42

£740.00

£232.00

68.65%

550

£127,600.00

£407,000.00

68.65%

36 to 42

£740.00

£232.00

68.65%

640

£148,480.00

£473,600.00

68.65%

36 to 42

£850.00

£210.00

75.29%

590

£123,900.00

£501,500.00

75.29%

36 to 42

£850.00

£210.00

75.29%

450

£94,500.00

£382,500.00

75.29%

RRP Margin Total Total £ Cost achieved quantity Cost Total Retail £795.00 £240.00 69.81% 300 £72,000.00 £238,500.00

Total Margin 69.81%

Navy

Charcoal Navy

Charcoal Fawn

Navy Auchaven IN

M IN

AC H IN

Alness

Chocolate

36 to 42

£795.00

£240.00

69.81%

565

£135,600.00

£449,175.00

69.81%

36 to 42

£795.00

£240.00

69.81%

485

£116,400.00

£385,575.00

69.81%

£9,435.00 £2,736.00

71.00%

6,835 £1,407,755.00 £4,854,575.00

71.00%

36 to 42

TO S

Outer: 100 % Wool Inner: 100% Cashmere

SIZES

TOTAL

COLS

Navy

SKETCH

FABRIC

STYLE

S K

Khaki

Outer: 100 % Cotton (Rubberised) Inner: 100% Cashmere

Fawn Navy

159

APPENDIX 4:

Standard Distribution Curve

http://www.appfirst.com/blog/wp-content/uploads/2013/12/bell-curve.jpg

160

APPENDIX 5:

Cash Flow Jan

Example of Cash Flow for Business Planning

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

Dec

Total

RECEIPTS. Sales Bank Overdraft Cash at bank and in hand Loan Share Capital (A) Total Income

£962,521

£758,911

£694,126

£675,616

£638,595

£601,575

£573,810

£638,596

£805,186

£842,206

£916,246

£1,147,621

£15,051

£106,370

£50,000

£124,022

£1,257,963 £1,054,353

£989,568

£971,058

£934,038

£897,018

£869,253

£934,038 £1,100,628

£1,137,648

£1,211,688

£1,443,064

£9,255,007 £180,607.00 £1,276,442.00 £600,000.00 £1,488,260 £12,800,319

LESS PAYMENTS Loan Repayment (Flagship Rent) Hire of plant and machinery Patents and licences

£3,037

£416

£1,000

Admin expenses

£137,649

Wages and salaries

£210,555

Social security costs

£20,134

Other pension costs

£1,491

Design Costs

£500

Samples

£400

Manufacturing Costs (Stock)

£12,500

£6,000

£20,300

£6,750

£7,200

£7,000

£46,300

£7,000

£8,200

£8,600

£18,200

£23,400

Distribution costs

£96,044

£36,044

£26,044

£46,044

£26,044

£46,044

£56,044

£96,044

£76,044

£56,044

£364,820

£264,820

£364,820

£164,820

£264,820

£364,820

£464,820

£564,820

£464,820

£0

£80,135

£0

£1,700

£8,550

£0

£133,333

Exposure PR Monthly (Covers samples)

£1,500

Digital (E-tail, Mackintosh Elements)

£1,000

Showcase (Invites, gifting)

£0

£1,000

£0

£1,000

£0

Transport Campaign

£0

£10,750

£0

£10,750

£0

£3,031

£0

(B) Total cash payments.

£987,410

£929,629

£822,179

£928,629

£789,214

£828,879

£979,879

£987,429

£971,829

£1,040,479

£1,150,079

£1,055,279

£270,553

£124,724

£167,389

£42,429

£144,824

£68,139 -£110,626

-£53,391

£128,799

£97,169

£61,609

£387,784

Costs of sales (Concession Stockists) Print Campaigns (M is For, Craftsmanship) Brand Ambassadors

Video Production (Kissing in the Rain, Craft)

(D) Opening bank balance. Closing bank balance. (D+C)

£36,449 £4,989 £12,000 £1,651,788 £2,526,660 £241,608 £17,892 £6,000 £4,800 £171,450 £672,528 £4,377,840 £90,385 £1,600,000 £18,000 £12,000 £2,000 £21,500 £3,031 £11,470,920

£5,000

£275,553

£400,276

£567,665

£610,094

£754,917

£823,056

£712,430

£659,038

£787,837

£885,006

£946,615

£1,329,399 £1,334,399

£275,553

£400,276

£567,665

£610,094

£754,917

£823,056

£712,430

£659,038

£787,837

£885,006

£946,615

£1,334,399

£2,663,798

161