Pandora Marketing Report*

Pandora Pebbleâ„¢ Product Launch Report

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nT

Executive Summary

introduction

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810

Consumers Competitors

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Marketing mix: 4 p’s

sWOT ANALYSIS

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18 20

PESTEL aNALYSIS

PORTER’S 5 FORCES

communication platforms

references

EN

TS

Executive Summary The aim of this report is to provide a marketing plan for the launch of a new range of Bluetooth jewellery

by Pandora called Pebble™. By investigating the various marketing models such as the four P’s, PESTEL analysis, SWOT analysis and Porter’s five forces, a conclusion can be drawn as to how to approach marketing by outlining the key areas of launching a product.

The report will also briefly look at the brand Pandora’s origins, their target market, their existing communication platforms and their updates, as well as future platforms to promote the launch of their new product.

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I N T RO D U C T I O N

Pandora is an international jewellery company, founded in 1982 in Copenhagen, Denmark. It has over 9000 points of sale and more than 2000 concept stores worldwide. Their pieces are of a modern, simplistic style, which encompasses youthfulness and captures the essence of their target market.

Although handcrafted and finished to a high quality, the brand still has an affordable price range, appealing to a wide range of consumers. ‘’Pandora inspires women around the world to express their female individuality’’. (Pandora, n.d) The Pandora Mission Statement: ‘To celebrate women by offering them the opportunity for personal expression through our universe of high-quality and contemporary jewellery at affordable prices’.

(Pandora, n.d)

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T a rg e t Consumer Pandora’s primary target audience are young working professionals aged 18-30, also known as millennials. According to Mintel (2015), Pandora attracts ‘young jewellery shoppers, the most avid self-purchasers’. In other words, millennials are deemed the primary influencer of the brand.

According to recent findings they have an annual buying power of $200 billion.

“Our findings confirmed that millennials are highly educated, career-driven, politically progressive and--despite popular belief--do indeed develop strong brand loyalty when presented with quality products and actively engaged by brands,” says David Arabov, CEO Co-founder Elite Daily. (Schawbel, 2015) The socioeconomic range for the target audience would be ABC1C2, corresponding to the UK socioeconomic grading system (Brassington & Pettitt, 2000).

The largest contribution would be from C1; Lower middle class,

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who are in professional, junior managerial or administrative positions. Whereas the smallest contributors would be C2; skilled working group, who may not always have the disposable income to indulge in the latest trends.

The smart jewellery range will appeal mostly to young working professionals who utilise their smart phones frequently and may benefit from the useful notification feature of the smart jewellery range. The consumer will also have an open mind to technological innovation and be enthusiastic about emerging trends in fashion.

“87% of millennials use between two and three tech devices at least once on a daily basis. 39% are either very or completely likely to purchase a tablet computer in the next five years, while 30% are for wearable devices”. (Schawbel, 2015) This indicates that there is a demand for wearable tech like the Pebble™ in this market for this target group.

file

ro P r e om

Cust Name: Lisa

Age: 21 Occupation: Junior Journalist @ i-D magazine About: Energetic and sociable with a keen interest in keeping up with new trends in technology and fashion. She likes to stay organised and does this with the help of technological devices like her smartphone and smartwatch. She is interested in investing in smart jewellery but is not prepared to indulge too much and is looking for affordable alternatives.

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COMPETITORS

Market share is the proportion of the overall market for a given category of

product,

held

by

a

specific

organisation. (Blythe, 2009).

Pandora is a strong contender in the Jewellery & Watches industry.

According to a Mintel report, Pandora had the highest growth rate between 2011 and 2015 of 26.2%. They were followed

by

jewellery

specialists;

Warren James with 16.6%, Ernest Jones with 2.5% and Swarovski at 1.8%.

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Ringly Smart Rings & Bracelets $195.00

Swarovski Activity Cr ystal Pendant £149.99

SIM

Bellabeat Leaf Nature™ Rose Gold edition £120.29

RO P ILAR

DUC

TS

Rebecca Minkoff Notification Bracelet £102.22

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Marketing Mix - 4P ’s

Product

The marketing mix is defined as “The combination of the 4P’s that creates an integrated and consistent offering to potential customers that satisfies their needs and wants”. (Brassington & Pettitt, 2000) The product is a collaborative attempt to merge technology with fashion. As Paul Williamson, Director of Low Power Wireless at CSR says, “If wearable technology is to reach its potential it needs to appeal to more than just technology lovers”. (Simon Hill, 2014) The core product is essentially a necklace which operates via an inbuilt chip called the CSR1012 which is powered by lithium polymer batteries making it very lightweight. It functions by alerting users of notifications on their phone with a flashing LED light. Currently the chip is only suitable for use with the iPhone but the company is working on Android compatibility and to introduce an app that allows LED colour and flash pattern customisability.

o

tion a “ v

“Early adopters use the data provided by the innovators’ implementation and confirmation of the innovation to make their own adoption decisions”. (Rogers, E, 1962)

on

of

In

n

Life cycle - The product is at its ‘Early adopters phase’ in reference to the Rogers’ ‘Diffusion of Innovation’ (1962) model. The product technology of Bluetooth in devices is not new but the idea of using it in jewellery/wearable pieces is a fairly new concept.

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s fi f u

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Early Adopters 13.5%

Early Majority 34%

Price

Innovators 2.5%

Recommended Price: £89.99

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Late Majority 34%

The price is an indicator of the positioning of the product for customers who sometimes have little experience of the product.

Pandora’s products are within an affordable but high end range, therefore the price should be an indicator of this.

Price also represents the value the customer attaches to the product based on the information given by the marketer of what it can do for the customer (Zeithaml, 1988).

For the Bluetooth jewellery, the most appropriate pricing strategy would be to use penetration pricing.

Penetration pricing works by pricing aggressively below existing competitors in order to gain sales (Brassington & Pettitt, 2000).

From comparing the products of competitors the Bluetooth jewellery range offers the least amount of features and is simple in design. Therefore pricing the product at a lower price than competitor’s to gain a substantial amount of market share is advisable.

I n s t a g r a m Po s t M o c k- u p

Considering the target market for the Pandora Pebble™ are millennials, an effective promotional platform to use would be blogs, YouTube and social media such as Instagram, Facebook etc. According to a study ‘Millennials are significantly more likely to turn to specific social media platforms for unique purposes’. (McMurray, S, 2014).

Promotion

Promotion is the way in which a company communicates with its target consumer and consists of five things; advertising, sales promotion, direct marketing, public relations and personal selling. (Brassington & Pettitt, 2000)

For instance, Millennials are much more likely than other generations to use YouTube for learning about products, Twitter for expressing opinions about them and Instagram for posting photos about the products” By using these platforms to promote and advertise, the product can reach out to the correct consumers and create a ‘buzz’ which will lead to increased interest and thus sales.

Place

The Pandora Pebble™ will ideally be sold in Pandora stores across the country and through the e-store. An option would be to have concessions in technology shops like RED5 or department stores like John Lewis, Debenhams or Selfridges. This can help promote the product and generate interest which can increase the customer base by attracting customers who do not usually shop at Pandora stores.

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S Stren gths

+The Pandora Pebble™ combines technology seamlessly with jewellery so does not lessen the visual appeal +Pandora has a strong

existing customer base so it will be easier for the company to attract attention to the product and sell it, as customers are more likely to trust and believe in the quality and features it offers due to the credibility of the brand. + Pandora’s annual growth rate was the highest amongst its competitors, 26.2%, (Mintel, 2016) which proves the company is leading in the market.

We a k n e s s e s

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- Smart jewellery can be seen as too niche and may not attract customers the same way the existing Pandora products do.

- A non-replaceable battery could be seen as a design weakness. They could address this in new updates in the future.

- The Pandora Pebble™ is only compatible with Apple phones so excludes Android customers thereby limits its potential customers.

- Aesthetically, the product may appear to be too ‘techy’ and not ‘fashionable’ due to its metal casing and obvious LED light.

The LED light is not necessarily visible when worn on neck, so more useful as a bracelet.

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O T W Opportunities

- Offer updated versions as technology advances. Add new features like biometric capabilities e.g heart rate tracking, step tracker, sleep sensor. In the future emerging technology will be affordable and in the price range Pandora’s customers can afford.

- Allow personalisation of the Pandora Pebble™, for example, with Pandora’s trademark charms the consumer can customise the necklace to suit their preferred tastes.

- Introduce gold/rose gold versions to add to range if the product launch is successful.

Threats

- There are many existing forms of smart jewellery in the market which are popular and offer more features. This can reduce Pandora’s share in sales which is why their pricing strategy should be strong and aggressive in order to gain market share and be profitable.

- Easily substituted by technology super powers like Apple and Samsung who can deliver smart accessories with advanced specifications and already have the trust of the consumer. For instance, Apple’s collaboration with Hermes for their Apple watch series.

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PESTEL Analysis Political Brexit

could

potential

have

impact

a on

the sales of Pandora Pebble™. The slowdown of the economy and inflation in

may

reduced

result income

therefore affecting the amount of disposable income to spend on luxury goods such as jewellery and watches.

(Mintel 2016).

Environmental The increasing of

ten times cheaper.

chances of discarding. A

“Globally, 40 million

possible solution would

tonnes of electronic

electronic wastage is

waste, is produced on

becoming an issue in the high demand for

consumers to hand in

average every year” -

old items for recycling,

UNEP 2009

for example; free repairs

today’s world due to

or a 25% discount for

electronic goods and consumer behaviour. A

For a product like the

majority of electronics

Pandora Pebble™,

from Europe and USA end up in Asia, contributing to masses of e-waste and build-up

selected items in store.

which has a short product life cycle and is thus easily replaceable by newer,

of toxic chemicals in

updated versions,

the environment. (Reid,

adds to the problem of

2017).

e-waste. The product is

Most e-waste is exported

not rechargeable and

overseas to India or

offers no option for

China where raw

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be to offer incentives for

material extraction is

battery replacement and thus has higher

Social/Cultural The prevalence of

Technological “Technological

smart phones in the

innovation can be used

past few years has led

to extend the product

However, researchers

to disconnect to real

life-cycle, by helping to

have discovered how

life and actual social

refresh and update the

to charge batteries on

interactions replaced

product, but it can also

wearable devices with

by digital ones.

Pebble™ allows the user to disengage from their smartphone

shorten a life cycle by

the body’s natural heat

rendering a product

(Daws, 2017). It will

obsolete” (Brassington & Pettitt, 2000).

be environmentally sustainable and result in a more efficient

and concentrate on the people around them,

A common problem

product. Pandora could

however, still be able

with wearables such as

be the first to deliver

to receive notifications

the Pandora Pebble is

this new concept and

discreetely.

the battery life being

invention to their

poor due to their

consumers in the

compact size.

Economical Inflation of the pound due The unemployment rate in the UK is the lowest

to Brexit is forecasted to rise by 3% this year

it has been in 11 years

and this could mean price

at 4.8%. As well as this,

increases in retail. This

average weekly earnings

could have an impact on

have risen by 2.8% ac-

the manufacturing costs

cording to November’s data, which was higher than the forecasted 2.6%. (Khan, 2017).

This can have a positive impact on sales of the Pebble™ as consumers have more disposable income.

of the Pebble™ and the retail price

Legal Under UK law, driving while using a mobile phone is an offence and the driver can be fined £100 or gain 3 penalty points on their license (Gov.uk, 2016).

future.

This begs the question if Pandora Pebble™ could be similar to a smart phone in that it has distracting lights that could be a nuisance to other drivers on the road.

A suggestion would be to add vibration features and have an option to turn off the light on the Pebble™.

Porter’s 5 Forces This model analyses the competitors in the industry to identify opportunities and threats that may arise. (Hill and Jones, 2007)

Rivalry High There are a number of high-medium end brands that offer wearable yet fashionable technology so the chances of consumers swapping/testing new brands is high. Especially with the millennial market who are not loyal to specific brands and are swayed by online blog reviews and the latest trends.

Threat of Substitution Medium New and emerging brands offering high tech features can threaten Pandora but not as much as Apple, the technology power house that has the upper hand in the wearable tech market. However Apple does not have as much credibility in regards to fashion as Pandora. New entries have to have a convincing marketing strategy to supersede Pandora.

Buyer Power Low There are not as many options for consumers to choose from in terms of wearable Bluetooth jewellery, and the ones that are available do not have the loyal customer base, popularity, or the affordable price point that Pandora has.

This leaves the buyer with low bargaining power.This leaves the buyer with low bargaining power.

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Apple X

Hermes Watch

Supplier Power High CSR who provide the main piece of the product, the Bluetooth chip, has the highest power as Pandora Pebble™ depends on this part for the function and identity of the product. The supply for the metal outer casing is likely to be low as Pandora already uses this material for much of their jewellery range and likely to be a loyal consumer of the supplier.

Barriers to Entry High-Medium There are likely to be many new entrants to the market as the wearable technology market expands and develops. Pandora may be affected by new products with higher specifications and newer technology but they can adapt with the new entrants if they modify the existing Pandora Pebble™.

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According to an article, “Only 1% of millennials surveyed said that a compelling advertisement would make them trust a brand more” (Schawbel, 2015). Online banners are also ineffective, as a majority of these consumers use Adblocking software to filter advertisements on websites and videos. To reach out to this target consumer a different approach must be taken.

Instagram This form of advertising is new yet gaining momentum. Instagram is one of the most popular platforms used by millennials on a regular basis and thus a perfect medium to promote the Pandora Pebble™. Instagram is a highly visual platform that can convey messages to the consumer directly and also able to gain feedback through the comments section. As well as this, it helps to build a relationship and higher chances of repeat purchases e.g. customer buys the product again for a friend or relative. A statistic that supports this is “62% of millennials say that if a brand engages with them on social networks, they are more likely to become a loyal customer” (Schawbel, 2015). This is further evidenced by the fact big brands are employing social media directors and managers, suggesting the importance of social media as a marketing tool.

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lle Mi

nn

Youtube Bloggers Sponsoring bloggers on YouTube and blog sites to review and test the product by sending out free samples is an effective method of advertising.

YouTubers have a massive following and a significant influence on the target consumer. These videos/ blogs can help to increase awareness in the online world and can be shared amongst anyone therefore giving the product exposure.

“33% of millennials rely mostly on blogs before they make a purchase, compared to fewer than 3% for TV news, magazines and books”. This is because social media gives a realistic view of what is happening in the world, untainted by biases and sponsored material.

“43% rank authenticity over content” (Schawbel, 2015). Blogs offer this authenticity as it is often run by individuals who are similar in age, whose opinions are valued and trusted more than a branded ad.

Communication Platforms

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References Reports Mintel (2016) Jewellery Retailing UK- September 2016. Retrieved From: http://academic.mintel.com/display/748750/# Pandora (n.d) About Pandora Retrieved from: http://pandoragroup. com/About-Pandora/Mission-and-Vision

Books Brassington, F & Pettitt, S. J. (2000). Principles of marketing (2nd edition).

New York: Financial Times Management.

Blythe, J. (2009). Key concepts in marketing. London: Sage Publications.

Hill, C. W. L., & Jones, G. R. (2007). Strategic management: An integrated approach (8th ed.). Boston: Houghton Mifflin (Academic).

Rogers, E. (1962) Diffusion of Innovations New York: The Free Press

Articles Hill, S. (2014). Smart jewelry is proving wearable tech doesn’t have to be hideous. Retrieved January 24, 2017, from Mobile, http://www. digitaltrends.com/mobile/smart-jewelry-roundup/ (Hill, 2014) Khan, M. (2017) UK unemployment rate sticks at 11-year low of 4.8% Retrieved from: https://www.ft.com/content/fa17cb55-c303-39978cda-12416b680d5b Daws, R. (2017). Wearables can gain eternal life from your body heat.

Retrieved February 1, 2017, from http://www.wearabletechnology-news. com/news/2016/nov/14/wearables-are-gaining-eternal-life-yourbody-heat/ Reid, R. (2017). Europe contributing to china’s e-waste problem.

Retrieved January 28, 2017, from http://sino.co.uk/news/article/europecontributing-to-china-s-e-waste-problem Schawbel, D. (2015) 10 New Findings About The Millennial Consumer Retrieved from: http://www.forbes.com/sites/danschawbel/2015/01/20/10-new-findings-about-the-millennial-consumer/#127e2c4b28a8 Journals Marketing to millennials: Millennial shoppers trust social media more but branch out beyond Facebook. Professional Services Close - Up, (2014). Retrieved from http://lcproxy.shu.ac.uk/login?url=http://search. proquest.com.lcproxy.shu.ac.uk/docview/1537112691?accountid=13827 Videos Guardian (2011). Digital debris: The toxic path of electronic waste - video Retrieved from: https://www.theguardian.com/environment/video/2011/jun/14/toxic-electronic-waste

Websites Gov.uk. (2016). Using mobile phones when driving Retrieved from: https://www.gov.uk/using-mobile-phones-when-driving-the-law

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Images Front – Goldberg, N. (2014). Daria Strokous for Harper’s Bazaar.

Retrieved from: http://www.harpersbazaar.com/fashion/photography/ g4818/the-best-brights-0914/?slide=1 Inner front – Phoebe1995. (2016). Fashion image. Retrieved from: https://pixabay.com/en/fashion-design-student-works-1904691/ Page 4 - Bethany Day. (2014). The Pandora store on the King’s Road, Chelsea. Retrieved from: http://blog.interflora.co.uk/chelsea-in-bloomin-pictures/ Page 5 – Screen capture from video. (2014) Stone Setting, Prong Retrieved from: https://www.youtube.com/watch?v=OT02B9EerPg Page 6/7 Ella H. (2016). London Fashion Week: Street fashion.

(Retrieved from:http://www.ellahphotography.com/london-fashion-week/4587760307 Page 9 – Bellabeat. (n.d) Bellabeat Rose Gold Edition Retrieved from: https://webshop.bellabeat.com/products/leaf-rose-gold-edition Rebecca Minkoff (2014) Woman wearing smart bracelet. Retrieved from: http://www.popsugar.com/tech/Rebecca-Minkoff-Wearable-Tech-35640638 Ringly (n.d) Out to sea, Lapis. Retrieved from: https://ringly.com/products/out-to-sea Wareable. (2015). Misfit Swarovski shine Retrieved from: https://www. wareable.com/misfit/misfit-swarovski-shine-release-date-price-specs-658 Page 11 - Giftuniverse. (n.d). Red5 store in Leicester. Retrieved from: http://giftuniverse.com/ Page 12 - Tranmautritam (2016). Girl. Retrieved from: https://www.pexels. com/photo/woman-sitting-on-bean-bag-white-using-macbook-in-frontof-round-table-with-green-leafed-plant-169915/ Guinnog (2011) Broken Circuit Board Retrieved from: https://commons. wikimedia.org/wiki/File:Brokencircuitboard2011.jpg Pag Electronics (2015) Smart Jewelry. Retrieved from: http://electronicdesignmanufacturing.com/blog/connected-jewelry-development-design-engineering-manufacturing Breakingpic. (n.d). Woman on phone while driving. Retrieved from: https://www.pexels.com/photo/person-woman-smartphone-car-3056/ Apple. (2016). Hermes Apple watch. Retrieved from: http://uk.businessinsider.com/hermes-apple-watch-photos-2016-1?r=US&IR=T Fancycrave. (2014) Using tablet. Retrieved from: https://pixabay.com/ en/ipad-tablet-technology-touch-820272/ Baliuk Oleg. (2016) Retrieved from: http://www.freepik.com/free-photo/ smiling-woman-with-a-phone-in-her-ear_1040908.htm

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Zainab Shah-Jehan Fashion Marketing & Management Student ID: 26012833