USE THE QUESTIONS inside the attached doc AS A GUIDE TO FORMULATE YOUR MARKETING PLAN.

8

This is a group assignment. Each group to present in class.

Due: Week 13.

INTERNATIONAL MARKETING PLAN.

After you have thoroughly read the case below:

*** Formulate a Marketing Plan for East End.

Note: Lots of data is available in the Competitive Matrix (also attached) for

your use in the Marketing Plan, especially to determine target market

size and to forecast sales.

Remain specific to the case. No marks for general theoretical answers.

Justify all your answers.

East End STORE CASE:

The Context

East End, a UK retailer (clothes, fashion), is considering entering the clothes fashion market by opening a store in Toronto and has collected the following information. Because of the expansion of Dundas Square area into “Fashion Central” and the opening of a Holt Renfrew, there is a definite market for retail stores there. Toronto’s demand is being boosted by increasing household income levels. The three sources of demand consist of tourists, young professional Toronto downtown workers, and suburban wives.

East End has exclusive retailing contract with some brands that are currently not available in Toronto, including Alexander McQueen, Rachel Roy, and Nina Ricci. Other successful brands like Nanette Lepore, and Twenty8Twelve are only available at Holt Renfrew.

High end stores like Holt Renfrew and the new Nordstrom focus on variety of products offered, store ambiance and offer customer services that are deemed adequate. The ultimate goal of creating an experience for customers unlike anything else is not achieved. For example, individualized service with a professional stylist is something that is missing. These stores’ website features special ordering services for customers, allowing customers to shop online and reserve items they wish to purchase. To further facilitate spending, in-store fitting for selected items is made available.

Suppliers

East End will be dealing with companies directly instead of working with suppliers, due to the fact that the majority of Canadian suppliers do not carry the brand names East End wishes to carry. Orders would be placed and an international distribution contract would be signed.

Staff

Staff will be hired based on experience in the retail industry, where at least three years in the industry would be required. A mandatory training program will be provided for employees. Due to the fact that an owner would be on location at all times, initially two part-time employees would be hired. The method of payment for employees would be hourly pay based on the market pricing.

The following will be required of all staff:

• Welcoming and pleasant, going beyond what customers expect

• Educated about all products and brand names carried

• Clean, attractive, and polished appearance

• Up to date on current trends in industry

• Tailoring and measurement skills

• Basic skills required to use computer programs

Store Layout

The layout of the store would focus on making it easy for customers to move around and view products easily. Music would be played at a soft level, not too intrusive, creating a relaxed atmosphere. Entering the store, a cashier desk would be to the immediate left, allowing employees to directly greet customers and watch for any type of theft. The cashier desk would double as a display case for accessories as it would be made of glass. Appropriately and professionally merchandised clothing racks would display matching outfits and colours.

The size of the store will be 3,000 sq ft.

Competitive Analysis

Industry Overview

The Canadian Apparel Market is a competitive environment. According to Statistics Canada, in 2022 the market consisted of 2,150 establishments and employed 69,911 individuals. The Canadian womenswear market includes dresses, suits, coats, jackets, shirts, skirts, blouses, sweatshirts, sweaters, and underwear. The sale of womenswear excluding sweatshirts, swimwear and such categories accounts for 42.4% of the market’s value. According to Data Monitor, the market grew by 6.7% in 2022, generating revenues of $12.6 billion. The market is forecast to have sales of $17.8 billion in 2025, a 41.2% increase from 2022.

In Canada, there are currently two major industry leaders in womenswear. The first is TJX Companies Inc. which operates the large off-price retailer Winners (25% of the market). The second is Gap Inc. which operates a number of high-quality retailers including Gap, Old Navy, and Banana Republic (20% of the market). The high end of the market is 18% of the total market in Canada and this percentage is the same in Toronto. According to Statistics Canada, women’s clothing and accessories purchases account for 50 cents of every dollar spent on clothing and accessories—almost double the amount spent on men’s. Toronto accounts for 8.5% of the total Canadian womenswear market and in Toronto the retail industry leader is Holt Renfrew. Sales of women’s clothing stores in malls grew in 2022 by 15.4% in Ontario, higher than any other Canadian province. Specialty apparel had the strongest sales growth in the Ontario market.

Summary:

Womenswear market size in Canada in 2022…. $12.6 billion

High end of the market …………………… 18%

Toronto womenswear market ……………. 8.5%

Competition

A number of factors were taken into consideration when evaluating the competition. Each competitor offers a large range of products and services, making the shopping experience more enjoyable. The quality of the competitors’ products and services ranges from extremely high to mid-range. Based on the market evaluation, there are five main operators in Toronto and two are at the secondary level. All information for analysis was gathered through personal interviews, secondary research, and mystery shopping.

The private company Holt Renfrew is currently the leading competitor in the Toronto market. The store is moving into the Toronto Eaton Centre, giving them an additional 60,000 square feet of space. The store is inviting and organized, styled by professional merchandisers according to brand. They are a highly respectable establishment offering extensive customer services such as a concierge service, as well as personal shoppers and stylists. The employees are extremely knowledgeable, friendly, and professionally attired. The store is unique in that they offer to go to a client’s home for a personal styling, have frequent special events, and carry brands exclusive to Holt Renfrew.

Worth, commencing business in May 2007, is a new store in the growth stage. The store carries unique brands with designers based mainly out of New York City, making them exclusive to Toronto. Owner Carl Abad, offers personal styling services based on his own experience of living overseas working as a professional stylist.

Purr is a more alternative store aimed at a younger target market. Opening 6 years ago, they have been very successful with a store move to a prime location and a second store opening. They are unique in that their clothing is very versatile, yet the lowest quality within the competition. Employees are very friendly and stood out in attire, yet do not know much about the products being sold. Purr’s largest downfall is their lack of promotions. Word of mouth and location are their only sources.

Focus Clothing, a contemporary, strictly womenswear, store offers a unique variety of products. They do not offer any exclusive brands and their store has a large amount of open space. Amongst the competition, they were the only store that did not have window displays. The employees are very friendly yet knew very little about the products in the store. Management is relied upon for any questions.

Shisomiso has been open in Toronto for the past four years and is in the growth stage. Carrying only Canadian designers, the store is unique in that it doubles as an art gallery. With a majority of the products being handmade, many are distinct and one of a kind. The small space is very inviting and the employees are extremely helpful in regards to the products carried. The atmosphere was much more casual and easygoing in comparison to other competitors.

Club Monaco is a recognizable retailer in its growth stage. Currently in Toronto there are two locations: Square One and TD Square. Inside, the atmosphere wis unusually colourful for Club Monaco—as they are infamous for carrying black, white, or grey items. Employees are polite, professional, and very knowledgeable about the entire company. They appear very clean cut as an all-black uniform (Club Monaco brand only) is required. The store offers only the Club Monaco private label, and books and home décor are also available for sale.

Banana Republic is another very recognizable retailer in the growth stage. Currently in Toronto there are four locations: Square One, TD Square, Southcentre Mall, and Market Mall. Inside the store displays are neat, although sale items are noticeably messy and disorganized. The employees are polite and slightly knowledgeable about the products, but no experts. Their appearance is polished as they are required to have a “Banana Republic” style. All products carried are the Banana Republic private label and they are the only competitor offering online purchasing.

Competitive Matrix

See attached excel file.

Market Analysis

Trends in Purchasing

• Clothing and accessory purchases in Canada are constantly evolving. It is more important to the average person today to “show off their individuality.” Accessorizing is becoming increasingly important in order to obtain one’s sense of individuality. Also, aiding in the creation of one’s own sense of style, “Canada’s long winters also provide a strong underpinning of solid consumer demand for hats, scarves and gloves, which make up the bulk of accessory sales.

• Purchase trends in the clothing itself are leaning more towards a casual look and there is a move “towards high fashion in a less dressy style than years past, especially in Toronto.

• Though casual is in, the demanding consumer needs more than just a closet full of casual wear. Because of the high demand for diversity, “both men’s and women’s suits showed stronger growth in 2022.

• Based on a survey done by the Labour and Household Surveys Analysis Division for Statistics Canada, “consumer spending rose as a percentage of economic activity from 52.8% to 58.9%.”

• Daily Statistics Canada shows that “spending on clothing increased 6% to an average of $3,330 per household, mostly owing to an increase in spending on women’s and girls’ wear.”

Toronto Demographics

Toronto is home to a younger arrangement of demographic characteristics, with an average age of 35.7 years.The overall descriptions of Toronto’s demographics are:

Education level Persons #

Total population (est) ……… ……………… 3,000,000

Individuals with income above $100,000…… 360,000

Average expenditure on clothes and accessories…. $ 1,990

#’s based on amount of both genders divided by 2 = approximated amount of females

Toronto Psychographics

Cluster Characteristics

Ontario is the lowest taxed jurisdiction in Canada and the greater Toronto area has the same number of households with annual incomes over $100,000 as the Greater Vancouver region.

Price Quality Grid Analysis

Quality of Dresses Based On

• Uniqueness of design

• Materials used

• Handmade/machine made

• Attention to detail

• Overall appearance

Exhibit 1 below shows differences in price and quality of the current stores in Toronto.

Exhibit 1 Price Quality Grid: Increase size of chart to see clearly.

Brands

Purr- Vera Moda brand (one)

• Sleeveless, silk ruffles and lining, back zip

• Button-down wrap dress, 3/4-length sleeves

• 68% cotton, 27% polyester, 5% elastane

• Made in Turkey

Banana Republic—-Banana Republic Brand (two)

• Short sleeve, twist on bodice, back zip

• Made in China

Club Monaco—Club Monaco brand (three)

• Sleeveless, large waistband, back zip

• 80% wool, 20% polyamide

• Made in China

Shisomiso-Nokomis brand (four)

• Sleeveless, silk ruffles and lining, back zip

• Cotton, silk

• Made in Canada

Focus Clothing—Teenflo (five)

• Sleeveless, wide waistband, zip-up back, silk lining

• 1% viscose, 23% polyamide, 6% elastane

• Made in China

Worth-Generra (six)

• sleeveless, large silk bow on front

• 100% cashmere

• Made in China

Holt Renfrew-Chloe (seven)

• Pleated chiffon dress, short sleeve, side zip

• Polyester, cotton

• Made in Italy

Hudson (eight)

Other Information

According to the Ontario Economic Departments survey results for “Tourism in Toronto & Area,” Toronto received 4.19 million visitors in 2022. Of this large-scale amount, Ontario is the largest contributor to the visitors to Toronto with 84%, where internationally, the United States contributed 7% of Toronto tourism.

The extended Dundas Square and Yonge Street has young professionals living and working in the Toronto downtown area, as well as the suburban wives with a high disposable income visiting ‘Fashion Central’ and, lastly, the tourists visiting the Toronto downtown.

Yonge street contains the bulk of the young working professionals’ group, due to the majority of businesses located right there. Yonge street has 60,000 pedestrians walk by a day. The number includes both men and women. The “Fashion Central” community allows each consumer to easily locate and/or contact the stores they want to visit. As “Toronto’s urban residential area is rapidly growing, all within walking distance to the Fashion Central, the projected future population for resident occupancy will double in Toronto downtown alone.

Attached: The Competitive matrix.

Questions: USE THESE QUESTIONS AS A GUIDE TO FORMULATE YOUR MARKETING PLAN.

You are the Global Marketing Manager for East End in the UK. Your task is to design a Marketing Plan for East End for entry in the Canadian market (Toronto).

1. Do an Environmental Analysis for the Canadian market with special focus on its economic part and competitors. This will be the first step in the formulation of the Marketing Plan. (3 marks)

2. How will you segment the market for East End? (10 marks)

3. Define your target market (7 marks) and determine its size/potential in dollars.

   1. Use 2 methods to determine the size of the target market. Show your calculations. (15 marks)

   2. As Global Manager, how will you ascertain the accuracy of your results. (5 marks)

4. What are the market drivers, market enablers (if any) for East End in the Canadian market? (5 marks)

1. What will be the Objectives of your plan? (3 marks)

2. What target Market Strategy will you use to achieve the objectives? (8 marks)

3. How will you Position East End and its brands? What Positioning Strategies will you employ? (7 marks)

4. How will you innovatively manage the marketing mix elements?

   1. What type of product or brands will you introduce in the store to meet the needs and wants of your target customers? Specific services? (1+4=5 marks)

   2. Define your:

      1. Pricing strategy (3 marks)

      2. Promotional strategy (2 marks)

      3. Location (2 marks)

1. Make a 5-year sales forecast for East End. Clearly state your assumptions. (20 marks)

1. If your contribution margin is 70%, make a pro-forma Income Statement showing sales, cost of goods sold and the gross margin. (2 marks)

2. How will this contribution margin affect the riskiness of the business? (3 marks)

Adapted from Small Business Management – Launching and Growing New Ventures,, Longenecker, Donlevy, Champion, Petty, Palich, Hoy (2016), 6th ed. And attached cases. Web Plan A.