Principles of Marketing Report
Brand: Michael Kors
Name: Simaan Shaikh
This report conducts an in-depth analysis of Michael Kors it analyses their customer market and its segmentation, competition, position in the market and its marketing mix. To do this, a number of research methods were employed. Firstly, primary research was gathered in the form of interviews with employees and customers of Michael Kors. Secondly, a comprehensive amount of secondary research was conducted in order to understand more about the brand, its values and what its product was. Then, a SPICC and PESTLE analysis was done in order to ana-lyse the current state of their micro/macro environment. Post-research, it was easy to ascertain what their marketing mix was and who their competition would be. Based on their competition and sources such as Business of Fashion, a perceptual market position map was created in order to help judge Michael Kors against its competitors. After this, a SWOT analysis of the brand was prepared in order to weigh out their strengths and weaknesses this was crucial in helping to create a conclusion and any recommendations for the brand in order to move forward and improve themselves. At the end of the report, it was recommended that Michael Kors continue their social media relationships with their customers. It was also suggested that the brand pay more focus on their older clientele and quality of their products as well as try to lessen their mainstream quality through the heightening of exclusivity by new collections with different prices or marketing strategies. Words: 245
Introduction 4 Environment Analysis:Micro - SPICC 5 Macro - PESTLE 7 Market Segmentation 8 Pen Portrait 8 Key Competitors 10 Perceptual Map 11SWOT 12 Marketing mix 14 Conclusion/Recommendations 19 Bibliography 20 Appendices 23
Michael Kors Holding Ltd is an American-based luxury designer brand. It was founded by designer Michael Kors in 1981 and after a tumultuous journey they have recently found themselves as on of the leading pioneers of fashion for todays generation. Mi-chael Kors bases their fashion on the theme of a jet-set juggernaut (Business of Fash-ion, 2015), therefore becoming famous for their fast fashion. Their high quality de-signer products are sold at a slightly lower price than other designer brands, making it more accessible to the masses. They produce clothing, resortwear, accessories, handbags and footwear for both men and women (Singer, 2013). The brand suffered serious losses and managed to procure a staggering comeback in 2013, rising quickly to the top and identifying itself as a luxury brand on par with brands such as Coach. According to the Business Insider, in Fall 2010 there was no mention of Michael Kors anywhere in their surveys of favourite brands, but in 2013 it was near the top (Lutz, 2013). Michael Kors pride themselves on their campaigns and their social media outreach, making them one of the first designer brands to be famous on social media. Its main headquarters are located in New York, on Madison Avenue. These headquar-ters act as a command centre, and the 1.1 million square foot building houses most of their main offices (Samtani, 2014). As of 2014, the brand operates around 555 stores and 1,560 in-store boutiques in department stores worldwide (Melton,2014). Their products manufactured in China by Sitoy Holdings Ltd, as labour costs and materials are at a lower cost in Asia. Currently MK is licensed with Estee Lauder, Fossil and Mar-chon 9Michael Kors Holdings Ltd., 2015). This report contains a detailed analysis of Michael Kors by reviewing who its target cus-tomer is and their market segmentation, marketing mix, the overall retail environment and competition. The aforementioned research will aid in coming to a conclusion that will outline the brands marketing activities by identifying underlying problems that need to be solved.
Image: (BorgenMagazine, 2013)
Micro Environment Analysis
SUPPLIERS Michael Kors is mainly supplied by Sitoy Group Holdings Ltd. This factory is located in Hong Kong and is a major manufacturer of high quality leather goods and travel items (Sitoy Group, 2011). Coincidentally, it also supplies on of Michael Kors biggest competi-tors, Coach (Zhao, 2014).
PUBLIC Michael Kors have their own personal News Releases page on their website, which allows customers an insight into their business for other press related inquiries they have their own press office and also work with Italian press group Onward Luxury Group even though the groups main focus is manufac-turing and distribution (Onward Luxury Group).
INTERMEDIARIES Resellers: Old stock from the company is taken to outlets of factory outlets or given to various online retailers to sell at a sale price.Physical Distribution: According to MKs annual report 2015, they currently distribute for themselves We also have several small-er distribution facilities across the United States. Outside of the United States, we have regional distribution centers in Canada, Hol-land, Japan, and Hong Kong, which are either leased or operated by third-parties. In April 2015, we expanded our existing distribution facility in Whittier, California to service our e-commerce site. In addition, during Fiscal 2016, we plan to invest in building our own distribution facility in Holland, which will support our European operations. (Michael Kors Holdings Ltd., 2015)
Micro Environment Analysis
Global Licensing: Currently, Michael Kors is contractually licensing with Estee Lauder, Fossil and also with Marchon. MK joined Es-tee Lauder in 2003 (Estee Lauder), following this its products are now being sold in over 30 countries and territories. Michael Kors will be contractually bound with Fossil until 2024 and will distribute eyewear and watches along side the brand (Michael Kors, 2014). Fincancial: Michael Kors main bank dealings are with Bank of America, HSBC and Wells Fargo Bank (Michael Kors Holdings Ltd., 2015).
COMPETITION MK has several competitors with similar brand outlooks to themselves; such as Coach, Kate Spade and Tory Burch.
CUSTOMERS Michael Kors target customers are most affluent young women who embrace the con-cept of fast fashion. They also cater to men.
Macro Environment Analysis
Political/Legal -Trade agreements limiting how much can go in and out of a country. -Environmental and ethical restrictions limiting imports/exports.-Tense international relations influencing trade agreements or retail locations.
Economical -Tax inflations which cause cost of materials and price of product to increase-Minimum wage boundaries in different countries influence how much each employee has to be paid-Recessions or inflations adding pressure on individual spending habits as there could be less disposable income available.
Social -Current trends influencing where people buy from or what people buy-Cultural differences influencing what each store sells -Risk of certain cultures not wanting certain prod-ucts due to cultural preferences.
Technological -Rise in online shopping leading to a fall in in-store footfall-Unpredictability of social media could affect sales as its mass outreach determines what the most desirable product is at any given time.
Environmental/Ethical -Counterfeit products or subtle copies being manufactured and sold in high street stores or bargain stores.-Environmental impacts of import/exports may lead to trade limitations depending on countrys governments and ecological footprints.
According to the Business of Fashion, Michael Kors is a Teen Fashion Idol and the preferred handbag label of over 39% of average-income women (Bloomberg, 2015). After conversing with MK sales employees (Appendix 1), it was evident that the brand doesnt place emphasis on who their particular demographic should be. They cater to teenagers and adults. However, the distinguishing factor between these groups would be their fashionability and their brand consciousness this allowed for a accurate pen portrait to be created.
NAME Jonathon SmithAGE 25GENDER MaleOCCUPATION Investment BankerRELATIONSHIP STATUS SingleLIFESTYLE/HABITS Young, sophisticated, driven - likes to have fun
but also works hard and wants to do well. Spends money but never goes overboard. Goes out with friends once a week to a classy bar straight after work and on the weekends likes to relax with friends and do outdoor activities.
STYLE/TRENDS Sophisticated and classy/relaxed and sporty - likes to look good and work so he can make a good impression but never ventures out of the box in terms of style as cannot not want to be too different from his peers in a professional workspace. When shopping he looks for smart clothes that are designer but of good quality but not extremely over-priced. Loves Michael Kors because it fits these requirements and also has outdoor wear/resort wear perfect for lounging or going on holiday with
GENDERS: FEMALE CEN-TRIC
STYLE: PROFESSIONAL, SIMPLE, STYLISH.