The Design Manufacture And Marketing Of New

Brand Of Jeans Essay, Research Paper

Contents

Summary

Introduction

1. The Operational Environment of Jeans Manufacturing Companies

1.1 The Structure of the Industry

1.2 Sales of Jeans Manufacturing Companies

1.3 Jeans Production in Greece

1.4 Sales of Jeans Importing Companies

2. Segmentation, Targeting and Positioning

2.1 Segmentation

2.2 Targeting

2.3 Positioning

3. Advertising Campaign Development

3.1 Target Audience

3.2 Campaign Objectives

3.3 Budget Setting

3.4 Media Selection and Planning

3.5 Advertising Development and Testing

3.6 Implementation and Scheduling

3.7 Evaluation

4. Sales Promotion

Conclusion

Bibliography

Appendix

Summary

In this project the group is acting as a representative of Glamor Jeans S.A. clothes manufacturer a company that is founded on January 2000, is based at London s industrial area and one of its branches is located in Athens and is involved in the design, manufacture and marketing of a new product: Glamor 4U Jeans. In the next pages details of the competitive environment in which the company operates are provided together with the indication by which the group conducted the segmentation, targeting and positioning in the clothes market and what the outcome of this process was. Finally, are provided information of designing and advertising campaign and details for the creative and media strategy through which the team supported the product launch. Jeans have been imported for the first time in Europe in 1960, by the manufacturing company LEVI STRAUSS & CO, in a form of a very expensive product, dedicated to meet the needs of a few specific buyers. But as the years gone bye and especially during the 1970 s, jean clothes came out in a larger variety (trousers, shirts, skirts, jackets etc.) and started to address to a bigger part of consumers. Although the sales of jeans are loosing every year almost 5% of its market share, jeans remain all these years one of the main type of clothing

Introduction

The production of jean clothes possesses a large percentage of the Greek textile industry, which is one of the major parts of the Greek industry.

The jean cloth made its first appearance at USA in 1853 with a brown color in order to meet the needs of San Francisco s workers. The manufacturer a Bavarian man called Levi Strauss at first used different kinds of cover soft goods. Seeking of a new material, Levi Strauss found a strong cloth, which was coming from a small French town Nimes. It was known as serge de Nimes and this is where the name denim came from later.

The jean clothes became well known in Europe during the 2nd World War through the American soldiers. They have been imported for the first time in Europe in 1960, by the manufacturing company LEVI STRAUSS & CO, in a form of a very expensive product, dedicated to meet the needs of a few specific buyers. But as the years gone bye and especially during the 1970 s, jean clothes came out in a larger variety (trousers, shirts, skirts, jackets etc.) and started to address to a bigger part of consumers.

In this project the group is acting as a representative of Glamor Jeans S.A. clothes manufacturer a company that is founded on January 2000, is based at London s industrial area and one of its branches is located in Athens and is involved in the design, manufacture and marketing of a new product: Glamor 4U Jeans. In the next pages details of the competitive environment in which the company operates are provided together with the indication by which the group conducted the segmentation, targeting and positioning in the clothes market and what the outcome of this process was. Finally, are provided information of designing and advertising campaign and details for the creative and media strategy through which the team supported the product launch.

1. The Operational Environment of Jeans Manufacturing Companies

1.1 The structure of the industry

The majority of these companies is a part of clothing industry and none of them is manufacturing or importing only jeans. Depending on their size are distinguished in large organized companies that are using updated methods of management and marketing, and in small handicrafts that are having limited opportunities of developing the updated technology and improving their productivity.

Furthermore, there is a large number of import businesses. These are again distinguished in large organized companies that are mainly trading with high class products and are expanding continuously in order to meet the demands of an international competitive environment, and in medium sized enterprises that are having limited opportunities of expanding.

During the last five years, a lot of local companies had to shut down, on one hand because of the increase of the labour costs and hence the operational costs, and on the other hand because of the luck of required for investment funds. This increase of the labour costs, together with the opening of the Third countries markets (i.e. countries outside EEC), forced many manufacturing companies to transfer part of the production process to other countries like Bulgaria and F.Y.R.O.M.

It is worth it to point out that the jeans manufacture industry in Greece has changed a lot since 1991. Until that year, the manufacturing companies covered the demand on jean clothes while the importing companies had a smaller share in the market. In 1991, the local production of well-known brands of jeans that had a large share in the Greek market – like LEVI S , DIESEL etc.- stopped, so these jeans started imported. As a result, the proportion between manufactured and imported jeans changed towards the second ones.

1.2 Sales of Jeans Manufacturing Companies

The table 1.1 shows the progress in sales for some of the main jean manufacturing companies in Greece for the period 1996 1999. According to this table, the total sales of these companies for the year 1998 was 20,885,933 thousand GRD when for the year before the total was 16,997,312 thousand GRD, an increase of 22.88%.

Table 1.1

Sales of Jeans Manufacturing Companies

(In thousand GRD)

COMPANY 1996 1997 1998 1999

INTERSOFT 2,994,641 3,864,826 4,437,942 3,500,000

STAFF 2,021,809 2,616,068 4,294,982 4,300,000

FAVE 1,733,484 1,623,564 1,982,380 N/A

MACEDONIAN CLOTHES MANUFACTURING COMPANY 979,665 1,549,937 1,802,344 1,600,000

LEDAI 706,706 1,083,335 1,561,299 1,770,000

MERIT 1,033,481 1,005,137 1,323,342 1,200,000

GENIMEX – 845,299 1,066,280 1,150,000

3 GUYS – MAGIOPOULOS 624,507 596,195 887,896 1,100,000

PAPATHANASIOU BROS 350,826 1,336,833 839,165 1,000,000

CASTELLO ROSSO 826,305 865,266 802,020 800,000

BANTITO – - 767,379 800,000

HIGHWAY 692,295 894,531 632,366 N/A

VIENE 678,115 716,321 488,538 266,000

TOTAL 12,641,834 16997312 20885933

FROM : ICAP

1.3 Jean Production in Greece

The table 1.2 shows the jeans production in Greece. This production is made mainly by small sized enterprises that are often undertake some stages or all the production process for other Greek or foreign companies.

Table 1.2

Jean Production in Greece

Year Quantity (in million of pieces)

1997 5.8

1998 5.5

1999 5.2

FROM: ICAP

1.4 Sales of Jeans Importing Companies

The table 1.3 shows the progress in sales for some of the main jean importing companies in Greece for the period 1996 1999. According to this table, the total sales of these companies for the year 1998 was 32,821,837 thousand GRD when for the year before the total was 28,142,777 thousand GRD, an increase of 16.63%.

Table 1.3

Sales of Jeans Importing Companies

(In thousand GRD)

COMPANY 1996 1997 1998 1999

LEVI STRAUSS HELLAS 10,501,840 10,792,175 13,350,748 8,200,000

CONNECTION 3,299,187 3,666,691 5,031,047 5,500,000

PAGONI 2,585,501 3,744,876 1,499,621 6,130,693

DIESEL HELLAS 3,905,835 3,919,403 4,153,025 3,900,000

FASHION BOX HELLAS 2,125,804 1,894,452 2,180,952 2,300,000

BRUNI SANDRO DISTRIBUTION 1,484,923 1,462,489 1,924,616 2,200,000

AMERICANINO HELLAS – 129,136 1,554,130 1,397,646

FELOUS FASHION GROUP 1,044,263 1,121,906 1,447,064 1,800,000

VF HELLAS – 599,337 928,309 1,200,000

FAR 1,131,300 812,312 652,325 N/A

TOTAL 26,078,653 28,142,777 32,821,837

FROM: ICAP

2. Segmentation, Targeting and Positioning in the Market

2.1 Segmentation

Because Glamor Jeans S.A. is a new company and in order to collect primary data to decide where in the market should its new product be positioned, the group agreed to assign to a Greek market research company ( ICAP ) a research in the jeans market (Appendix). Proceeding in the market segmentation, the team used the results of this research in order to follow the survey, analysis and profiling stages. The bases used for the segmentation were the consumer s characteristics and responses. The group felt that the best variables for the segmentation were age, lifestyle and usage rate.

2.2 Targeting

The evaluation of the market segments had been made according to the objectives and resources that the company has.

Thus, the target groups were aged between 15 and 39 years, of both gender and of average income. According to ICAP s survey, the main factors that affect the demand for jeans wear are the following:

The price regarding the brand of the jeans. Some well-known brands with high prices, discourage people from buying them, so they turn to other products with lower price.

The population of men and women that wear jeans more than any other are between 15 and 39 years old and in 1996 was approximately 4,000,000, almost 40% of the total population of Greece, with younger people spending usually more money for clothes than older ones.

Consumer s preferences for casual or classic wear are changing always, so the promotion of alternative casual wear and people s lifestyle affects the market. Therefore advertising campaigns may change and lead mostly young people to increase the demand for jeans wear.

2.3 Positioning

Although the sales of jeans are loosing every year almost 5% of its market share, jeans remain all these years one of the main type of clothing.

Glamor 4U jeans will be positioned in high quality as the well-known brands of jeans, like LEVI S, DIESEL etc. as these products have the largest part of sales comparing to the rest (Table 2.1). The price of Glamor 4U will be about 20% lower than the price of LEVI S in order to attract all those people who can not afford to buy LEVI S but they seek the same quality.

With this positioning (Figure 1.1) the group felt that Glamor Jeans S.A. will build a strong image in consumers mind and will be able to gain a significant part of the market share.

Table 2.1

Sales of Jean Trousers

NAME SALES (in pieces) %

LEVI S 1,234,800 28

LEE 220,500 5

DIESEL 485,100 11

MOSCHINO JEANS 88,200 2

EDWIN 264,600 6

RED ROCK JEANS 352,800 8

TRUSSARDI 132,300 3

CALVIN KLEIN 176,400 4

AMERICANINO 441,000 10

OTHERS 1,014,300 23

TOTAL 4,410,000

Figure 1.1

Perceptual Map

PRICE

LEVI S

GLAMOR 4U DIESEL

TRUSSARDI

LEE CALVIN KLEIN

MOSCHINO

RED ROCK

AMERICANINO

EDWIN

QUALITY

45.OO

3. Advertising Campaign Development

3.1 Target Audience

Target audience is the group of people at which ads are aimed. So from the above information, the advertising target will be the group of people between 15 and 39 years old, of both gender and of average income. The 4 million people of this group that spend more money for jeans than any other group, and seek for high quality at a better price than competitors (LEVI S, DIESEL etc.) offer.

3.2 Campaign objectives

Campaign objectives are these that our group hopes to accomplish with this advertisement and the objectives should be defined in such a way to ensure that the campaign will achieve what the company wants.

The main objective is to penetrate the market and win a 10% of it, within a year. There are other objectives that group agreed that the campaign needs to communicate to the targeted audience.

First step will be to build the brand awareness, as it is a new product in the market. Simple clear messages can build name recognition in consumer s mind, and this procedure will take time.

The next step is to build consumer preference, therefore must be communicated through this campaign the high quality of the product at a premium price. Another objective is to persuade them that these jeans are their best choice.

The last step is to convince the target group to purchase the product. In order to attract the consumers to purchase the jeans, there will be a discount offering of 20% of the initial selling price and a guarantee for good performance for 6 months period.

3.3 Budget Setting

The promotion of a new product presupposes the creation of an advertising campaign in order to gain an important share in the sector of clothing and particularly, in the market of jeans. Often, the setting of budgets is determined by the politics of each firm, always according to the needs of the specific market. The most important question that a business has to make for promoting its product, is how big can be the budget of a firm for advertising purposes. There are some budgeting methods at which we can be based on constraining an appropriate budget. Our business has selected the Competitive parity method. According to Brassington and Pettitt ( p. 593), it involves discovering what the whole competition are spending and then matching or exceeding it. Based on primary and secondary data the purpose of our firm is to spend the amount of 500 million GRD., approximately, for the needs of our advertising campaign.

3.4 Media Selection and Planning

The process of advertising a product presupposes the delivery of a message to the consumer. Selecting some advertising media through which the consumer has the opportunity to be informed for the specific product can occur this. These media will be radio stations, magazines, periodicals, newspapers, hoardings and outdoor media.

The criteria at which the group based on selecting these media are:

Radio: It can be transmitted from everywhere. It is a low cost broadcasting media, which give us the opportunity to select stations that appeal to our target audience.

Magazines/periodicals: The major advantage of a printed medium is that information can be presented and then examined selectively at the leisure of the reader. Also, a copy of a magazine is kept for quite a long time.

Newspapers: The main role of newspapers for advertisers is to communicate quickly and flexibly to a large audience. There is the opportunity to advertise information in connection with the audience, you want to attract, e.g. men aged 20-39.

Hoardings and outdoor media: These are advertisements in and on buses, taxis and trains and in stations. They offer an exciting medium, capitalizing on their size and location, which attracts the eye of our target. ( Brassington and Pettitt).

Radio

Examining the Greek radio stations and their audience, the following stations can more efficiently represent the new product:

Radio DJ, Love Radio, Lampsi, Lady FM, Antenna and Sport FM. For the first three radio stations, we will have 4 spots per day in the morning hours ( 09:00 11:00) and other 3 spots in the evening hours ( 19:00 21:00). For all the other radio stations, we will have 5 spots per day only for spring and summer months.

Magazines, periodicals and newspapers

After careful consideration it s been selected the following print media: Escape, Nitro, Click, Lipstick, Elle, Men, Max, The News, Espresso, Kathimerini and Eleytherotypia. We have selected these magazines and newspapers because they are addressed to both male and female sex. Also, they attract people that are aged according to our segmentation. The following table (3.1) shows the cost per magazine for the advertisement.

Hoardings and Outdoors Advertising

First of all, 60 sheet outdoor ads will be located in key areas in big cities and there is a plan of using 10 super Pizas from which 7 in the area of Athens and 3 in Salonica. (Super Pizas are great moving stands, which are the most eye-catching outdoor activity available and are located in every big city). The outdoor advertising will cost 50 million approximately.

Table 3.1

Glamor Jeans S.A. Advertising Budget

Radio Stations Months Spots/day Cost/month(in GRD) Total cost(in GRD)

Radio DJ FM 12 7 5,500,000 66,000,000

Love Radio FM 12 7 4,750,000 57,000,000

Lampsi FM 12 7 6,000,000 72,000,000

Lady FM 6 5 3,500,000 21,000,000

Antenna FM 6 5 4,500,000 27,000,000

Sport FM 6 5 4,750,000 28,500,000

Total 36 271,500,000

Magazines/Newspapers No. of Issues and Months Cost per Issue(in GRD) Total Cost(in GRD)

Escape 12 2,250,000 27,000,000

Nitro 15 2,000,000 30,000,000

Click 11 2,000,000 22,000,000

Lipstick 8 1,500,000 12,000,000

Elle 16 1,750,000 28,000,000

Men 18 2,500,000 45,000,000

Max 14 2,750,000 38,500,000

The News 8 1,500,000 12,000,000

Espresso 12 750,000 9,000,000

Kathimerini 9 1,000,000 9,000,000

Eleftherotypia 11 850,000 9,350,000

Total 241,850,000

3.5 Advertising Development and Testing

At this stage, the company had to decide how to develop the advertisement and test that the content, message and impact are as expected. It is clear that for a new product as 4U we had to use an institutional advertisement with information on this new product (Pioneering advertising). The aim was to stimulate enough interest to encourage further investigation, trial and possibly purchase and build reputation and image for the product.

Print Presentation: The team involved in the design and marketing of 4U had to prepare a persuasive message in terms of words simultaneously with an image. We found that a person like Cindy Crawford who is easily recognized and can affect a large part of consumers would be the suitable image. The slogan now you know the secret of her beauty creates positive emotions and makes the product attractive even just for a trial. As a result, the team came to that Cindy was the perfect celebrity for the advertisements (Figure 2).

Broadcast Presentation: Marketers agree that radio always provide an important mean of broadcast communication. According to this theory and with the support of an advertising company (Greta Advertising Ltd.), the team developed a radio commercial for the advertising campaign of 4U . Table 3.2 shows the process that has been used to produce the commercial.

Table 3.2

Radio Commercial Process

Script Storyboard

Main action Written description Audio effects

Figure 2

The main action is with Cindy Crawford. She describes her career in modeling. The clothes she has wore, the people she has met, the photo sessions she has made and after all these years she selected 4U as the perfect jeans to wear every day. Finaly, music from fashion shows will suit as Cindy is part raying her career and promoting 4U .

Testing: The next step after creating the advertisement was to pre-test it with a sample of members of the target audience. ICAP, a marketing research organization, made a research for us in a sample of too people between 15-39 and found out that the advertisement was very interesting and likeable. It had, also, stimulated the audience to try 4U and made them feel that if Cindy wears Glamor jeans they could wear, too.

3.6 Implementation and scheduling.

In the implementation phase, Glamor had a need for professional experts to develop and deliver the advertising campaign. The team, as a representative of Marketing Department, co-operated with photographers, graphic designers and copy writers to reach its goals. The whole process of scheduling the campaign was the most difficult and costly stage of the project. The frequency and intensity of this effort guided all production decisions. The team knew that there were many different scheduling patterns that has to be taken into account.

Marketing conditions: The team decided that the speed of the impact should be quick because the competitors were established in the jeans market and it would be costly for Glamor to keep up this impact.

Customer turnover: The turnover of Greek customers is high enough, so there was a need to advertise more frequently to keep the message available for new consumers.

Purchase frequency and volume: After research, the team found that demand for jeans in Greece is higher in Winter and Spring and the scheduling will provide a high frequency advertising in these two seasons

Message : The campaign of 4U needs more repetition than jeans of our established competitors because of the newness of our message. Research has shown also, that a simple message like Glamor s message, becomes successful without being complex or becoming familiar with audience, so they are less likely to notice or remember it.

Media: At this phase, as 4U is a new product, it has been selected a more intensive advertising in both print and broadcast media.

3.7 Evaluation

The evaluation perhaps was the most important stage of Glamor s campaign process. At this part of the process, the team had to find out if the campaign would gain attention, create interest and engender desire for the product. Although it was difficult to assess the final result, the team used methods like Attitude and Enquiry tests to investigate the level of the campaign s success.

The advertisement was shown to another sample audience and questions were asked to measure the respondent s attitude to the product and what interest was been generated. All the above gave us a positive feedback but as Brassington and Pettitt ( 2000) said advertising is only one of many factors contributing to sales . So, after the advertising campaign, there will be a research and final evaluation of the whole process which will give us useful information for the future sales of Glamor 4U .

Conclusion

The majority of jeans companies is a part of clothing industry and none of them is manufacturing or importing only jeans. They are distinguished in large organized companies that are using updated methods of management and marketing, and in small handicrafts that are having limited opportunities of developing the updated technology and improving their productivity. Furthermore, there is a large number of import businesses. These are again distinguished in large organized companies that are mainly trading with high class products and are expanding continuously in order to meet the demands of an international competitive environment, and in medium sized enterprises that are having limited opportunities of expanding. After 1991, the local production of well-known brands of jeans that had a large share in the Greek market – like LEVI S , DIESEL etc.- stopped, so these jeans started imported. As a result, the proportion between manufactured and imported jeans changed towards the second ones.

Proceeding in the market segmentation, the team used the results of ICAP research in order to follow the survey, analysis and profiling stages. The bases used for the segmentation were the consumer s characteristics and responses. The evaluation of the market segments had been made according to the objectives and resources that the company has thus the target groups were aged between 15 and 39 years, of both gender and of average income. The price of Glamor 4U will be about 20% lower than the price of LEVI S in order to attract all those people who can not afford to buy LEVI S but they seek the same quality. With this positioning the group felt that Glamor Jeans S.A. will build a strong image in consumers mind and will be able to gain a significant part of the market share.

The process of advertising a product presupposes the delivery of a message to the consumer. Selecting some advertising media through which the consumer has the opportunity to be informed for the specific product can occur this. These media will be radio stations, magazines/ newspapers, hoardings and outdoor media. The team involved in the design and marketing of 4U had to prepare a persuasive message in terms of words simultaneously with an image. We found that a person like Cindy Crawford who is easily recognized and can affect a large part of consumers would be the suitable image. The slogan now you know the secret of her beauty creates positive emotions and makes the product attractive even just for a trial. As a result, the team came to that Cindy was the perfect celebrity for the advertisements.

Bibliography

Books

+ Bedward, D. (1999) Quantitative Methods. Oxford: Butterworth Heinemann.

+ Bell, J. (1997) Doing your Research Project (2nd Edition). Buckingham: Open University Press.

+ Brassington, Fr. and Pettitt, St. (2000) Principles of Marketing (2nd Edition). Essex: Prentice Hall.

+ Ghauri, P., Gronhang, K. and Kristianslund, I. (1995) Research Methods in Business Studies. Hertfordshire: Prentice Hall.

+ Kotler, P. (1997) Marketing Management (9th Edition). N. Jersey: Prentice Hall.

+ Morris, Cl. (2000) Quantitative Approaches in Business Studies (5th Edition). Essex: Prentice Hall.

Other Sources

+ ICAP Marketing Research Company (March 2000). Creece