MARKET STUDY
[Gaultier Lingerie from Thailand Exported to United
States]
Prepared for:
BICG9303 International Market Research
Professor Dawit Eshetu
Prepared by: George Dimba, Anastasyia Zaluzhna and Anel Naimanbayeva
Table of Contents
1. Executive Summary…………………………………..3
2. Research Definition…………………………………...4
3. Business Definition……………………………………5
4. Country Selection……………………………………...9
5. Market Study…………………………………………11
6. Conclusion and Recommendations………………….19
7. Bibliography…………………………………………..21
8. Appendices…………………………………………….23
1. Executive Summary
Gaultier is a Milan based company that provides customizable lingerie, underwear and stockings
for women of all sizes but concentrates on plus-sized women. Gaultier’s main office is in Milan
but all production is done in Thailand, for cost reasons. Gaultier offers the option of customizing
the lingerie we produce with different graphics depending on the personality and tastes of the
customer. Gaultier plans on opening an office in the most lucrative market and spreading to
conquer the world depending on sales and the latest trends in lingerie sales.
The target market for Gaultier is the plus-sized women of the United States (anybody above a
size 8). This market was chosen because of the need for plus-sized women’s clothing that is not
only comfortable to wear but also appealing to the eye, something that most plus-sized clothing
is not. United States was chosen because of its position in the number of people who were
deemed plus-sized. It is the highest in the world.
The potential revenues in the United States are estimated at above 2 billion. This number is
estimated but follows the trend where in 2013, the sales of plus-sized clothing was 17.5 billion
and it is expected to rise every year.
Major partners of Gaultier include Spanx who team up with us to help us in advertising and we
help them in offering customization for spanx products. We share the same distribution channels
as Spanx since Spanx has a stake in our company and we work towards a similar goal. Other
distribution channels include Target for our off the rack clothing line and other retail store. We
also chose to partner up with plus-sized celebrities who will market our product via product
placement and are spokespeople for Gaultier.
Potential clients want clothes that not only suit their body type but also are appealing to the eye.
This is the main demand from the plus-sized women in the United States. One problem that the
potential clientele has complained about was the very expensive plus-sized clothing because it
was not available on the rack. Gaultier provides perfect lingerie at below market price to invite
the customers, also known as skimming. The price will be lower but it will be accounted for in
sales.
The main competitor include Curvy Girlz and Victoria’s Secret but with our partnership with
Spanx, we believe that we will be able to overcome the competition.
Gaultier does have a competitive advantage because of the partnership with Spanx, a US based
company. Spanx is trusted by the market because it has been there longer and thus the market
will trust us.
As of now, Gaultier does not face many risks in entering the United States. Though the United
States is recovering from a recession, the lipstick effect ( a phenomena in which women buy
more beauty products at a reduced price after the recession) helps our sales and reduces any fear
of risk.
In conclusion, we believe that penetrating the US market would be successful.
In October, 2014, Gaultier conducted an extensive market research study to determine whether
its new product, the customized lingerie was able to penetrate markets, below are the results.
2. Research Definition
Research Purpose:
In order to choose the best market to enter, Gaultier has conducted research, which should help
by answering the following questions:
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Which markets are ideal to enter?
Which markets are easy to operate in?
Which countries have the biggest target market for our product?
Which countries have the least competition?
Which are the Top-5 countries to enter for our company?
What are those countries background?
What are their Cost of Doing Business, Risk Profile, Availability of Labor, Business
Operating Environment, Quantity and Quality of Infrastructure and Product specific
market?
Which country has the best result in those criterias?
Which one country would be the best, based on criterias?
What are the target market’s political, economical, social and geographical backgrounds?
What are the import and export duties for this country?
What are the industry characteristics in the chosen country?
What are the risks and competitors in the market?
What should be company’s enter strategy?
What are the recommendations for the company?
Research objectives:
 Identify the TOP-5 markets to enter
 Based on collected information about them, choose the best country
 Identify the most fitting country to enter
 Collect the necessary information to enter
 Choose the strategy
Research Design and Data sources
For research, Gaultier uses secondary data from reliable sources, like World Bank. The collected
data is going to be mostly quantitative, with a critical analysis and recommendations in the end.
3. Business Definition
Gaultier is a Milan based company that provides customizable lingerie, underwear and stockings
for women of all sizes but concentrates on plus-sized women who have been neglected by the
fashion industry. The Business Model shows what our company is all about. Below are some
questions and answers that show off our Business Model and our Value Propositions.
3.1 Key Partners
● Suppliers:
○ Manufacturing Company in Thailand ($1.74 per hour)1 :
Here the garments are made at a cheap labor price without any use of child labor.
○ Zephyrs:
Zephyrs supplies Gaultier with hosiers
○ Suppliers of raw material:
The textile companies supply us with raw material
○ Importers:
They import our products from manufacturing to all our stores
● Plus-sized Celebrities (marketing):
We will use plus-sized famous ladies to market our product. They will act as
spokespeople for Gaultier and help us gather an even larger market share.
○ Queen Latifah
○ Khloe Kardashian
○ Mindy Kaling
○ Mariah Carey
● Business Enablers
○ Banks and Financial institutions
They provide us with the credit needed for operations
○ Warehouses
They provide storage for our various products
● Retail Providers
○ These include online stores like e-bay and amazon.com which sell our products.
● Different designers and our customers
○ They design the different prints and custom-made designs that make our brand
different from the rest in the market.
There are no sources in the current document.
3.2 Key resources
Physical Resources
These include textile from Thailand
manufacturing,
Intellectual Resources
These include designs from outside
designers and our customers, image rights
from the celebrities
Human Resources
These include labor from Thailand,
managers in stores, different warehouse
managers, and general staff
Financial Resources
Banks provide credit for day to day
activities
Others
These include partnerships with Spanx.
Retail stores
Key activities performed by partners
● Zephyrs acts as Hosiery Supplier
● Spanx supplies our company with their distribution channels while we help them with
designs
● Banks give Gaultier credit
● The staff ensure the day to day running of the company
● The celebrities give us the rights to use their image during advertising and also act as
spokespeople for the company
3.3 Key Activities
Key Activities required by our Value Propositions:
High Quality designs by professionals
Each design is unique and has not been seen in the market. We also plan to bring back
designs from the past as a part of our retro collection.
Marketing and Promotion
We use plus-sized models and celebrities to act as spokespeople for our product. We have
ads on television and on billboards and all Spanx stores have advertising of our products.
Fully Functioning website with 24 hours assistance
We hire “helpers” who sit at servers and aid shoppers who buy their garments online. These
“helpers” are available throughout the day.
High Quality Manufactured garments
All our clothes are made from the best quality and all are Haute Couture meaning that they
are handmade and are fitting perfectly on a curvy body.
Phone Assistance during the day
We have phone operators who help with any queries for those who do not use the Internet.
3.4 Revenue Streams
Revenue streams
Our revenue streams include:
● Direct sales
These sales come from online purchases and goods bought from our stores
● Affiliate sales
These include all sales done in any Spanx store and any other that has partnered with us.
● Advertising revenue
These include revenue got from our advertisement of Spanx (as a partner).
Contribution of each Revenue Stream
The usage fees and asset sales contribute the most to Gaultier’s revenue because a lot of our
customers order online and the ones who do not, get from their local Target stores. The
advertising fees contribute the least.
Since some of our products are in mass production (not our haute couture but our target line) and
because we sell more than one product, economies of scale is perfect for us. There is less risk
involved if we have to vacate a country because one product is not doing well.
It expected that the cost to have some celebrities as the face of our product is the most expensive
among the costs, including utilities and rent. The designers are the most expensive out of our key
activities. They earn considerably higher than the phone operators.
3.5 COST STRUCTURE
Costs
Our company is more value-driven than cost driven because we want to provide high quality,
high fashion lingerie for the plus-sized market. Though our business is more value driven than
cost driven, it does not mean than that all our products will be priced at a very high price. We
price our lingerie 2 dollars below that of our main competitor (Victoria’s Secret). We also have a
line for low-income clients and thus all segments are taken care of.
Fixed Costs in Milan tend to be high for example rent costs 16000 dollars2 a month, salaries for
the workers at minimum wage is 8.75 dollars an hour3 and the utilities bill varies from month to
month depending on how much is used.
Pricing
2
"542 3rd Ave, Manhattan, NY 10016." LoopNet. N.p., 01 Oct. 2014. Web. 02 Oct. 2014
3
"New York State Department of Labor." Minimum Wages -. N.p., n.d. Web. 02 Oct. 2014.
Our pricing strategy is to keep all our products at a fixed price but offering discounts for more
than two items purchased. By doing this we aspire to subtly influence our customers to buy more
products just to get the discount.
We also employ a product feature pricing strategy because some products will be available for
people who cannot afford some of the ‘luxury’ garments we offer.
3.6 Customer Relationships
The main goal for our company is to have maximum customer satisfaction and because of that
we are letting them contribute to the quality of the product. The company website has a feature
where ladies can customize their underwear based on their interests. They can choose to add a
print or add jewels and rhinestones.
Given that we want our customers to feel beautiful, Gaultier will be able to:
1. Provide 24/7 customer care for all clients both via phone and via customer support on
the website
2. Give discounts for more than one purchase
3. Create a customer loyalty system that rewards customers for staying loyal
4. Staying under the price of more expensive brands.
3.7 Value Propositions
Curvy girls have problems finding good lingerie that fits them, isn’t very expensive and isn’t
boring. Gaultier solves all three problems. The lingerie is high quality, at a lower price than that
of our competitor, customized to the owners weight and figure and lastly, easily accessible.
Bundles of products and services we offer to each Customer Segment:
We segment our customers according to age. For the 18-49 demographic, we offer:
 Lingerie
 Underwear
 Hosiers
 Garter belts
For our 49-79 demographic, we offer
 Underwear
 Hosiers
 Stockings
 Body shapers
Customer needs
Because there are not many companies, providing plus-sized beautiful lingerie, usually it’s hard
to find something nice and fitting so we are providing our valuable customers with comfort. We
therefore fulfill the customer need to wear luxury goods but not paying too much money.
We also fulfill the need for comfort for the plus-sized women that do not feel comfortable
shopping at stores; we offer a very interactive online store.
Value are our customers really willing to pay
The customers are willing to pay for high quality, never been seen before designs. This is what
we are offering to them, less than the official market price.
In most shops excluding ours, plus-sized ladies pay extra because their sizes might not be there
and they have to be custom made in some cases. We will feed their need for a cheaper alternative
because our main focus is them instead of focusing on smaller sizes.
The customers are currently paying in cash, debit and credit and this is how they prefer to pay.
3.8 Channels
Our customers would like to be reached through our own channels via the store front or even the
online store. This gives them a feeling that the company cares for them and they feel
comfortable.
Currently we are reaching them through our stores, the online store, Target shops and Spanx
shops.
Distribution Channels
Gaultier uses two types of Distribution Channels:
● Physical
○ Company-owned Gaultier stores
● Online
○ Company-owned Gaultier online-store
○ Partner’s (Spanx) website.
Integration of our channels:
● The stores and the online stores are integrated in such a way that if one buys a garment
online, they can return it to a store near them
● Everything available online is available in the stores
● The staff in charge of supporting customers help as much as the online ‘helps’ do
● The items in our main store are not available at Target. Target does not store the Haute
Couture items.
The best
The online store works best because you can find both the high end and the mass produced
clothing.
Most cost-efficient
The online stores are more cost efficient than the physical stores.
How we integrate them with customer routines:
 The website and the stores allow the customers to return their product at any time given
that the product is not damaged and they are in possession of a receipt.
 The website is fully functioning 24 hours a day, meaning the customers can shop at any
time
 Target is close to many homes not like the main stores that are only open in select malls
4. Country Selection
In order to choose the best-fitting market to enter, Gaultier had to make a complex matrix
analysis, in order to choose the best-fitting market to enter.
To choose TOP-5 countries, which could be the most profitable, easy to enter and operate in,
Gaultier looked at next factors:
● The percentage of plus-sized women, comparing to the population of the country;
● Growing middle-class;
● High enthusiasm about fashion and luxury goods;
● Percentage of youth to the population of the country (mostly youth customize their
clothes, because they want to look unique).
After the close analysis of world’s tendencies and numbers, Gaultier chose five countries, which
had the most matches with the ideal target market for the company:
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United States
United Kingdom
Germany
France
Japan
Further, the company had to choose the best country to enter, and to do business in. The best
way to do it – is to complete the country market analysis, which includes next criterias: Cost of
Doing Business, Risk Profile, Availability of Labor, Business Operating Environment, Quantity
and Quality of Infrastructure and Product specific market.
Each criterion has its own weigh, some are more important than others, but in result, total
weights for criteria are equal to 100%. After getting information about countries level in each
criteria, results are rated from 1 to 5, in order to find the best country in this criteria.
After the country matrix analysis was done, it was totally clear that the best-fitting market for
Gaultier for now is United States.
The detailed information about the process of country matrix analysis can be found in
Appendances (Table 1 and Table 2).
5.1
Target market definition
Brief History
United States of America is known as the world’s most powerful nation state. US got its
independence on July 4, 1776, but was recognized as independent country by Britain only in
1783.
From that point the country was developing year by year and has been known for its advanced
technologies, low unemployment and inflation rates. During the 1861-1865 US had Civil War,
after which a northern Union of States won over the slavery states. Since then USA won WWI
and WWII and its economy has stable growth until now.
Geography
USA is located in North America, mostly between Canada and Mexico. Its total area is equal to
9,826,675 km2 and ranked 3rd biggest country in the world. USA includes 50 states and District
Columbia and has no overseas territories. Climate of the country varies by the location. The
coldest state is Alaska (the lowest recorded temperature is -62oC and the highest is 38 oC) and the
warmest is Hawaii (the lowest recorded temperature is -9oC and the highest is 38 oC). USA is
known for its natural resources: natural gas, copper lead, gold, iron etc., US has the biggest
amount of coal reserves and accounts 27% of the world’s total amount.
Politics
United States of America is constitutional-based federal republic and its current President is
Barack Obama. The federal government contents three parts: legislative branch, executive
branch, and judicial branch.
Senate and The House of Representatives compose legislative branch. It makes federal law,
declares war, has the power of impeachment etc. Elected by voting population
The President, The Vice President and 16 heads of executive departments (the Cabinet)
constitute executive branch, which role is to implementing, enforcing and administrating the
laws in day-to-day activities. Elected by voting population.
Judicial branch is elected by President and confirmed by Senate. The number of people in there
is chosen by Congress, but for last 45 years there were nine people: Chief of Justice and eight
Associate Justices. This branch includes criminal and civil courts and its role is to interpret the
Constitution and clarify rules
Social
Population of USA is 318,892,103, and takes 4th position in the world ranking.
The most popular languages: English (official) – 82.1%, Spanish – 10.7%, other Indo-European
– 3.8%, others – 3.4%. There is no common religion in USA, and population has divided in next
groups: Protestants – 51.3%, Roman Catholic – 23.9%, Mormon – 1.7%, Jewish – 1.7%, others –
21.5%.
Our main customer group is females between the age of 15-54 years, which is equal to
85,000,000, and our secondary target group is males, who would like to buy lingerie for their
wives, girlfriends, etc. This group takes another 85,000,000 of population; therefore our targets
groups together take 53.6% out of total population.
Urban population takes 82.4% out of total population, which has positive impact on our product,
considering that our stores will be located in the biggest cities of the country. The biggest urban
cities in USA are: New York (20.352 mil), Los Angeles (13.395 mil), Chicago (9.676 mil),
Miami (6.061 mil) and Philadelphia (5.927 mil.).
Economy
USA has one of the largest economies in the world that continuously grows at a moderate rate.
However, due its financial sector it is not one of the most sustainable ones. The country has
established several agencies and committees that are in charge of international trade agreements.
Some of those agencies impose tariffs and monitor overall policies to support national producers
while benefiting from trade with other countries. Others negotiate with different countries about
free trade agreements or lowered rates for US businesses. All the goods entering USA are
classified as either agricultural or industrial (96% of products, that are basically all nonagricultural: machinery, clothing, technology and so on). Both groups have its own tariffs. Since
USA is a member in so many FTAs, half of the goods enter US duty free.(5)
USA is a part in many bilateral FTAs with following countries: Australia, Bahrain, Chile,
Columbia, Israel, Jordan, Morocco, Oman, Panama, Peru, Singapore and South Korea; it’s also
member in two multilateral FTAs: NAFTA (Mexico, Canada and USA) and DR-CAFTA
(Dominican Republic and Central America Free Trade Agreement). But there are many other
FTAs that were proposed: bilateral ones with such countries as UAE, New Zealand, Indonesia
and many others including Thailand; and multilateral ones: FTAA, US-MEFTA and TAFTA.
USA is a member of WTO and became a leader in free trade movement. (1) However, US has
imposed embargoes for Cuba and North Korea, among with severe sanctions against several
countries such as Burma, Syria, Iran and Sudan. There are also many trade restrictions with other
countries such as Russia (due to Ukraine crisis issue) or China in some industries (tires,
chicken). (7)
USA has special tariff programs and list of eligible countries most of which have duty free
agreements. However, most countries of the world are not in this list. For those ones the
Harmonized Tariff Schedule was designed that states special rates of duties consisting of general
and special charges and rates of duties with fixed percentage. For example, there is 8.5% duty on
underwear made of wool + 7.6% for Australia and free for some other countries. For the rest of
the world, including Italy, the rate is 54.5%. (2,3,4)
Trade balance is the difference between imports and exports. This is also called as net export in
economics. Trade balance includes all the goods and services that were imported or exported.
Since 1976 USA consistently had trade deficit. In 2014 the trade deficit of USA was $360.7
billion. The biggest trade deficits of US were recorded with China, Mexico, Japan and Germany.
But it had great trade surpluses with Hong Kong, UAE, Netherlands and Australia.
GDP
GDP – per capita
GDP growth rate
Year
Amount
2013 est.
$16.8 trillion
$52,800
2.3%
As seen from the graph, GDP of USA had a stable growth during years 2004-2014, except the
crisis of 2008. For year 2014, USA has growth rate of 2.3%.
As for the sectors, main incomes provide services, which take 79.4% out of GDP composition.
Inflation rate is dropping since 2011 and now it is equal to 1.5%.
Partners
Commodities
Exports
Imports
$1.575 trillion
$2.273 trillion
Canada – 18.9%
Mexico – 14%
China – 7.2%
Japan – 4.5%
Capital goods – 49%
Industrial supplies – 26.8%
Consumer goods – 15%
Agricultural products – 9.2%
China – 19%
Canada – 14.1%
Mexico – 12%
Japan – 6.4%
Industrial supplies – 32.9%
Consumer goods – 31.8%
Capital goods – 30.4%
Agricultural products – 4.9%
Current
Account
Balance
-$360.7 billion
5.2: Industry Characteristics
The USA market is very open to products marketed to plus-sized people especially right now
when social issues take center stage in many debates. The New Yorker magazine describes the
change in the attitude towards plus-sized lingerie as “the democratization” of fashion and
expects the trend to continue and stay permanently.4
4
http://www.newyorker.com/magazine/2014/09/22/bigger-better
The United States is a very diverse nation to many religions and faiths who as a whole do not
command what the people can and cannot buy. This is because of the separation of church from
state law which prohibits any religious involvement in state affairs and it also trickles down to
fashion choices because the church does not prohibit the wearing of lingerie. The Muslim faith
does prohibit wearing certain clothes but since our line is mostly for inner clothes, there is no
problem. To help cater for our Muslim shoppers, we have very private changing rooms and a
perfect online store with female helpers to guide them through every one of their decisions. In
conclusion, the demand for our product will not be affected by religion, values or even culture
because we try and accommodate every single one of those factors in our target demographic.
Our first store is going to be situated in New York, known for its underground, up and coming
art and where a large part of the population are known to be “hipsters”. Hipsters is a term used to
describe the people who do not like the norm, the people whose hobbies are not liked by
everyone. To factor this segment of the market, Gaultier has the customize your clothes to fit
your style option and plans on hiring a “hipster” in the store who will also act as a marketing
salesman who will promote our product in underground events such as The Core Fashion Show5
that only features local New York artists and does not feature any huge name brand clothing. If
our design is liked there, our market will increase. Any suggestion will be taken very seriously
and the product changed if need be.
Any modification made will be to make the product more appealing, not more affordable.
Despite being different lines that cater to people from different socio economic backgrounds, any
customization will cost money and any costs must be reimbursed through sales so as to not make
any losses.
The New York market is very knowledgeable when it comes to social issues. Because of that
Gaultier must not associate themselves with any company or country that goes against any
human rights. Based on recent history, any company that violates human rights is boycotted. 6
Language is very important when it comes to labelling the instructions for washing the clothes.
The top three languages spoken in New York in order are English, Chinese and Spanish.7 Our
products come with instructions (with illustrations) that are in the three languages. Our online
shop helpers are diverse in the fact that there is a person for almost every language spoken in
New York.
No technical specifications in the target market require any modifications to the design. Our
product features a wide variety of sizes and any size not available at the physical store will be
available at the online store. The fabric used to make all our products is comfortable and long
lasting, the high end products are handmade, ensuring comfort and durability. Despite being
5
http://www.newyorkcool.com/archives/October_2004/fashion_1.html
http://www.ethicalconsumer.org/boycotts/boycottslist.aspx
7 http://www.city-data.com/states/New-York-Languages.html
6
mass produced, the rest of the product line is made of synthetic blends8 that last for a long time,
are easy to wash and are extremely comfortable and nice to touch.
The Gaultier brand of lingerie does not challenge any patents and is viable to be sued by any
company. All our products have patents and are protected by intellectual property laws.
One advantage of lingerie is that it will never run its life cycle so long as women want to look
beautiful and men want their spouses to look beautiful. Therefore the product is not close to
running its life cycle or being replaced. The product could be modified if a new cheaper and
better way of manufacturing appears but for now, there is no risk of the product being replaced.
5.3 MARKET POTENTIAL:
Currently, plus –sized clothing make up 14% of the market share but only because they were the
first items to get removed from stores when the economy collapsed in 2008.9 Despite the low
availability the market for plus-sized clothing is very large. A survey done by NPDGroup
revealed that 55% of women in the USA wear a size 16 and up.10
The survey also revealed that 75% of plus-sized women cannot find any clothes in their size
especially fitting lingerie (that is including bras). In the past year, (2013) the market for plussized clothing grew by 7% and is expected to grow even further. In 2013, sales were 17.5 billion
which an increase from the 16.7 billion in 2012.This trend is good for Gaultier because the
market is expanding but there is still a need for beautiful lingerie in a more friendly size.
There are similar products being produced locally. One store that is similar to ours is the
Gwynnie Bee store but since it only makes them locally and has no advertising partners, it is of
no completion.
Our target customers are women between the ages of 18-64. Sixty four was chosen as the cut off
because in 2013, women aged 55-64 were the highest consumers of plus-sized products at Spanx
and other stores. They represented about 4.2 billion of total revenue. The 18 to 24 age group had
revenue of 1.1 billion, a growth from the 850 million in the prior year.
We segmented our customers according to their socio economic status and their age. The high
income customers get Haute Couture lingerie while the rest of the customers get a version of less
quality but still as good. We offer risqué designs to the age groups of 18-45 and a more mature
respectable product to the older generation,
8
http://www.streetdirectory.com/travel_guide/34666/modelling/a_look_at_some_of_the_best_feeling_linger
ie_fabrics.html
9 http://www.today.com/style/first-plus-size-designer-label-show-nycs-fashion-week-8C11064066
10 http://www.prweb.com/releases/2014/07/prweb11985947.htm
The way our company differentiates itself from others is through the customization of every
product. The consumer can customize their garment to anything they want. This gives us an edge
of our competitors and makes the customers feel like they are our partners.
Based on the growing market, this is what we believe our revenue will be:
Sales
Haute Couture
customized lingerie
standard lingerie
accessories
The price list is:
Couture Style Products: from 150 USD
Price to customize: from 20 USD (price rises depending on design)
Standard lingerie without customized feature: from 70 USD
Accessories: from 20 USD
Total revenue:
Total women above 18 population=3112081
55% are considered plus sized=1711644.55
With that knowledge of population, price and the trends, few competitors, we believe that our
first year revenue could be 8 billion.
This is assuming, every plus sized woman spends at least 50 dollars in the store.
5.4 Risks
The United States is a federal constitutional republic. President of the country is the head of the
state and head of government. The legislature of the country consists of Congress with the Upper
House as a Senate and the Lower House as a House of Representatives. The U.S. Constitution is
the dominant feature of the American governmental system. Federal laws and regulations are
interpreted in the Constitution of the United States. Politically the country is stable with the
figure of 0.63 out of 1 (2012).
The country has the highest investor protection rate and corruption rate is insignificant
comparing to other potential countries that we want to enter but country’s openness to new
businesses is quite low due to long process of licensing. The USA is world’s number one in FDI
with the figure of $2,815,000,000,000 in 2013. The United States is a signatory to international
agreement on intellectual property. It joined WIPO in 1970. The United States of America has
been a WTO member since 1 January 1995 and a member of GATT since 1 January 1948. It has
free trade agreements with 20 countries. The United States has signed NAFTA (North American
Free Trade Agreement) in 1994 and CAFTA-DR (Dominican Republic-Central America-United
States Free Trade Agreement) in 2004.
Our product does not belong to classes of merchandise that may be prohibited or restricted to
protect the economy and security of the United States, to safeguard consumer health and wellbeing. Also lingerie is not a subject to an import quota or a restraint under bilateral trade
agreements and arrangements.
The foreign exporter should make certain that the United States importer has been provided with
proper information:
 Submit the necessary information concerning packing, labeling, etc., and
 Make necessary arrangements for entry of the merchandise into the United States.11
Women’s lingerie HS commodity code is 6212.20.0030, MFN duty rate is 20%, sales tax
depends on state, additional duties and taxes include merchandise processing fee.12
There are no political barriers for Italy to exporting into the USA. There are no specific
measurement, packaging and labelling requirements.
Inflation rate of the country is quite high (1.5%) comparing to others. Government debt to GDP
is 101.53% which is concerned to be very risky.
The US Dollar is the currency of United States. Currency rankings show that the most popular
United States Dollar exchange rate is the USD to EUR rate. The currency code for Dollars is
USD, and the currency symbol is $. Central Bank Rate is 0.25. The total number of banks in the
US is 7,357. US banks have roughly $14 trillion in total assets. The United States has one of the
11
Importing into the United States (2006), U.S. Customs and Border Protection online report. Retrieved
from http://www.cbp.gov/sites/default/files/documents/Importing%20into%20the%20U.S.pdf
12 Dutycalculator. (2014). Import duty and taxes for Women’s lingerie. Retrieved from
http://www.dutycalculator.com/dc/6649094/clothes-for-women/body-shapers/body-shaperscorsets-girdles-other/import-duty-rate-for-importing-women-lingerie-from-united-kingdom-tocanada-is-18/
Investing in the United States. (2011). KPMG. Retrieved from
http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/invest-in-the-usinternational.pdf
largest scale private banking systems. The top 5 largest private banks: USAA Federal Savings
Bank – $57.6 billion, OneWest Bank – $25.8 billion, Arvest Bank – $13.8 billion, FirstBank –
$13 billion assets, Central Bancompany – $10.2 billion assets.13
The United States does not have a value added tax, or VAT system, but many of
The U.S. states impose sales or use taxes in addition to income and other (real and
Personal property) taxes. A foreign corporation active in the United States is taxed on certain
U.S. investments and other passive net income and on net income that is effectively connected
with the conduct of a trade or business in the United States.14
5.5
Companies and products in the market
US lingerie market can be described as purely competitive. There are all the characteristics that
can be attributed to this type of market: there are no barriers to entry for any firm, there are many
competitors and therefore the price is driven by demand and supply, the products are similar and
the technology of production is well-known
There are different brands, that have their own special products features for target markets –
cheap prices, luxury looks, plus sizes, small sizes, casual lingerie, sexy lingerie, different textiles
etc.
There are three types of competitors that exist in our market:
 Online underwear shops – sell products from different underwear companies online only,
usually unknown and cheap; might be local or import;
 Clothing shops – have additional underwear line, usually in simple colors and standard
size, price depends on the type of the store; might be local or import;
(H&M, Zara)
 Brand stores – concentrate on lingerie and have different sizes, colors etc., might be local
or import; price depends on quality and reputation of the company.
Considering that our company concentrates on plus-sized women with higher-than-average
income, we’ve reduced our research to the companies that promote their product on those two
features (brand stores). Taking into consideration this factor, the companies, provided below, are
the most popular companies from our target market.
1. Curvy Kate
Launched in 2009 in UK, company concentrates on curvy girls and girls with fuller bust. Curvy
Kate doesn’t hire models for their advertisement, instead they run a modeling competition, and
the winner gets 1-year contract with the company. Has 377 stores worldwide and 34 of them are
in USA, also company has an online-shop. Average price is $50 for bra.
2. Ashley Stewart
13
14
Financemymoney. (2014). How many banks are in the US? Number of US banks shrinks while
banking assets increase. Retrieved from
http://financemymoney.com/how-many-banks-are-in-the-us-number-of-us-banks/
Company was founded in 1991 in USA and concentrated on selling lingerie to plus-sized African
women. Has over 168 stores in more than 100 cities over USA. Since 2012 there was a decrease
in revenue, which caused a lot of worries through shareholders. The results did not have to wait
– in 2014, company has announced that it is closing 27 stores in order to cut the costs.
3. Curvy Girlz Lingerie
Created in 2012, has a major store in New York and an online-shop. Average price for a bra is
$60. The special feature of the company is that it’s not only selling the products, but also gives
curvy girls some kind of “psychological mentoring”, which make them feeling comfortable
about themselves. Also this store has “fashionistas”, who help girls to choose the proper style,
matching their personal parameters.
To deal with competitors, our company has to contain the best characteristics of our competitors
and a special feature that would help us to overcome them and become the leading company in
the market. One of our advertisement strategies (advertisement with famous curved women), will
help us to increase the level of self-consciousness in our market better than any “fashionistas”,
and persuade the target market that exactly Gaultier will make you look fabulous, as those stars.
Also we will hire plus-sized youth, which will help to make our brand well known and increase
its reputation through their friends, classmates, etc. Considering that we are just coming into
market, we can’t overcome our competitors by number of stores, but it could me also an
advantage, because that was a mistake of Ashley Stewart, thus, we should open couple of stores
in the biggest and most urbanized cities of US, and gain market’s trust and reputation.
And as our biggest advantage – we have a customizing option that will provide customers bigger
possibilities, than in any other shop. Usually, an average American woman buys her clothes and
underwear spontaneously and spends a lot of money on something that she wouldn’t wear later.
But why would she spend her money on something, that looks good only on manikin, if they can
order lingerie, made of their favorite textile, choose their own print, wear it with pleasure and
feel themselves as a star? Exactly.
6. Conclusion and Recommendation
The United States of America is the main target for Gaultier Company. It has recommended
itself as the perfect destination for startup businesses in terms of ownership and intellect
protection, political stability, tariffs and regulations, financial system, government businessoriented programs and infrastructure.
The U.S is also located in a strategic location due to the fact that it is geographically close to
Mexico and Canada. These countries are considered to have efficient demand on the products the
company provides which means high revenue.
The United States has the largest economy, the most stable financial sector, the largest
population in the world with the figure of 318,892,103 people and a GDP of $16.8 trillion. It has
a big range of free trade agreements like FTAA, US-MEFTA, TAFTA, DR-CAFTA (Dominican
Republic and Central America Free Trade Agreement) and, of course, NAFTA (Mexico, Canada
and USA). Italy, which is the original country of the company, is not in the list of countries that
the USA has imposed embargoes and severe sanctions to.
Due to the fact that The USA market is very open to products marketed to plus-sized people
especially right now, plus-sized lingerie, underwear and stockings are extremely relevant in this
country.
The most diverse city in terms of religion, faith, culture, traditions, income and languages is New
York that is also the biggest city of the country which makes it suitable for starting up a new
business with a huge amount of potential customers. Gaultier Company can satisfy the
preferences of every single purchaser.
For Gaultier Company the United States is strongly recommended to be the most appropriate
country to enter first. This country is not likely to cause any kind of problems related to
establishing and operating the business.
7.
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1
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8.
Appendices
Summary of the Scores
Table 1
Table 2