Bienvenido a México, el
Secreto de Victoria
The Expansion of Victoria’s Secret
into Mexico
Aparna Donthi
Man Tsun Lee
Bouphavanh Mathouravong
Marisol Rivera
Nicole Winkle
Research Overview
• Primary Research
– In-depth survey
• Industry Analysis
– Demographics
– Perfume Industry
• United States
• Mexico
• Company Analysis
– Situation Analysis
– STP
– Marketing Mix
• Implementation
•
Executive Summary
• Due to the declining market in the U.S. and
growth in Mexico, Victoria’s Secret has the
potential for a sizeable fragrance market in
Mexico.
• Mexican consumers’ product values are
congruent with that of the Victoria’s Secret brand
image.
• Significant similarities and differences in
marketing Victoria’s Secret brand in Mexico.
Primary Research
• Bilingual In-Depth Interview
– Parallel Translation
– Administered in Cuernavaca, Mexico
• Goals of the Interview
– Awareness of Victoria’s Secret in Mexico
– Product Perceptions/Knowledge
– 4 P’s
– Competitor Awareness
Situation Analysis
– Mexican Consumers
• Highly rank service and price
• Have short term view of products – initial
price means everything
• Receptive to high quality products that are
sold in smaller packages
– Implications
• Victoria Secret offers great service/personal
attention to customers
• Offers smaller, affordable product selection
Situation Analysis (Cont.)
•
Company
– High International Awareness
– Sales Growth 8.1% (2003)
•
Competitors
– Estee Lauder, Avon, JC Penney, Lancôme
•
Collaborators
– CBS, Musicians
– Supermodels – Heidi Klum, Tyra Banks,
•
Environmental Factors
Perfume Industry Analysis
• Perfume Industry in The United States
– Perfume industry to grow at declining rate
over next five years
– Dominated by female fragrances (2/3 of
sales)
– Male fragrances accounts for 23.5% of
market)
• Implications
– Declining U.S. market
– Seek International Growth
• Mexican Perfume Market
Mexican Demographics
• Male customers account for 70% of
perfume sales despite the fact that men’s
fragrances represent 1/3 of the market
• Women between 40-50 years can afford to
pay $40-$150 for a bottle of perfume
• Mexico City represents 52% of sales
• Guadalajara and Monterrey have large
potential for sales
Mexican Market
• Perfume Industry in Mexico
– “Female Fragrances Experience Dramatic Growth”
• 2001 - $253 million
• 2006 – Predicted $348 million (37.5% increase)
– Many competitors (“Satisfactory
sales…suggests…there is still space for new
launches…”)
– Black market
• Relevant to price and distribution
Mexican Economy
– Increased Purchases of Luxury Commodities
• Economic recovery in 1996
• Increase in private consumption
– International Companies are increasing their
presence
Victoria’s Secret (STP)
• Positioning
– “For the woman who wants to feel sexy, sophisticated,
and ultra feminine”
• Segmentation
– Does not segment based on age
– Segment based on products
• “various Victoria’s Secret brand fragrances appeal to different
aspects of the Victoria’s Secret woman”
• Targeting
– “Target how a woman feels, rather than her age,
ethnicity, or other specific demographic”
VS Marketing Implementation
• They cross promote between their online
and offline operations.
• “360-degree brand” – connects all 3 selling
channels (catalogs, the stores, and
website)
• Sex appeal is portrayed through
advertisements and promotions.
Expansion into Mexico
• Segmentation and Targeting
– Highly populated/developed cities
• Mexico City, Monterrey, Guadalajara
– Product selections to appeal to different tastes and
preferences
– Low price-sensitivity
• Positioning
– Provide high quality product that delivers a flawless
experience
– Creates an image of sensuality and femininity
Who and How Old?
AGE
MALE
FEMALE
>18 years
(0) 0%
(1) 6%
19-25 years (3) 60%
(6) 52%
26-35 years (1) 20%
(2) 18%
36-45 years (1) 20%
(2) 18%
46+ years
(0) 0%
(1) 6%
Total
(5) 100% (12) 100%
•More
women
between the
ages of 1925
responded
to the
survey.
Interest
Are you interested in receiving a
catalog?
Male
Female
Yes
No
40%
60%
100%
0%
Are you interested in shopping at a
Victoria’s Secret store?
Male
Female
Yes
No
20%
80%
100%
0%
• Women are more apt to put their name on a mailing list to
receive Victoria’s Secret catalogs than are men , thus it is
important to target women with catalog advertising mediums.
• Women are interested in shopping at Victoria’s Secret more so
than men. Tactics emphasizing femininity and sensuality would
be appropriate.
Where and How?
25%
Preferred Female
Shopping Location
0%
Media Channels Influencing Product
Awareness
specialty
store
TV Ads
department
store
17%
8%
17%
discount
store
8%
67%
• Brick and Mortar
– Provide service
– Provide quality
• Discount store
– Black market
Fashion
Mags
Friends
and
Family
Gift
supermarket
58%
•Focus on print ads
•De-emphasize
online ads
Characteristics of Target Market
Typical Amount Paid for a
Perfume by Women
Importance of Price Among
Females
slightly
important
17%
83%
8%
$26-$40
>$40
59%
33%
neither
important nor
unimportant
extremely
important
• Mexican consumers are willing to pay Victoria’s
Secret price-range.
• Customers are not price-sensitive.
Marketing Mix
• Product
– Victoria’s Secret perfume lines
• Price
– Equivalent to USD: range between $15-$60
• Place
– Open retail stores in major cities
– Primary distribution channels: specialty/beauty stores and
discount stores
• Promotion
– Fashion magazines, catalogs
• People, Cosmopolitan, Elle
• Mailing of 364 million catalogs worldwide
– Less emphasis of online sales
Goals
– Short-term (one year)
• Establish test markets in urbanized cities
• Monitor sales and product awareness
• Evaluate effectiveness of distribution options
– Long-term
• Evaluate potential production possibilities in
Mexico
• Gain competitive market share
• Evaluate opportunity to expand to lingerie and
clothing line
Summary
• Emphasis on fashion magazines, catalogs,
and television ads, not internet
• Specialty stores and discount stores
• Acknowledge differences in sex roles
when promoting
– Women are seductive, not assertive and
aggressive
QUESTIONS?
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