DISSERTATION
Dóra Belme
2009.
Budapest Business School
FACULTY OF INTERNATIONAL MANAGEMENT AND BUSINESS
INTERNATIONAL BUSINESS ECONOMICS COURSE
International Marketing specialization
AVANS HOGESCHOOL INTERNATIONAL BUSINESS SCHOOL BREDA
BUSINESS ADMINISTRATION COURSE
MARKET RESEARCH ABOUT THE FASHION MARKET OF THE BENELUX
STATES. ANALYSIS AND SUGGESTION ON HOW A FOREIGN BRAND, LIKE
MAKÁNY MÁRTA CAN APPEAR ON THESE MARKETS.
Prepared by Dóra Belme
Budapest, 2009
2
Table of content
EXECUTIVE SUMMARY_________________________________________________ 5
1. INTRODUCTION________________________________________________________ 6
1.1. Current Situation, Problem Definition and Objective of the report _______________ 6
1.2. Methods of working ___________________________________________________ 7
2. THE MAKÁNY MÁRTA BRAND __________________________________________ 8
2.1. Company profile _____________________________________________________ 8
2.2. Positioning __________________________________________________________ 9
2.3. Target group _________________________________________________________ 9
2.4. Main features ________________________________________________________ 9
2.5. Strenght and Weaknesses_______________________________________________ 9
2.6. Organizational Structure ______________________________________________ 11
3. DEALING WITH THE CONCEPT OF FASHION DESIGN IN BUSINESS ________ 12
3.1. What is fashion design? A brief history of the concept _______________________ 12
3.2. Types of Fashion design ______________________________________________ 12
3.3. Industry structure ____________________________________________________ 13
3.4. Areas of Fashion design_______________________________________________ 14
4. SECONDARY RESEARCH_______________________________________________ 15
4.1. Methods of working __________________________________________________ 16
4.2. Industry overview-Netherlands _________________________________________ 16
4.2.1.Market Analysis _______________________________________________ 16
4.2.2.Market Value and Forecast _______________________________________ 17
4.2.3. Market Segmentation ___________________________________________ 18
4.2.4. Five forces Analysis ____________________________________________ 18
4.2.4. Designer overview _____________________________________________ 23
4.3. Industry overview-Belgium ____________________________________________ 25
4.3.1.Market Analysis _______________________________________________ 25
4.3.2.Market Value and Forecast _______________________________________ 25
4.3.3. Market Segmentation ___________________________________________ 26
4.3.4. Five forces Analysis ____________________________________________ 26
4.4. Most important fashion designers (competitor analysis) ______________________ 29
4.5. Magazines, fashion blogs ______________________________________________ 31
4.6. Important events, Dutch and Belgian Fashion Week_________________________ 32
4.7. Multibrand shops ____________________________________________________ 33
3
5. PRIMARY RESEARCH__________________________________________________ 35
5.1. Methods of working __________________________________________________ 37
5.2. In-depth analysis: personal interviews ____________________________________ 38
5.3. Observation ________________________________________________________ 42
5.4. Questionnaire design: targeted at customer needs ___________________________ 43
5.5. Results of Primary research ____________________________________________ 50
6.
RECOMMENDATIONS, ACTION PLAN___________________________________ 51
7. EVALUATION AND CONCLUSION ______________________________________ 58
8.
BIBLIOGRAPHY ______________________________________________________ 59
9. APPENDICES _________________________________________________________ 60
4
Executive Summary
My graduation placement took place at a Hungarian fashion designer, Makány Márta and her
company. My assignment was a market research topic: the investigation of the Belgian and
Dutch fashion markets using primary and secondary data collection methods. This report was
made to describe the process, the methods of working during the research and the final results
and outcomes of the market research. Furthermore the report contains an overall introduction
of the Makány Márta brand and the company itself.
In order to carry out a precise and in-depth market research, which is useful in planning the
company’s policy and helps to make recommendations, a secondary research was needed at
first. This step included the building up, and the analysis of different data gained mainly with
the help of the Internet. I collected this market information, evaluated the products of
competitors and structured them into database. In the secondary research, I analyzed different
areas, which were necessary for the company, such as magazines, fashion blogs, fashion
weeks, opinion leaders and trendsetters, most important fashion designers, wedding and
fashion fairs, multi-brand shops and department stores.
The next step in the research process was a primary research, which consisted of personal
interviews with Belgian and Dutch persons competent in this field about their ideas and
opinions, using their expertise and experience as a main element in my research. The other
part of the primary research was a questionnaire targeted 50 buyers in both countries in order
to gain information about their tastes, needs and desires.
The intention of this analysis is to provide answers to the following questions: How to
introduce this Hungarian brand on the fashion market of the Benelux States? , What kind of
different ways exist to appear on these markets? , What is needed from the company’s
perspective?
After gathering and analyzing all this information, I was able to provide recommendations for
the company. In the last part of the report, an action plan can be found with the practical steps
that are necessary for the export activity.
5
1. Introduction
This report contains a market research topic: the investigation of the Belgian and Dutch fashion
markets using primary and secondary data collection methods. This assignment was carried out for
the AVANS Hogeschool Breda, University of Applied Sciences as well. The introduction part
consists of the current situation, the problem definition and and the objective of the report.
Furthermore, the methods of working is also described.
1.1
Current Situation, Problem Definition and Objective of the report
The brand, Makány Márta named after the designer is well-known on the Hungarian market.
The growth in Hungary is stabilizing due to the economic crisis and the limited possibilities of
the market and the management is considering expanding abroad. The company already has
contacts in some of the neighboring countries, such as in Slovakia, and the Makány Márta
dresses can be bought in few countries like in Italy, Japan or South-Korea. The next objective
of the director is expanding in Western-Europe.
The company chose the Benelux States because of several reasons. Firstly, the brand put a big
emphasis on quality, French and Italian materials and hand-made work. Belgium is close
enough to Paris to feel its effects, but the market is a smaller segment than the French, with
less competition. On the other hand, according to data and experiences in the Netherlands,
there are a lot of bridal stores for our target group which all can be potential customers of the
Makány Márta brand. This is not typical in every country, and we should take this into
consideration. As a geographical unit, it was obvious to investigate the Benelux States, in a
group. Luxembourg is the third member of the states. As this country is a really small market,
it can be seen only after the secondary research, whether it is worth to continue the
investigation.
The main question, as it was referred as my research question is: How can the brand, Makány
Márta appear on the markets of Belgium and Netherlands? This problem has to be analyzed
and my assignment tries to find a final answer, solution for the company. In the last part of the
report, I try to suggest a strategy for the company how to enter the given markets. Further
arising questions are: What kind of different ways exist to appear on these markets? What is
needed from the company’s perspective?
6
The objective of my report is to solve these questions and suggest a possible strategy for the
company.
1.2
Methods of working
The purpose during my research was a detailed investigation using primary and secondary
data collection methods. I decided to implement two theoretical methods of market research
learnt at the college in order to use this knowledge in real business life situation: to conduct
interviews, and to ask the target group about their opinions with the help of questionnaire. My
intention was to prove how it works in practice and to support my secondary research.
Regarding the personal interviews with people from the given countries competent in this
industry, I decided that 3 would be appropriate in each country. I wanted to gather qualitative
information about the market from different viewpoints. On the other hand, the purpose of the
questionnaires, the quantitative part of my research was to get opinions from the target group
in order to better understand their special needs, desires and attitudes. These steps and choices
turned out to be very useful for the company and the method can be implemented later in the
case of new potentiel markets.
Besides my primary research, I also had to use secondary data collection. In the secondary
research, I analyzed different areas, which were necessary for the company, such as
magazines, fashion blogs, fashion weeks, opinion leaders and trendsetters, most important
fashion designers, wedding and fashion fairs, multi-brand shops and department stores.
I could not use internal documents for my secondary analysis as the company is totally new
on the Benelux markets. There was no relevant document in this topic. That is why in order to
get all the necessary information needed I used mainly the Internet. I worked on a structured
basis, I had all the important topics that had to be analyzed and gathered into a common
database.
7
2. The Makány Márta Brand
The company was established in 1998 by the owner and the designer, Makány Márta. Márta
did fashion design at the Hungarian University of Applied Art with master degree. The
company is based in Budapest, Hungary.
In 2008, the average amount of sold customs-made dresses was around 200 items. It meant a
turnover above €. 200.000. Accessories accounts for € 10-20.000/ year. This tendency
continued in 2009 with a slight decrease due to the economic crisis. The market is quite
competitive; however the Makány Márta brand is among the market leaders.
2.1
Company profile
The Makány Márta brand covers 3 labels: the bridal (Makány Márta Bridal Wear), the
evening wear (Makány Márta Collection) and the prêt-a-porter collection (Makány Márta
Boutique). The brand stands for elegance and sophisticated luxury.1
The competitive advantage that is emphasized is excellence, which can be seen not only in the
pictures, but in real life too: in the details of the dresses. For all of the collections the designer
uses particular fabrics (from Italy, France, Spain and the UK) and Swarovski crystals. The
dresses are meticulously crafted and very detailed. Another important feature is that the style
absolutely follows the fashion trends, mixing with the particular own style and taste of
Makány Márta, which defines her own label and line.
Regarding the reputation of the company, we can state that Makány Márta, the designer is one
of the most famous designers in Hungary. She already presented herself in several European
countries, (i.e. exhibitions in Milano Fashion week). Since 1998, when the company was
established, she has gained an outstanding success. The strength of the brand also confirmed
by the clients who wear Makány Márta, such as the prime minister and her wife, the Chair of
the Parliament and the popular and internationally well-known tennis player, Agnes Szavay.
Furthermore we can also mention many actors/actresses, and all of the NEWS presenters of
the National TV Channels. Another differentiating feature against the competitors is that
Márta creates the evening wear of the Budapest Opera Ball’s host and hostess. The Hungarian
Olympic team’s uniform in Beijing was also designed by Makány Márta.
1
See Appendix I/1-3
8
2.2
Positioning
The brand is positioned as an artistic fashion brand with high fashion taste, which keeps an
eye on the trends. This is the main differentiating feature.
2.3
Target group
The company’s target is selective and ambitious women who like to be women and who like
to express it with their dresses. They are women with fashion taste and need for being
different from others. This group is open to the world with full of flow, taste, energy,
happiness, and self-confidence. They are women with need for exclusivity, art and passion.
2.4
Main features
In 2007 the brand was presented at the Si Sposaitalia Collezioni exhibition in Milan as the one
and only fashion designer from Eastern-Europe. Both the business professionals and the press
received the collections with high expectations. This international appearance further
improved the brand’s profile. The Nonsolosposi (Italy) magazine and the Wedding TV (UK)
made exclusive interviews with the designer. Moreover, this year Makány Márta started her
advertising campaign in Vogue Sposa, with a very particular print ad. Another main feature
emphasized by the brand is product quality. Every piece of clothes is made of crystallized
Swarovski elements. Fabrics are purchase from Italy, France, Spain, UK and every piece is a
hand-made work.
2.5
Strengths and Weaknesses2
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a business venture. It involves specifying the objective
of the company, identifying the internal and external factors that are favorable and
unfavorable to achieving that objective.
A SWOT analysis must first start with defining a desired end state or objective. A SWOT
analysis may be incorporated into the strategic planning model. Strengths are the attributes of
the company that are helpful to achieving the objective. Weaknesses are the attributes that are
harmful to achieving the objective. Opportunities are external conditions that are helpful to
2
Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey
9
reaching the goal. Threats are external conditions which could do damage to the goal.
Identification of SWOTs is essential because subsequent steps in the planning process for the
achievement of the objective may be derived from the SWOTs. It is particularly helpful in
identifying areas for development.
In our case, I analyzed the internal factors, the strengths and weaknesses of the company that
have an effect on brand expansion. I applied the analysis for the Hungarian and the foreign
market.
Table 1- SWOT Analysis
Strengths
Weaknesses
In Hungary
9 The
an
9 Not everyone from the target group is
outstanding success in Hungary since its
aware of all the services given by the
establishment
company
Makány
Márta
brand
has
9 Well-known designer behind the brand
9 Makány Márta is rather known for her
with outstanding customer base (the elite
wedding dresses, than the other lines of
layer of the society)
the brand (e.g. prêt-a-porter)
9 Commitment to quality: particular fabrics
9 Informal network
(from Italy, France, Spain and the UK)
9 No complex strategy regarding the
and Swarovski crystals. Meticulously
development of product lines offered by
crafted dresses.
the brand
In the Benelux States
9 Quality features: the target group in these
countries
appreciates
and
rewards
quality-conscious brands
9 Strong bridal wear line: the opportunities
given by the bridal salons in the
Netherlands
9 No real internal documents about the
Benelux States (e.g. database, contacts,
etc.)
9 Lack of knowledge about expanding
abroad
9 Continuous improvement is needed
9 Low entering limits
9 Good defined positioning
9 Differentiated marketing
10
Opportunities
Threats
9 Opportunities given by the bridal salons
9 Effects of economic crisis on the buyer
of Netherlands and multibrand stores of
power
9 Appearance of new competitors
Belgium
9 Further expansion in Western-Europe
9 Lack of demand
9 Introduction of all product lines in the
9 Price sensitiveness of consumers
long-run
2.6
Source: own analysis
Organizational structure
Figure 1- Organizational structure
Makány Márta
Leader designer
Th
Based on projects the
followings:
Art director
e
co
mp
Online Manager
2 Strategic advisor
PR Agency
any
Lyricist
has
aro
und
10
Timea Szivek
Modelliser /
Production manager
Judit Lehoczki
Designer assistant
Emese Juhasz
Brand Manager
Krisztian Hackl
Sales director
Dressmakers
em
ployees, 2 strategic advisors and a PR Agency that helps the brand. The number of employees
can increase at the time of different projects when an art director, online manager or a lyricist
is hired under work orders.
The owner of the company and the leader designer is Makány Márta. Under her supervision,
we can find the different positions. As the company is really small, all the control is in the
hand of the director and all the employees report to her. One advantage is that the company
can respond very fast to the changes on the market and it also allows using the potentials
given by the employees. The company works as a small team with experts in different fields,
which means that knowledge is added up to find the best solutions from the company’s
perspective. The main positions are: the production manager, the brand manager, the sales
director and the designer assistant. The dressmakers are under the control of the production
manager, however, they closely work together with the designer herself, as well.
11
3. Dealing with the concept of Fashion Design in Business
-Determining the segment in which the company operatesFashion design is considered to be an applied art dedicated to the creation of clothing and
accessories, influenced by the cultural and social impacts of a specific period. The term,
obsolescence is usual in this industry: the products of fashion design can be out of fashion in
one to two seasons, which means that companies have to respond very fast to changes in
trends and styles. A season is defined as autumn-winter or spring-summer. Nowadays, the
French, Japanese, British and American fashion is regarded as top in style, however, the
Italian fashion has the biggest importance in design and it leads the fashion world since the
1970s and ‘80s.
Furthermore, most major countries have their own fashion industry, such as Belgium, Spain,
Canada, Portugal, Brazil, India, The Netherlands, Germany, Hungary and Australia.3
3.1
A brief history of the concept
The term, fashion design started in the 19th century with an important name in this field,
Charles Frederick Wort. Before him, maison couture, fashion houses were set up and the
design and creation of clothes were handled by anonymus dressmakers. Worth was the first
designer to have his label sewn into the garments. The wheel turned, he was able to tell the
customers what they should wear instead of the earlier practices of following the customer
needs. The term, couturier was crated to describe Worth’s newly- developed role.
Earlier, all articles of clothing were studied by academics as costume design, only after 1858
we can use the term, fashion design. During this period, many fashion houses hired artists to
sketch the design for garments. Only if the customer liked the item, the house ordered the
chosen cloth. This process gradually gained ground, and began as an economy. At this time,
we cannot draw a sharp line between haute couture and ready-to-wear clothes. The two
separate modes of production were often mixed and co-existed in the fashion houses.
3.2
Types of Fashion design
There are three important lines of fashion design, although these categories can be further
divided into specific ones.
3
http://en.wikipedia.org/wiki/Fashion_design
12
Hautre couture is a French word, meaning for high fashion. The couture garment is made for
an order by a given customer, and it is made from high-quality, expensive fabrics. The
method often uses time-consuming, hand-executed techniques with extreme attention to
details. The cost of materials and the time it takes to make plays second role.
Ready-to wear or pret-a-porter clothes represent a cross between haute couture and mass
market. They are not sewn for individual customers as in the case of haute couture, however
great importance is taken in the quality and fabrics. As clothes are made in small quantities
for exclusivity, they are rather expensive. Collections by fashion houses are presented in ech
season during a period named as Fashion Week. The most important cities have their own
events and occurs twice a year: autumn/winter and spring/summer.
The third category is the mass market, which gains an outstanding popularity nowadays. The
mass market produces ready-to-wear clothes in large quantities and standard sizes from cheap
materials in order to produce affordable fashion. Mass market designers generally use the
trends set by the famous names in the fashion world. They often wait a season to make sure a
trend is going to gain ground and then they produce their own versions of the original look.
If we examine these three categories, we can say that the Makány Márta brand covers haute
couture and pret-a-porter clothes.4
3.3
Industry structure
Fashion designers can work in different ways. One option is when designers work full time
for a fashion company called as in-house designers. Freelance designers work for themselves,
and sell their garments for fashion houses, directly to shops or to manufacturers. Some
designers set up their own labels which are marketed, and there are ones who design for just
individual clients. Other high-fashion designers create original garments or those that
followed established trends and provide the clothes to specialty stores or high-fashion
department stores. Although, the big proportion of the designers work for manufacturers
creating designs for men’s, women’s and children’s fashions on the mass market. Large
designer brands, as Gucci, Chanel or Dior are designed by a team of designers directed by a
designer director.
4
See examples in Appendix I.
13
Makány Márta is a freelance designer, working for herself and selling garments mainly for
individual customers. The intention of the brand and the company is to appear on more and
more markets on the world with the own label which is the same as the designer’s name:
Makány Márta. The aim is to sell the three different lines for shops such as bridal stores,
multi-brand shops or department stores. The strategy is close to the ones implemented by the
large designers mentioned above. However, the brand is only in the first stage of brand
expansion.
3.4
Areas of fashion design
As many designers, Makány Márta also started by specializing in a particular area, bridal
wear. At the beginning, it is easier to establish a name in the fashion industry if a company is
known from a given type of product. Once a fashion company becomes established, get
stronger, has regular clients and is well-known by both the public and the trend, it may decide
to expand into new areas. The Makány Márta brand is in this phase at the moment.
The following table shows the areas, in which the brand operates and the potential new fields.
Table 2: Areas, in which the brand operates
Area
Differentiating feature
Market
Bridal wear
purity and naturalness
Haute couture, ready-to-wear
Women's Evening wear
Women's Day wear
Sportswear
Men's Evening wear
Uniforms
Elegant, sophisticated, apt
for the occasion
Comfortable, fashionable
Adapted for competitions,
team uniforms
Elegant, formal, apt for the
occasion
Haute couture, ready-to-wear
Ready-to-wear
Special segment
Tailoring, special orders
Special orders as Olympic
Possibilities mainly offered
team’s uniform in Beijing
by tenders
Interior decoration,
Elegance, sophisticated
accessories
luxury
Possible new fields
Source: personal analysis according to internal data
14
4. Secondary Research
Secondary data is data that already exists and has been collected by someone else for another
purpose. Secondary research involves the investigation of secondary sources of data. The
sources can come from within the firm itself – this is known as internal secondary data.
External secondary data, on the other hand, is data that has been published by other
organizations. Internal sources of data should always be considered as a first line of enquiry
for any investigation because they are usually the quickest, cheapest and most convenient
source of information available. Internal data will also be exclusive to the organization that
generated it, so that rival firms will not have access to it. However, internal data may be
incomplete or out of date, and, if a project is new, there may be no relevant data at all. In such
cases, an organization may need to consider using external sources of secondary data.
There are several sources of existing data available from outside of the organization that may
be of value. These include commercial market research organizations including MINTEL,
Keynote and Euromonitor, the government and competitors making company reports and
websites which are easily accessible and contain a limited amount of information. Moreover
trade publications and the general media can also be a starting point for the research.
Secondary data sources should always be considered by any firm conducting research. No
firm can afford to waste time and money conducting expensive surveys to gather data that
already exists. However, secondary data may have been collected some time ago and
therefore, be out-of-date. Because it has been collected for another purpose, it may be in the
wrong format or incomplete. The advantages and disadvantages of using secondary data will
vary from source to source. Government data, for example, is usually cheap or even free to
access. It is likely to be accurate and updated regularly. However, it may be too general and
because it is available to everyone, it is unlikely to give an organization any competitive edge.
Some information on competitors may be easily available via company reports or websites,
but these are unlikely to contain sensitive information or data that gives the firm a negative
image.5
5
McCarthy, E. Jerome; Perreault, William D.: Essentials of MARKETING, 6th edition, Irwin
15
Secondary data collection is a starting point in every situation and researchers can examine
whether the problem can be fully or partly solved without collecting expensive primary data.
The results of the secondary analysis make it clear whether the company can rely only on the
findings of the secondary research or primary data collection is also needed.6
In my case, secondary data provided a starting point to get a general overview about the
fashion market of the Benelux States. I took an advantage of low cost and ready availability
and I got a preliminary sense how these markets operate and which kind of threats and
opportunities are given by these countries.
4.1
Methods of working
First of all, I could not use internal documents for my secondary analysis as the company
is totally new on the Benelux markets. There was no relevant document in this topic.
Moreover, the company needed a database, which they can use in the long-run, as well. That
is why I had to structure and build up a summary and a database about different areas, such
as: magazines, fashion blogs; Dutch and Belgian fashion weeks; opinion leaders, trendsetters;
most important fashion designers; wedding and fashion fairs; multi-brand shops and
department stores. In order to get all the necessary information, to build up a database and to
compile a detailed analysis about the markets, I used the help of the Internet.
4.2
Industry overview- Netherlands
The womenswear market comprises women's activewear, casual wear, essentials, formalwear,
formalwear-occasion and outerwear. In the following tables and diagrams the market’s value
is calculated at retail selling price (RSP).
4.2.1 Market Analysis7
According to Datamonitor, the Dutch womenswear market decelerated significantly since
2006 and is expected to continue to 2011. Furthermore, the market is expected to exhibit a
stable level of growth through to 2013.
6
7
Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey
Datamonitor Europe: Womenswear in the Netherlands- Industry Profile, United Kingdom, August 2009
16
The report states that the Dutch womenswear market generated total revenues of $8.7 billion
in 2008, representing a compound annual growth rate (CAGR) of 3% for the period 20042008. In comparison, the German market declined with a compound annual rate of change
(CARC) of -0.2%, and the Belgian market increased with a CAGR of 3.8%, over the same
period. These markets reached values of $43.6 billion and $5.7 billion in 2008, respectively.
The performance of the market is forecasted to decelerate, with an anticipated CAGR of 1.6%
for the five-year period 2008-2013, which is expected to drive the market to a value of $9.5
billion by the end of 2013. Comparatively, the German market will decline with a CARC of 0.3%, and the Belgian market will increase with a CAGR of 1.5%, over the same period, to
reach values of $42.9 billion and $6.1 billion in 2013,respectively.
4.2.2 Market Value Forecast8
Table 3: Netherlands Womanswear
Market Value: $billion, 2004-2008
(Source: Datamonitor report)
As
mentioned
before,
the
Dutch
womenswear market grew by 2% in
2008 to reach a value of $8.7 billion. The compound annual growth rate of the market in the
period 2004-2008 was 3%.
Figure 2: Netherlands Womanswear
Market Value: $billion, 2004-2008
Figure 3: Netherlands Womenswear
Market value Forecast: $ billion,
2008-2013
In 2013, the Dutch womenswear market
is forecasted to have a value of $9.5
billion, an increase of 8.3% since 2008.
The compound annual growth rate of the
market in the period 2008-2013 is
predicted to be 1.6%.
8
Datamonitor: Womenswear in the Netherlands
17
4.2.3 Market Segmentation
The clothing, footwear, sportswear and accessories retailers segment was the market's most
lucrative in 2008, generating total revenues of $7.5 billion, equivalent to 85.9% of the
market's overall value. On the other
hand, the department stores segment
contributed revenues of $0.4 billion in
2008, equating to only 4.1% of the
market's overall revenues.
Figure 4: Netherlands Womenswear
Market Segmentation I: % Share,
by Value, 2008 (Source: Datamonitor
report)
Figure 5: Netherlands Womenswear
Market Segmentation II: % Share,
by Value, 2008
The Netherlands accounts for 3.8% of
the European womenswear market's
value.
In
comparison,
Germany
accounts for a further 19% of the regional market's value.
4.2.4 Five forces Analysis9
"Porter's five forces" is a framework for the industry analysis and business strategy
development developed by Michael E. Porter. It uses five forces that determine the
competitive intensity and therefore attractiveness of a market. Attractiveness in this context
refers to the overall industry profitability. An "unattractive" industry is one where the
combination of forces acts to drive down overall profitability. A very unattractive industry
would be one approaching "pure competition". The framework consists of those forces close
to a company that affect its ability to serve its customers and make a profit. A change in any
of the forces normally requires a company to re-assess the marketplace.
9
Porter, Michael E. (1980): Competitive Strategy: Techniques for Analyzing Industries and Competitors
18
Porter's five force include three forces from 'horizontal' competition: threat of substitute
products, the threat of established rivals, and the threat of new entrants; and two forces from
'vertical' competition: the bargaining power of suppliers and the bargaining power of
customers.
According to Porter, the five forces model should be used at the industry level; it is not
designed to be used at the industry group or industry sector level. An industry is defined at a
lower, more basic level: a market in which similar or closely related products and/or services
are sold to buyers. A firm that competes in a single industry should develop, at a minimum,
one five forces analysis for its industry. This five forces analysis is just one part of the
complete Porter strategic models. The other elements are the value chain and the generic
strategies.
Due to lack of information about the designer segment, I analysed with the help of the
Datamonitor report the Dutch and Belgian womenswear market taking clothing retailers as
players. The key buyers are taken as individual consumers, and clothing manufacturing or
wholesalers as the key suppliers.
Figure
6:
Forces
Driving
Competition in the Womenswear
Market in the Netherlands, 2008
(Source: Datamonitor report)
As clothing is an essential item and
consumer choice is influenced by
factors such as fashion and a desire to signal social status, demand patterns are sensitive to
branding, advertising, etc. These factors tend to weaken buyer power despite the lack of
significant switching costs. Supplier power in the market is also moderate. Due to the steady
market growth observed in recent years, and low barriers to entry, there is a high likelihood of
new entrants in this market. Substitutes pose a minimal threat to the market players. Rivalry in
the market is assessed as fairly strong due to the combination of growing market size.
19
1. Buyer power
Figure 7: Drivers of Buyer
Power in the Womenswear
Market in the Netherlands,
2008
Virtually all buyers are individual
consumers, which weakens buyer
power. Generally, all retailers
have large numbers of individual
customers. Retailers can differentiate themselves quite strongly through the styles of clothing
offered, which also weakens buyer power. Buyers have negligible switching costs and brand
choice is dependant only on the personal taste of customers.
Although brand awareness in the market is high, loyalty of consumers to specific brands is
moderate and a high level of choice enhances buyer power. Brand loyalty within the
womenswear market is connected more with the particular designer than the retailer, although
some labels also have their own retail operations.
There is a large market for non-designer womenswear especially among customers with lower
disposable incomes. On the other hand, for many people clothes represent lifestyle and social
status, which gives retailers a chance to influence what is bought through brand advertising
and this may weaken buyer power.Retailers are obliged to offer buyers what they require, in a
market often subject to unpredictable and rapid changes in fashion. These factors strengthen
buyer power, which is assessed overall as moderate.
2. Supplier Power
Figure 8: Drivers of Supplier
Power in the Womenswear
Market in the Netherlands,
2008
(Source: Datamonitor report)
20
Key suppliers in this market are clothing manufacturers and wholesalers, which are typically
small to medium sized enterprises, giving the retailers possibility to source from both.
As international trade liberalizes, supplier power in the global market is decreased through
competition from manufacturers in low-wage regions, most notably China. (Apparel
manufacturing is almost always labor intensive, due to the difficulty of automating processes
such as the sewing of garments.) Retailers’ switching costs are not very high and include the
risk of choosing a supplier with more extended supply chain for whom it may not be possible
to cope with sudden changes in demand on the market.
Suppliers are further weakened by their lack of diversity, which makes the womenswear retail
market highly important to their business. Retail is also labor-intensive, and the existence of a
minimum wage in the many countries slightly increases the power of suppliers of labor.
Overall, there is weak to moderate supplier power in this market.
3. New Entrants
Figure 9: Factors Influencing the
Likelihood of New Entrants in
the Womenswear Market in the
Netherlands, 2008
The Dutch womenswear market
like most retail markets has fairly
low barriers to entry meaning
capital requirements are low enough for individuals to enter. However, a few much larger
corporations account for a major share of total market revenues.
Their scale economies include the ability to build brands in multiple retail outlets, and greater
buying power when negotiating with suppliers. The latter allows them to compete more
intensely on price. There is little regulation as such for retailers in the market, but there are
some self-imposed conventions like avoiding clothes manufactured with child labor. New
entrants who are known to have items manufactured in this way may lose customers. Overall,
there is a strong likelihood of significant new entrants to this market.
21
4. Substitutes
Figure 10: Factors Influencing
the Threat of Substitues in the
Womenswear
Netherlands,
Market
2008
in
the
(Source:
Datamonitor)
While there are no substitutes for
womenswear as such, there are alternatives to retail. This includes buying directly from
manufacturers the conventional distribution chain, which is facilitated by the growth of online
sales. However, the threat of substitutes to womenswear retail is assessed as moderate.
5. Rivalry
Figure 11: Drivers of Degree of
Rivalry
in
the
Womanswear
Market in the Netherlands, 2008
The Dutch womenswear market is
fairly fragmented with generally
large numbers of similar retailers,
and
many
of
these
are
independents. However there is still a room for large numbers of smaller players in this
market.
While some retailers selling womenswear are highly diverse (e.g. department store chain
HEMA), many retain a strong emphasis on clothing, or womenswear specifically, which
intensifies rivalry. A fast pace of change in womenswear’s market combined with moderate
market performance over the past five years only partly decresed rivalry, which is assessed as
fairly strong overall.
22
4.2.5 Designer overview10
There are around 46,000 designers working in the Netherlands. Around 72 percent of them
work in the commercial services sector, while one fifth in the manufacturing industry and
only 7 percent in the non-profit sector. The number of fashion designers doubled in the past
10 years, which proves the growing importance of this industry. The design sector includes
the following activities: fashion design, communication design, industrial and product design
and interior design.
Dutch fashion design is concentrated in Amsterdam and Arnhem. The Amsterdam Fashion
Week, The World Fashion Centre and the Amsterdam Fashion Institute are all important
elements in the fashion life of Amsterdam. Other important institutions in the Netherlands are
the Artez Fashion Institute in Arnhem, Artemis, and the Rietveld Academie. Further sectoral
organizations include the Dutch Platform for Design and Fashion and the Dutch Fashion
Foundation, responsible for the Dutch Fashion Awards. The Dutch Fashion Award was first
organized in 2007 and was won by a designer duo Klavers and van Engelen. Design is a free
profession in the Netherlands which means that designers are not bound by a government
body. That is why professional organizations attempt to provide a form of representation. The
Professional Association for Dutch Designers has circa 2500 individual members.
Economic indicators11
Table 4: Structure of the Dutch design sector
Fashion
design
Number of designers
Advertising and
Interior design Product design
communication
design
1,300
1,600
13,900
14,000
Number of companies
3,290
1,540
13,175
Percentage SME companies
100%
99%
99.8%
Value added of the sector (€
209
n/a
1915
109
n/a
526
mln)
Value added produced by
designers in the sector (€ mln)
(52,2% of total)
(27.5% of total)
Source: Number of designers and value added based on TNO (2004) companies and percentage SME on Central
Bureau of Statistics (2008)
10
11
http://www.hollandtrade.com/sector-information/design-and-fashion/?bstnum=3208
http://www.hollandtrade.com/sector-information/design-and-fashion/?bstnum=3209
23
Table 4 presents the number of companies and employees in the different design sectors, as
well as the value added of the segments. The last row represents the value added produced by
the designers in the different subsectors. In the brackets, the share of the total added value of
the subsectors can be seen. The statistics shows that advertising is the most important activity,
employing 14,000 people. The fashion and interior design sectors account for a total of 2,900
employees.
Altogether, 16,900 people work in the design industries. These are companies offering design
services, such as advertising, fashion or interior design. Product design is mainly carried out
by design companies and in-house design departments within companies.
The important fact for us from this statistics is the number of independent fashion designers
present in the Dutch industry. Their total number is around 1,300 according to the Central
Bureau of Statistics.
Perspectives to take into consideration12
In the view of hollandtrade.com, an important aspect against fierce competition in this sector
is the designer’s private network, and peer review, which means the appraisal and judgement
by colleagues. These points have a significant impact on the success and reputation of the
individual designers. It is also worth mentioning that due to the importance of having a
regional network, most designers operate on a regional basis. Design firms are generally
small—sized companies, as in the case of Makány Márta. That is why we have to take these
aspects into account when we define the company’s strategy regarding the expansion in the
Netherlands.
Customers in the Benelux States are very quality conscious. Therefore, Dutch design firms
pay huge attention on quality, reliability, use of materials. In the Netherlands, most of the big
high-fashion companies outsourced their production. Designers are hired on a project basis. In
the middle segment, department stores gradually contract independent designers. A good
example is the cooperation of C&A and the designer and stylist, Dyanne Beekman. We
cannot leave this out of consideration, as it can be a possible way for a foreign designer to
enter the market.
12
http://www.hollandtrade.com/sector-information/design-and-fashion/?bstnum=3210
24
Industry overview- Belgium13
4.3
We can see in the report made by Datamonitor that the Belgian womenswear market has been
decelerating over the last five years, a trend which is anticipated to continue through to 2012.
4.3.1
Market Analysis14
The Belgian womenswear market generated total revenues of $5.7 billion in 2008,
representing a compound annual growth rate (CAGR) of 3.8% for the period 2004-2008. In
comparison, the French market increased with a CAGR of 1.9% over the same period, to
reach value of $27.9 billion in 2008.
The performance of the market is forecasted to decelerate, with an anticipated CAGR of 1.5%
for the five-year period 2008-2013, which is expected to drive the market to a value of $6.1
billion by the end of 2013. Comparatively, the French market will increase with a CAGR of
2.8% over the same period, to reach value of $32.1 billion in 2013.
4.3.2
Table
5:
Market Value and Forecast
Belgium
Womenswear
Market Value: $ billion, 2004-2008
The Belgian womenswear market grew
by 2.1% in 2008 to reach a value of $5.7
billion. The compound annual growth
rate of the market in the period 2004-2008 was 3.8%.
Figure 12: Belgium Womanswear
Market Value Forecast: $ billion,
2008-2013
In 2013, the Belgian womenswear
market is forecast to have a value of
$6.1 billion, an increase of 7.7% since
2008. The compound annual growth rate
of the market in the period 2008-2013 is predicted to be 1.5%.
13
14
Datamonitor Europe: Womenswear in Belgium- Industry Profile, United Kingdom, August 2009
Datamonitor
25
4.3.3
Market Segmentation
Figure 13: Belgium Womenswear
Market Segmentation I: % Share,
by
Value,
2008
(Source:
Datamonitor- Belgium)
As noticed in the Netherlands, the
clothing, footwear, sportswear and
accessories retailers segment was the
market's most lucrative in 2008,
generating total revenues of $5.2 billion, and equivalent to 91.4% of the market's overall
value. The hypermarket, supermarket, and discounters segment contributed revenues of $0.2
billion in 2008, equating to 4% of the market's overall revenues.
Figure 14: Belgium Womenswear
Market Segmentation II: % Share,
by Value, 2008
Belgium accounts for 2.5% of the
European
womenswear
market's
value.
comparison,
Germany
In
accounts for 19% of the regional
market's value.
4.3.4
Five Forces Analysis15
The same method was implemented in the case of Belgium that I used analyzing the data
about the Netherlands. I took clothing retailers as players; the key buyers are taken as
individual consumers, and clothing manufacturing or wholesalers as the key suppliers.
Examining the Datamonitor report about the Belgian womanswear market, I found the same
charts as in the Dutch one. I came to the conclusion, that the forces driving competition is
very similar in the two countries. Hence the following figures correspond with the previous
ones, that is why I did not explain the charts step by step again.
15
Datamonitor report: Belgium
26
Figure 15: Forces Driving Competition in the Womenswear Market in Belgium, 2008
Figure 15 proves the fact that the
functioning of the Belgian market
is almost the same as in the case of
Netherlands. Regarding the five
factors as buyer and supplier
power, substitutes, new entrants
and rivalry, the same features can
be presented.
1. Buyer Power
Figure 17: Drivers of Buyer
Power
in
the
Womenswear
Market in Belgium, 2008
As we have seen before, the chart
about the Belgian buyer power is
totally
the
Dutch
one.
The
characteristic features are similar
and overall we can state that
Belgian buyer power is assessed as
moderate.
2. Supplier Power
Figure 18: Drivers of Supplier
Power
in
the
Womenswear
Market in Belgium, 2008
27
3. New entrants
Figure 19: Factors Influencing
the Likelihood of New Entrants
in the Womenswear Market in
Belgium, 2008
4. Substitutes
Figure 20: Factors Influencing
the Threat of Substitutes in the
Womenswear
Market
in
Belgium, 2008
5. Rivalry
Figure 21: Drivers of Degree of
Rivalry in the Womenswear
Market in Belgium, 2008
(Source: Datamonitor- Belgium)
28
4.4
Most important fashion designers- Netherlands
Table 6: Competitor analysis
Key players on
the market
Viktor and Rolf
Francisco van
Benthum
Mada van Gaans
Joline Jolink
Marlies Dekkers
Strength, Characteristic
features
MM’s position, opportunities
given by competitors
Biggest reputation among Dutch
Different target group; the MM brand
designers. Operating in the high
wants to sell in designer shops, not in
fashion industry
high fashions stores
Luxury brand for men
MM’s main labels are for women
Ultra feminine style, sold in the best
The distribution channel of Mada can be
designer shops
useful for MMÆ has to be analyzed
Amsterdam FW participant
Lingerie, 100 points of sales
worldwide
Warmenhoven &
High quality, ready-to-wear
Venderbos
collections for high end retail stores
Opportunity given by the distribution
channel, online fashion store of JJ
MM operates in another segment
Ideas close to the MM brand. Same
target groupÆ opportunities in W&V
distribution
Source: personal analysis according to secondary data
In the high fashion industry, Viktor and Rolf made a reputation around the whole world. Their
success is flourishing outside the borders of the Netherlands, as well. They have fashion
boutiques all over the world. In 2006, Viktor & Rolf designed a line for the Swedish-based
retailer H&M following others. It is clear that this designer duo achieved the biggest success
from the fashion industry. 2008 was a turning point in the life of the company. They
announced that Renzo Rosso —owner of Diesel Jeans, chairman of Only the Brave (OTB)—
has taken a controlling stake in their company. Rosso already controlled Dsquared, Maison
Martin Margiela and Sophia Kokosalaki, and manufactures Vivienne Westwood's leading
lines. The impact on the brand can not be seen yet, however Viktor & Rolf stated that the
main intention of the deal was to put out a wider range of products and to open more stores.16
Other notable fashion designers are Alexander van Slobbe with his own brand Orson-Bodil
and Francisco van Benthum with the brand Wolf. Since 2003 Francisco van Benthum is the
16
http://www.viktor-rolf.com/dispatch.htm
29
leading force behind luxury men’s fashion with his own label. Mada van Gaans has an ultra
feminine style and is sold in some of the best Dutch designer boutiques such as Coming Soon
in Arnhem and Wendela van Dijk in Rotterdam.
Although, Joline Jolink started her women’s wear label only in 2005, she managed to make
quite a name for herself. As she aims specifically for the American market she shows her
collections during both Amsterdam Fashion Week and New York Fashion Week. Apart from
her online shop, Joline Jolink is currently available from Sky in Amsterdam, Wendela van
Dijk in Rotterdam, Wandjina in Amersfoort, and Pixie Market in Los Angeles and New
York.17
Another key player on the market is Marlies Dekkers with her prominent brand in lingerie and
undergarments. The marlies|dekkers brand has established 100 points of sale worldwide and
her stores are located in cities such as Amsterdam, Rotterdam, Antwerp, Paris, Bangkok,
Berlin and Cologne.18
The label, W&V was founded in 1996 by Sascha Warmenhoven and Babette Venderbos.
Their first collections were mainly haute couture pieces. In 2001 they decided to create a preta-porter collection targeted on the Asian market. In 2008 they launched a ready to wear
collection for the European market. Warmenhoven & Venderbos are also art- and creative
directors for collections of various major brands. For some of their clients they also design
and develop complete special collections. 19
Most important fashion designers- Belgium
Regarding the most important Belgian fashion designers, our competitors, we can name the
Antwerp 6 who gained the biggest reputation not only in their own country but around the
world. The name refers to a group of influential avant-garde fashion designers graduating
from Antwerp's Royal Academy of Fine Arts between 1980 and 1981. The members are
Walter Van Beirendonck, Ann Demeulemeester, Dries van Noten, Dirk Van Saene, Dirk
17
18
19
http://www.dutchfashionfoundation.com
http://www.marliesdekkers.nl/
http://www.warmenhoven-venderbos.com
30
Bikkembergs and Marina Yee. They run their business in Antwerp which is the centre of
Belgian fashion world.
Other important players in the industry are Martin Margiela, Elvis Pompilio, Raf Simons and
Veronique Branquinho. However, if we examine these designers and their products offered on
the market, we can draw the conclusion that they are not our direct competitors as they target
another group and not the potential customers of the Makány Márta brand. They represent an
avant-garde direction, while our concept is elegance, sophistication and purity.20
4.5
Magazines and fashion blogs
- Designing integrated marketing communication -
An important way to appear on the market is to be mentioned in magazines or on fashion
blogs. Selecting the appropriate communication channel is an important step of brand
expansion. The company must select efficient communication to spread the message, the
mission of the brand. We have to identify influential individuals, who shape and form
customers’ tastes and needs and are followed by people. We need to find opinion leaders who
have influence on the market, and determine what can be successful and which products are
fashionable to buy. The company can also work together with community influentials such as
bloggers which is one of the easiest ways to introduce the brand to the audience. It is a
possible path to develop word-of-mouth referral channels in order to build local reputation.
Bloggers can recommend our products to others as they have influence on fashion fans, and it
can become a successful marketing communication tool. The above mentioned ways are part
of personal communication.21
Regarding nonpersonal channels, at the beginning of brand introduction it is quite expensive
for the company. As the company is small and has few employees, without an investor, it has
to find the cheapest ways for marketing activities. Print media, such as newspapers,
magazines or broadcast media, as radio and television can be permanent channels in the longrun. However, the company can use these channels only if the marketing budget can cover the
costs of advertising in one of the following magazines.
20
21
http://www.kuleuven.be/iccp/2003/iccp11/start.htm
Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey
31
Table 7: Dutch and Belgian magazines and fashion blogs
Elle Group
•
•
•
•
•
•
ELLE Wohnen
ELLE girl
ELLE eten
Santé
Red
Fashionfinds
Fashion Magazines
Netherlands
www.elle.nl
Cosmopolitan
www.elle.nl/wonen
www.ellegirl.nl
www.elle.nl/eten
www.santeonline.nl/
www.red.nl
www.fashionfinds.nl
•
•
•
•
•
•
Styletoday
BeauMonde
Grazia
Pink Ribbon
Nouveau
Marie Claire
www.glamour.nl/
Bruid
www.jackieonline.nl Wit wedding
Trouwen
Belgium
Glamour
Jackie
ELLE Group
Marie Claire
Purple Fashion Magazine
http://www.elle.be/
Belgian edition
www.purple.fr
Elle Netherlands
Madame Mode s
Dutch Fashion Blogger
Fashion Mission
Shoppen.blogo
Everything Stylish
Bozar
Mariee
www.styletoday.nl
www.beaumonde.nl
www.grazia.nl
www.pinkribbonmagazine.nl
www.nouveau.nl/
www.marieclaire.nl
het.huwelijks.net/
www.witwedding.nl
www.trouwen.nl/
http://www.bozar.be
www.mariee.fr
Dutch and Belgian Fashion Blogs
My Fashion Blog-Emma
Andrea Campbell
Source: own analysis according to secondary data
The Table summarizes the most important magazines and fashion blogs in the two countries.
Our goal is to contact them and to either advertise in the magazine or publish an article about
Makány Márta as the outstanding fashion designer from Eastern-Europe. It is really important
to achieve the most favorable position for our brand and to find the most cost-effective way at
t he beginning of brand introduction.
4.6
Important events, Dutch and Belgian Fashion Week
Netherlands
Examining the fashion market of the Netherlands, we have to mention the most important
event in the Dutch fashion world: the Amsterdam Fashion Week. Two times a year, a series of
fashion shows, mainly by Dutch and Belgian designers takes place in Amsterdam. The shows
on the catwalk are accompanied by series of events called Laundry Days, which consists of
openings of museum and gallery exhibitions, meetings and parties.
The Amsterdam Fashion Week exists since 2004. During the last years it obtained a growing
reputation, as it is trying to position itself as a platform for the fashion of the new generation
and so called New Luxury segment of the market. Designers taking part value exclusivity and
originality, and often reject established commercial brands. During the Fashion Week an
32
important, two days fashion fair takes place called Modefabriek. Besides other important
events, it is the largest fair in the Netherlands. The date is at the end of July and the end
January each year.22
Modefabriek as mentioned before is a significant event for both the national and international
fashion world. Innovation and creativity are the main characters in the trade show; it gathers
the most important brands. The participants of Modefabriek are from a wide range:
recognized brands, newcomers and trend-setting designers. Over 600 labels can be found in 6
different segments: refined, appearance, authentic, limited, industry and department. The next
fair will be held on Sunday 24th and Monday 25th of January 2010.23
Regarding Makány Márta, the Amsterdam Fashion Week is not yet realistic to be a
participant, however the Modefabriek can be interesting as it is a place which gathers
designers from all over the world. It can be a possible place to find contacts in the
Netherlands and build up co-operations with other designers, which is favorable for both
partners. Once, a foreign brand is present in a shop, it is much easier to expand further in the
country. However, it depends on the conditions of the fair, such as fee of being a participant
and the financial resources of the company.
Belgium
As most of the Belgian designers go to Paris to show their clothes, there is no Belgian
fashion week. There is no point in organizing a FW in Antwerp or Brussels, because Paris and
Amsterdam are such big events, that the Belgian would count nothing in the fashion world.
The only show is the graduation show for the Antwerp Academy of Fashion & La Cambre.
Although, several fairs are organized in Belgium, from which the “A Fair” in Antwerp is
the most famous. It gives the opportunity for the designers to show their talents and
collections. The organizers of A Fair have created a unique event within the fair: A Store. The
participating high-quality level brands are contemporary and neither of them are present at
any other fair in Europe. The next A Fair edition (February 2010), A Store will logically
expand this project to the Antwerp retailers who buy the participating brands. Their selection
of the season will be revealed “in store” to consumers on the one hand and visitors of A Store
22
23
http://www.amsterdamfashionweek.com
http://www.modefabriek.nl
33
on the other hand. These fairs can be considered as the most important events in the Belgian
fashion life.
The most relevant events in the Benelux States are summarized in a table.24
4.7
Multibrand shops
Once a company decides to enter a foreign market, it has to determine the way of entry. There
are broad choices, however the most common strategies are direct exporting, licensing, joint
ventures, direct investment and direct exporting. In our case, export is considered as the most
appropriate one. Occasional exporting is the way when the company exports from time to
time, either on its own initiative or in response to orders from abroad. As a main feature of the
company’s profile is quality, and the most of the garments require special methods, the
clothes have to be made by our dressmakers. Exporting allows the company to produce all its
clothes in the home country.
The company can decide either to employ an export sales representative or hire a foreignbased distributor. One option is to send a home-based sales representative to the Benelux
States to find business. On the other hand, we can hire a foreign-based distributor, an agent to
represent the brand in the country. However, this way could require more investment. The
company has to decide, which distribution is more efficient and cost-effective.25
Although, our main targets as retailers are the multibrand shops in these countries. These are
boutiques, which sells garments from different designers. These stores are the best
intermediaries between a designer and the customer if the designer lacks the financial
resource to open an own store in the given country. These multibrand shops help foreign
designers to enter markets abroad.
My task was to structure our competitors from all over the world and try to find the designers
whose profile is similar to the MM brand. After this step, I had to find the locations where
they sell their collections. From this data, I could build up a database containing the potential
multibrand stores where Makány Márta has the possibility to sell her garments. When the
company decides about the entering strategy, it will be a useful tool to contact these
retailers.26
24
See Appendix II/4- Fashion fairs in the Benelux States
Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey
26
See Appendix II/5- Competitor and Retailer Overview in Brussels
25
34
5. Primary Research27
Primary research involves getting original data directly about the product and market. Primary
research data is data that did not exist before. It is designed to answer specific questions of the
interest to the business. To collect primary data a business must carry out field research.
Qualitative and Quantitative Research
There are two basic methods for obtaining information: qualitative and quantitative research.
Qualitative research is called the ‘WHY’ research. Its basic purpose is to provide additional
insights and understanding of the problem at hand. This type of research is typically based on
a loosely structured non representative sample, unstructured interviews, or observations and a
non statistical approach to data analysis. The most widely used forms of qualitative
questioning are focus group, in-depth interview, projective techniques and observation.
•
Focus group is the most popular qualitative research technique because it is relatively
inexpensive which can be used in almost any situation requiring preliminary
understanding and insights. This technique has several advantages including:
stimulation, spontaneity, serendipity (making new discoveries), specialization,
structure and speed. Generally between 5 & 8 people are able to participate
constructively and a period of no more than 1.5 hours allows topics to be adequately
explored. The analysis and interpretation require expert and objective attention. The
discussions are usually tape recorded and objective and systematic analysis applied to
the content.
•
In-depth interview is an unstructured and direct way of obtaining information and is
conducted on a one-to-one basis. The respondent is probed in depth by a highly skilled
interviewer to uncover underlying motivations, beliefs, attitudes, and feelings on a
topic. The interviewer attempts to encourage the subject to talk freely and the direction
of interview is influenced heavily by the subjects answers.
•
Projective techniques are indirect methods of investigation, borrowed from clinical
psychology, in order to obtain data that cannot be secured through more overt
methods, e.g. direct questioning. The techniques enable and encourage participants to
involve themselves in relatively unstructured task related to aspects of consumption
27
McCarthy, E. Jerome; Perreault, William D.: Essentials of MARKETING, 6th edition, Irwin
35
behavior. It may be used in group or in individual sessions. There are 4 technical
procedures: association, completion, transformation and construction.
•
Observation is used when it is believed that the best way to find out what people do is
to watch them in natural settings. It can be done with or without the knowledge of the
observed. It may be done in a structured (record only certain things) or unstructured
(record everything that happens) way.
The advantage of qualitative research is that it is much cheaper than quantitative research. It
produces a good mechanism for coming to an understanding of customer attitudes and
motivations. It can also improve the efficiency of quantitative research. On the other hand, the
limitation of qualitative research is that it does not pick out small differences quite as well as
large-scale quantitative research. Moreover, qualitative studies do not provide samples that
are representative of the target population of the research.
That is why, many researchers use qualitative research in order to prepare for quantitative
research. Structured questioning gives more objective results. Samples can be larger and more
representative and various statistics allow drawing conclusions. For these reasons,
quantitative research is widely implemented by researchers which seeks structured responses
and can be summarized in numbers, percentages, averages, etc. Typical example of
quantitative research is survey, such as mail surveys, telephone surveys.
Advantages and disadvantages of Primary research
In most cases it is not possible to ask all existing or potential customers the questions that the
business wants answering. That is why primary research makes use of surveys and sampling
to obtain valid results. The main advantages of primary research and data are that it is up to
date. The research is specific to the purpose, we can ask the questions that the business wants
to know. The results are confidential, no other business have the access to the collected data.
In the case of online surveys and telephone interviews, the data can be obtained quite quickly.
On the other hand, the main disadvantages are that it can be difficult to collect the necessary
information and takes a long time. The collection is expensive and may provide misleading
results if the sample is not large enough or chosen with care; or if the questionnaire questions
are not worded properly.
36
Despite of the disadvantages of primary research, after gathering all the secondary
information, I still lacked sufficient data about the different needs of customers. That is why I
turned to primary sources and planned the process of conducting formal investigation.
5.1
Methods of working
I used different methods to gather primary data: in-depth interviews, questionnaire and
observation.
The aim of the personal interviews was to gain expertise and knowledgeable opinion
concerning the fashion markets from competent persons in these fields. I selected as
objectives of the interview those persons who have different roles in the markets and act like,
bloggers, retailers, etc. I wanted to make sure as well that I get the answers specific to the
purpose of my assignment. An additional reason why I chose this type of field research is that
this way I obtain the needed data quick and the collected information remains confidential for
the company. All together I conducted four interviews in Belgium with one blogger, Andrea
Campbell who is an active participant of the Belgian fashion world and have a huge
knowledge about this market and with 3 retailers operating on the bridal and prêt-a-porter
markets. In the Netherlands, I conducted 3 interviews with retailers selling prêt-a-porter and
bridal wear, moreover I interviewed dutchcatwalk.com that deals with the Dutch fashion
industry and supplied useful information for my primary research.
The observation method helped me to better understand the behaviour of our target group in
natural settings and to discover independent designer boutiques and the structure of the Belgian
and Dutch fashion market. Information was gathered by personal observation. The technique
was useful to gain information about the group of people buying in multibrand or designer
shops, the attitudes of shop assistants and qualities of products offered in these shops.
The questionnaire focused on our target group in order to discover their special needs, desires
and attitudes towards fashion. I applied online questionnaire because it saves time, effort and
money compared to mail, telephone or personal interviewing. The questionnaires targeted 50
buyers in both countries. I compiled the questions together with the management of the
company and paid attention to the different requirements for the appropriate questions.
37
5.2
In-depth analysis: personal interviews
The intention of the personal interviews was to explore the most relevant information about the two
markets. I wanted to confirm the results of my secondary research and gain opinions about the
market in general; who our competitors are; the potential retailers we can contact; the events
organized in the countries; and possible strategies entering the markets. The other part of my
questions was related to the interviewee’s competence whether it is blogging or a special market. I
asked the persons about their experiences and suggestions what I could include in my report which
is useful for the company.
Belgium- Interview with Andrea Campbell28
According to Andrea Campbell, “the Belgian fashion market is characterized by many
independent designers co-existing with the usual high street stores and designer boutiques. It
is quite competitive, but Belgian women are willing to pay for a quality product and
originality, if the price is right. There is a strong place in the Belgian market for mid-range
brands that sit between the high-end and mass market retailers.”
The centre of Belgian fashion world is Antwerp, where we can find the Antwerp 6, the bestknown designers and a really famous Art Academy. From this viewpoint, Brussels is lagging
behind. “It is quite strange that despite of the fact that Belgian people can afford buying from
the independent designers, and the market offers several options, she has the impression that
Belgian people have lack of taste and style. However, in the suitable setting, there is a group
of people who is open to new foreign brands and trends appearing on the market.”
Regarding the trendsetters and the main opinion leaders, the interview proved the fact of my
secondary research. The Antwerp Academy of fashion and the Antwerp 6 (Dries Van Noten,
Maison Martin Margiela, Ann Demeulemeester, etc) are good examples of designers that lead
the fashion ideas in Belgium. Besides their role as opinion leaders, they are the most
important Belgian designers, as well. The best-known designers according to Andrea are the
representatives of the big brands such as Chanel Gucci, Dior Luis Vuitton, etc. However, my
interviewee is rather interested in Alexander Wang, Stella McCartney and Hussein Chalayan.
28
See Appendix III/6: Interview questions
38
My fifth question referred to the topic of Fashion Weeks. “There is no Belgian Fashion Week
and the most Belgian fashion designers show in Paris. The only shows are the graduate
fashion shows for the Antwerp Academy of Fashion & La Cambre.” As Andrea explained it,
there is no point in organizing a FW in Antwerp or Brussels, because Paris is so close and
such a big event, that the Belgian one would count nothing in the fashion world. However,
several fairs are organized in Belgium, from which the “A Fair” in Antwerp is the most
famous. It gives the opportunity for the designers to show their talents and collections. These
fairs can be considered as the most important events in the Belgian fashion life.
Considering strategies how to enter the market, Andrea said, that “the easiest way to enter the
market for a foreign brand is through getting stocked in influential boutiques in Brussels, but
more importantly in Antwerp: boutiques such as Princess Blue or Sien in Antwerp and Mapp
or Icon in Brussels.” Moreover, fairs like ‘A Fair’ give another opportunity for a foreign
designer. One of the easiest ways to find contacts in Belgium is through other designers and
fairs are the best places to build up co-operations with others, which is favorable for both
partners. Once, a foreign brand is present in a Belgian shop, it is easier to expand further in
the country.
“In order to get known to the Belgian audience, it is about getting presence and being
profiled in the local fashion magazines.” The blog culture that Andrea is involved in is rather
targeting international inhabitants in Brussels, and not Belgians. She gains her information
from different sources such as Knack Weekend for Belgian news and normal sites like
Vogue.com, style.com, Vogue.co.uk, fashionista.com, the Moment blog, style bubble,
elle.co.uk and twitter posts from the Telegraph/NY times. Fashion blogs which Andrea
aspires to is fashionista.com and Antwerpisthenewparis.com.
“The best Belgian shops are Y-dress, Conni Kaminski, and some mix brand shops such as
Icon, Mapp or Stijl in Brussels. In Antwerp, we can mention Princess Blue, Ann
Demeulemeester, Dries Van Noten and Maureen De Clercq. The most significant department
store in Belgium is Immo.”
I also wanted to get an overview about the Belgian wedding habits. Andrea told me that in
Belgium it is often happen that couples live together and delay getting married like in many
European countries nowadays. The bride usually buys the dress and sometimes she goes to the
39
independent designers and gets custom dresses made. Mostly, the family organizes the event
and they do not hire a wedding planner.
Interview with retailers
Brussels Ceremony is a salon for wedding and evening clothes in Brussels. I conducted an
interview with the manager of the salon. I was interested in the bridal market and I wanted to
gain specific information about this segment. “Belgians do not spend so much money on e.g.
the bridal wear. They do not put such a big emphasis on this issue. That is why wedding
planners are not common, as well. The family rather wears the burdens of the wedding and
they organize the ceremony on their own.”
These facts were proved by the manager of another bridal salon, Pronuptia. The brand covers
two designers, who design the clothes in the boutique. The manager confirmed the facts heard
in Brussels Ceremony. They do not work together with wedding planners. Almost in all the
cases, the bride comes to choose the suitable wear for her wedding.
New generation is a boutique in Brussels specialized in prêt-a-porter collections. The manager
gave me an overview about this market segment. They sell not only designer’s clothes but
also jewelry, shoes and interior decoration. The store is advertised as an international one with
foreign designers. The manager works together with Danish, English designers, upcoming
talents. In her view, Belgian designers are more famous abroad than in their home country,
which is typical in many other countries, too. As the manager is Irish, she wanted a place
where international talents get scene, and she is always looking for something special. She
choose her designer either by travelling directly to the designer or just discovering something
special in a catalogue or magazine. It changes in every situation. She confirmed that Andrea
told me that “the Belgians are open to new brands and styles if it is packed in the suitable
form.” Our interview was successful as all the information given by her confirmed the data
heard before and helped me to gain an overall picture about the Belgian fashion market.
40
Netherlands: Interview with bridal stores
In the view of the employee of Honeymoon Shop in Rotterdam, “the Dutch bridal market is
quite conservative like its customers. However, in the last years change and a small
development can be experienced in the tastes and desires. Customers are getting more openminded than before to new trends and styles. In general, although, we can tell that the socalled ”princess-style” is successful in design.” It means that retailers have to sell these
“fairytale” dresses as these are saleable on the market. It is also a limitation, as commercial
brands have less opportunity on the market.
As wedding is important in the life of couples and Dutch people like making it memorable,
the expenditures can be really high. The price of the bridal dress can range from € 500 to €
4500. However, the economic crisis had an effect on the bridal stores as well. It means that
salons which sold before high-priced dresses had to turn to middle-range wear, etc.
“In most of the cases the family arranges the wedding and they do not hire a wedding
planner. Wedding planners can be found on fairs but they do not play such an important role
on the market.”
Most of the bridal stores choose the designers, with who they work together, on various fairs
in Italy, France or in the Netherlands. On the other hand, they receive e-mails from designers
all over the world. The key factor to success is to be innovative, creative and interesting.
According to the opinion of Amica’s manager, “sending an e-mail introducing your brand
can be successful if it raises the attention of the store. They will definitely answer and contact
you if the salon is interested and realize the opportunity in your garments.” Another
successful way entering the market is being present on various fairs. You can build up
contacts with other designers and possible clients in the foreign market.
Interview with Dutchcatwalk.com about the Dutch fashion market
Dutchcatwalk.com deals with the Dutch fashion market and with all the players involved in
fashion. I could not conduct a personal interview, that is why I have sent my questions via email.
According to Dutchcatwalk.com, “in contemporary culture, dressing has become a vital
element in performing one's identity. Netherlands has a creative industry of fashion, which
combines a mix of individualism, innovation and (post)modern design.”
41
Dutch fashion design is concentrated mainly in Amsterdam and Arnhem. “The Amsterdam
Fashion Week, The World Fashion Centre and the Amsterdam Fashion Institute are all
important elements in the fashion life, not to mention the Artez Fashion Institute in Arnhem.
The main opinion leaders and the trendsetters are celebrities and TV personalities.”
According to dutchcatwalk.com, the most successful Dutch fashion designers are Viktor&
Rolf, Frans Molenaar and Mart Visser. The best-known foreign designers are the
representatives of the big brands such as Versace, Lacroix, Louis Vuitton, etc. The wellknown fashion events are organized by organizations dealing with fashion, such as
Professional Association for Dutch Designers and the Dutch Fashion Foundation, responsible
for the Dutch Fashion Awards.
The Amsterdam Fashion Week is organized twice a year and is gaining growing reputation in
the last years. However, it is rather a significant event in Europe and not world wide. Other
important fairs are the Modefabriek and events organized by fashion associations. “The most
outstanding department stores in the Netherlands are de Bijenkorf and V&W.”
According to Dutchcatwalk.com, “entering the Dutch market for a foreign designer is not
easy, however different ways exist to appear on the fashion market, such as finding a TV celeb
who wears your dress. Another option can be taking part in a fair, which suits the profile of
the given designer“. These events give the opportunity for building up relationships in the
foreign country. The Dutch fashion industry is innovative with a lot of upcoming talents and
designers, that is why it is really important for a new brand to find the suitable segment and
the appropriate strategy.
5.3
Observation
Belgium
There are few designer districts in Brussels, where you can find the local designers, the multi
brand shops and the luxury brands as well. Department stores do not play an important role in
the life of these independent designers and multi brand stores. They sell their collections in
flagship stores, boutiques, etc. I visited few stores to observe the motives, attitudes and
opinions of the buyers. I conducted my observation method in the two important designer
districts of Brussels: Rue Antoine Dansaert and Avenue Louise- Bailli Baljuw. In the case of
designer shops, I experienced a high level of service offered by the shop assistant. I spent
42
around 15 minutes in each shop and I met 1-5 customers in each boutique. I felt that the
buyers have a close connection to these shops and the possible level of customer retention is
very high. Most of the cases, the clients had personal talks with the shop assistants and they
really relied on the opinion of the “expert”. The boutiques pay attention to their customers and
appreciate that the customer chose them among plenty of other options. The price range of the
products is between € 150 and € 600 in general.
Table 8: Multi-brand shops in Brussels
Multi-brand shops that can be the potential clients of the Makány Márta brand
1st district
2nd district
Rue Blanche
Francis Ferents
Cotélac
Louis 54
Olivier Strelli
Sekel
Lula
New generation
FLM Fashion
Source: Table made according to personal observation
Netherlands
Visiting the designer districts of Rotterdam and Amsterdam, I tried to find out which product
line of Makány Márta has the biggest chance to successfully enter the Dutch market. As the
wedding dresses have the highest prices among the products, they earn the highest profit, and
the Dutch bridal market is significant enough, I would suggest starting with the introduction
of the Makány Márta bridal wear. The number of bridal stores in the Netherlands, hence the
number of our potential clients is remarkable and they offer a high quality for their clients.
The salons meet the requirements of the company regarding garments offered in the stores
and service quality.
5.4
Questionnaire design: targeted at customer needs
Questionnaires are a choice of market research instruments in the hand of market researchers
to collect primary data. A questionnaire consists of a set of questions presented to
respondents. Because of it flexibility, it is the most common tool used to collect primary data.
Questionnaires need to be carefully developed, tested before they are used on a large scale.
The first step in the process is to carefully choose the questions, their form, wording and
sequence. The questionnaire should use simple, direct, unbiased wording. In addition, the
form of questions asked can also influence the response.
43
The lead question should create interest. The personal, more difficult questions should be
included toward the end of the questionnaire so that the respondents do not become defensive.
The questions should flow in a logical order. We can distinguish between open-end and
closed-end questions. In my questionnaire, I used both types. Open-end questions allow
respondents to answer in their own words and reveal more because they do not constrain the
answer. On the other hand, closed-end questions specify all the possible answers and
respondents make a choice among them. These questions provide answers that are easier to
interpret and tabulate when we analyze data.29
After constructing the questionnaire, the market researcher must design a sampling plan.
Three questions arise: Who is to be surveyed?, How many people should be surveyed?, How
should the respondents be chosen?. In my case, the target population was Belgian and Dutch
people interested in fashion. The age group was between 19-39 and mainly women. I decided
to survey 50 people from my target audience. I used a simple random sample to choose the
respondents for my survey.
After the sampling plan, the contact method has to be determined. I uploaded my
questionnaire on a website, in this way making it available for my target group. It took only
two minutes to answer my questions which made the process for the respondents easier. Using
the Internet is a big advantage for the market researchers in the collection process, because it
saves time, effort and money compared to mail, telephone or personal interviewing. Thanks to
modern computers and telecommunications, data collection methods are rapidly improving
nowadays.
After collecting the respondent’s answers, the –next-last-step is to extract the findings from
the collected data. The researcher tabulates the data and apply different statistical techniques
and decision models to discover additional findings and correspondence. The final step is
presenting the findings for the management. We should not overwhelm the decision-makers
with statistical techniques and lots of numbers, but rather we should focus on information
which is relevant for the decision-making.
29
Kothler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey
44
Findings of the Questionnaire30
I analyzed and evaluated the results of the questionnaire question by question.
In both countries, the sample consisted of 80% females, and 20% males. There was no
missing data for this variable. The age group was between 19 and 39, which corresponds with
the target group of the Makány Márta brand.
How much do you care about fashion?
The respondents could give their answers on a scale from 0 to 10, where 10 means top
interest. The average was 7.1 and 7.7 in Belgium and in the Netherlands, respectively. It
means that the respondents are interested in fashion, care about their outfit and the type of
clothes they buy.
Informing about fashion
How often do you w atch fashion new s?
Netherlands
16
18
34
24
8
1 times a w eek
2 times a w eek
Never
Daily
Belgium
0%
46
20%
40%
24
16 6 8
60%
80% 100%
Monthly
From this diagram we can see that the majority of the respondents (46%) watch fashion news
1 times a week in Belgium. The next group is 2 times a week with 24%. However, 16% of the
respondents do not watch fashion news at all. The Dutch diagram shows different results. The
majority of the respondents (34%) never watch news about fashion. On the other hand, a
significant proportion (24%) is interested in fashion on a daily basis.
30
See Appendix III/7- Questionnaire
45
Where do you inform about fashion? Belgium
42% of the Belgian respondents inform about
fashion mainly from magazines. Magazines
22%
42%
Magazines
Online w ebpages
26%
Fashion bloges
10%
Friends
are followed by Fashion blogs, friends and
online web pages with 26%, 22% and 10%,
respectively. In the Netherlands, magazines
stand on the first place with 64%, which is
Where do you inform about fashion?
Netherlands
significant compared to the 28% of online
8%
web pages.
0%
28%
0
Magazines
64%
Online w ebpages
Fashion bloges
Friends
Personal style
As an open-ended question, the respondents could give different answers regarding their own
style.
What is your presonal style considered to be
like? Belgium
What is your personal style? Netherlands
8%
12%
20%
42%
Casual
24%
Leisure
Leisure
Artistic
14%
10%
Artistic
28%
26%
16%
Modern
Casual
Modern
Trendy
Sporty
In Belgium, the most of the respondents (42%) gave the category of leisure clothes. It is
followed by artistic, modern and casual with 24%, 20% and 14%, respectively. In the
Netherlands, the respondents gave more categories, and the most popular one was trendy and
casual with 28% and 26%.
Favorite designer
The respondents gave a long list of fashion designers, such as Conni Kaminski, Olivier
Theyskens, Vandenvos, Balenciaga, Gucci, Dior, Victor& Rolf or Christian Louboutin.
Approximately 25% of the respondents do not have a favorite designer.
46
Influences on personal style
What influences you the m ost w hen you buy
clothes?
We can realize that the different
Trend and Fashion
66
20
14
on the Belgian and Dutch buyers.
Belgium
Wearability and
Comfortability
28
42
12
In Belgium, the 42% of the
The brand
18
respondents are mainly influenced
Other: Speciality
0%
50%
categories have different impact
100%
by wearability and comfortability
when they buy clothes. Trend and
fashion is also important with 28%. On the other hand, 66% of the Dutch respondents stated
that trend and fashion have the biggest impact on them. Wearability and comfortability
account for only 20%.
The greatest proportion of the
Who or What influe nce s your s tyle ?
Belgian respondents stated that
44
Netherlands
18
trends have the biggest impact on
38
their style. On the other hand, the
Magazines
12
Belgium
18
52
18
Friends
Trends
Myself
0%
20%
40%
60%
80%
100%
Dutch respondents confirmed it,
but in their case magazines also
play an important role when they
create their own style.
Expenditure
How much are you w illing to spend on one
item of clothing? Belgium
How much are you w illing to spend on one
item of clothing? Netherlands
12%
18%
-50 euro
82%
-50 euro
50-500 euro
50-500 euro
88%
We can conclude from the diagram that in both countries, the 80% of the respondents are
willing to spend between 50 and 500 euro on one item of clothing. The respondents probably
thought for prêt-a-porter collections.
47
How much do you usually spend on clothes in
one month? Belgium
How much do you usually spend on clothes in one
month? Netherlands
14%
20%
50-100 euro
44%
50-100 euro
36%
100-200 euro
-50 euro
56%
30%
-50 euro
100-200 euro
200-500 euro
0%
The diagrams show that there is a small difference in the spending of the Belgian and Dutch
respondents. The majority (44%) of the Belgian respondents spend € 50-€ 100 on clothes
every month. They are followed by the group (36% of the total) who spends under € 50.
20% stated that their monthly spending on clothes is between € 100 and € 200. In the
Netherlands, it looks quite differently. More than half of the respondents (56%) are willing to
spend € 50- € 100 in a month on clothes. Moreover, 14% of the respondents have expenditure
between € 200 and € 500 in every month. In general, we can state that the Dutch respondents
are willing to spend more on clothes.
Where do you usually go shopping?
Where do you usually go shopping?
Department store
Netherlands
42
48
Belgium
42
16 18
0%
20%
40%
60%
10
24
80% 100%
Second-hand shop
I am brand loyal, only
in the shop of a given
brand
Multibrand shops
The
place
where
the
respondents
usually
go
shopping
is
different
in
totally
the
two
countries. The 42% of the
Belgian respondents prefer
department stores. It is
followed by multi brand shops, the shop of a given brand, and second-hand shops. 48% of the
Dutch respondents stated that it depends on the clothes and not on the shop. Furthermore,
42% prefer multi brand shops and 10% said that they usually buy online.
Openness to buy new brands
The respondents could give their answers on a scale from 1 to 5, where 5 means top interest.
The average was 4 and 4.2 in Belgium and in the Netherlands, respectively. It means that the
respondents consider themselves open to buy new, foreign brands.
48
If you see a new brand, do you look for it on the Internet?
Belgium
Netherlands
Yes
-51%
No
20%
19%
Seldom
80%
30%
How often do check the website of different brands?
Belgium
32%
8%
10%
--
Rarely
I don't care
Not really
Often
Netherlands
31%
-8%
11%
The influence of advertisements on decision-making
The respondents could give their answers on a scale from 1 to 5, where 5 means totally. The
average was 2.8 and 3.3 in Belgium and in the Netherlands, respectively. It represents that the
respondents are not really influenced by the advertisements of fashion brands when they
choose their clothes.
If yes, please specify which has the biggest impact:
Print
42
Netherlands
10
20
22
City light
Virus- e.g. youtube,
f acebook
42
Belgium
38
20
TV
Online- e.g. banner
0
50
100
49
5.5
Results of the Primary Research
On the basis of the primary research, I can draw the conclusion that from the 3 main lines of
Makány Márta (wedding dresses, evening dresses, prêt-a-porter collection), the prêt-a- porter
has the biggest chance to enter the Belgian market first. The style, the collections that can be
found in the Belgian designer shops and the opinions of my interviewee supported the same
strategy.
On the other hand, in the Netherlands I would suggest to start the introduction of the Makány
Márta Bridal Wear. These garments have the highest prices which mean that we have to sell
less to reach the same profit than in the case of the prêt-a-porter collections. The number of
bridal stores in the Netherlands, hence the number of our potential clients is remarkable and
they offer a high quality for their clients. The salons meet the requirements of the Makány
Márta brand regarding garments sold and service quality offered in the stores. The same
distribution channel can be used for the Makány Márta Collection in the long-run.
50
6. Recommendations, Action plan
-Preparing for the export activityThis section is dedicated to introduce and list the main elements and characteristics of my
idea how the current situation could be improved and the problem could be solved within the
organization.
Action plan
A business plan serves mainly three functions. Firstly, it is a plan that can be used to develop
ideas about how the business should be conducted. It is a chance to refine strategies and
"make mistakes on paper" rather than in the real world, by examining the company from all
perspectives, such as marketing, finance, and operations. Secondly, it is a retrospective tool,
against which a businessperson can assess a company's actual performance over time. The
plan can be used as the basis for a new plan. Thirdly, most lenders or investors will not put
money into a business without seeing a business plan. When the plan is prepared for internal
use, it is more detailed. For external use, it focuses on the subject which is important mostly.
In our case, I have compiled an action plan for the export activity and I used the various parts
of a business plan as a basis for my planning: Marketing plan, Price policy, Financial Analysis
and NPV calculation. I set up a goal, which should be achieved, determined the deadlines and
the employees responsible for the activity. Moreover, I formulated the different tasks that
have to be done in the process.
I.
Marketing plan
a) Advertisements
• Apply of introductory ads, such as in Vogue Sposa
• Fairs
• Magazines
b) PR
• Objective: formulation of favorable picture about the company
51
• Communication: journalist, editor, bloggers, trendsetters ( to make contact,
continuous communication, newsletters in every 2 weeks)
• Celeb dress-up and red carpet events
• Virus marketing: mood movies on the Internet, events,
• Generating content and news continuously in the website and on the blog
c) Sales Promotion
• Discount for the retailers after a certain amount of order
d) Indirect communication
• Influence on forums
• Generation of news on advertising WebPages (adsoftheworld.com,
adforum.com, lurzersarchive.com, shots.net, contagiousmagazine.co.uk)
• The same process on sites dealing with trends ( trendhunter.com,
trendcentral.com)
e) Online communication
• Community sites: facebook, twitter, tumblr, blog, myspace
• Presence on a daily basis
• Strategy on a weekly basis about the content and the news
The marketing activities have to be started from 1 January 2010. The marketing manager,
Emese Juhász is responsible for the coordination of the project. The tasks are carried out by
the intern of the company.
II.
Price Policy
Pricing
The prices of the products are given by the company. The company decided that the same
prices should be applied as in the case of other foreign customers from Italy, Japan, etc. That
is why I do not have to deal with pricing strategy.
Discounts for retailers- 5%
Belgium: prêt-a-porter collection- Makány Márta Boutique
Discount after 20 pieces of dresses
52
Netherlands: bridal collection- Makány Márta Bridal Wear
Discount after 10 dresses
III. Financing plan
This plan will be the base of financial function of the export activity. The previous market
study helped me to make this financing plan. It refers to the period of January 2010December 2010.
We do not establish an office in the Benelux States, the company will keep in contact with the
retailers from the Hungarian office.
Financial Analysis
The balance sheet and the income statement are the keystone of the company or a project
activity. I have taken notice of account and tax law and the local regulations in the course of
making the financial plan. The data were determined according to previous study and
operative laws. I assume that the laws and regulations will be constant.
Our income comes from the garments sold for the retailers. The target is 5 bridal stores in the
Netherlands in the 1st year and 5 multi brand stores in Belgium. The average amount of sold
items for 1 retailer is 10 dresses for the bridal salon/ year and 20 dresses for the multibrand
store. The number of sold items for 1 retailer was calculated according to the market research
and market demand.
Assumptions:
1. Revenue:
Netherlands: 5 stores*10 garments* € 1300= € 65 000
Belgium:
5 stores*20 garments* € 350 = € 35 000
€ 100.000
53
2. Costs
• Marketing cost: 10% of the revenueÆ € 10 000
• Shipment expense: Two different types for the different product lines:
o 1 big package for the ready-to-wear collection/ retailer- approximately € 100 for
the shipment of 1 package
o The bridal wear shall be shipped 1 by 1, with value-assurance included, €85/
each item
o € 100* 5 retailers = €500 and €85* 50 bridal dress= €4250 Æ €4750
• Variable cost: according to previous experiences, the cost is 40% of the price of a
given dress Æ € 40 000
ƒ
Direct labour
ƒ
Direct material
• Payroll: € 2100
o The sales and marketing managers are responsible for the export activity. Their
salary: € 750/ each employee Æ € 1500
o Their tasks are helped by two interns. Their salary is € 300/ internÆ € 600
• Tax: 25% of the profit according to the Hungarian law
• Payroll Taxes: € 840 (40% of the payroll)
• Total Costs: € 10 000 +€ 4750+ € 40 000+ € 2100+ € 840= € 57.690
3. Profit
Revenue- Costs= Profit
€ 100 000- € 57 690= € 42 310
Income statement for exporting
Profit and Loss (thousand €)
Sales
Direct Cost of Sales
Other
Total Cost of Sales
Gross Margin
Gross Margin %
Expenses:
2010
100
40
0
40
60
60%
54
Payroll
Sales and Marketing and Other
Expenses
Depreciation
Insurance
Rent
Payroll Taxes
Other
Total Operating Expenses
Profit Before Interest and Taxes
Interest Expense
Taxes Incurred (25%)
Net Profit
Net Profit/Sales
2,1
10
0
0
0
0,84
4,75
17,69
42,31
0
10,58
31,73
31,73%
Break –even analysis
Total Costs= Total revenues
Marketing expense: if we decide to spend € 4000 to generate income before the export
activity (1st fair and ads), the gross margin has to be € 4000 to break-even and achieve 0
profit. It means that we have to generate at least € 6668 in order to break-even.
Gross margin =€ 4000
€ 40000/ € 60000= x/ € 4000
Total Cost= € 2667
Sales= € 6668
The sales manager, Krisztián Hackl is responsible for the sales activities. His work is helped
by another intern. From the 1st January, two interns should be hired for 6 months period in
order to help the tasks of the marketing and sales manager. Their salary is included among the
costs.
Deadlines:
•
January- March 2010: making contact with the bridal salons and the multibrand shops
from the database which I have built up.
•
April- June 2010: cooperation with the retailers (the target was set above), setting
agreements, writing contracts.
55
•
June-August 2010: shipment, building- up strong relationship with our existing clients
(discounts, strong marketing activity)
•
September- December 2010: searching for new customers in the target countries,
expanding on the market according to the previous practices. Strong marketing activity
during the whole year. 2 other interns can be hired, or on the basis of the profit, the
company can decide to hire new employees competent in these fields.
NPV Analysis
This project has certain delivery dates. Let’s take 3 different options.
1. All the incomes and costs appear in the same time, at the beginning of the project
2. All our costs appear in the beginning of the project and all our income in 1 year time
(pessimistic version). In this case all of our costs accrue in the very first moment (1st
January) and all of our incomes come in the last minute, 31/12/2010.
3. All our incomes appear at the beginning and we only have to pay costs in one year
time (optimistic version).
NPV is counted as the PV of all our cash flows, or as a difference between the PV of all our
income and the PV of all our expenditures. (NPV = PV (ΣI - Σc = PVi - PVc)
1. Pessimistic version:
PV = c* (1/ (1+r)n
For all our costs n = 0, therefore PV (costs) = c*1 = c
Where:
c: is our cash flow (cost or income)
r: is our inflation rate
n: is the number of years
So PV (costs) = C meaning: costs
PV (income)
PV = c*(1/ (1+r)1
56
NPV = PVi – PVc
Inflation rate: 4, 9%
PV (income) = PVi= 100 000/1,049= € 95.329
PV (costs) = PV c = € 10 000 +€ 4750+ € 40 000+ € 2100+ € 840= € 57.690
NPV = €95.329- €57.690 =€ 37.639
2. Centrist version
In the next case all of our costs and incomes accrue in the very first moment (1st January).
PVi = € 100.000
PVc = € 57.690
NPV= € 100.000- € 57.690= € 42.310
3. Optimistic version
PVi = €100.000
PVc = €57690*0,95328885= €54.995
NPV= € 100.000 – € 54.995 = € 45.005
Difference: € 45.005- € 37.639= 7366€
There is more than a slight difference between the different solutions. When looking at the
pessimist and the optimist version, it is visible, that the Net Profit differs as much as 7366€
more, than 16%. In reality, incomes and payments are in different times during the year. The
calculations proved that it is extremely important to pay attention on incomes-timetable.
Fortunately, designer clothes are usually paid up-front, and some suppliers are ready to set
longer payment dues. Not being a financial institution, it is a pretty financial result to earn
16% on financial transitions.
57
7. Evaluation and Conclusion
The aim of my dissertation was to prepare a market research about the fashion market of the
Benelux States and to explore the potentials given by these countries. To the research’s
objective that consisted of analyzing the markets and investigating the possibilities, we have
clearly seen that several possibilities exist in order to enter these foreign markets. After
gathering, analyzing and putting together all the collected information, I was able to provide
recommendations for the company, a solution, a possible strategy that serves the company’s
interest.
The action plan proves the success of my research as it serves as a formulated strategy for the
export activities. My market research, both the secondary and primary data collection helped
me to explore the market potentials and gave an in-depth overview about these markets. It
was important to use several market research instruments in order to better understand the
market from different perspectives. Moreover, the databases that I have built up during my
research will be the key factors when the company contacts possible new clients and starts its
marketing activity in the given countries.
To conclude I do feel that the product of my mission at Makány Márta serves its aim and it
provides the management with the right solution. I consider the action plan as a useful tool
for future export activities that is pertinent and can serve its purpose in the long run.
58
BIBLIOGRAPHY
Literature
•
Dibb, Sally; Simkin, Lyndon; Pride, William M.; Ferrel, O.C. (1997): MarketingConcepts and Strategies, 3rd European edition, Houghton Mifflin, Boston
•
Malhotra, Mares K. (2003): Marketing Research, Prentice Hall, New Jersey
•
McCarthy, E. Jerome; Perreault, William D.: Essentials of MARKETING, 6th edition,
Irwin
•
Porter, Michael E. (1980): Competitive Strategy: Techniques for Analyzing Industries
and Competitors
•
Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey
•
Stanton, William J.; Etzel, Michael J.; Walker, Bruce J.: Fundamentals of Marketing,
9th edition, McGraw- Hill Inc.
Articles/ Magazines/ Reports:
•
Datamonitor Europe: Womenswear in the Netherlands- Industry Profile, United
Kingdom, August 2009
•
Datamonitor Europe: Womenswear in Belgium- Industry Profile, United Kingdom,
August 2009
Internet Sites:
•
Holland trade- pioneers in international business
http://www.hollandtrade.com/sector-information/design-and-fashion/?bstnum=3208
http://www.hollandtrade.com/sector-information/design-and-fashion/?bstnum=3209
http://www.hollandtrade.com/sector-information/design-and-fashion/?bstnum=3210
•
Dutch Fashion Foundation: http://www.dutchfashionfoundation.com
•
Marlies Dekkers: http://www.marliesdekkers.nl/
•
Warmenhoven- Venderbos: http://www.warmenhoven-venderbos.com
•
Antwerp Six: http://www.kuleuven.be/iccp/2003/iccp11/start.htm
•
Viktor&Rolf: http://www.viktor-rolf.com/dispatch.htm
•
Amsterdam Fashion Week: http://www.amsterdamfashionweek.com
•
Modefabriek: http://www.modefabriek.nl
59
APPENDICES
I- 3 labels of the Makány Márta brand:
1. Makány Márta Bridal Wear
Page 61
2. Makány Márta Collection
Page 61
3. Makány Márta Boutique
Page 61
II– Additional context information to the secondary research
4. Fashion Fairs in the Benelux States
Page 62
5. Competitor and retailer overview in Brussels
Page 62
III– Additional context information to the primary research
6. Interview questions
Page 64
7. Questionnaire
Page 65
60
I- 3 labels of the Makány Márta brand:
1. Makány Márta Bridal Wear
2. Makány Márta Collection
3. Makány Márta Boutique
61
II/4.: Fashion Fairs in the Benelux States
Fashion Fairs- Benelux States
Name
City
Time
Notes
Belgium
EXPOFIL
Brussels
08.09 - 11.09
2009
European Spinner's Fair – Yarns and fibres
at the origin of creation
INDIGO BRUXELLES
Brussels
08.09 - 11.09
2009
International Exhibition of Creative Textile
Design
MARIAGE
Charleroi
22.01 - 24.01
2010
Wedding fair
A FAIR
Antwerp
February 2010
New Luxury Brands, Fashionable wear and
Denim and Sportswear
Amsterdam International Fashion Week
Netherlands
Amsterdam
22.07 - 26.07
2009
MILLIONAIRE FAIR –
AMSTERDAM
Amsterdam
10.12 - 14.12
2009
International Luxury Goods Industry Fair
PLEIN 13- FASHION FAIR
Amsterdam
15 Jul, 2010
organized by World Fashion Centre (WFC)
SPOSATEX FASHION
FAIR
Houten
15 Jun, 2011
Apparel, Clothing, Fashion, Wedding
Rotterdam
16-17 Jan,
2010
organized by J.E.S. Organisatie & Advies
AIFW
LOVE&MARRIAGE
Luxembourg
BRIDAL SHOW
Luxembourg
14-15 Nov,
2009
Wedding Fair
II/5: Competitor and Retailer overview in Brussels:
Multibrand and designer shops in Brussels
Name
Brands offered
Accessability
Competitor overview
Annemie Verbeke
Only own label
www.annemieverbeke.be
Martin Margiela
Only own label
www.maisonmartinmargiela.com
Johanne Riss
Only own label
www.johanneriss.com
Filippa K
Only own label
www.filippa-k.com
Maje
Only own label
www.maje-paris.fr
Norden
Only from Scandinavian designers
www.ilovenorden.com
Louise Assomo
Only own label
www.louiseassomo.com
Ogotai
Only own label
www.ogotay.com
Pierre Gauthier
Only own label
Hartford
Only own label
Armelle G
Only own label
Dominique Lila
Only own label
Alix&Jo
Only own label
Mais il est oú le
Only own label
www.pierre-gauthier.be
www.hartford.fr
Tel: 02.513.75.65
www.domlila.com
www.alixandjo.be
www.ousoleil.com
Soleil?
62
Potential Customers
Charlotte aux
Pommes
Own Shop
Houben
Jean-Paul Gaultier, Jil Sander, Miu Miu,
Prada or Issey Miyake
A.P.C, N-Hollywood, Atelier 11
www.charlotteauxpommes.com
www.own.be
Nina Ricci, Undercover, Yamamoto, Comme
Tel: 02.502.32.05
des Garcons
Soho
Plein Sud, Irié Wash, Irié, Ebéne by Patrick
Tel: 02 374 63 99
Assuline, Milly, Stuart Weitzman, Mackage,
Balthazar
Ventcouver, or Belstaff
Paul Smith, Filippa K, John Smedley or
www.balthazar22.com
I’Erotokritos
Icon
Essentiel
No Concept
Isabel Marant, Vanessa Bruno, Les Prairies
de Paris, Acne Jeans, Sandrina
Fasoli,
Humanoid,
Chloé,
Indress,
See
by
Paul&Joe, Citizens of Humanity.
Multibrand store
Chloé, Vanessa Bruno, Bérénice, American
www.icon-shop.be
www.essentiel.be
Tel: 02.511.84.20
Vintage, Les petites, Bash, Paul&Jo
Privejoke
Multibrand store
www.privejoke.be
Kusje
American Vintage, Nümph, Yumi, Repetto,
Tel: 02.514.71.56
Fred Perry
Cachemire Coton et
Missoni, Moncler, Church, Sartore, Loyd
Soie
Maish, Blanc Kelly, Mathilde, Heschung
Dansart@Uccle
Hugo Boss, Max Mara, Gérard Darel, Jeff,
Vert Chasseur
Missoni, Joseph, Barbara Bui, Isabel
www.cachemirecotonetsoie.com
www.dansartatuccle.be
Elisa Blue, Sandwich
Tel: 02.375.79.43
Marant, Vanessa Bruno
Seventy Nine
Schumacher, Coast, Aspesi
Tel: 02.513.19.79
Eighty Nine
Coast-Weber-Ahaus, Aspesi
Tel: 02.375.51.61
Elles
Patrizia Pepe, Joseph, Majestic, Citizens,
Tel: 02.346.46.19
Jucca, Berenice et Juicy Couture
Parachute Jump
Jeff, Essentiel, Coast
www.parachutejump.be
Harmony
Veronique de Nijs, Nicole Farhi, Corléone,
Tel: 02.647.82.42
Overland
One step, Sandwich, La Fée Maraboutée,
I.Code
Tel: 02.640.67.44
Expresso
Ayna
Herry, Twist, Dept, Ipekyol, Chilli Pepper
Tel: 0476.51.71.07
Tabou
Exelle, Lidira, Tabou, Ulla
www.boutiquetabou.com
63
III/6: Interview questions
1)
What can you say in general about the Belgian/ Dutch fashion market? What are its
characteristics?
2)
Who are the trendsetters, and the main opinion leaders? Could you name some?
3)
Who are the most important Belgian/ Dutch fashion designers?
4)
Who are the best-known foreign designers according to you?
5)
Where is the Belgian/ Dutch Fashion week organized? Is it famous worldwide?
6)
What are the most important events regarding fashion?
7)
What is the easiest way to enter the market for a foreign brand? What do you think?
8)
Could you name some famous department stores in Belgium/ Netherlands?
Special information about wedding habits:
9)
Could you tell me some facts about the Belgian/ Dutch wedding habits?
a) How important is the wedding in Belgium/ Netherlands?
b) Does the bride buy or just lend the wedding dress? How much do they spend?
c) Do they hire a wedding planner or the family arranges everything?
d) Role of wedding planners?
e) Special habits?
Extra questions for bloggers:
10) How can the bloggers, such as you influence the market?
11) How do you get your information about fashion?
12) Favorite Belgian/ Dutch fashion journalists?
13) Do you have competitors in blogging?
14) Who is your ideal (icon)?
15) Which are the best Belgian/ Dutch shops?
64
III/7: Questionnaire
1. Sex:
 Female
 Male
2. Age status
-18
 19-39
 40-59
 603. How much do you care about fashion? (0 is you don’t care, 10 is the top interest)
__________________
4. How often do you watch fashion news?
 Daily
 2 times a week
 1 time a week
 Monthly
 Never
5. What is your personal style considered to be like? ( E.g. romantic, artistic, leisure, etc.)
______________________________________
6. Who is your favorite designer?
______________________________________
7. What influences you the most when you buy clothes?
 Trend and Fashion
 The brand
 Prices
 Wearability and Comfortability
 Other (Please State):__________________
8. Who or what influences your style?
 Magazines (if yes, please specify which ):__________________
 Trends
65
 Friends
 Celebrities
 Other (please specify): __________________
 No (please specify why): __________________
9. Where do you inform about fashion?
 Magazines
 Online web pages
 Fashion blogs
 Friends
 Celebrities
10. How much are you willing to spend on one item of clothing with an appropriate brand
image?
 - 50 euro
 50- 500 euro
 500 – 1000 euro
 1000 - 2000 euro
 2000 euro11. How much do you usually spend on clothes in one month?
 - 50 euro
 50- 100 euro
 100 – 200 euro
 200 - 500 euro
 500 euro12. Where do you usually go shopping? (Please underline the two most frequent ones)
 Multi brand shops
 Department store
 Second-hand shop
 Online stores, such as Ebay or Net-a-porter
 I am brand loyal and only in the shop of a given brand
 It depends on the cloth not on the shop
66
13. Do you consider yourself open to buy new brands? (1 no, 5 totally)
__________________
14. If you see a new brand, do you look for it on the Internet?
 Yes
 No
 Seldom
15. How often do check the website of different brands?
 Often
 Rarely
 Not really
 I do not care
16. Do the advertisements of fashion brands influence you in choosing clothes? (1 not at all, 5
totally)
__________________
If yes, please specify which has the biggest impact:
 Print
 TV
 Online (e.g. banner)
 Billboard
 City light
 Virus (e.g. youtube, facebook)
Thank you for your answers!
67