Marketing Plan

CALVIN KLEIN

Name

Tony Lin Lung Lung and ernie ong

Lecturer

Frank Gonzales

Date

24/09/2009

Word count

8400

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Abstract

Calvin Klein is a respected and well-known brand that have flagship all around the world
with a huge customer base. Calvin Klein is a brand name that being categorize as a mid-
range product that target mid-range income customers. They have a reputation that they
spent years building it up which reach the successful current stage of their company.

Calvin Klein is most famous for their minimalism design and clean cut look of monochrome
color scheme that suits all ages of customers. They are also one of the brand that push
creative advertising ideas into the market which using iconic faces that later successfully
help the models to become famous actors themselves.

Calvin Klein are able to reach its current state of success is no meant of luck. They have full
analysis of the market and strategically layout a plan for their company journey to date.
They emphasize most on advertising to push their products but they also identify their
market potential and market environment from their original store to the economic
potential of other countries CK flagship stores.

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TABLE OF CONTENT

Abstract -------------------------------2
Table of Content -------------------------------3
List of Illustrations -------------------------------4
1.0 Introduction -------------------------------5
2.0 Methodology -------------------------------5
3.0 Background of Calvin Klein -------------------------------6
3.1 Location -------------------------------7
3.2 S.W.O.T of Calvin Klein -------------------------------8
3.3 Marketing Strategy Applied in Calvin Klein -------------------------------12
3.3.1 Relationship between Target Markets, -------------------------------12
Marketing Mix and It Environment
4.0 Introduction to Marketing Environment of Calvin Klein -------------------------------15
4.1 Environmental Scanning -------------------------------16
5.0 Microenvironment -------------------------------17
5.1 Suppliers -------------------------------17
5.2 Marketing Intermediaries Competitors -------------------------------18
5.3 COMPETITORS -------------------------------19
5.4 Employees -------------------------------21
5.5 Customers -------------------------------21
5.6 Public -------------------------------22
6.0 Macroenvironment -------------------------------23
6.1 Political – Legal Environment -------------------------------23
6.2 Economic Environement -------------------------------24
6.2.1 Business Cycle -------------------------------25
6.2.2 Inflation -------------------------------26
6.2.3 Unemployment and Income -------------------------------27
6.2.4 Resources Availability -------------------------------28
6.3 Technological Environment -------------------------------30
6.4 Social Cultural Environment -------------------------------31
7.0 NEW PORPOSAL IDEAS -------------------------------33
7.1 Calvin Klein Vibrant (cK Vibrant) -------------------------------33
7.2 Green Products -------------------------------34
7.3 Online Market -------------------------------36
7.4 Partnership -------------------------------36
7.5 Campaigns -------------------------------36
7.6 Fashion show -------------------------------37
7.7 New Series (Calvin Klein – the classic) -------------------------------39
7.8 Privilege Card -------------------------------40
7.9 Interior Design -------------------------------41
8.0 Conclusion -------------------------------44
9.0 List of References -------------------------------45

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LIST OF ILLUSTRATIONS

Figure 1. Retrieved on 20 October 2009 By Author

Figure 2. Retrieved on 20 November 2009 from http://en.wikipedia.org/wiki/Calvin_Klein

Figure 3. Retrieved on 20 October 2009 By Author

Figure 4. Retrieved on 20 October 2009 By Author

Figure 5. Retrieved on 20 October 2009 By Author

Figure 6. Retrieved on 20 November 2009 from http://www.marketingteacher.com

Figure 7. Retrieved on 20 October 2009 By Author

Figure 8. Retrieved on 20 October 2009 By Author

Figure 9. Retrieved on 20 November 2009 from http://en.wikipedia.org/

Figure 10. Retrieved on 20 October 2009 By Author

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1.0 INTRODUCTION

In order to build up a well-known fashion brand one must understand the market potential
and the economic potential in that location. Which in turn this research adopt a famous
brand Calvin Klein to investigate how the company built up from scratch and what kind of
marketing strategy they use to reach their current status.

A brief history background of Calvin Klein in its most respective areas were shown with an
elaborate explanation of different kind strategy marketing that are adopt and used by Calvin
Klein with examples, S.W.O.T of CK and also some visual proposal of improvements.

2.0 METHODOLOGY

The background and profile of Calvin Klein has been researched through internet resources
while Calvin Klein ION Orchard on site analysis was conducted through interview with the
actual designer of that space. While business plans research were conducted through a
series of reading from books, elaborating information and apply on the basic use of a
fashion retail shop.

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3.0 BACKGROUND OF CALVIN KLEIN

Calvin Klein Ltd. Was a coat shop in York Hotel,

New York City in 1968 founded by Calvin Klein
himself. Currently it is owned by Phillips-Van
Heusen. Mr. Klein himself was described as “the
supreme master of minimalism”. Current date of
Calvin Klein have developed a series line of
products such as, Calvin Klein collection, ck Calvin
Figure 1. Calvin Klein, Ion, Singapore Klein, Calvin Klein, Calvin Klein Sport, Calvin Klein
Jeans, Calvin Klein Home, Calvin Klein Golf, Calvin
Klein Underwear, sleepwear, watches, fragrance, eyewear and other home line collections
too.

Calvin Klein brand has always been about sex.

Their mission statement : to use sex as a weapon.
Calvin Klein’s products are usually portrayed by a
series of sophisticated models with confidence,
Figure 2. Calvin Klein Logo masculine or famine sides and a minimalist
photography. Which in turn reflect utmost
through their company logo.

Calvin Klein logo has a grey background with black color wording. The logo itself is in its
most minimalist form that shows complete integrity, confidence and expertise to their
brand, a clear cut symbol of their name that is easily recognize across the room, provoke
deep emotion to customers. Their logo is also a direct reflect of their product color scheme
and minimalism design to it.

Calvin Klein himself once said “I’ve always had a clear design philosophy and point of view
about being modern, sophisticated, sexy, clean and minimal. They all apply to my design
esthetic.” Calvin Klein’s unwavering vision of minimal designs and wearable urban styles are
part of what make him an icon: his widely recognized marketing genius is also part of the
package.

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 3.1 LOCATION

Calvin Klein has just recently open their biggest

flagship store in Ion, Singapore. It is located at
level 3 lot 09 and has an area of 390 sqm.

Ion Orchard towering 218 meters over Singapore’s

premium shopping precinct and it is the most
striking landmark to pierce the orchard skyline.
The attraction lies in more than its stunning visual
appeal.

Ion also houses six global fashion brands like the

Cartier, Christian Dior, Dolce & Gabbana, Giorgio
Armani, Louis Vuitton and Prada and other more
tenants.

Figure 3. Street Map of Ion Location

Figure 4. Calvin Klein Shop Location at Level 3 of Ion

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3.2 S.W.O.T OF CALVIN KLEIN

STRENGTHS

Calvin Klein being able to sustain a long period in fashion retail market is not due to luck.
They have their strengths that bring them to their success now.

1. Cater a Wide Variety of Products

Through the years, Calvin Klein have produce a wide variety of sub-lines brand
that cater the needs of different age people and also a wide variety of different
products for different customers such as, bags, watches, glasses, jeans, suits,
men’s wear, women’s wear, bed sheets, sports wear, etc.

2. Strong Company Philosophy and Statement

Statement built by the founder himself, Calvin Klein to use sex as the weapon
and a clear design philosophy and point of view about being modern,
sophisticated, sexy, clean and minimal has been pass down through thick and
thin. This built a strong foundation of the company’s journey for all employee
that is clear cut without any misunderstandings.

3. Strong Advertising
They have always use sex as the weapon so does this apply to their advertising
strategy. As they adopt beautiful and sophisticated well built men and women
for their advertisement that makes every design of theirs to have a strong
beautiful outcome after using it encourages consumers to purchase.

4. Huge Loyal Customer Base

For a season brand, they have a huge customer base, potential customer and
loyal customers in their pockets. As long as they are able to maintain the
connection with them, their market will never go down.

5. Good Services

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 Their employees in every branch are well trained to serve all walk-in customers
and they even provide alteration if the customer needs it.

6. Strategic Locations
For store locations, Calvin Klein has always target well-known shopping complex
with units that are easily access and seen by public.

7. Online Store
Calvin Klein do provide online catalogue, online purchasing and online shipment
to customer door step.

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WEAKNESS

Weakness of a brand is usually being compare to other similar brand meaning their
respective competitors.

1. Plain Interior Design

For preserving their all time color scheme and minimalist design, interior design of
CK shops have always remain plain and simple without any stunning interior design.
Enhancing the interior design of their flagship shop can often bring surprises
attention.

2. Price Range for Variety Products

Being able to produce a lower price range products may extent their customers base
horizon.

3. Conservative Design
Calvin Klein fashion designs are sort of conservative in a sense which they trying to
preserve their original style. At times going for an out of the box design may refresh
customer expectation and bring in new style and attract new customer base while
maintaining the old.

4. Membership Card
Providing membership card can make sure CK keep track of customers information
for survey and maintain a close relationship with them. Allowing discounts and
update letters or emails to inform them of new arrival makes them feel valuable.

5. Sustainable Goods
According to current serious global warming issue, we starting to be aware and alert
of the condition of the earth suffering which will in return destroy mankind. So most
companies starts to invest in sustainable goods which also bring good faith to
mankind which gain the support of public. CK can do the same for their product this
can gain support and good faith from their customers.

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OBJECTIVE

Calvin Klein objective is very simple, to create a brand name that sell itself. Which means
they spent effort into advertising and using sex as the weapon to promote fashion sense
that are produce by CK to makes consumer looks extremely good while wearing it.

It is a brand of sophistication and appealing to both sexes. A leading brand that provides
variety of products to different ages of consumers and variety of usage products.

THREATS

Base on flagship of Calvin Klein located in Ion Singapore. There are a few threats that can be
an obstacle to them.

1. Other Branded Fashion Retail Shops

There are other well-known retail shops located around CK which gives the
consumers chances and choices to wonder into other shops before going in or more
opportunities for consumers to select and compare prices which result in purchasing
from other shops.

2. Same Concept Retails Shops with Cheaper Price Range

This means same level of retail brand such as Ralph Lauren and Armani Exchange
may have similar design or known as alternative goods that are at lower price.

3. Current Economic Crisis

The economic of a country will bring a huge effect to the sales of products in retail
shops. Which means currently the down cycle of asia economic has create an impact
to the sales of CK. How do they bounce back up their sales target.

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3.3 MARKETING STRATEGY APPLIED IN CALVIN KLEIN

Philosophy of Marketing
Marketing is the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, services, organizations and events to create and
maintain relationship that will satisfy individuals and organizational objectives. According to
the Chartered Institution of Marketing (CIM) in United Kingdom, marketing is a process of
anticipating, identifying, and satisfying customer requirements profitably. In other words,
marketing enable the company like Calvin Klein to sell it product according to the
consumer’s demand which involved process of market research, new product development,
product life cycle management and pricing channel.

3.3.1 RELATIONSHIP BETWEEN TARGET MARKET, MARKETING MIX AND IT ENVIROMENT

Competitive

Political Product Distribution

Social
Legal Target Cultural
Market

Price Promotion

Economic Technological

Figure 5. Elements of Marketing Strategy and Its Environmental Framework

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 From figure 5, we can see that the target market, the group of people that Calvin
Klein selected as to market their products, services or ideas will direct the company
activities and affect the marketing decision making of the company is in the center of the
circle. The marketing strategies that we focus on are product, promotion, place and price
which also recognized as Marketing Mix, the blending of the four elements to match with
the needs and preferences of a specific target market will affect the target market
immediately. These decisions will affect by the environment factors which are in the outer
level of the circle. These are the factors that cannot control by a marketer but still have to
be in consideration as it gives a big impact on the success or failure of the product. The
external factors included the competitive environment, political-legal environment,
economics environment, technological environment, and the social-cultural environment. It
will eventually affect the marketing management’s ability to develop and maintain
successful transactions with it target market.

By studying each and every environment carefully, it can assist the marketer to come
out with a set of strategy that complies with the needs and want of the target market and
subsequently gaining profit for the company because of the successful of the product.
Product is the goods, services and ideas that the company going to market it for the target
market. Here, the target market maybe is the end user, the intermediaries or other
businesses that need it for further production and government market. The product must
be match with the taste and preference of the purchaser, and most important, the
fundamental needs and wants of the consumer. The second marketing strategy, promotion
is how the seller wants to promote his product. It required communication between the
seller and buyer, it maybe directly market to the buyer like direst selling or indirectly
promote their products by using means likes advertising, sales promotion through some
media or channel.

Following by the third element, place, and the right quantities of goods must be sell
in the right time at a right place to boost sales. It included all the modes of transportation of
air, ground and sea, warehousing of goods, inventory control, order processing, and
selection of market channel, wholesale or retail selling. The final and the most critical
elements, price, will determine the purchase decision of the buyer. It must be reasonable to
the customer yet it profitable to the seller. The space in justification of price usually will

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leads to the competition of sellers, some they may compete by offering lower price than it
competitors but some will prefer maintain a constant level of pricing as to maintain it
product quality and the brand name of the product. These circumstances can be easily
observed between luxury goods and daily product. Luxury goods like Louis Vuitton or Calvin
Klein handbag will only remain it price or increase the pricing although it may hold back new
customer from buying their product, but the brand still have a group of loyalty customer
which will keep on using it product as it may reflect that they are in the higher class and
they are well-off enough to use the product.

In today world, marketer will more emphasis on relationship marketing which give
the company opportunity to gain competitive advantage against it competitors as in
maintain good relationship with all it stakeholders who are customer, employees, suppliers,
and the shareholders. It will subsequently establish and maintain mutually beneficial
relationships with all the contributing parties. New product can be developed and the
existing products can be improved to meet the changing consumer’s demand, therefore
new customer will become a frequent user of the product and finally he or she will become
the supporter of the product and will recommend the product to his or her friends. It rely
heavily on Information technology as a large amount of information is required to analysis
the customer’s taste, preferences, price sensitivity, lifestyle and campaign response.

The products sold by Calvin Klein will be exist in the retail and fashion market. We
are going to apply all these marketing concepts in the marketing of the retail and fashion
market; hence, we are going to analyze the environment where the product stands.

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4.0 INTRODUCTION TO MARKETING ENVIRONMENT AROUND CALVIN KLEIN

Figure 6. The Marketing Environement

The environment of marketing consists of internal environment, micro environment

and macro environment which contain the forces and actors that affect the marketing
decision making of Calvin Klein, which related to the management ability to develop and
maintain successful transactions with it target market by offering both opportunities and
threats.

The internal level environment included forces like men, money, machinery,
materials and minutes (length of time) exist within the organization and are under the
estimation and control of the management. The micro environment will directly influence
the organization, the company, suppliers, marketing intermediaries, competitors, and
customers are located within this environment. It is the level which also creates a
competitive environment between firms. The outer level of the marketing environment is
macro environment, it included factors that the organization cannot control and not easy to
predict. Political, social cultural, economical and technological factors will continuously
change and the company must be flexible enough to adapt on it in order to survive in the
industry. Hence, globalization means that there is always the threat of substitute products
and new entrants into the market, international trade very much depends on all these
factors.

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4.1 ENVIRONMENTAL SCANNING

Environmental scanning is the acquisition and search of information about events,

trends, and relationships in an organization’s external environment, the knowledge of which
would assist the management in planning the organization’s future course of actions.
(Aguilar, 1967) It is a process where the firm collect information from the external
environment to identify and interpret the marketing environment that they in. By analyze
the information in hand, they are able to interpret the potential trends of market and
therefore prudence decision can be made on oversee the opportunities and threats of the
company.

In the case of the retail and fashion marketer, the marketer has to collect various
information from all the potential sources like the political background, social cultural
background, technological background and economic background of the target market.
Besides that, the marketer also have to access to the background of the potential
competitors within the market. It is to identify the opportunity that the said retail and
fashion market products survives and succeed in the market and what kind of competition
and threat that the product will face with.

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5.0 MICROENVIRONMENT

In microenvironment, the factors that will affect the success of the products are
suppliers, marketing intermediaries, competitors, employees, customers and the public.

5.1 SUPPLIERS

In order to provide goods or services, the company has to obtain raw materials from
the suppliers. Today, increasing in price of raw materials will have a knock effect on the
marketing mix strategy of the organization and price may be forced up as a result. To
ensuring the competitiveness of products, it is very important for the firm to achieve cost
effectiveness by maintaining closer supplier relationships.

This is because the supplier bargaining power is likely to be high when there is a
concentration of supply and the switching costs; the costs that incur while switching from
one supplier to another are high. Perhaps it is because of a manufacturer’s processes are
depend on the specialist products of a supplier. For an example, production of a machine
required a specific semiconductor that comes from a single supplier. Intangible services like
management consultancy, corporate tax advisors may also be the supplier of the company.

In order to maintain it cost effectiveness, the production of the clothing wear and
accessories should acquire the ingredients from different supplier and not stick on one.
Buying from different suppliers can ensure the cost of production maintain at a lower level
as you can get discount or offer from the different suppliers. If we stick on one, the supplier
may charge you with a higher price and you cannot compare the other supplier’s price. By
comparing the price from all the suppliers and the market price, it will be easier for the
company to get a good deal yet maintain the quality of the product.

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5.2 MARKETING INTERMEDIARIES

Marketing intermediaries is the firms that help the company to promote it product
by selling and distributing the goods to the final buyers, the end users. They are the
middleman of the business, the resellers, the transportation system, the marketing, the
services agencies and the financial intermediaries.

The company is to do a survey on the product before the launching of it. It may be
done by using the company own marketing department to do the survey or hire the
marketing company to work on it. The results will influence the marketing strategy as in it
pricing, the place to sell, the kind of promotion it should do.

Since the target market of the product Is Singapore, the main transportation system
that the company can use is highway to distribute the product within the country. Usually,
the resell of the product will be in shopping complex.

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5.3 COMPETITORS

The competitive environment in marketing is a situation whereby the organizations vie with
one another to satisfy the customer’s needs and wants. In order to be the winner in the
competition, the decision maker must be continuously monitor the competitor’s marketing
activities and understand the competitor’s strategies. The organization has to be concerned
with the extent of direct rivalry between themselves and the competitors.

Compete for
Type of Competition

Direct Consumer Indirect

Competition Purchase Competition

Calvin Klein
Type of Customer Markets

Consumer International
Markets Markets
Reseller
Markets

Business Government
Markets Markets

Figure 7. The Type of Competition and The Type of Customer Markets a Firm Face

As shows in Figure 7, there are three types of competition which is direct competition on
whereby the firms compete on similar products like Motorola and Samsung compete on flip
phone, indirect competition where the competitors produce substitute products against the
organization, the example here is the competition between Pizza Hut and Domino’s Pizza.
For the third type of competition, the firms compete for the consumer’s purchase since they
have limited purchasing power. The competition became more obvious when it goes to the
middle class and working class target market, since their discretionary buying power force

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them to make a choice among products. For an example, by using the same amount of
money, will the consumer choose to buy a Volkswagen Cars or a vocation to Japan?

And also, in Figure 7 we can see the different kinds of competition market due to the
difference in target market that the marketers are required to do more than simply adapt to
the needs but to gain strategic advantage by positioning their offers strongly. Since there is
no a single marketing strategy that is the best of all, each firm have to consider on the
available resources, the company’s size and their capacity while formulating relevant
strategies.

Time based competition emerges as another key factor that influences the success or
failure of the product. Globalization and information technology reduce the trade barriers
and increase the efficiency in conduct businesses, the firm have to develop a strategy that
can distribute their goods and services more quickly than the competitors. It enable the firm
to improve it product quality, reduce costs and expand the range of product that it offer in a
flexible and high responsiveness way.

The recent trend of the competition is more and more company are now focus on
the global market and the existence or development of the global customers will increase
the competition among the competitors, it is due to the globalization which leads to the
increase in international trade and internet based business. Company can now sell their
product online, our product here, the clothing and accessories line can also be market to the
overseas as to expand it market and gain more market share.

Some analysis should be done to identify the rivals of the product. In Singapore, the
direct competitor of the product is Armani Exchange and Ralph Lauren which is the same
range fashion product. There is only a slight different on the product price and quality, if the
retail and fashion market product is to enter the market, the very first analysis it should be
focus on these two brand in order to gain competitive advantage over them.

Indirectly, other brand like Ted&Baker, Dunhill, Gucci, LV, Prada, etc, will also affect
the sale of the product. Although the target market of the indirect competitors maybe
different, but all these brand got a wider and different target range of market as it is
categorize at different class and higher purchasing power customers.

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 The company should develop a series of marketing strategies. It started by asking the
question should we compete? To answer this question, the company has to access it own
profile, it financial ability, resources, objectives, and it expected profit essence. Secondly, if
the company decided to compete, which market should it enter? It required the firm to look
for greater opportunity by using the limited resources that the company own, it rely heavily
in the sales personnel, advertising budget and the product development capability of the
firm. Finally, the firm should answer the question how. How should it compete? By analyze
and gone through the marketing mix decisions in order to gain competitive advantage,
product differentiation is a critical point here. It can be fulfilled by providing good quality
product, reasonable pricing and good customer services.

5.4 EMPLOYEES

Relationship marketing emerged as the latest trend of marketing. It not only

included external marketing which focus on customers and marketing intermediaries but
also internal marketing which aim to satisfy the employees of the organization.

The company has to satisfy the employees first before the external customers
because they are the one who deliver satisfaction to the external customers. It helps to
create an organization culture whereby the employees will become more customers-
oriented; they can maintain good relationship with the customer and provide good service
to them. Positive attitudes towards their job and good comments on the organization will
indirectly influence the customer to believe in the company’s products and therefore create
loyalty to the company.

5.5 CUSTOMERS

It is clear that the organization survive on the basis of meeting the needs and wants
of the customers by providing the right product in a right time and right place. Failure to do
so will result in a fail of strategy. There are five types of customer market that the company
needs to put in consideration.

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 Consumer market consists of personal consumer, household that buy the product for
personal consumption and not for business use, business market which usually buy for
further processing, reseller market like warehouse which will resell the rejected product or
past seasons products and gain profit, government market which focus on public services
like military and infrastructure, and international market where international trade takes
place.

Different customer has different wants and needs; their demand on goods will be
different according to their personal income, background and their own desire. So, it is not
easy for the company to satisfy all the customer wants and needs, what a firm can do is to
satisfy the majority. Products that produce have to meet most of the taste and preference
of the customer in order to get higher sales volume.

5.6 PUBLIC

Publics are the group of people that have actual or potential impact on the ability of
an organization to achieve it objectives and goals. There are financial publics where the
company’s fund s come from, the media publics which assist the company in the promotion
of the product like newspaper, television program and radio. Besides that, the government
publics that the management must also taken in account in subject matters like government
development, marketers must always consult the company’s lawyer on some issue like
product safety, truth in advertising and some latest rules and regulations in business.

The citizen action publics like consumer group, environmental group and minority
group have a huge impact on marketing decision too as it is one of the immediate way for
the company to keep in touch with the is customer and citizen groups. The attitudes of local
publics and general publics which included neighborhood residents and community
organizations will also have a big impact on the products and the organization. So, it is
common that the company appoint a general relations officer to deal with this group of
people to maintain a good image for them.

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6.0 MACROENVIRONMENT

6.1 POLITICAL – LEGAL ENVIRONMENT

In political-legal environment, it consists of laws and interpretation of law which

required the firm to operate under the competitive conditions and aiming to protect
consumer’s right. Laws, government agencies, pressure groups that influence and limit
various organization and individual in a given society will be the factors that affect the sales
of the product. The government also plays an important role in marketing as the
government developments and plantation project will affect the demand in some raw
material and there will be opportunities for firm to increase their sales

To launch the product into a new market place, we must consider the political
climate of the market place, the amount of government activities and the stability of the
political environment. The political arena has a huge influence upon the regulation of
businesses, and the spending power of consumers and other businesses. The
businesspeople need to consider on how stable is he political environment, will government
policy influence laws that regulate or tax your business, what is the government’s position
on marketing ethics, what is the government’s policy on economy,

All the regulations and policies that the government required will eventually affect
the decision of the marketer on the design of the product, the labeling, packaging,
distributing, advertising and the way to promote the product.

The recent trend of the political legal environment is the increasing in legislation
which will encourage competition among business and ensure a fair market for goods and
services. Issues like product safety, fair trade practices, environmental protection was
actively establish lately, it very much affect the product standard, product liability,
commercial transaction and competitive behavior of firms.

These rules may require the company to make costly design changes, to retool
substantially, and to add new quality control system. For an example, a season of clothing
design or accessories products must gain special approval before launching of brands that
duplicate those already existing on the market, such as additional clothing sub line, or new

23
watches product line from Calvin Klein. Since all these regulations are always change, the
marketers must work hard to keep with changes in order to gain more market share.

Another recent trend is that the enforcement of government agency is changing.

Agencies like Federal Trade Commission, Consumer Safety Product Commission have some
discretion in enforcing the law; they can have major impact on a company’s marketing
performance. Beside that, government deregulation on international trade,
telecommunication and banking area bring some new opportunities for the marketer. It is
because of them aware that overregulation protects inefficiencies, restricts new entrant,
and create inflationary pressures. Countries in Europe and Asia being liberated since the
trade barriers are crumbling due to political unrest and technology innovation.

The increase of the important in legislation, government agency enforcement and

the emphasis on ethic and socially responsible actions with the growth of public interest
forcing the business to comply with the policies as to protect the consumer right. The
product must be label with it material made and manufacture location from where. Besides,
proper way of cleaning and washing of the product must also be show.

6.2 ECONOMIC ENVIRONMENT

The economic environment consists of forces that influence consumer buying power
and marketing strategies. They include the stage of business cycle, inflation, unemployment,
resources availability, and income. Marketers need to consider the state of a trading
economy in the short and long run. This is especially true when planning for international
marketing. Their spending pattern very much depends on their level and the distribution of
household and discretionary income.

The economic performance of a country is usually measures by it Gross Domestic

Product (GDP), usually on a per capita basis after accounting for inflation.

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 Business Cycle

Inflation Unemployment

Resources
Availability
Income
Economic
Environment

Figure 8. Forces in Economic Environment

6.2.1 BUSINESS CYCLE

Figure 9. Business Cycle

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 The stages in business cycle are prosperity, recession, depression and recovery.
Prosperity period is the time where consumers are able to spend more and can afford luxury
goods; they are willing to spend more for premium versions of well known brand like
Toyota’s Lexus, LV’s handbag and Tiffany’s diamond ring. During this period, the marketer
can try to increase the price to widen the profit margin, expand their product line by
increase the promotion effort. The distribution of product can be increase by expand it
market line through export. During the recession period, the marketer will turns to market
their product in a lower price. It is due to the customer in this period are tend to purchase
product which is more basis and functional, they are most cost consciousness in this time.
What a marketer can do in this period is to lower the product pricing and eliminate marginal
production. At the same time improve it customer services and increase it promotion to
stimulate customer’s demand on the product.

The creepy stage in the business cycle is the depression period where the consumer
reluctant to spend as their income is low and the economic of the country is in it lowest
level. Here, the consumer rather save their money in bank than taking it out for spending,
they will only spend on the necessities like foods and clothes. Recovery stage in the business
cycle starting to strengthen the country’s economic level and increase the consumer’s
purchasing power and their ability to buy, they willing to spend more and can afford more
indulgent product.

6.2.2 INFLATION

Inflation devalues money by reducing the products that the consumer can buy by using the
same amount of money. For an example, 5 years ago we can buy two bottle of coke with
SGD$ 1.50, but now we can only get a bottle of coke by using the same amount of money.
Inflation rate alone will not affect the society much as if it increases at the pace that
anticipated and the household income also increases in that pace. But if the inflation rate is
out of the prediction of the economic and it faster than the increase in income, the goods
and services will become less affordable for the consumers especially the one with fixed
income.

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 Besides that, it also increase the marketer’s cost, the wages and the cost of raw
materials will gradually increase and leads to the increase in price. The outcome of this
circumstance is the consumer will be more aware and conscious about the price of the
product by giving three different kind of response, the may buy immediately as they scared
of the increase of price, they may postpone the purchase or they may look for the substitute
of the product.

The annual rate of inflation in Singapore rose 3.7 % in Q1 2006 from Q4 3.4% last year,
largely duel to the 18% increase in retail fuel prices in February. The increase in inflation
associated by increase in income does not affect much of the consumer purchasing power
and their purchasing pattern. Some more the retail brand is not consider a luxury product
but merely a brand that most of the consumer can afford, so the slight increase in inflation
rate would not give a big impact on the sales of the product.

6.2.3 UNEMPLOYMENT AND INCOME

Unemployment is a situation where the proportions of people who quote under the
work force do not have job but actively seeking for it. It is very obvious that when the nation
is in it recession period, the unemployment rate will increase but when during the period of
prosperity and recovery, the unemployment rate will gradually increase and may reach a
level that all resources are fully employed.

The unemployment rate affect the market by modify the consumer purchasing
behavior as they may spend less because of the relatively small portion of income and they
tends to save their money rather than spending it. Although some nations may given out
money for them, but that portion of money can only enable them to spend on some
necessities like food and clothes.

Income influences consumer buying power in a way that when income increase but
the inflation rate remain the same or only increase a bit, the consumers are willing to spend
more than before. By studying the income statistic and trend with the nation’s inflation rate
and other economic factors, the marketer can estimate the market potential and specify the
target market, develop plan for targeting specific market segment.

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 The unemployment rate in Singapore is relatively low and the household income is
increasing. It indicates that Singapore has a mature and stable market that the business can
invest in new product with ease. The consumer in this market has the purchasing power to
consume more goods and services and they are willing to try on new products. So,
Singapore is considering a piece of cake for most of the local and global company due to it
increasing economic activities and market potential. It will be less difficulty for the retail
brand to launch into Singapore market as most of the consumer is able to afford and willing
to purchase on this type of product.

6.2.4 RESOURCES AVAILABILITY

The natural environment involves all the resources that are needed as inputs by marketers
or that are affected by marketing activities. Beyond the depletion of many earth’s valuable
product, the overall health is declining and the natural environment are now being the
major worldwide issues that the many of the business and public is facing. Today, forest is
shrinking, lakes are dying, the quality and quantity of water also declining and the
temperature is rising due to the depletion of ozone layer.

Shortage of raw Increased

materials Pollution

Natural
Resources

Increased Emergence of
government Eco-friendly
intervention group

Figure 10. Trends in Natural Environment

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The very immediate trend that we can see from the natural environment is the shortage of
raw materials, although air and water may be infinite, but the increasing level of air
pollution and water pollution chokes many of the world’s large cities activities. The world
population is expected to double to 11 billions by 2020, but currently the renewable
resources like forest and food already showing a shortage associate with the explosive
population and strong economic growth in the developing country. Moreover, some
nonrenewable resources like petroleum, oil, coal and various minerals is already an
immediate issue to the nations.

The second trend in the natural environment is the increased pollution, which
damage the quality of the environment leads to the rising temperature which causes the
melting of polar ice, flooding of coastal plains, and also the infection of nontropical
populations with diseases like malaria, hepatitis, yellow fever, cholera and meningitis. The
disposal of chemical wastes, the dangerous level of mercury in ocean, the littering of
nonbiodegradable resources like plastic and polystyrene will also increase the chemical
pollutant in the ocean.

These factors, leads to the increased intervention of government into the natural
resources management and those rules and regulations that the government set up in order
to protect the environment have to be concerned seriously by the marketers. Beside that,
emergence of some environment protection group also giving pressure to the businesses.
The responding of all these factors, consumers are now more demanding on ecologically
safer products, recyclable or biodegradable packaging, better pollution control and ore
energy efficient products. Here is a very example from McDonald’s. The McDonald’s has
eliminated it polystyrene cartons and now using smaller and recyclable paper wrappings and
napkins. Companies nowadays have aware of the link between a healthy economy and
healthy ecology to create environmental sustainable strategies.

The clothes and products purchased can be bag in the kind of materials that are
recyclable and not disposal materials like paperbag rather than plastic bag. Hence, the
product will be more welcome by the government and the public as it is part of the effort to
rescue our earth. Since the environmental protection group and the public giving good

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comment on the product, the sales of the product will increased and it also help the product
to gain a competitive advantage against it competitors.

6.3 TECHNOLOGICAL ENVIRONMENT

Technology is a vital for competitive advantage, and is a major driver of

globalization. It is the most dramatic force now to shape our world as it able to create new
technology, create new products and create new opportunities for the company. The
technology environment changes rapidly, thirty years ago, while people are still using letter
for long distance communication, no one can imagine we are now using electronic mail and
Skype to communicate and interact.

Infocommunication industry is changing the scope of the telecommunications

industry by merging the telecommunications, computing, and audiovisual sector. Nowadays,
the businesses operation is also under revolution by changing the way how goods, services
and ideas are exchanged, and how individuals learn and earn as well as interact with one
another. Hence, the technology development affects the marketing activities by the creation
of new media or new selling tools, new channels of distribution or modifying of existing
channel, use of new materials, and monitoring marketing research by means of scanners. An
example here is in the agriculture sector, more and more farmers are now beginning to
plant commercial crops of genetically engineered corn, cotton, soybeans and potatoes. This
disease-resistant livestock and plants is a mean to crop losses from salty soil and it enable
the farmers to earn more revenue.

Many firms are now more focus on it research and development activities to search
for a wide range of promising new products and services, ranging from solar energy, electric
cars and cancer cures. The R&D teams in the company are meant to develop a stronger
marketing orientation in the company. The challenge of the teams is to make practical,
affordable products to the consumers.

The marketer has to conduct a series of tests with the R&D team in the company to
come out with a successful adult soft drink in the market. By gathering information from
various means and conducts survey on the product before the launching. Besides that, the

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marketer can use some new channel like internet to promote it product and monitor the
sales more efficiently. The marketer should aware that new technologies create new
opportunities, in the mean time, it also replace old technology.

6.4 SOCIAL CULTURAL ENVIRONEMNT

In the social cultural environment define the relationship between marketing and its culture
within the society. Hence, the marketers should cultivate sensitivity to the changing society
and the shift of demographic as population growth and age distribution changes. The
cultural environment made up of institution and other forces that affect a society’s basic
values, perception, preference, and behaviors. People grow up on a particular society that
shapes their basic beliefs and values. They absorb a world view that defines their
relationship with others. The social and cultural influences on business vary form country to
country. It is very important that such effects are considers, the marketer have to be very
sensitive in cages in the society in order to sustain in the market place.

The age, the gender, geographical distribution and the lifestyle of the population
have to be taken into account when the marketer wants to market a new product into the
market. Beside, the demographic factor also play an important role to make sure an existing
product is capable to sustain in a market.

The changing family structure from traditional male-dominated and close-structures

family to more and more single individuals, adults of the same sex or both sexes live
together, unmarried adults and single parents family have also changed their lifestyle.
Double income family are increasing and this made more goods and services affordable to
the family since they are now having more income for spending. On the other hand, the
aging of population changing the wants and needs for the whole population, demand on
health care product increase as a result of aging population and demand on baby products
also increase as a result of increase in birthrate.

More and more people shift from the rural area to large metropolitan area to search
for job opportunity causing the different in geographic distribution and lifestyle. Although
their living cost and expenses will be increase much in big city compare with in the rural

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area, most of them still wanted to shift in as gain a better living there. People are now
demand for more luxury life style and starting to enjoy their life by joining club or
association. They are now more concern on self-actualization and self-esteem. They seek for
products, brands, and services as a mean of self expression. They will now go for happy
hours and enjoy themselves in the evening after work, for them, it is one of the ways they
can release stress and interact with others in order to get more friends. And yet, consider
the impact of popular music groups, movie personalities, and others celebrities on people’s
hairstyle, clothing, and sexual norms, it proved that a marketer who can predict the future
shift and trends have more opportunities to success and sustain in the market.

Today people focus on physical fitness and love to have outdoor activities; food
producers have found growing market for natural products like natural cereal, natural ice
cream, and health food. People tend to purchase those products which labeled with low fat,
low calories or low cholesterol. Marketing communications are using appealing natural
background in advertising their products, some may also use some sport stars to be their
ambassador to show that it is a healthy product.

Diversity in cultural also have a huge impact on marketing. There are different ethnic
groups in the market; they are different in belief, cultural background, unique
characteristics, religion, taste and preference. A good example here is the different between
the three ethnic groups in Malaysia, Chinese, Malay and Indian, they are practicing different
kind of life style and belief in different religion. Here, the marketer should be aware that
Malay is not allows to take alcohol, it is forbidden by their religion. Hence, the market of
adult soft drink that contains alcohol will loss a market of Malay which consider a big group
in Malaysia.

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7.0 NEW PORPOSAL IDEAS

Giving Calvin Klein fresh ideas to generate larger income and new customer base, we
propose a few ideas that will help the company to achieve that.

7.1 Calvin Klein Vibrant (cK Vibrant)

This is a new brand I propose for CK to embark the journey on. It is known as
Calvin Klein Vibrant (cK Vibrant). Which is a totally new sub-line that
penetrates CK new market as a fresh look to the company products. It sway
away from the traditional Calvin Klein concept design for their products
which is very conservative and minimalism, instead cK Vibrant promote wild
and colorful vibrant clothing to the market that is why it is call cK Vibrant.

So we will use this new sub-line to launch a new face for Calvin Klein which
creates new season of clothing line, new look of bags, new accessories, new
advertisement and new poster advertising. With some example shown
below. Other than that we created a mission statement for this sub-line: “Be
at ur limit”.

Women’s Wear Wild and Vibrant Color Clothing Line

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34
35
Men’s Wear Wild and Vibrant Color Clothing Line

7.2 Green Products

This project is to let Calvin Klein develop a image of producing green products
to gain public support and also help save the world. For example, using
recyclable paper bag or clothing bag for every purchase to the customer. Also
Calvin Klein can produce their product using recyclable textile materials such
as recyclable wool, linen, silk, cotton, hemp, etc. Indeed, this product can
actually launch itself an independent sub-line also. Below are some visual
examples of sustainable bags.

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37
7.3 Online Market

Calvin Klein views internet sales as a prime source of future growth. We

purpose to create online website buying for customer which can let
consumer browse CK items at home and order online. Which will then later
be deliver to their door step. This will generate a new target customer base
also which is internet base consumers.

7.4 Partnership

Wholesale could be the development of private labels with department

stores, for example cK Vibrant launched a partnership with Ecko. As a part of
cK Vibrant expansion plans, CK can partner with Ecko and debut in their
stores with plans to expand to all Ecko flag-ship stores. The brand potentially
allows cK Vibrant to target large demographic seeking high quality

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 merchandise at lower prices. The private label partnership represents a
significant opportunity for growth in the Wholesale segment for CK, as the
company could enter more partnerships with new brands with Ecko or other
department stores.

7.5 Campaigns

Armani Exchange can also try support Cancer campaigns and eco friendly
campaign to promote a good image for the product and gain support from
the public. However, there is opportunity to develop these campaigns.

7.6 New Series (Calvin Klein – the classic)

Calvin Klein – the classic is a series for those

fans of CK who simply love the brand CK. It
designs in such a way that is simple yet
brings out the style of Calvin Klein.

Meaning this series of CK, they do not have

to use money to advertise on. People would
just buy it without a 2nd thinking.

Calvin Klein – the classic basically is a must

buy for CK fans and who is new in CK.

Picture shown is 2 examples for CK-classic.

A unisex T-shirt and Man bag.

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7.7 Privilege Card

We notice that Ck doesn’t have a discount card or any privilege card. Make this one as
one of an idea to increase sale is good, even this is such a common marketing plan in the
market yet is still useful.

To bring up to the next level, to be different with others, this can be not only a privilege
card; can be a master card, visa card. Apply it with different bank. As what I design, I
used AMERICAN EXPRESS for example.

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7.8 Interior Design

This is the original Floor

Plan.

As you can see

everything is boring,
like a normal high class
retail, of course to be
understanding up this
period, CK is a very
successful company,
people doesn’t go to
the shop for anything
but their item.

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One point is important in CK shop is they are always use the same material and lighting for
all the CK shop. (As shown below)

We could not say it is not one of the points to let them successful. The material and lighting
which is always metal and cold blue lighting brings out the style of CK. So we decide to
change the lighting to green. Let they have a new fresh look.

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Display island.

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From floor to ceiling height.

Create a modern style for the retail shop.

Shocking effect.

Material used: CK metal and light green lighting.

8.0 CONCLUSION

All the above factors will affect the marketing of Calvin Klein, the marketing
strategies that the marketer formulate should be suitable to apply in the market. The
product, the place, the promotion and the price of the product should be set in a reasonable

44
and profitable range. Also in order to break through the conservative way of doing things in
Calvin Klein, one must first understand the different technique to successfully influence the
market of a product hence generate creative and new ideas to be imply a new marketing
strategy way that no one has yet in the market.

Calvin Klein brand name already stands for itself in the heart of many consumers, to
be able to generate and attract new potential customers, we have to think out of the box.
We have to try new ways to promote the brand or new product lines that slightly move out
of the conservation sophisticated and minimal design. This department can be a sub-line
created to stand-alone to test out the potential market.

Pushing lower price range items and higher price range items can also widen the
customer base but it has its own advantages and disadvantages for consideration. A choice
of maintaining the target consumer price, but creating a side-line of new and fresh design
lines is a good option too to broaden the customer base.

To promote the product, the company can choose an ambassador that gives a
healthy and sustainable impression to the pubic in order to attract them to buy the product.
Besides that, the company can also advertise it product through the internet and others
tradition means of advertising like newspapers, magazines, television and radio. Promotion
and membership cards are a good way to make the customer feel treasured and connected
which they will return for more especially giving out discount coupons from time to time for
members.

Generating more sponsorships for events and fashion shows are a great way to
promote the brand name. Calvin Klein still have room for expanding their business to reach
a higher height given time.

9.0 LIST OF REFERENCES

http://en.wikipedia.org/wiki/Calvin_Klein

http://www.marketingteacher.com

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http://apriorism.wordpress.com/2008/05/21/a-unique-marketing-strategy/

http://www.janhoo.com/skole/university/ckone.html

http://marketing-case-studies.blogspot.com/2008/04/ck-be-campaign.html

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