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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

2011

LONDON SCHOOL OF BUSINESS & FINANCE E-Marketing Plan of Fashion House

Submission Date: 2nd October, 2011 Module Name: Internet and Digital Marketing Communications Module Code: IDMC Assignment Title: E-Marketing Plan of Fashion House Word Count: 4401

Madhura Kuduvalli Nagendra A4030598

Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

2011

Table of Contents
1. 2. 3. EXECUTIVE SUMMARY .................................................................................................................... 1 INTRODUCTION ............................................................................................................................... 2 CONTEXTUAL ANALYSIS .................................................................................................................. 3 3.1 4 MARKET ENVIRONMENT ......................................................................................................... 3

COMPETITION ANALYSIS ............................................................................................................... 17 4.1 SWOT ANALYSIS .................................................................................................................... 17

COMPANYS STRATEGIC APPROACH ............................................................................................. 19 5.1 5.2 5.3 5.4 5.5 CURRENT MARKETING OBJECTIVES ...................................................................................... 19 KEYS TO SUCCESS .................................................................................................................. 19 CRITICAL ISSUES AND CHALLENGES ...................................................................................... 20 E - MARKETING MIX .............................................................................................................. 20 PROMOTION TOOLS .............................................................................................................. 23

6 7

BUSINESS MODELS ........................................................................................................................ 25 IMPLEMENTATION AND CONTROL ............................................................................................... 27 7.1 7.2 IMPLEMENTATION ................................................................................................................ 27 CONTROL ............................................................................................................................... 27

8 9 10

CONCLUSION ................................................................................................................................. 28 REFERENCES .................................................................................................................................. 29 APPENDIX .................................................................................................................................. 31

APPENDIX 1 - Using the Code Source of Banana Republic ............................................................... 31 APPENDIX 2 - Searching the Key Words at J CREW Website on http://www.jcrew.com/index.jsp . 32 APPENDIX 3 - Using Google Analytics to Determine the Key Words ................................................ 33 APPENDIX 4 Layout of the Website ............................................................................................... 34

Madhura Kuduvalli Nagendra A4030598

Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

2011

1. EXECUTIVE SUMMARY
The report delineates the e-marketing plan of Fashion House. The systematic market analysis enables the outlining of the unsurpassed strategies that the organization follows to achieve the strategic goals and objectives. Fashion House is an exclusive store for the fashion hungry customers and has positioned itself as a trend setter of the industry, by introducing innovative products in the market as well reinforcing the existing products. The amalgamation of unparalleled expertise, latest technology, and an excellent corporate strategy has resulted in the unprecedented growth of the sales of the company over the years. The difference between style and fashion is quality (Giorgio Armani, 2007) As rightly quoted by Giorgio Armani, Fashion House provides customized quality products for the individual buyers to craft their own style statement. With a spectrum of clientele, they offer a wide array of products to the consumers with expertise in ideation, production and delivery. Never stepping back on mediocre performance and always striving for the best result, the company is today in history and has emerged as a robust brand. The success of the company is mirrored by a substantial capture of market shares within this market, while strategically escalating the company up to the pinnacle as the leader in the market for the clothing sector. The e-marketing plan portrays the current marketing mix of Fashion House, investigates the popularity of individualization and personalization prospect for the customers (new variants) and formulates suggestions with regard to the extension of brand promotion with the aid of digital marketing tools including Paper Click Ads, SEO and Affiliate Advertisements. Primary and secondary sources of information have been used for the purpose of this analysis.

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

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2. INTRODUCTION
Fashion House is a newly established UK based company. The company manufactures high quality, fashionable, exclusive, casual and formal customized clothing targeted towards fashion conscious men and women, mainly single professionals and DINKS (double income no kids) couples between the age of 21 to 35 years with a higher disposable income and a palate for indulgence. Whatever customization clothing a client desires, the companys in-house designers and highly skilled tailors can design, craft and deliver. The company offers original off-the- rack designs for customers to choose from and add their own twist and modifications to make their clothes personalised and unique as per their individual taste. The company also provides a high quality personalized shopping experience by providing information on the latest fashion trends and a one-on-one guidance to their customers on dressing well for any occasion. Fashion House aims to be a one stop shop to meet all the needs of an individual interested in high quality fashion through its extensively interactive and design focused website which enables the customers to make customisation to their desired products and also place orders online and have the clothes delivered to their doorstep. The company also has an exclusive boutique in Shoreditch - a young hip fashionable area of London where customers can visit by making an appointment and get personalised service.

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

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3. CONTEXTUAL ANALYSIS
3.1 MARKET ENVIRONMENT

Market environment consists of the actors and forces that affect a companys capability to operate effectively in providing products and services to its customers (Jobber, 1998, pg 106). MACRO ENVIRONMENT ANALYSIS OF FASHION HOUSE Domestic or foreign jurisdiction, accounting standards & taxation, technological advancements and other macro factors affect the company which are by and large uncontrollable by the company. PESTEL analysis is used to analyse changes in these macro factors and their effect on the company. Political and Legal Analysis Government Policing and Regulations UK based companies have to comply with the EU regulations and the EU emphasizes strict implementations of data protection and privacy laws, under which the EU countries must ensure the confidentiality and security of communications by prohibiting intrusion, tracking and surveillance without the users consent. (Baker and Hart, 2008) The Internet Advertising Key Report (2009) states that The European technology

Commission is concerned about the use of a behavioural internet interests and preferences .

known as Phorm, which constantly tracks and analyses customers behaviours,

The rapid pace of innovation of these privacy laws could mean that the law is unclear and had never been enacted upon to govern a particular activity or tested in courts. These laws could have significant impact on the marketing activities of the company and any non-compliance of the law could lead the company in dire legal consequences and also cause serious damage to the reputation of the company. Negative sentiment could result into loss of trust among current and potential customers, resulting in reduction of online sales.

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House Government Taxation

2011

The UK government has increased VAT tax rates in 2011 to its highest at 20% to make up for the budget deficit caused by the recession. The increase in VAT tax on luxury clothing has a direct negative effect on the sales and revenue of the company. Economic Analysis Rapid Growth of Online Retailing The UK Online Retail Report (2009) claims that between 2008 and 2011 whilst UK retail sales will increase by just 0.2% and high streets sales will decrease by 1.4%, the non- store (online) are projected to increase their sales by 49%. In fact, the only growth sector in British retailing in 2012 will be online retailing. The online retail market is also forecasted to double its participation of total retail spending between 2008 and 2011 from 3.2% to 7.4%. (Richard M.S et al, 2005) These figures mentioned above led us to conclude that although the recession of the economy that has hit the country since 2008 (Clothing Key Note, 2010), there is a big opportunity for retailers to adopt an online buying model to sell their products. The impact of these trends on Fashion House has been very positive, since the companys primary aim is to sell clothing products and provide services like fashion advice through online platforms to increase customer reach, provide additional value and decrease costs. Social and Cultural Analysis European Consumer Trends The Internet Key Note Report (2009) states that European consumers will spend an average of 14.2 hours a week on the Internet, and it will become the most popular and preferred buying channel in the future. It is also stated that the social media will play a significant role in e-commerce and e marketing. In order to take advantages of these consumer trends in the UK, Fashion House is investing heavily in digital media channels to increase its online presence.

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House Security and Reliability

2011

Safety and privacy issues are the most important issues faced by e-commerce growth in the UK (Internet Advertising Key Report, 2009). Increased attacks on social networking sites by hackers and Phishing websites created by cyber criminals for identity theft and to steal credit card details can result into high risk for consumers and cause hesitance in online shopping, especially from a relatively new and less known Brands website. Fashion House has built alliances with trusted companies like PayPal UK that provide secure and reliable online payment transfers, to offer customers a safe & assured shopping experience and in turn build their trust in the company and the brand. Technological Analysis Increased Broadband Access and Speed One of the most important issues of setting an online buying channel for the company is the internet access of the population of a country. In Britain, 70% of the households had access to the internet in 2009 compared with 65% in 2008 and 57% in 2006; which is a large percentage of the population, also increasing broadband speed determines the capacity for the communication and saves time and these two technological developments works very favourably for our company by increasing our customer reach and facilitate the navigation of current online shoppers. The late 90s witnessed a surge in the services sector of the Indian economy with numerous BPO centres for global conglomerates. From technical customer support to bill handling to medical transcription services to banking back-end operations to insurance services, BPO put India on the world map and identified that it was a force to consider with in the postglobalization world 24x7. BPO services in India initially started with email and voice-only customer support services that later led to the mushrooming of numerous call centre hubs across the length and breadth of the country. While this created employment Madhura Kuduvalli Nagendra A4030598

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

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opportunities for numerous graduates and part time job seekers, there was a progressive transition of these call centres into more professional outsource service centres offering specialized high end services to overseas clients. SNS communication technologies enable or facilitate user-to-user interactivity and interactivity between user and information. Internet replaces the "one-tomany" model of traditional mass communication with the possibility of a "manyto-many" web of communication. Any individual with the appropriate technology can now produce his or her online media that include images, text, and sound about whatever he or she chooses. So the new media with technology convergence shifts the model of mass communication, and radically shapes the ways we interact and communicate with one another. When we think of interactivity and its meaning, we assume that it is only prominent in the conversational dynamics of individuals who are face-to-face. This restriction of opinion does not allow us to see its existence in mediated communication forums. Interactivity is present in some programming work, such as video games. It's also viable in the operation of traditional media. Other settings of interactivity include radio and television talk shows, letters to the editor, listener participation in such programs, and computer and technological programming. Social networking is the term used to describe the websites that offer people a chance to meet virtually, sharing information, news and views via the Internet. Social networking provides many significant benefits and allows people from all over the world and from all walks of life to meet in a way that would have been inconceivable only a few years ago. A social network service focuses on building online communities of people who share interests and / or activities, or who are interested in exploring the interests and activities of others. Most social network services are web based and provide a variety of ways for users to interact, such as e-mail and instant messaging services.

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

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Recently they have started many additional applications such as iPoke, Tag etc to put across emotions. Social networking has created new ways to communicate and share information. Social networking websites are being used regularly by millions of people, and in most societys social networking have become an enduring part of everyday life. Why Social Networking Sites are Becoming Popular? One of the big reasons why social networking sites are popular is because of the multitude of things people can do on social networking sites. Here are just a few of the things users can do: Reconnect with Old Friends If the users are looking for people they haven't seen in a long time or people they went to school with, it is easy to find them on social networking sites. Many sites categorize people by their hometown, where they went to school and the different places they have worked, so they can browse through the people who went to their school or search for the name of someone they are looking for. They can also use a social networking site to keep in touch with family members who live far away, plan reunions and share pictures without clogging up their email account. Make New Friends Social networking websites have the potency to connect the users to the friends of their friends, and can see and contact people in their friends' circles whom they don't know. This gives the users the ability to connect with people they might not have otherwise met. The users can also use social networking sites to find people to date. Back in the days when Facebook was just for college students, many people used it as a dating service to find people on their campus who they might not have known otherwise. Find Business Partners Social networking sites link people with similar interests. The users can use a site (and the same process of meeting people through friends and their friends) Madhura Kuduvalli Nagendra A4030598 Page 7

Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

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to find business partners or people whom they are working in a business that is similar and want to engage in a joint venture. Some social networking sites are also great for getting publicity for a business enterprise because they can write about what's going on in their business for the entire world to see. They can even set up their own music group as its own entity on a social networking site so that it can have "friends" who then get all the updates about their events. Fun and Frolic The social networking sites aren't just about hooking up with people. They also let people share videos, pictures, quizzes and develop online games and applications. It also allows the users to develop their own applications and share them over the network. These games and other options can be a lot of fun, but they can also drain time, which can be good or bad depending on what your goal in using the social networking site is in the first place.

Social Systems, Culture and Individualization in Organizations


A social system is a complex set of human relationships interacting in many ways. Within an organization, the social system includes all the people in it and their relationships to each other and to the outside world. The behaviour of one member can have an impact, either directly or indirectly, on the behaviour of others. Also, the social system does not have boundaries as it exchanges goods, ideas, and culture with the environment around it. Culture is the conventional behaviour of a society that encompasses beliefs, customs, knowledge, and practices. It influences human behaviour, even though it seldom enters into their conscious thought. People depend on culture as it gives them stability, security, understanding, and the ability to respond to a given situation. This is why people fear change. They fear the system will become unstable, their security will be lost, they will not understand the new process, and they will not know how to respond to the new

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situations. Individualization is when employees successfully exert influence on the social system by challenging the culture.

Productivity and Social Networking in the Modern Economy


Bernolak (2009) defines productivity as 'how much and how well we produce from the resources used. If we produce more or better goods from the same resources, we increase productivity. Or, if we produce the same goods from lesser resources, we also increase productivity'. In this article, 'productivity' refers to the time spent by an employee actively executing the job he or she was hired to do, in order to produce the desired outcomes expected from the employees' job description. Recent studies, for example, Golder, Wilkinson and Huberman (2010), Arvanitis and Loukis (in press) and Coyle and Vaughn (2010) concur that social networks are typical characterisations of human behaviour to fulfil the need to communicate and connect with people they know, meet new people who share a common interest, collaborate, participate and share information and knowledge as well as gain new knowledge. Generally, these are also the reasons why individuals engage in social behaviour via the Internet. To many, the Internet provides effective social networking opportunities and their online behaviour includes building individual relationships, expanding their personal network of friends, finding people who have had similar experiences, discussing common topics of interest, dating and finding potential life partners, staying connected to old friends or distant family and virtually meeting peers, including work colleagues, to discuss current issues or topics of interest.

Capital Factors in the Modern Economy


In the modern economy, Boase, Horrigan, Wellman and Rainie (2009), Acquaah (2009), Arvanitis and Loukis (2009); Shalley and Perry-Smith (2009), and Wong (2009) identify some of the 'new' factors that are becoming increasingly important, namely: Human Capital - Knowledge, skills and capabilities that people possess

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House

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Social Capital - The relationship between people and the collective wealth contained therein Organisational Capital - The new workplace management skills and knowledge acquired through learning within the modern organisation, which simultaneously and continuously adapts and learns to sustain performance

Intellectual Capital - The knowledge people possess that can be exploited for financial gain or any other useful purpose that might be advantageous to a company or cause

Network Capital - The contacts individuals draw on as a source of trusted information. This usually happens in an environment where people are confronted with institutions and rules, typically in a work environment, which forms part of problem solving processes.

The combination of the factors mentioned above can be referred to as 'knowledge capital', which refers to people as key organisational assets, because knowledge that is valuable knowledge exists mainly in individuals. People should therefore be the main focus of the knowledge-based economy, as they are the most valuable resource it has. Since the individual is the main focus of the knowledge-based economy, effective interaction between individuals is of great importance to stakeholders. The Internet has aided such interaction since its inception, and the flexibility of the World-Wide Web (the Web) has a unique capacity to 'break down boundaries of distance, language and domains of knowledge' (Berners-Lee, 2009).

Rise of the Social Web


Since 2005, the term 'Web 2.0' has been used to describe the new applications and sites that were rapidly emerging in the existing Web environment (Anderson 2008) However, to discourage the misconception that these 'new' technologies are part of a 'separate' Web, the term 'social Web' is used to describe the interactive technologies that form a part of the so called Web 2.0 technologies. Web 2.0 technologies include blogs, wikis, podcasts, RSS and online social networks. Madhura Kuduvalli Nagendra A4030598

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House Online Social Networks and Social Networking

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The concept of social networking is not new. Human interaction inherently promotes the formation of networks through social contact (Tapscott and Williams 2010). Collaboration used to take place on a much smaller scale between relatives, friends and associates in households and communities. The present situation has changed substantially and today one rarely finds an organisation that functions without group collaboration and accordingly applies Information and Communication Technology (ICT) in its collaboration space. In this space, social networking technology, for example, allows members to create personal profiles and network with other members, as well as with other organisations. Members network by adding other members as 'friends', posting public and private messages, participating in discussion forums and engaging in other forms of digitally mediated social interactions (Vander Veer 2008). Through the development of Online Social Networking (OSN) technologies, it is now possible to network much quicker and reach a much larger expert audience. Online Social Networks and Human Capital Social networking is common human behaviour, but the question arises: Do social networks add value to organisations? With specific reference to 'productivity', Arvanitis and Loukis (2009) investigated the link between ICT, human capital, workplace organisation and labour productivity. This was a comparative study based on firm-level data and India and Switzerland. Their study showed that although the use of ICT in Indian firms has led to positive productivity effects, the full productivity potential was not reached because human capital was not efficiently combined with technology. Similarly, Arvanitis and Loukis (2008) found that: 'The decentralization of some competencies has positive productivity effects, but this potential is not fully exploited due to inefficient combination with human

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capital. Swiss firms, on the other hand, seem to be able to exploit the potential of technology and decentralization through the combination of these factors with appropriate human skills, which in turn enables a higher level exploitation of ICT and a more successful decentralization of competencies.' From the above quote it is clear that the effective combination of human capital and technology is required to increase productivity. To this point it has been established that a focus on human capital, that is what people know, will contribute to an organisation's productivity. Organisations have to optimise this human capital by facilitating the interaction of communities and networks through, for example, social networking sites and business customised OSN technology. This is necessary to increase what people know, how they perform and how they apply their knowledge and energy in the organisational context and specifically within their communities of practice.

Online Social Networking and Interactivity


Communities of Practice (CoPs) or communities of interest are groups of individuals who share a passion for something that they know how to do, and who interact regularly in order to learn how to do it better' (Wenger 2010). Boothby (2010) argues that today's knowledge worker can work efficiently in large virtual teams, and social networking sites create such an electronic platform. Wenger and Bryan (2010) concur and add that groups of people, who interact regularly, such as virtual teams, are bound to improve their skills through knowledge sharing. Therefore, notice should be taken towards the knowledge workers of today who not only function efficiently in large virtual teams, but thrive in such an environment to an extent where they advance their knowledge sharing skills. If knowledge sharing can be increased by a virtual CoP, then social networking sites may prove to be the catalyst to promote interaction (Boyd, Ellisonal, et al., 2011). Considering the potential of virtual teams interacting within a CoP by utilising the OSN platform, the effect may be an increase in productivity of those employees who actively search and employ their list of contacts as well as Madhura Kuduvalli Nagendra A4030598

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others' linked-in profiles and their contacts and by updating and growing their own list of contacts. If these 'connected individuals' spend time interacting with other individuals who possess knowledge about the relevant working environment, increased knowledge sharing is likely to take place. With this in mind, the potential positive effect of virtual CoPs is further investigated. Online Social Networking and Communities of Practice Productivity was described above as the time spent by an employee actively executing the job he or she was hired to do, in order to produce the desired outcomes expected from the employees' job description. Productivity refers to how well an individual performs. Research by Groysberg and Lee (2009) shows that individual top performers do not 'own' their performance, but that the 'quality of colleagues' in the organisation also significantly affects top performers' ability to maintain their performance. Thus, in an organisational context, value can be found in attracting and developing individuals who hold specialised knowledge, but that value can further be promoted by encouraging the social networks that enable the sharing of knowledge between these individuals. Lesser and Storck (2009) and Bartlett and Ghoshal (2009) explain how: by connecting these individuals a CoP is formed, which allows and encourages members to engage in sharing and learning based on their common interests. To this Khanna and New (2009) and Hong, Kianto and Kylheiko (2009) add the importance of optimal use of the social Web to enhance knowledge work in a culture and generation diverse organisation. This is important in order to increase employee satisfaction and to foster individual and organisational performance. OSN technology may aid knowledge work in a diverse organisation and foster individual and organisational performance through collaboration. However, the risks associated with OSN are manifold.

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House Advantages and Risks of Online Social Networking

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Social networks function in the online environment through social networking sites, that is, technology that allows people to set up profiles, link to other individuals' profiles and view, navigate and interact with others in the social network. Lange (2009) views the linking of profiles together with the ability to view the resulting connections on others' profiles as the most tangible mechanisms reflecting existing social networks. Boyd and Ellison (2010) add that this technology allows people to articulate their relationship to others in a way that is visible to anyone who can access their profile. Being linked or connected to others can lead to potential benefits such as improved collaboration and information sharing, greater productivity and enhanced communications among co-workers, business partners and customers. KPMG , Barker and Bernoff (2010) review recent studies of OSN in the workplace and conclude that OSN permits a robust blend of member profile and contact information, rich presence information, collaborative document creation, distribution tracking and other features that 'build a pulse' inside the organisation. In this environment, individuals know who knows who, what each member is currently involved in and how they can be reached. In short, OSN provides a simpler and more intuitive approach for members of the same community of employees to find each other based on complementary knowledge or need for knowledge. OSN, however, is coupled with risks associated with it. Hathi (2009), Perkins (2010), Star Technology (2009) and Violino (2010) summarise some of the risks as follows: OSN spurs social activity and is associated with developing addictive behaviour; if not managed properly it will result in a decline in employee productivity. OSN poses privacy issues and poses security risks such as identity fraud. OSN may result in secondary data collection, that is, indirect derivation of data from existing sources. Madhura Kuduvalli Nagendra A4030598

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OSN may lead to social networking spam, that is, the propagation of unsolicited messages.

OSN holds the risk of corporate espionage, that is, organisations can expose their intellectual property and other proprietary information to the outside world or to people within the organisation with negative result.

OSN may expose members to malware thereby introducing viruses, worms and spyware to the organisation's ICT infrastructure.

OSN results in bandwidth and storage consumption. Many social network members share pictures, music, videos, high-definition movies and other large files.

Many individuals who use the social Web do so at work for both non-work and work-related purposes. Even though the above list of risks is not inclusive it suffices to stress the need to understand the effect of OSN in the workplace.

MICRO ENVIRONMENT ANALYSIS FOR FASHION HOUSE Porters Five Forces This framework is used to assess the attractiveness of the UK Clothing Industry by analysing the impact of the Internet on the five competitive forces affecting the company. Threat of Potential Entrants (High) According to the Clothing and Footwear Key Note Report (2010) the clothing industry has shown a slow growth due to price deflection occurred between 2005 and 2009. By contrast, online shopping including Clothing has dramatically increased in the past decade in the UK (Internet Advertising Key Report 2009). Hence, E-Commerce has become a very attractive option for companies to diversify and expand customer reach by increasing their online presence. Also, there are no significant barriers for companies to enter E-Commerce in the UK (Internet Advertising Key Report 2009). An offshore company with similar

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product offerings can build an online presence by adopting an e-commerce business model and use the internet to facilitate their entry in the UK market. Even traditional competitors can create new internet companies that can enter the market rapidly as these new entrants do not have to develop a separate and local distribution network & manufacturing base. Bargaining Power of Buyers (Low) Taking into account the nature of the internet marketplace, increase in customer knowledge and price transparency to evaluate products and easy comparison with competitors products can significantly drive down prices and tremendously increase the bargaining power of customers. However, taking advantage of their highly interactive website, Fashion House has recognized a gap in the market of premium customized clothing. Hence even though the internet marketplace increases the bargaining power of the buyers, it is mainly relevant to standardised products and services, while companies like Fashion House offering highly differentiated products with negligible substitutes can still charge a premium price for their premium products. Threat of Substitute Products (High) Customers enjoy easy comparisons and wider choice of products online. Therefore, the main threat of substitute of customized clothing would be the established designer brands clothing of the same price bracket, sold by ecommerce and physical stores. Fashion House needs to monitor substitute products and services offered by its competitors and continue to offer more valuable and differentiated products to avoid erosion of market share. Competitive Rivalry (Low) Online retail is expected to grow by over 36% in the next 18 months compared to just 1% for in-store sale according to the UK Online Retail Report (2009). Thus, we expect a drastic increase of competition in the E-commerce of the clothing sector. However, to succeed, companies need to be market leaders in executing e-marketing and online customer service. Also, Fashion House serves Madhura Kuduvalli Nagendra A4030598 Page 16

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a very niche segment with negligible number of rivals. Most companies that currently provide mass customised clothing online offer cheap and casual clothing like t shirts with screen prints designs on them or customised logos of a company or an education institution. These companies are not competing with high end personalised products of Fashion House. Hence the internet has not yet significantly increased rivalry in the unique case of Fashion House. Bargaining Power of Suppliers (Low) Generally, in the case of the E-Commerce marketplace, the power of the suppliers is low since the barriers to switching to a different supplier are reduced. Also, the use of the internet can reduce cost by increasing supply chain efficiency which is another reason to demand lower prices from suppliers. Only suppliers with rare or specialised raw materials to supply will have any bargaining power left. Hence low bargaining power of suppliers caused by the internet is an opportunity and not a threat.

Abridgement From the five forces model we can conclude that the e-commerce clothing industry is a highly competitive environment. Furthermore, there is not much stability since the threat of new entrants is high. However, there are few competitors in the customized and stylish clothing niche segment; which is an opportunity for Fashion House to provide for this market gap in the UK market.

4
4.1

COMPETITION ANALYSIS
SWOT ANALYSIS

A SWOT analysis is a structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threats. (Jobber, 1998: 37) Madhura Kuduvalli Nagendra A4030598

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The potency of Fashion House as a brand in the UK is indicated clearly in the SWOT analysis. The brand was swotted to be at the pinnacle in the category of customized clothes option, with strong customer loyalty.

The quintessential threats of the brand, as depicted above, indicates that Fashion House has made numerous efforts to refurbish itself as a top designer brand but till date its assiduousness towards the tag line is low-slung by the customers. The brand is in the currently in the growth stage of the product life cycle with a robust proclivity towards the maturity stage. Competitors There are hardly any companies in the UK that provide high end, customised, fashionable clothing. Hence the competition is mainly based on the price factor and not necessarily on the similarity of the product range. High price end high street brands with high online presence like Banana Republic, Brooks Brothers, J. Crew and lower price end designer brands like Karen Millen and Tommy Hilfiger do not provide customised products but targets the same price segment

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clothing and their products too are high quality, trendy and fashionable, just as Fashion House, making them direct competitors of the company. Intermediaries The company does not use any intermediaries. It sells its products and provides its services directly from its own interactive company website and less frequently from its London based boutique.

5
5.1

COMPANYS STRATEGIC APPROACH


CURRENT MARKETING OBJECTIVES

Primary Objective To increase sales and brand awareness via strong digital presence while building and maintaining strong customer relationship. Secondary Objectives Achieve 10% online revenue contribution within 2 years Achieve the first mover advantage with proactive penetration in the market Future Objectives To achieve a cost reduction of 10% in marketing communications in the next 3 years Create value added customer services not currently available Expand the brand into developing markets in Asia in the next 2 years Develop database of customers and prospects/collect sales leads Up-sell customer to premium and customized product or service Improve internal efficiency by reducing marketing cost and improving customer retention rates ROI (Return on Investment) to be achieved within the time period of 4 years of business operations

5.2

KEYS TO SUCCESS

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Fashion House is the pioneer in introducing customization of clothes online in the market. It has the first mover advantage. Continued improvement in differentiating Fashion House from an ordinary online store to specialized customized platform positioned it at the zenith.

5.3

CRITICAL ISSUES AND CHALLENGES

In order to maintain its position as a leader in the market, Fashion House has to be perceived as the preferred option in customized clothing market.

5.4

E - MARKETING MIX

PRODUCT AND SERVICE OFFERING The companys website in detail displays the clothing line which includes Suits, Coats/Jackets, Shirts, Trousers, Shorts, Skirts, Dresses and Denim for men and women. To add value and improve custom, the company provides a number of online after sale and general customer services. The website has a section dedicated to explain and demonstrate to the customers how to best care for their clothes to make them last and keep looking like new for longer. The Website also hosts a blog that gets updates on a regular basis and includes contributions from the companys in-house designers on the latest fashion trends, general tips on dressing well for different occasions and a RSS web feeds from leading fashion dedicated websites like Vogue Magazine website and famous fashion designer Gok Wans website etc. The Customers also have an option to book private consultations with an inhouse designer of the company through the different contact points like telephone number, email addresses and online forms available on the website. PROMOTION Customer database linked with the companys website will generate greets, recommendations and target offers to all the registered customers. Attention grabbing and easily comprehended web banner adverts displaying a part of the product line will be placed on fashion related websites like styleshop.co.uk - a search engine for high end fashion clothing, websites of fashion magazines like

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Marie Claire, websites of fashion events like London Fashion Week, blogs and message boards dedicated to fashion. Direct email marketing for those who chose to opt-in would be used to target upcoming and budding new designers and fresh graduates of design and fashion schools to inform and introduce them to the company as a platform to display, promote and sell their designs. Editors of reputed fashion related online publications will be invited to positively review the companys products and services and mention and recommend it on their websites and e-zines as a part of the companys E-PR campaign. Search engine marketing is used and integrated with search engine optimisation by the use of appropriate and sufficient range of keywords in the website content, building external and internal links with other good reputation and relevant websites and databases such as Google Product Search, Youtube, social networks, directories, reputed bloggers etc. to achieve the highest position practical in the natural and organic listings on a search engine. Pay-per-click advertising with a link to the companys website are displayed on the side of natural listings will be used to drive more traffic to the website. Application and widgets will be built to enable the customers to browse and shop from the companys websites from their smart phones.

PRICE The pricing of the products is strictly based on competition-based pricing. Our customized products will cost more than high end high street brands like Banana Republic, Brooks Brothers, as they are positioned as exclusive along with highest quality along with additional associated valuable services. However, they will be cheaper than big established designer labels like Ralph Lauren and Armani, and so on as the company and the designers are new, young and lesser known compared to the more established fashion labels. This gives the customers an incentive to try a relatively less famous brand while receiving the highest possible quality without paying the highest price. PLACE Madhura Kuduvalli Nagendra A4030598

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This UK based company operates in a seller controlled and seller oriented environment by selling through its own website and fashion oriented websites through would display its products along with their competitors. E.g net-aporter.co.uk. The customers are encouraged to customise and purchase their products through a direct sales channel from the companys website, however, the products are distributed through traditional courier and postal channels. PEOPLE A combination of people and technology is used to provide the best possible products and online customer service and seamless online shopping experience. The people and the staff are the core of this customer centric and service oriented business. The company employs talented but new, lesser known and upcoming designers and fashion graduates along with skilful tailors. The designers also make contribution to the companys blog about fashion tips, trends and general advice on dressing well. The companys cutting edge website with heavy graphics and designing and customization features is extremely integral feature towards the differentiating factor of the products. A team of skilled website designers are employed to constantly update the website and adding new features and designing options. General administration staff with knowledge of fashion industry is employed to timely answer email queries, phone queries, provide call back facility, maintain online appointment bookings of consultations with designers and queries through online chat, maintaining general smooth running of the operations. In addition to above, the website provides FAQ section to answer the most common customer queries and a forum for customers and patrons to leave comments, suggestions, even complaints and general feedback to create a dialogue between the customer and the company to stay in tuned with the customers preferences and in turn provide improved services. The website also has an in-site search engine enabling the customer to easily find a specific product or piece of information. PHYSICAL PRESENCE Madhura Kuduvalli Nagendra A4030598

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The company has a boutique in a high end part of London where customers can come for fittings, alterations (if required any). Physical presence assists in establishing trust and reassurance among new customers. However, the point of sale will mainly be on the website

5.5

PROMOTION TOOLS

Power of the Mass Media Media has power and is considered to be the voice of the people. Advancements in graphics and special effects in placing advertisements, marketing using digital communications and effective usage of the new media plays a vital role in the promotion of the product and its sustainability in the market. OFFLINE PROMOTION TOOLS Advertising These include tools like print ads in leading fashion magazines and high circulation newspapers, billboards and posters. Sponsorship Sponsoring fashion related events such as London Fashion Week, organizing inhouse fashion shows, etc.

Direct Mail High value spending customer database will be built and information about latest products and offers will be mailed to them on regular basis ONLINE PROMOTION TOOLS Search Engine Optimisation (SEO) Specific combination of keywords like tailor made, personalized, customized, luxury apparel and so on is used be used to achieve the highest position practical in the natural listings of popular search engines like Google. In order to identify the keywords we had a look at the keywords of three main competitors by using the code source. Madhura Kuduvalli Nagendra A4030598

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House From Banana Republic.com we identified the following keywords: office wear" (Refer APPENDIX.1)

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apparel,

clothing, clothes, womens apparel, mens apparel, mens clothing, work wear,

J Crew: the following key words: meta name="keywords" content="women's clothing, men's clothing, children's clothing, Crewcuts, women's dresses, cashmere, cashmere sweaters, women's shoes, wedding dresses, men's shorts, men's ties, designer clothing, luxury apparel, cashmere, sweaters, gift cards, J.Crew, jcrew.com, JCrew, J Crew". (Refer APPENDIX 2) Afterwards, by using the Google analytics tool we determined the most suitable keywords for Fashion House to be used on the SEO (Refer APPENDIX 3). Several landing pages are built to provide better user experience as it takes the user straight to the information related to the keywords typed into the search engine by the user. Pay Per Click Ads A well thought out text ad with a link to a company page are used to advertise the company profile and its products and services on leading search engines like Google and Yahoo.

Sponsored Search Adverts Sponsored search advertisements will be advertised on search engines like Google and Yahoo by entering specific keywords is will be used to attract traffic to the website Display Banner Ads Engaging and rich media display banner ads which are similar to offline posters will be placed on different fashion related websites, blogs and forums E.g. fashion-conscience.com etc. Affiliate Marketing

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Affiliate marketing is used by placing ads on website of fashion magazine like Vogue and popular news websites like guardian.co.uk .These websites with heavy traffic are used to drive traffic to Fashion Houses website. Social Media Features like Add This is added to the companys website which lets the site visitors share the webpage on popular social networking websites like Facebook and Twitter with millions of other subscribers. When the user click on the Add This widget, the specified web page will be displayed on users Facebook and Twitter page. In the beginning of the business the company will need to drive traffic to the landing pages. Therefore the company and its products will be promoted on social media websites by following the cost per impression model which is cost effective and significantly helps increase sales and brand awareness. E-Mail Marketing Opt-in email customer database will be created to send automated e newsletters to update, personalised recommendations and offers to engage, encourage and persuade customers to buy the trial out the products.

BUSINESS MODELS

Business Model A Birds Eye View A business model is how business makes money. It is accumulation of all the departments i.e. sales, marketing, operation, administration, R&D, finance and everything that is involved into a business. It includes all the strategies and tactics that determine if the company is going to make money or not. (Kaufman, K., 2010). Following business models are used by Fashion House: Online Business Model

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Online business model is used to promote and sell products and services on the internet. Customers can place their orders using the companys website and online payments are accepted by credit cards and trusted third parties such as PayPal. Benefits of Using This Approach - Operating cost of online business is cheaper as compared to offline business. Promotion venues are wide and options are low cost. You can have a global reach with a small investment. Manufacture Model Manufacture model is the most important for Fashion House as it will help the company maintain a direct contact (in the absence of an intermediary) with their customers, provides a better control on the outcome of the final product in addition to increase efficiency, improve customer service and provide better understanding of customer preferences. Benefits of Using This Approach The Company will be able to provide superior products and services by better understanding of the customers and having total quality control of the product. Merchant Model The merchant model is used as the products and services will mainly be offered online. The company has established an electronic storefront on the World Wide Web , a complete technology infrastructure capable of receiving and processing orders, appropriate security measures so assure confidentiality, safety and confirmation of transaction information and completing fulfilment. Hence the company is an online retailer of its own products. Advertising Model Advertising model will play an important role in marketing the company and its products and services. Online and offline advertising channels are used to promote the products and services. For online communication, banner ads, portals, contextual marketing, content targeted marketing and intromercials are used. Advertising model will work best for targeting UK high end customers. Madhura Kuduvalli Nagendra A4030598

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Fashion House will liaise with Institute of Practitioners in Advertising which is professional institute of leading advertising agencies in the UK and specialize in outdoor, digital and sponsorship sectors. Fashion House will also obtain the membership for Internet Advertising Bureau for digital marketing as it will help the company identify the best role for online market, engaging with customers and brand building. Benefits of Using This Approach - Advertising model will enable the company to market the brand, product and services to the target market and generate traffic to the website and generate sale leads which is the ultimate target for the advertisement campaign.

7
7.1

IMPLEMENTATION AND CONTROL


IMPLEMENTATION

Email and SMS marketing being less intrusive than telephone marketing will be used to build customer relationships and to keep them updated with the companys latest offers. Using the companys website is also a very flexible option to meet most of the companys online marketing needs. A knowledgeable and well trained workforce needs to be employed for a smooth running of online marketing campaign activities from building websites, designing online adverts to maintaining an E-PR. Constant improvement to stay abreast with developments in technology and regular review of marketing practices with the e-marketing regulations will be key to the success of the companys online marketing campaign.

7.2

CONTROL

It is extremely important to use web analytics and other online metric tools to measure the effectiveness of the online marketing campaign, to test which emarketing tools are more effective which in turn helps in the allocation of the marketing budget and concentrate our efforts, time and creativity to optimise the use of the more successful marketing tools. It also helps us understand why other tools are less successful and decide whether to improve them or abandon their use all together.

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The overall sales of the products are measured once in every six months for its stability and sustainability in the market. Customer feedbacks are obtained time and again to improvise the product and evaluate the success of the product.

CONCLUSION

In conclusion we can confidently say that an E-marketing plan with its digital media tools like websites, emails, mobile devices and social networking is an economical, flexible and efficient alternative to traditional marketing tools to send personalised communications to the companys target customer base and build brand awareness. It enables the company a global reach of new markets at a lower cost. It is much easier to measure the effectiveness and responsiveness of the individual e-marketing activity and enable the company with the right amount of budget allocation to each marketing activity. E-marketing tools are an integral and unavoidable part of any successful marketing campaign.

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REFERENCES

BOOKS
Baker and Hart (2008), The Marketing Book, 6th edition, United States of America, Butterworth-Heinemann Brassington and Pettitt (2006), Principles of Marketing, 4th edition, United Kingdom, Prentice Hall Dann, Stephen, and Susan J. Dann (2010), E-marketing: Theory and Application, Houndmills, Basingstoke, Hampshire, Palgrave Macmillan David Loudon, Robert Stevens, and Bruce Wrenn (2005), Marketing Management (Text and Cases), 1st edition, New York, The Haworth Press Fill Chris (2009), Marketing Communications, 5th edition, United Kingdom, Prentice Hall M.C Cant, J.W. Strydom, and P.J Duplessis (2007), Marketing Management, 5th edition, South Africa, Juta and Co Mercury Crescent Richard M.S Wilson and Colin Gilligan (2005), Strategic Marketing Management, 3rd edition, Burlington, Elsevier Butterworth Strauss, Judy, Raymond Frost, and Judy Strauss (2001), E Marketing, Upper Saddle River, NJ, Prentice Hall Subroto Sengupta (2005), Brand Positioning Strategies for Competitive Analysis, 2nd edition, United Kingdom, Tata Mc Graw Hill Publishing Company Limited

ARTICLES
Emirates 24/7 (2011), E-Marketing Specialist, [Online], Available: http://jobs.emirates247.com/en/job/?xid=1718164 [Accessed: 21st September, 2011] San Francisco Chronicle (2011), Internet Marketing Company Announces New Access to Free Quotes on Their Site, [Online], Available: http://www.sfgate.com/cgi-in/article.cgi?f=/g/a/2011/09/30/prweb8843770.DTL Madhura Kuduvalli Nagendra A4030598

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Internet and Digital Marketing Communications E-Marketing Plan of Fashion House [Accessed: 19th September, 2011]

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JOURNALS
Gilmore, Audrey, Damian Gallagher, and Scott Henry (2007), E-marketing and SMEs, Operational Lessons for the Future, European Business Review, pg 234247 Manouselis, Nikos, and Constantina Costopoulou (2006), A Metadata Model for E-markets, International Journal of Metadata, Semantics and Ontologies, pg 141 Robins, Fred (2000), The E-Marketing Mix, The Marketing Review, pg 249-274 Stafford, M. R (2005), Introduction to the Special Issue on E-marketing, Marketing Theory, pg 5-6

WEB
Liberty Institute (2011), [Online], Available: http://freemarket.org/ [Accessed: 22nd September, 2011] Mean, That I (2011), Internet Marketing
th

for Free, [Online], Available:

http://www.askjinger.com/ [Accessed: 19 September, 2011] Internet Marketing Newsletter (2011), [Online], Available: http://internetmarketingnewsletter.com/> [Accessed: 15th September, 2011] Group Marketing
th

Services

(2011),

[Online],

Available:

http://gmsil.com/

[Accessed: 25 September, 2011]

DOCUMENTARY MOVIE
Business Leffler and Blair (2009) [DVD], Online Marketing, Word of Mouth Marketing on Your Business, 6 minutes, 33 seconds, Dogwoof Studio David (2008) [DVD], The 13 Pillars of Internet Marketing, 2 hours, 22minutes, 50 seconds, Final Cut Studios Pvt Ltd

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10

APPENDIX

APPENDIX 1 - Using the Code Source of Banana Republic

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APPENDIX 2 - Searching the Key Words at J CREW Website on http://www.jcrew.com/index.jsp

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APPENDIX 3 - Using Google Analytics to Determine the Key Words

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APPENDIX 4 Layout of the Website

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