Tommy Hilfiger Marketing Activities: A Group Presentation and Report

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Group Presentation and report of marketing activities of
Tommy Hilfiger
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Table of Contents
Task 1: Report.............................................................................................................3
Introduction................................................................................................................. 3
Main Findings..............................................................................................................4
(a) Brief overview of the luxury clothing market.......................................................4
b) Macro and micro environment Analysis of the company.....................................5
c) Segmentation, Targeting and Positioning of the company................................14
d) Marketing mix elements of the company...........................................................15
Conclusions and Recommendations.........................................................................18
Task 2: Group Presentation......................................................................................19
Introduction............................................................................................................19
Company’s current marketing performance...........................................................19
Conclusion.............................................................................................................20
Reference List...........................................................................................................21
Appendix................................................................................................................... 24
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Task 1: Report
Introduction
A nominal or actual place where there is demand and supply for a specific good or
services in consideration of money is known as market. Among the sellers and the
buyers there is an interaction of business and economical nature in market (Kerin,
and Hartley, 2015). In the market one trades for the ownership of the goods for
exchange of money. This study would do a detailed analysis of the UK clothing
market, including the evaluation of the macro economic factors of the market,
competitive advantage of the UK market, SWOT analysis of the company. Moreover,
the study would also discuss about the target, segmentation and positioning of the
Tommy Hilfiger. Tommy Hilfiger founded the premium clothing enterprise of America
in the year 1985 (Global.tommy.com, 2019). The headquarter of the company is in
New York City, US. It manufactures products like fragrances, accessories, apparel
and footwear. In the year 2018, the company recorded the global sales of $8.5
billion.
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Main Findings
(a) Brief overview of the luxury clothing market
In 2019, the sales in the luxury fashion market of UK were recorded as
US$6,425million. The forecast of the luxury market depicts an annual growth in the
market of 2.0%. In 2019, the segment of luxury clothing was recorded as the largest
market segment having a volume of about US$4,578million. In 2018, of the total
luxury goods sales, the sales of luxury fashion were 30% (statista.com, 2019). The
largest retailer of the luxury clothing market of UK is Mark and Spencer and accounts
for about 8.1% share of the UK market. In 2019, US$95.15 was the average income
per person in the section of luxury fashion (statista.com, 2019).
As the residents of UK have, high purchasing power they are inclined more towards
the luxury clothing. Taking note of the pattern of purchase of the UK residents the
UK based clothing companies’ price their products exclusively. This can be the
justification of UK for earning income from the sale of revenue. The clothing segment
in UK employs about 4150000 people as they are expanding their business
operation at high rate (Donzé and Fujioka, 2018). This segment has played a very
important role in decreasing the unemployment rate of the company. The worth of
fashion industry in UK is about $ 3 trillion and the size is constantly growing.
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b) Macro and micro environment Analysis of the company
Pestle Analysis
Factors Influence Analysis
Political  Stability of the
government– The
country ranked 0.26
in the political
stability index in the
year 2018
(
theglobaleconomy.c
om, 2019).
 Level of corruption
– In 2018, UK
ranked 11th in the
corruption index. In
2017, the rank
reached to it all time
low at eighth
position (Lord,
2016).
 As the government
of UK is quite
stable, it would
positively
influence the
organisation.
Tommy Hilfiger.
The Company has
no threats of
change in
government
policies. The
stability in
government policy
would ensure
stability in the
functions of the
company.
 The company
ranks low in the
corruption index. It
reached its lowest
in 2017 taking the
rank to eighth.
This low rank on
the corruption
index would
positively influence
the company. The
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lower is the level
of corruption in the
country lower it
would be in the
company. As there
would be no extra
cost incurred, it
can function
smoothly.
Economical  Inflation Rate – In
2018, the rate if
inflation in the
country was
recorded as 2.48%.
The inflation rate of
UK in 2017 was
3.58%. Therefore,
improvement in the
rate of inflation has
been observed in
2018 (statista.com,
2019).
 GDP growth rate –
In 2018, UK
recorded the GDP
growth rate of 1.4%
and in 2017, the
rate of growth of
GDP was 1.8%
(statista.com, 2019).
 Currently the rate
of inflation of the
country is low. The
low inflation rate
would positively
influence the
enterprise. The
cost of production
would be
considerably low in
case of low
inflation rate. The
cost of labour and
other expenses of
the company
would also be
considerably
lower. In this way,
the company can
also gain the
advantage of
economies of
scale.
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 Fall in the GDP
growth means that
the economy of
the country has
less money so the
growth would be
considerably low.
The GDP growth
rate is low in
comparison to
year 2017.
Therefore, it would
have negative
impact on the
business.
Social  Rate of
unemployment – In
2018, the rate of
unemployment of
UK was recorded as
3.8% (statista.com,
2019).
 Rate of literacy –
The literacy rate of
UK as recorded in
2018 is 99.90%. A
constant rate that
UK has been
maintaining since
2015 (statista.com,
2019).
 The rate of
unemployment has
decreased from
the year of 2017
(4.2%). This would
positively influence
the enterprise. As
less number of
people are
unemployed, the
demand for the
product of the
company would be
high and it earn
more revenue
would earn more
revenue.
 High literacy rate
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would positively
influence the
company. The
company’s target
market would
comprise of people
that are employed
and more
educated. The
demand for the
company’s product
would constantly
increase if it
follows the
changing trend in
the taste of its
customers.
Technological  Emergence of
communication
and information
technology - UK is
a developed
economy and
constantly discovers
new technology of
communication and
information to tackle
the increasing
demands (Weaver,
et al., 2017).
 UK is the third
most promising
country that is
immensely
encouraging the
rise of new
technology. The
country has well
developed
technology system
in all sectors like
health, digital and
transport. This
would positively
influence the
development of
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the company in the
country, as it
would have all
available
technological
resources to
expand its
business.
Legal  Nature of the legal
system – The
country is legally
strong. The federal
court is the most
important power in
judicial system.
 Labour laws - the
Fair Labour
Standards Act
decides Standards
for wages and
overtime pay
(Coulter and
Hancké, 2016).
 The Judiciary
system of the
country is strong
and independent.
The country has
High level of
transparency in
corporate
decision-making.
This would have
positive influence
on the growth of
the company
Tommy Hilfiger as
the strong judiciary
would ensure
compliance of
legislative
requirements of
the company.
Therefore, the
company would
not suffer from any
unnecessary
attack from the
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government and
would continue to
function smoothly.
 Tommy Hilfiger
would have to
follow the
standards and
policies laid down
by the Fair Labour
Standards Act to
avoid any
discrepancies in
the production
process. As per
the law, company
does not
discriminate based
on caste, creed
and colour and
maintains a hassle
free environment
in the production
sector. This would
positively influence
the company, as it
would be able to
maintain friendly
relation with its
labour force.
Environmental  National
Environmental
Policy Act – This is
one of the first law
 In order to follow
the national
environmental
policy act Tommy
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establishing
frameworks for
protection of
environment. It has
laid down (Arts et
al., 2016).
 Hazardous and
solid waste
amendments Act -
The comprehensive
federal law known
as hazardous and
solid waste
amendments Act
that laid down ways
of treating the
wastes (Turner,
2016).
Hilfiger would have
to restrain from
producing huge
supplies to help in
decrease of the
pollution and
wastage. This law
would have a
positive impact
on the company.
 Proper dumping
system has to be
adopted by the
company and the
wastes produced
during fabric dying
has to be treated
properly before
discharging it into
the environment.
This would have
the positive
impact on the
establishment of
the company in
UK.
Table 1: PESTLE Analysis
(Source: Created by the learner)
Porter’s five forces
Factors Analysis
Competitive Rivalry
(High)
Many well-established players like Arcadia and Marks
and Spencer’s rule the UK market. Therefore, the
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company would face fierce competition in the market.
The competitive rivalry is quite high in UK market.
Tommy Hilfiger gain the advantage by being a discount
player and offer seasonal discounts to the consumers
(Arshed and Pancholi, 2016).
Supplier Power (High) The UK luxury fashion has less number of suppliers.
High cost of raw materials is the reason for presence of
such low number of suppliers. Another reason that
affects the number of suppliers in the market is the high
cost of real estate. Therefore, the supplier power in the
UK cloth industry is quite high. In order to eliminate this
difficulty the company can outsource its department of
production to countries where the supplier power is low
(Jelinek, 2018).
Buyer Power (high) The number of competitors in the market is quite high.
Therefore, the consumers have ample options and
substitutes. The entire ruling brands of the market
targets the elite class and upper middle class people
and follow premium-pricing strategy to earn maximum
profit. As a result, the switching costs of the consumers
are low and they can easily find substitute for their
wants (Jelinek, 2018).
Threat of new entry
(Low)
High cost of establishment demotivates the new players
to enter into the market. Moreover, the market is
captured by ruling brands like Arcade and Marks and
Spencer’s the new brands do not have enough power
to snatch the market from the existing players.
Therefore, new entrants would not pose sufficient threat
to the enterprise (Jelinek, 2018).
Threat of substitutes
(Low)
The existing players would not switch to strategy of
producing substitutes because substitutes are generally
low priced. The supreme brands invest highly in
research works so that they can know about the hidden
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