MARK200 Campbellsville University Prada Marketing Plan Paper

complete my research I just finished steps 1 to 6 I just need you to do me steps 7,8,9,and 10 you will find my research in the attachments below

Marketing Plan for:
Prada
Mark200-E Fall 2019
Table of Contents
Executive Summary (Cristian Palermo)
…Page 1
Company Description
…Pages 2-4
Strategic Focus and Plan
…Pages 5-6
•
Mission/Vision
•
Goals
o
Nonfinancial goals.
o
Financial goals.
Situation Analysis
•
•
…Page 7-17
Porter’s Five Forces analysis
o
Threat of new entrants
o
Threat of substitutes
o
Bargaining power of customers
o
Bargaining power of suppliers
o
Competitive rivalry
The SWOT analysis: (Cristian Palermo)
o
Strengths
o
Weaknesses.
o
Opportunities.
o
Threats.
•
Industry Analysis
•
Competitor Analysis
•
Company Analysis
•
Customer Analysis
Market-Product Focus (Cristian Palermo)
•
Marketing and Product Objectives
•
Target Markets
•
Points of Difference
…Page 1
•
Positioning
Marketing Program (Cristian Palermo)
•
Product Strategy
•
Price Strategy
•
Promotion Strategy
•
Place (Distribution) Strategy
…Page 1
Financial Data and Projections (Faris Alqibti)
•
Past Sales Revenues
•
Five-Year Projections
Organization
…Page 1
…Page 1
Implementation Plan (Faris Alqibti)
…Page 1
Evaluation Plan (Faris Alqibti)
…Page 1
Appendix A. Biographical Sketches of Key Personnel
…Page 1
Appendix B. Detailed Financial Projections (Faris Alqibti)
References
…Page 1
…Page 1
Executive Summary
Prada is located across the country with multiple stores in various locations. CONTACT
INFO. There are several things that our company has to offer including several products. Some
of our best selling products include our leather goods. We sell accessories, clothes, shoes, and
fragrances. These products give customers their basic needs at a higher quality. We are working
to extend our target market to the new generation of customers. We are revamping our products
to catch the customers attention and include styles and patterns that will draw them in to our
stores and make purchases. Our goal is to maintain a perspective that places the basic values at
the heart of our products and promote activities connected with art and culture. We are trying to
close the inclusion gap in the fashion industry through its new Diversity and Inclusion Advisory
Council. Lastly, we are trying to increase Prad’s current online market by 15% before 2020.
2. Company Description
•
What is Prada:
•
An Italian luxury fashion brand based in Milan, Italy
•
It specializes in leather handbags, travel accessories, footwear, ready-towear, perfumes, and other fashion accessories
•
It operates internationally with franchise operated stores stores in
countries around the globe.
•
Prada’s history:
•
Founded in Milan in 1913 by Mario Prada
•
Originally leather-goods and other luxury items which included handbags, travel
trunks, beauty cases, jewelry, and accessories
•
Became an official supplier to the Italian royal family in 1919 allowing Prada to
display the House of Savoy coat of arms (Royal family coat of arms) in its
trademark logo
•
Was only a prestige brand for Italian aristocrats for the early part of the 20th
century and did not make much of an impact on the overall market due to small
market share
•
In the 1970’s Granddaughter of Mario Prada, Miuccia Prada, partnered with
entrepreneur Patrizio Bertelli to lay foundation for international expansion
•
Maintained a single store with selective distribution in licensed partner locations
until the 1980s when new Prada stores were opened in New York, Paris, Madrid,
London, and Tokyo.
•
Leather goods line was expanded to women’s footwear in 1979 and men’s
clothing and footwear in 1993
•
The founder created a new brand named Miu Miu in 1993 focused on women’s
ready-to-wear apparel which added to Prada’s overall revenue
•
Acquired the traditional Britsh shoe brand Church’s in 1999
•
Entered into licencing agreement with global eyewear industry leader Luxottica in
2003 which was again renewed in 2012
•
•
In Prada 2007 partnered with LG in the release of the Prada cell phone
Some more recent activities of Prada include:
•
Entered the food industry in 2014 after acquiring the owner of the
historical Milanese patisserie
•
Prada Group made extensive iventements in 2016 to build a new leather-goods
factory, renovate seval other factories, and founded a new logistics hub for
finished goods
•
Prada became the Title and Presenting Sponsor of the 36th edition of America’s
Cup and Main Sponsor of the Luna Rossa team in 2018
•
Hosted several men’s and women’s fashion shows throughout 2018 inviting
several famous creative minds to join
•
Prada signed the Fashion Pact in 2019 along with 31 other global fashion and
textile companies for the pursuit of practical objectives in sustainability
•
•
Plans to increase its current online market share by 15% before 2020
Some recent successes of Prada include
•
Prada relaunched its 1990’s sportswear line Linea Rossa, targeted at younger
buyers in their 20’s, in 2018 which resulted in increased sales for the quarter
•
Prada has expanded online access to purchasing its products through joining
Instagram’s Checkout program for online shopping.
•
In 2018, Prada posted its first major increase in revenue since 2013.
•
Has been gaining increased awareness in online marketplaces due to quality of
fashion products and leather-goods.
3. Strategic Focus and Plan
•
Mission/Vision
•
Prada’s mission statement as a luxury fashion and leather-goods company is:
•
To maintain a perspective that places at the heart of its principles
the basic values of:
▪
•
uncompromised quality
▪
valorisation of labour
▪
freedom of creative expression.
Prada’s vision statement as a luxury fashion and leather-goods company is:
•
To promote activities connected with arts and culture
•
Invest in a unique working environment, combining respect for individuals
while caring for the places
•
•
Preserving artisanal skills and supporting the brands’ heritage
Goals
•
Nonfinancial goals.
•
Revitalize products and increase awareness through digital marketing
campaigns
•
Reinforce their relationship with the customers
•
Strengthen the importance the brand’s cultural heritage
•
Uphold the objectives of the Fashion Pact signed in August of 2019 which
entails a commitment to the pursuit of sustainability in climate,
biodiversity, and the oceans
•
Offer customers exclusive opportunities and offer a simpler purchasing
process though a wider range of channels (mainly digital and e-commerce)
•
Close the inclusion gap in the fashion industry through its new Diversity
and Inclusion Advisory Council
•
Financial goals.
•
Enhance corporate value to its shareholders by:
▪
▪
Granting dividend payouts
Taking into account business expansions needs
•
Increase its current online market share by 15% before 2020
•
End seasonal markdowns and cut back on wholesale distribution to to
increase revenue from full priced retail sales
•
Improve consistency in pricing
4. Situation Analysis
•
Porter’s Five Forces analysis
a.
Threat of new entrants
•
Threat of new entrants is currently a weaker force in the luxury fashion
industry for several reasons:
▪
Those who can produce large capacities of products, like Prada,
have a cost advantage in the industry
•
Entrance into the market is costlier to new entrants who
have not who are not moving a large volume of products
▪
The luxury fashion industry focuses on product differentiation over
standardization which brings added focus to advertisement and
customer service
•
The added ephesus on advertisement adds to the costly
nature of being a new entrant in this market
▪
Governmental policies surrounding the industry are quite strict
regarding licencing and legal requirements which must all be met
before an entrant can even begin to sell their product
▪
For customers in Prada’s industry, brand loyalty and the
psychological costs of switching, due to higher product costs, are
usually quite high, reducing the chances a customer will switch
from Prada to a new entrant
•
Even though the current threat of new entrants is low in Prada’s industry,
Prada can counteract the possibility of new entrants through:
▪
Taking advantage of economies of scale and its ability to move a
high volume of products in order to maintain a cost advantage over
new entrants
▪
Continued innovation with strong advertising campaigns to
strengthen the brand’s image and retain customers
•
The threat of new entrants may become a stronger force acting against
Prada if:
▪
Regulations begin to more heavily support the new entrants into
the industry
▪
Customers lose brand loyalty for some reason that may or may not
be in Prada’s control
▪
Setting up a distribution network like Prada has become easier for
new entrants
b.
Threat of substitutes
•
The threat of substitutes is moderate in Prada’s industry for several
reasons:
▪
Like for new entrants, brand loyalty and the psychological costs of
switching, due to higher product costs, are usually quite high in
Prada’s industry, reducing the chances a customer will switch from
Prada to a substitute
▪
Due to Prada’s focus on uniqueness in style, the brand does not
have a direct substitution for its products
•
Cheaper or even more expensive substitutes do exist, but
customers may get the same unique utility out of these
products
▪
Cheap imitations of Proda’s products do exist online which could
greatly increase the threat of substitution if the replate market is
big enough
▪
The threat of substitution for Prada could increase if another brand
produces a product of similar or greater quality at a more
competitive price
c. Bargaining power of customers
•
When it comes to Prada’s industry of luxury fashion the bargaining power
of customers is quite low for several reasons:
▪
There are few firms that produce products at the quality of Prada,
meaning customers have less choice in which firm they can choose
to buy from and less choice diminishes the buying power of the
customer.
▪
The quality of products is an important factor to buyers in Prada’s
industry
•
Buyers expect high prices and are often less price sensitive
as a result, reducing their bargaining power
•
Buyers are often more brand loyal in this industry and
make repeat purchases from the same brand reducing their
bargaining power
▪
Due to being a luxury brand, Prada focuses more on top tier
customers rather than the general custer, reducing the bargaining
power of customers as a whole
d. Bargaining power of suppliers
•
The bargaining power of suppliers in Prada’s industry is moderate for
several reasons:
▪
Prada is an important customer to its suppliers in the industry, this
makes suppliers much more willing to negotiate prices in order to
keep Prada as a customer weakening their bargaining power
▪
Since Prada demands quality in its industry, there may be fewer
suppliers for the resources they need, therefore increasing the
bargaining power of some suppliers
•
The reverse can also be true where there are multiple
suppliers who offer the same product decreasing the
bargaining power of some suppliers in this scenario
e. Competitive rivalry
•
The force of competitive rivalry in Prada’s industry of luxury fashion is
strong for several reasons:
▪
Relatively few firms hold large portions of the market share in
Prada’s industry resulting in strong competitive actions by
different firms in an attempt to become a market leader
▪
Fixed costs are high in the industry in which Prada operates,
pushing a need for high revenues to cover these costs, resulting in
greater efforts among rivals to push larger volumes of product
▪
A focus on quality and differentiation in the luxury fashion
industry results in strong advertising campaigns between
competing rival firms
•
Differentiation in the industry can also work to reduce competitive rivalry
as the uniqueness of different firms products might attract different groups
of customers
•
The SWOT analysis:
a.
Strengths
•
Stores are located across the country
•
Come out with new products seasonally
•
Products are well known
•
Highly skilled and motivated workforce
▪
•
Sustained through strong internal training and learning programs
Has a strong base of reliable suppliers for raw material reduce the
likelihood and potential costs of supply chain issues
•
Constant innovation and product differentiation
•
Well established brand known high quality with a long history
•
Actively involved in the fashion world through fashion shows and other
such activities
•
Strong advertising campaigns
•
Developing a strong digital presence
b. Weaknesses
•
Limited products in stores.
•
High turnover rate on employees resulting in more time and money spent
training new employees
▪
In 2012, Prada lost one third of its managers and former employees
▪
This turnover rate is unusually high for the industry
•
Imitation Prada products hurt the bran
•
d’s image and sales
•
There are often gaps in Prada’s product lines which can lead to
competitors taking advantage of the opening
•
The owners of Prada are aging, leaving investors nervous about Prada’s
leadership in the near future
•
Prada’s brand has shown limited success in sales outside it core products
▪
•
Most of the sales are from a single product class – leather goods
Current financial planning at the firm has not been very efficient in recent
years
▪
•
Prada has not shown high positive revenues in the past few years
Not very good at product demand forecasting, thus leading to missed
opportunities in it market place
•
Lack of innovation
▪
Prada has resorted to rereleasing old product lines like Linea
Rossa, a product line from the 1990s
c. Opportunities
•
Partner with celebrities to make Prada well known
•
More franchises in countries around the world
•
The firm has shown an uptick in revenues in more recent years
•
New environmental policies in the countries where Prada operates in will
give the firm a more even playing field on which to compete with other
firms
•
New trends in consumer behavior open up new opportunities for more
products outside its core to perform better
•
Online marketplaces along with other digital and technological trends
open up new avenues for sales and extend reach
•
Social media allows for more opportunities in the realm of customer
service
•
Emerging markets in the world can be tapped
•
Can host or collaborate on fashion shows in increase awareness
•
Can partner with other firms or agencies to increase awareness
d. Threats
•
Other competing stores like Louis Vuitton and Gucci
•
Imitation products are easily available online
•
Changes in the world economy or an economic downturn may lessen the
demand for luxury fashion
•
Changes in consumer tastes may lessen the demand for the brand
•
Demands for higher wages in countries where Prada’s produces its
products may severely affect the firms profitability
•
Online consumer shopping trends could threaten the viability of Prada’s
physical locations
•
a.
Industry Analysis
Luxury Fashion
•
The segment of luxury fashion covering apparel, clothing, leather-goods,
and footwear is expected to grow 2.3% annually from 2019 until 2023
•
Luxury apparel, the largest segment of luxury goods market segment, is
expected to grow 1.8% annually from 2019 until 2023
•
Luxury leather-goods is expected to grow annually by 4.5% between 2019
and 2023
•
Luxury footwear is expected to grow 3.5% annually from 2019 until 2023
•
Growth of luxury markets can be tied to sustained growth in key regions
such as the United States and China
b.
Online Retail
•
Online retail sales are expected to make up around 25% of the market by
2025
▪
As of 2017 online sales account for 9% of all luxury product sales
which is a 24% increase from previous years
▪
Customers in the America’s make up the largest portion of the
online market, about 47%
•
Accessories, such as jewelry, are the most frequently purchased online
product, 41%, followed by luxury apparel, 26%
•
Competitor Analysis
a.
As of 2019, annual revenues for luxury fashion worldwide are around 112,880 million
dollars.
b.
The luxury fashion industry can be split into several major segments (Some of these
segments can overlap from product to product so total revenues from each segment will be used
for comparison):
•
Apparel and Accessories (Largest segment)
▪
Includes Ready-to-Wear clothing, hats, gloves, neckwear, and
belts
▪
•
Shows annual revenue of 80,623 million dollars
Footwear
▪
Includes sandals, dress boots, dress shoes, high heels, hiking boots,
etc.
▪
•
•
Shows annual revenue of 32,262 million dollars
Leather-goods
▪
Includes luggage, handbags, walles, purses, etc
▪
Shows annual gross revenue of 38,609 million dollars
Major competitors in all segments include: Armani, Gucci, Burberry,
Chanel, and Jimmy Choo
•
a.
Company Analysis
Prada is very well developed as a brand and has been around since 1913, much longer
than much of its competition
b.
It has experienced executives such as Patrzio Bertelli and Miuccia Prada who have being
majority owners Prada since the 1970s
Prada recently agreed to become part of Instagram’s Checkout program
c.
•
Helps in the firm’s goals on increasing their online market share
•
Allows the firm to offer customers new deals through e commerce
•
Extends the reach of the firm’s digital advertisement
d. Prada is publicly traded, though Patrzio Bertelli and Miuccia Prada are still
majority owners, so the firm has an obligation to their shareholders
•
Wholesales are being rationed by the firm and seasonal markdowns are
being stopped to increase revenues and ensure price consistency
•
a.
Customer Analysis
Customer Characteristics
•
Prada’s products, due to their high price points are purchased by
customers who generally hold a higher rank in the socioeconomic
spectrum
▪
These include people of higher income who may consider
themselves an intellectual or fashionista and have a preference for
premium brands
▪
•
Celebrities and socialites also customers of Prada’s brand
Customers are often wealthy are are at least of higher income, 75000+,
fashion aware, and heavily concerned about their appearance in public
•
The age range of customers is usually from 20-45 including both men and
women
•
Prada customers usually have specific style preferences, these might
include styles which are modern, sophisticated, stylistically innovative, or
are just of high quality
•
Customers are usually from large cities and suburbs in wealthier countries
around the world
5. Market-Product Focus
•
Marketing and Product Objectives
a.
Strengthen the importance the brand’s cultural heritage
b.
Uphold the objectives of the Fashion Pact signed in August of 2019 which entails a
commitment to the pursuit of sustainability in climate, biodiversity, and the oceans
c.
End seasonal markdowns and cut back on wholesale distribution to to increase revenue
from full priced retail sales
d.
Improve consistency in pricing
•
a.
Target Markets
Next generation of customers
i.Focus on online sales, shops, and products
ii.New products such as nylon belt bags, block-heeled loafers, and comic book images
iii.Using social media
•
a.
Points of Difference
Prada is not just about fashion
b.
Described as “uniforms for the slightly disenfranchised”
c.
Depth of the collection
d.
Unconventional and idiosyncratic aesth…

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