Reiss Three Year Marketing Plan
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INTRODUCTION
Created in 1979 by David Reiss, Reiss is has developed into a powerful brand offering stylish clothes at affordable prices. 2006 proved to be a successful year for the organization, where it achieved ÐЈ6.8 million in operating profit and sales of ÐЈ44.5 million. Currently, it has 39 stores worldwide and is expanding rapidly. The following 3 year strategic marketing plan will demonstrate the steps Reiss need to take in order to become a dominant force in the UK and a strong international brand.
Keys to success:
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E-business development
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International expansion
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Domestic market growth
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Product development
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Brand awareness
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Organization flexibility
SITUATION ANALYSIS
2. 1 MACRO ENVIRONMENT
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ECONOMIC
In order to tackle interest rates, The Bank of England has increased interest rates to 5.25%, which will subsequently decrease consumer expenditure.
The recent rise of inflation to 3% has made it more expensive and left less disposable income for consumers.
The key Consumer Price Index to a decade high of 2.7%.
Although, unemployment decreased by 7,000 from August to October, leaving it to 5.5% in the UK
General consumer expenditure (GMID 2006) has increased to ÐЈ742,977,000,000, which can be demonstrated in figure 1.
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SOCIAL
The UK populations is ageing
The birth rate is declining.
2.2 MARKET ANALYSIS
Overview
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There is still a strong interest in fashion.
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UK spending on clothing has increased, which can be demonstrated in figure 2.
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Demand is doing well, but the industry is expected to fluctuate due increasing costs in borrowing. 2006 is projected to be a tougher year.
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Although costs are increasing, prices of clothing are decreasing due to a very competitive market.
Opportunities
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Although lowers price have increased demand, consumers are not mainly influenced by price when making sales. Fashion is one of the main elements.
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Celebrities and fashion media are still a huge influence in the market.
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Sales of fashion accessories have increased by 40% from 2000 to 2005 (Mintel — Fashion Accessories Retailing — 2006).
Threats
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Demand is expected to decrease in 2007
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Erratic weather and fashion trends make it more difficult for retailers.
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Price Deflation.
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Catwalk trends have become less influential than previously, due to the erratic market.
PORTERS 5 FORCES
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The Bargaining Power of Customers
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Buyer power is high due to substitutes.
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Buyer price sensitivity is high.
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Buyer volume has risen.
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Buyer information availability has increased.
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Switching costs are low.
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The Bargaining Power of Suppliers
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Bargaining Power is low.
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High presence of substitute inputs.
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Supplier switching costs low.
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The Threat of New Entrants
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Barriers to entry low.
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Switching costs low.
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Access to Distribution easy.
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Government policy liberal.
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Brand identity strong.
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The Threat of Substitute Products
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Buyer switching costs low.
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Level of product differentiation high.
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Brand loyalty decreasing.
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Price elasticity increasing.
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The Intensity of Competitive Rivalry.
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Competition high
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Industry growing.
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Middle market being squeezed.
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High diversity
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Brand equity high.
2.3 CONSUMER ANALYSIS
Overview
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In 2006, the fashion market has become very competitive and consumers have become more demanding of price, quality, and styling (Mintel — Clothing Retailing 2006).
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Customers are a lot more fashion conscious now and confident with what they