Padini Holdings Berhad Case Study
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1.0 Introduction
As the current economic environment becomes more competitive and introducing new brands becomes increasingly costly, companies must find new brand strategies to increase their capacity and competitiveness (Lipponen et al., 2004). Brand strategy defined as how the brand intends to create customers and advance them beyond the reach of competitors (Mann, 2010). A brand strategy will position customers as a key part of the companys competitive edge.
According to Aaker (1996), brand equity has four elements, which are brand loyalty, brand awareness, perceived quality, brand association are fundamentals of value creation. Brand loyalty encourages repeated purchase behavior from consumers, and discourages them from switching to competitor brands (Yoo et al., 2000). Therefore, the greater the customer loyalty, the higher the brand equity will be. Customers product experiences, expenditure situations and unique needs might influence their judgment of product quality (Yoo et al., 2000). A brand association is anything that linked in memory to a brand (Aaker, 1996).
Brand image is the overall mental image that consumers have of a brand, and its uniqueness in comparison to the other brands (Faircloth, 2005). Faircloth et al. (2001) found that the more positive the brand image, the more consumers are willing to pay and thus the greater the brand equity.
2.0 Background of Padini Holdings Berhad
Padini Holdings Berhad is a Malaysia-based investment holding company. Padini began operations as Hwayo Garments Manufacturers Company in 1971, it was affiliated in garment manufacturing and wholesaling. It entered the retail industry in 1975 with flagship brand Padini. The name “Padini” was selected by Mr. Yong Pang Chuan, the founder, out of five brand identities crafted by a consultant.
Padini started from humble beginnings in the apparel industry, but with the driven by a vision, “we ventured into distribution and retail by creating our own brands catering to specific consumer niches”. Today, Padini is a leader in the multibillion textile and garment industry in Malaysia. Padini has 10 labels (refer to Appendix 1) in their family of brands and retail in 330 freestanding stores, franchised outlets and consignment counters in Malaysia and around the world.
3.0 Branding
3.1 Brand Image
Brand image is developed over time through advertising campaigns with a consistent theme, and is authenticated through the consumers direct experience (Burmann et al, 2008). Padini is an iconoclastic name which is something unique, different and memorable. Padini do not have any specific logo, they used their corporate as their corporate logo. Padini used black colour for the all the brands, which represent distinctiveness, power, sophistication and elegant.
The types of brands for Padini Holdings fall to flanker brand. Padini sells both mens and ladies shoes and accessories, garments, ancillary products, childrens garments, maternity wear and accessories through various subsidiaries. Its most prominent brands are Padini and VINCCI.
The Vision of the Padini Group is “To Be The Best Fashion Company Ever”. The Mission is “To Exceed Customers Expectations And Our Brands Promise”. Their core value is “Caring From The Heart” (refer to Appendix 2). They aspire to be a global leader in the fashion and retail industry with the highest standards in design, manufacturing, quality, customer service, branding and innovation. As a creatively driven and design oriented group, they want to create fashion consciousness that is stylish yet affordable within their brand niches.
3.2 Brand Awareness
Padini Holdings relies on two main factors to drive awareness of the 10 brands it owns, which are consistent store presence and always giving the customer a reason to stop by. With over 330 free-standing stores nationwide, Padinis brands are present in every major shopping mall. Some of the Padinis brands have identities that have made them automatic destination s for shoppers looking for particular styles.
Another business decision that helped boost the groups brand identity and the brand awareness of its labels was the introduction of the Padini Concept Store in 1997. The large 21 standalone multi-brand stores have paid off not only in reducing rental and operational costs. Padini Concept Store has become must-see destinations for shoppers. Padini Concept Store serve as a one-stop shopping for the consumer which included all Padini brands fit in a place.
During the downturn, Padini Holdings focused on its bargain-friendly Brands Outlet stores which focuses on high-volume fast-selling garments at low prices. Introduced in 2007, Brands Outlet features Padini designs, but with more affordable fabrics and lower-cost production resulting in rock-bottom prices. The Brands Outlet stores have been a growth driver for the Padini Holdings, which contribute around RM54.6 million in sales of the brands own products (Tan, 2010).
3.3 Brand Equity
“We tuck the concept store in a remote corner and shoppers will come looking for us”, said by Mr. Chan Kwai Heng (Executive Director). It proven that the Padini Holdings has brand equity in the market. Nowadays, Padini Concept Store becomes a must-see destination for shoppers. “Our brands currently possess a level of brand equity that is not only comparable, but which also exceeds that enjoyed by many international brands,” said by Mr. Chan.
3.4 Brand Strategies
Padin have started to focus their brand strategy to meet the needs of value-conscious customers, such as opening more brand outlets that target the lower end of the market (Teoh, 2009). Padini quick turnaround time for styles, VINCCI has something new every week, and the other brands, every month give customers a reason to walk into the stores. “If you walk into Padini Concept store and cannot find a pair of VINCCI shoes you like, do not worry. Return in a weeks time and there will be something new”, promises by Mr. Chan. During sales, the group releases stockpiles of more affordable merchandise that is further discounted up to 70%.
Padini spread their target market widely by introduced different brands with different styles. For instance, VINCCI – ladies shoes, Padini – office-wear, SEED – urban contemporary style, PDI – preppy casual, Padini Authentic – collegiate quality casual, MIKI – maternity and childrens fashion, P & Co – fuss-free fashion, VINCCI accessories – accessory-haven, VINCCI+ – affordable luxury