Introduction
The fashion industry is becoming more competitive and as a result high-end fashion brand houses have been forced to come up with new techniques that will enable them successfully market their products (Blaszczyk 2008).
The advancement of technology has led to the use of pop-ups stores and internet marketing, which has become a very promising marketing channel for fashion houses. These pop-up stores have enabled fashion houses move their stock more quickly and efficiently in pored to meet demand patterns and respond to consumer needs (Lancaster & Withey, 2006).
Also the supply chain members normally use pop-up stores in order to generate buzz and excitement around a new product launch or even boost the sales of certain products during specific periods.
Rubirosa
Rubirosa is a high end fashion brand that was launched three years ago and now has its dominant market located in prime areas of Europe and America such as St.Tropez, Monte Carlo and St. Moritz, Paris, Cannes, Zurich, Milan and California. Reviews from critics have been positive and many designers have praised the various designs that have been created by Rubirosa.
The brand was named after one of the most famous playboy known for his for his jet setting lifestyle, and his legendary prowess with elite women.
Porfirio Rubirosa was of Dominican decent and was career diplomat and also the man who was credited for being the inspiration for James Bond movies and lifestyle due to his particularly lavish and classic lifestyle. Among the various achievement of Rubirosa include his success as a polo sport player and also car racing. When it particularly came to cars Rubirosa used to drive the most expensive cars such as Ferrari’s.
Rubirosa will be remembered for his elegant charm and high end lifestyle that made him an icon during his lifetime. The idea of branding the fashion house after him has been greatly applauded and received by the Ă©lite community of designers positively.
Among the offerings of Rubirosa brand includes high end dresses for elegant women, designer glasses, customized designer watches, purses and designer shoes for both men and women.
The current strategy of the company is to serve the high end market hence the cheapest item among all products in the Rubirosa brand are designer glasses going for $300. The amount of returns in the high end market is attractive and this has attracted the Rubirosa to concentrate on this market.
Since the main ideology of the business was based on the fact that the particular lifestyle and ways which Porfirio Rubirosa lived then the company serves consumers who are attracted to the, most premium offering as far as fashion is concerned.
The fashion industry and current sales techniques used by Rubirosa
The fashion world requires designers and different product labels which they represent to effectively distinguish themselves not only in terms of products, but moreover by ensuring that the right brand and store design is used in marketing products and ensure that sales are at an all time high (Blaszczyk 2008).
Consumers are currently demanding for more convenient and easily accessible purchase techniques that have often contributed to the massive growth of internet marketing and also pop-up stores within various high potential locations. This is hence why Rubirosa uses pop-up stores within St.Tropez, Monte Carlo and St. Moritz, Paris, Cannes, Zurich, Milan and California, which are famous fashion cities.
In order to stabilize demand and supply patterns, Rubirosa opens up pop-up stores and offers incentives to its customers to purchase their high end products. These pop-up stores are usually set up according to consumer traffic patterns in excusive high end destinations.
Marketing and branding of designer clothing is very important since people purchase not only products while dealing with designer brands but they also yearn for the whole package that includes the shopping experience his is why Rubirosa has also put in place a state of the art online shopping centre where individuals can purchase their items online and have them delivered to their doorsteps (Blaszczyk 2008).
The simple design and display of the website helps customers to more appropriately place their orders more comfortably due to its simple nature.
The use of pop-up sales techniques and internet marketing to motivate consumer behavior has become very common and very popular among businesses because it allows consumers to experience the thrill of shopping and many and many high end fashion companies are adapting to it (Bardi & Langley, 2002).
The retail fashion industry sector was one of the many industries that were hit particularly hard during the recent recession this factor prompted marketers to concentrate more on the online market and Pop-up shops, these sales techniques have been quite effective in creating a unique type of buzz around a brand hence sustaining sales to desired levels (Ian & Chris, 2009).
The use of pop-up stores ensures that designers are able to put up sales points at unexpected locations suddenly over short periods of time in order to attract consumer interest and vanish quietly before consumer excitement goes down.
The non permanent nature of these pop up stores is advantageous because it allows designers to operate in a more flexible manner with low amounts of investment as compared to situations where other designers operate with permanent stores.
PESTEL Analysis
Political-Legal Environment
The favorable political policies of European counties and America have enabled the business model of Rubirosa to be accepted within these regions especially in the fashion capitals of Europe such as Milan and Paris (Blaszczyk 2008). This fact has made the supply chain strategy of Rubirosa a successful one. The political within Europe and America environment is thus favorable for high end fashion multinationals especially those with their roots in Europe (Carsrud & Malin 2007).
Technological Environment
European countries are well known for their high levels of technology. Rubirosa was founded on principles developing the highest quality of fashion that targets the high end consumers. The availability of technology has enabled the company develop appropriate websites that can process issues of payment, track delivery and also appropriately design the design of their clothes
Socio-Economic Environment
Many individuals around St.Tropez, Monte Carlo and St. Moritz, Paris, Cannes, Zurich, Milan and California are demanding high end luxury designer clothing. Many of these individuals do not care about pricing but rather care about setting social standards this has therefore provided a niche market which Rubirosa can cater for their needs (Ian & Chris, 2009). The availability of social classes and individuals who are economically empowered in these regions has made it easy for the company to have steady demand patterns.
External Analysis
Strategic planning when conducted in the short-run or long term it is done in the light of company’s strength, weaknesses, opportunities and threats.
A company’s strengths and weaknesses take a critical look into internal factors such as company resources, culture and structure while on the other hand opportunities and threats take a look at a company’s external environment (Wheelen and Hunger 2002).
In the business management, external analysis is one of the most important factors of the existence of the company. The basic external analysis is an attempt to match an organization with the outside impacts in which the business is situated and how this influences overall strategy.
To understand the external analysis on the Rubirosa, we have to concentrate on emerging trends and norms within the fashion industry The SWOT analysis of Rubirosa is a very important aspect because it will assist the Rubirosa improve its performance as a participant in the fashion industry (Blaszczyk 2008).
Opportunities
The high end fashion markets have a lot of consumers who still have majority of their needs and wants not yet satisfied. It is thus the duty of Rubirosa to compare its business structure and designs and compare them to designs of other dominant players such as Gucci, Luis Vuitton, Gap and other participants.
If Rubirosa will be able to identify the various weaknesses in the business models of their rivals then this can be used to their advantage (Blaszczyk 2008).
Additionally, the internet business market together with the use of pop-up stores is rapidly expanding in various parts of the world therefore making it quite a good opportunity for the organization to market its product in a much better and less costly way.
Threats
The level of competition within the fashion industry is stiff especially between well developed brands such as Gucci and Luis Vuitton dominating the industry. It is therefore harder for newer and more recent design houses such as Rubirosa to penetrate the market more easily.
Additionally, the fashion industry is highly unpredictable because tastes of consumers are rapidly changing hence; this factor makes it quite hard for those who are within the industry to operate more freely since they can lose their investments if they do not invest in the right products (Ian & Chris 2009).
These threats can have a negative impact on the fashion industry by reducing the amount of profits expected by the industry participants. Additionally, owing to the fact that consumers are dynamic due to shifting trends, it makes it hard for fashion designers to invest freely on certain products because of risk minimization strategies (Blaszczyk 2008).
Due to difficult economic times, the contraction disposable income among consumers together with other challenges such as, trade barriers, stringent government regulations and increasing minimum wage has led to increase in labor costs which pose a threat to participants such as Rubirosa within the Fashion industry.
Internal Analysis
The internal analysis of a company basically focuses on the strength and weaknesses of the organization itself, and how they impact the total business scenario and company strategies (Wheelen and Hunger 2002). In this aspect, one thing is very important, what can be determined as strength can change into the weakness in another aspect.
There are factors like finance, marketing, and the service providing capabilities, the macroeconomic factors, the technological changes and most importantly the different legal matters that come with the maintenance of the properties (Wall & Isabella 2005).
Strengths
One of the key strengths of Rubirosa is that the organization was founded on very strong and good culture that is based on the need of creating high premium fashion for a specific niche market.
The company has also recruited good managers who have a lot of knowledge as far as the fashion industry is concerned. Their business model and fashion design expertise is expected to match with the particular lifestyle of Porfirio Rubirosa which was a high class lifestyle that is not accessible to everyone but the high achievers in the society (Blaszczyk 2008).
This business culture and business model will enable the company be able to sell products at higher prices and achieve higher profit margins. Additionally, the name Rubirosa is a well respected name that is even associated with James Bond hence the brand name is expected to help the company strengths compete with well established brands within the market (Michael 2004).
Weaknesses
Rubirosa is a relatively new designer that is not well known as other fashion houses such as Gucci and Luis Vuitton. With its current lack of a well established reputation, the organization’s mission may be hard to realize unless it engages in vigorous marketing campaigns (Blaszczyk 2008).
Because Rubirosa lacks well established name recognition then this will be expected to impact negatively on the company in case the industry is full of well established competitors.
Other competitors have a huge capital base and over 50 luxury brands in their belts which generate well over $20 billion annually is sales. Well established companies are more likely to utilize profit reserves in order to expand their businesses. However, due to the young nature of Rubirosa, the company will be faced by resource constraints (Blaszczyk 2008).
Porters Industry Analysis of High end fashion market
Threat of new entrants
The threat from new entrants entering the High end fashion market is quite high. In order to build fashion houses entrepreneurs are required to have the right knowledge, staff and capital. There are numerous designer academies all over Europe and United States which has made it easy for top designers who stand out and are easily picked up by venture capitalists/investors so that their ideas can be funded (Michael 2004).
Doing business in the European Union is harmonized and with shows such as the Milan/Paris fashion festival, upcoming designers who have an entrepreneurial passion are more likely to have their brilliant ideas funded as soon as they showcase their design (Blaszczyk 2008). This fact hence means that the level of competition within the industry is high because companies can easily enter or leave the industry if they operate in a small-medium scale capacity.
Although due to the fact that companies like Gucci, Christian Dior and Luis Vuitton operate in very large capacity and have invested millions of dollars making it hard for new comers who wish to operate at their capacity/economies, it maybe wise to note that they also took many years for these companies to grow to where they are (Campbell 2002).
Moreover Gucci now has over 425 outlets in Italy alone hence establishing such stores is very hard especially for companies such as Rubirosa to develop such a supply outlet network. But due to the fact that upcoming high end designers can operate using pop-up stores and Internet marketing then this makes it easier for new entrants to enter into the industry and compete with giants.
Intensity of competitive rivalry among existing firms
All firms within the high end fashion industry are competing against each other and attempting to outshine each other. The nature of the industry is always characterized by fads and trends which are easier to imitate or replicate (Michael 2004).
Once a competitor launches a successful product that becomes a success, then other competitors may opt to follow suit by launching another product in order to react to competitor’s actions and survive within the market (Blaszczyk 2008).
The level of rivalry and competition within this industry forces companies to operate with more flexible business models that are appropriate for responding to actions of rivals. When it comes to the design of high end bags, Lois Vuitton and Gucci have over the years managed to compete among each other by constantly responding to each other’s actions.
This means that if Rubirosa wants to succeed within this industry which is characterized by high levels of rivalry within the industry, the company must put in place competitive intelligence and research and development mechanisms that will enable the company respond appropriately to the actions of competitors (Blaszczyk 2008).
Threat of substitute products or services
Consumers is certain situations can opt to go for substitute products if quality is better, price is relatively better, or the cost of switching is favorable.
The number of substitutes within the high end fashion industry may include brands belonging to the same company that may be cheaper and considered to be of high quality (Bardi & Langley, 2002). This is hence why companies must engage in regular marketing and use appropriate psychological marketing to create a difference between their more prestigious and low end products even if they are of the same quality.
In times when there is an economic downturn, then many consumers may also decide to go for black-market products that look similar to the real thing. But due to the fact that high end customers are motivated by prestige due to their social orientation hence for them adopting to substitute products that are not considered prestigious is moderately low.
The bargaining power of customers
The bargaining power of buyers depends on number of buyers within the industry who purchase from the available suppliers, differentiation of products, and the profit margin of buyers especially if they are resellers, switching costs that are associated with switching brands and the importance quality and service to the buyers (Blaszczyk 2008).
By providing high quality and highly differentiated products then the bargaining power of Rubirosa increases. But because the fashion industry is also dominated by a lot of competing companies’, buyers have more bargaining power because they can choose from a larger array of companies (Michael 2004).
The Likes of Christian Dior, Gucci, Luis Vuitton Armani, Polo Ralph Lauren, and Versace, consumers within the high end market can choose which products they like and even make quality and price comparisons hence increasing their bargaining power.
The bargaining power of suppliers
Suppliers who provide raw material can determine the profitability and viability of an industry by setting prices of inputs. If the price of inputs is high then the profit margins of the entire industry are automatically affected.
The concentration and number of suppliers also affects their bargaining power, consequently if there are a few suppliers then their bargaining power go ups but if there are many suppliers their bargaining power goes down (Blaszczyk 2008).
The fashion industry usually source the highest quality of cotton and other raw materials from developing countries, additionally the high number of suppliers within the industry ensures fashion houses are able to purchase materials at relatively lower costs.
The only disadvantage is that labor costs in Europe are much more higher as compared to labor costs in Europe hence fashion houses mass producing their products in Europe are more likely to pay more for labor as compared those that acquire labor from Europe.
Conclusion
The ability of High end fashion companies to sell products using pop-up stores and the internet has made it even easier for new industry entrants to reach out to their potential customers all over the world.
Well established companies are able to sell products because they have a well established network of retail store, which are quite expensive to maintain It is hence much better and more effective for companies to target consumers at specific times by opening pop-up stores which are more cheaper to maintain and sell more units over shorter period of time as compared to retail outlets.
The use of the internet by Rubirosa is also appropriate because customers can place their orders all round the clock and have their orders delivered to them quickly.
In order for Rubirosa to sell more effectively, the organization should keep open their pop-up stores and increase their internet presence in order for them to sell more units and save on unnecessary costs.
References
Bardi, E. & Langley, E. (2002).The Management of Business Logistics 7th edn. Mason: South-Western College Publications.
Blaszczyk, R. E., 2008. Producing fashion: commerce, culture, and consumers. Philadelphia: University of Pennsylvania press.
Campbell, D. (2002). Business Strategy an Introduction, New York: A Butterworth-Heinemann.
Carsrud, A. & Malin E. (2007). Entrepreneurship, Illustrated edition. Melbourne: Greenwood Publishing Group.
Ian, W. & Chris, B. (2009). Business environment. 6th edn. Montrel: Pearson Education.
Lancaster, G. & Withey. F. (2006). Marketing Fundamentals’: CIM Course book. London: Oxford publishers.
Michael, P. (2004). Competitive advantage, Illustrated edition. free press: Northampton, MA.
Wall, M. & Isabella, O. (2005). Chasing Rubi: The Truth about Porfirio Rubirosa, The Last Playboy. Santa Ana, California: Seven Locks Press.
Wheelen, T. & Hunger. (2010). Strategic Management & Business Policy: Achieving Sustainability, 12th International Edn. New York: Pearson Prentice Hall.