Overall Strategy
In the Taiwanese apparel market, the women’s wear segment is the biggest with a market value of 47.6% (New Look: annual report 2014). The other consumer segments include men’s wear and children’s clothing, which account for 35.7% and 16.7% of the market share respectively (Euromonitor International 2014).
The major product categories that dominate the Taiwanese apparel industry include casual, outerwear, and formal clothing for men, women, and children. International brands, such as Gap, offer multiple product lines, including clothing, footwear, and jewellery, among others (Gap Inc. 2014).
To compete effectively, New Look will need to offer products and services that are not provided by the major players.
It is apparent that while the major brands offer multiple product lines, they do not sell intimate apparels such as underwear, lingerie, vests, and bras. The level of competition in this market is low; hence, it can be a good opportunity for New Look to increase its market share in all the three market segments.
The new product line will allow New Look to “distinguish its products, create value, and gain a competitive advantage” in the apparel industry (Sharp & Dawes 2001, p. 741). New Look can offer branded intimate apparels for girls, boys, men, and women.
Since competition is low in this market, New Look can sell its products at competitive prices. Complements and endorsements from Taiwanese supermodels will elevate the popularity of the products in the three market segments.
Additionally, the Taiwanese buyers have a low bargaining power because they are usually individual consumers (Datamonitor 2009). Thus, New Look will gain huge profit margins by providing a broad price range for its products.
Intimate apparels also lack substitutes and their demand is relatively steady. Fashion and comfort are the two major characteristics of intimate apparels that New Look will need to consider when producing intimate apparels. Producing stylish, yet comfortable products can elevate the firm’s brand image in this market.
Market Segments
The major segments that constitute the Taiwanese market include the men’s wear, kid’s wear, and women’s apparels. Targeting the three market segments will give New Look a strategic advantage in the intimate apparel industry.
The women’s garments segment includes “active wear, formal wear, essentials, outwears, and casual wear” (MarketLine 2014, p. 10). Providing trendy and fancy intimate apparels will attract young women with diverse tastes and preferences. Thus, products of different designs, fashions, and sizes will appeal to a broad range of preferences.
In the women’s wear segment, New Look will need to offer products that appeal to both the old and young women subgroups. The fashion preferences of teenage girls differ from those of the adult women.
Kotler and Keller (2006) write that identifying the characteristics and needs of specific consumer subsets is essential in developing appropriate marketing strategies to reach them. This market segment is the best starting point for New Look’s Taiwanese entry, as intimate clothing is often associated with long-term brand loyalty.
In addition, young girls spend more when buying fashion items, and thus, have a strong buying power. The strong purchasing power provides an opportunity for New Look to increase its sales by providing stylish apparels for young girls.
The Taiwanese men’s wear segment is another potential market for New Look’s undergarments. Its net value in 2013 stood at $2.9 billion, compared to the industry’s average of $8 billion (Datamonitor 2013). Men’s wear in Taiwan is characterised by casual wear and sportswear due to the high health awareness among the people.
To appeal to this segment, New Look will need to provide comfortable undergarments that go well with sportswear. Taiwanese men also prefer high quality products and are willing to pay more for quality brands.
Therefore, by producing quality vests, boxers, and shorts, New Look will stand a chance of doing well in this market segment. Kid’s wear in Taiwan constitutes 16.7% of the market.
It entails formal and casual wear for boys and girls as well as baby’s clothing. The key emphasis in this segment will be on comfort as opposed to fashion.
Brands
New Look is a renowned apparel brand internationally. Its strong brand image is an intangible resource that it can use to enter new markets successfully. Pitta and Katsanis (1995) argue that leveraging brand equity can help a firm to introduce new products into a market at minimal costs.
In this view, retaining its established brand name will reduce New Look’s costs of entering the Taiwanese apparel market. Advertisement and product promotion costs are high for brands being introduced into the market for the first time (Pepall, Richards & Norman 2005).
Thus, by introducing its undergarment products as extensions of the New Look brand, the firm will cut considerable costs.
New Look will need to introduce brand extensions or sub-brands that appeal to the three market segments. Brand extensions like the New Look lingerie will appeal to the young and the old women. The brand name will add value to undergarments designed for men, women, and children, and give the firm a strategic advantage.
References
Datamonitor 2009, Global Textiles: Competitive Landscape, Datamonitor, London.
Datamonitor 2013, Apparel Retail Industry Profile: Taiwan. Web.
Euromonitor International 2014, Apparel and Footwear in Taiwan. Web.
Gap Inc. 2014, Gap Unveils Three Story Flagship Store in Central Taipei. Web.
Kotler, P. & Keller, P. 2006, Marketing Management, Prentice Hall, New Jersey.
Market Line 2014, Apparel Retail Industry Profile: Asia-Pacific. Web.
New Look: annual report 2014. Web.
Pepall, L. Richards, D. & Norman, G. 2005, Industrial Organization, Contemporary Theory and Practice, John Wiley, Ohio.
Pitta, D. & Katsanis, L. 1995, ‘Understanding Brand Equity for Successful Brand Extension’, Journal of Consumer Marketing, vol. 12, no. 4, pp. 51-64.
Sharp, B. & Dawes, J. 2001, ‘What is Differentiation and How Does it Work?’, Journal of Marketing Management, vol. 17, no. 1, pp. 739-59.