Lilly Pulitzer Strategic Brand Extension Paper
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Lilly Pulitzer Strategic Brand Extension Paper Lilly Pulitzer Strategic Brand Extension Paper Document Transcript

  • 1 LIFE’S A PARTY FOR LILLY LOVERS:BABSONCOLLEGE GROWING & STRENGTHENING LOYAL BRAND COMMUNITIES WITH NEW PRODUCT OFFERINGS Alexandra R. Glazer Marketing Management Professor Metraux March 11, 2013
  • Executive Summary From sailboats, to buttons, birthday cake, lipstick or African critters, Lilly Pulitzer has aprint for it all. I am Alexandra Glazer of Glazer Consulting and I will be the AccountCoordinator on the Lilly Pulitzer Alcohol Brand Extension Account. Lilly customers are not likemost other retail customers, because buying Lilly Pulitzer coincides with portraying a certainlifestyle. In Oxford Industries‟ words, a lifestyle brands are “those brands that have a clearlydefined and targeted point of view inspired by an appealing lifestyle or attitude”. There is a cultfollowing that forms this brand community supporting the label. In some ways these existingcustomers make introducing new product offerings more simple, because of the already existing,easy to access and eager audience. However, because there are such loyal fans, each new productmust be strategically examined to avoid damaging this strong bond between customer and brand.The attachment Lilly lovers have formed for the brand is part of the reason why Lilly Pulitzeroften asks consumers for their input. Though the company is actually not that large, there areonly 17 retail stores nationwide, its presence feels larger because of the enthusiasm behind thebrand. Lilly originally became best known for their sundresses, but over 50 years later they havebecome known for a lot of their lifestyle products. Most customers are not one-time buyers butrather own several items to fully outfit their life in Lilly, outside of just retail. One of the mosthighly coveted items is actually the Lilly Jeep Cherokee or Lilly golf cart, the ultimate sign of areal Lilly fanatic. If Lilly fans will flock to anything with the Lilly print and script logo, why notintroduce a colorful and classy alcohol brand extension that fits in with the company? Throughmuch research, it was proven just how perfectly this idea fits with the already existing marketing,partnerships, products and overall content they use. Suggested will be a partnership with SkinnyGirl Cocktails, to a form an exclusive limited time offering, Skinnylilly. Glazer Consulting hasprepared a multifaceted marketing plan surrounding social media with three steps: an awarenesscampaign with Facebook contest prior to the product launch, a Foursquare & tracking widgetimplemented throughout the launch and the Shake it Up: Cocktail Picture Contest after theproduct has been in stores.It all started with a juice stand… The year was 1959 in Palm Beach Florida - Lilly Pulitzer was a New York socialiteworking at a juice stand when she developed a line of colorful dresses to hide the citrus stainsshe was getting on her clothes. Jackie Kennedy was photographed often wearing these classic
  • pieces, and soon enough everyone else desired the new and innovative clothing line as well.Eventually, Pulitzer no longer wanted to own the company, and so it was bought by SugartownWorldwide Inc. in 1993 and then again by Oxford Industries in 2010 for $60 million (New YorkTimes); however, Pulitzer does still remain active. Before acquisition Oxford‟s operatingincome was just over $40 million until Lilly Pulitzer boosted sales and increased income to justunder $70 million (2011 Annual Report) (Exhibit A). Oxford Industries “acquires additionallifestyle brands [they] believe fit within [their] business model” (2011 Annual Report). Theirmission which further explains why Lilly Pulitzer operates the way it does says, “lifestylebranded products create an emotional connection with our target customers [and] can commandgreater customer loyalty and higher price points at retail, resulting in higher earnings” (2011Annual Report). From 2011 to 2012, comparing the second quarters, Lilly Pulitzer increased netsales by 24.5% proving just how financially stable this company is (2012 Quarterly Report)(Exhibit B). Lilly‟s customers are primarily affluent, female tastemakers, between the ages of 16 and45, with preppy influences, who likely started wearing the brand at a young age and continueddoing so through adulthood. There are certainly different degrees of “Lilly Lovers”, but thereexists a particular segment with an obsession. One interviewee expressed, “I surround myselfand my closet with everything possible that is Lilly”. Because the brand of Lilly itself has thismuch power over its customers, there is virtually no competition because nothing can substitutefor a Lilly dress. In other words, the brand personality is comprised of “thinking” and “feeling”thoughts. “Thinking” Lilly would be symbolized by someone stating, “Lilly is preppyexcellence, classy, and the unofficial uniform of the preppies.” How people feel about Lillywould be expressed through a customer stating, “I am young, independent, and stand out whenwearing Lilly. Lilly adds a pop of color and an element of fun to each and every day.” At thecore of Lilly Pulitzer are the building blocks the company is primarily associated with andoperates on such as socialites, patterns, color, classy, preppy, east coast, and more. Theirextended identity is comprised of partnerships, lifestyle products, men‟s clothing and more. Afull look at the core and extended brand identity can be found in exhibit C.New Product Offering for Lilly Pulitzer
  • Glazer Consulting has made its mission to determine what the best product for LillyPulitzer to expand into will be. Oxford Industries believes “a successful lifestyle brand opens upgreater opportunities for direct to consumer operations as well as licensing opportunities inproduct categories beyond our core” (2011 Annual Report). In order to make this determination,a vast compilation of research deemed necessary. The team thought carefully about what LillyPulitzer could be lacking and what kind of product would make sense for this company.Ultimately, the idea that spurred the most excitement and promise was a Lilly-branded line ofalcohol products. This seems to make complete sense as the company sells everything needed fora party sans the actual alcohol to fill the cocktail shakers, wine glasses, and pitchers. While someconcerns are inevitable, Lilly Pulitzer promotes the idea that Lilly girls enjoying their cocktailswith patterns such as Drinks on Me, Spike the Punch, and Scorpion Bowl. In addition, in 2011,Lilly Pulitzer paid tribute to Gosling‟s signature drink, “Dark‟N Stormy” by creating a limitededition print featuring the Goslings bottle available in only a few select items. The marketing forthis print included the words “our new party friend”, “happy hour” and clearly displayed theGosling‟s logo (Exhibit D). In fact, many articles were published commending the “refreshinglyfashionable pair” (Newport Stylephile). After all, does this idea not seem to fit in extremelywell? In order to further explore the concept, the Glazer Consulting team had to determine whatkind of alcohol would sell best and how it would be marketed. With the remaining questions stillunanswered, the team sought out and approached Lilly‟s loyal fan base with the potential idea foranswers.Meet the Lilly Lover Mentality Lilly Pulitzer fans are unlike many others; the brand has cultivated a strong, opinionated,and energetic following, otherwise known as a brand community. These fans enjoy beinginvolved with the brand as much as possible, and often contribute valuable insights that give thecompany accurate direction of how to proceed. Interviews and a survey were administered andGlazer Consulting received great results. Starting off very generally to confirm the team‟sthoughts, fans were asked to think of words used to describe Lilly Pulitzer. To no surprise, manyof the words overlapped including “colorful prints”, “playful”, “timeless”, “classy”,“whimsical”, “summer” and so forth. The team also thought it would be important to get deepinside consumer minds and find out what Lilly really means to them. Here are quotes that trulyshowcase the consumer‟s product infatuation:
  • “Lilly Pulitzer Successfully branded happiness; wearing Lilly seeing Lilly, owning Lilly makes you happy” “I surround myself and my closet with everything possible that is Lilly” “I love the lifestyle the brand promotes. Her pieces are timeless and I will be able to wear for life” The company has never come forth and said what exactly it is that they are promoting,rather they leave the interpretation up to customers through their happy go lucky, always summerattitude and imaginative prints. The fact that so many people can be on the same page, idealizingabout this lifestyle that Lilly Pulitzer represents, is extremely powerful. One survey respondentsaid, “I love both the Lilly style and what being a Lilly girl is all about”; to someone else in thebrand community, you just know what „being a Lilly girl‟ means without having to describe anyfurther. In terms of habits, 92% of respondents said that they purchase Lilly products because ofthe print or pattern, following with 70% being because of brand loyalty. Another finding was that80% of those surveyed, follow Lilly on at least one social media site and also have participatedin a social media sweepstakes, contest, poll, etc. We found that the largest motivator forparticipating was because the prize was enticing with 62%.Fans Back Brand Extension After getting basic information from Lilly Lovers, the alcohol brand extension conceptwas introduced. When fans were asked if they would purchase an alcohol product if it wasavailable, 92% agreed that it was an exciting opportunity, and of that, 82% suggested thatcocktail mix would be the best area to penetrate. One respondent noted, “People are so loyal totheir wines, where they are made, and the vintage, I think a cocktail mix would work better.”Glazer Consulting is not oblivious to the fact that alcohol could spur some concerns about howthis could affect Lilly Pulitzer‟s image. 64% of those on the survey answered that the idea doesnot bother them or that they love the idea and that it fits perfectly with the brand. Though thiswas a high percentage, the sensitive segment concerned the team, thus Glazer Consulting tookthe idea to corporate to get some additional feedback.Corporate Concerns
  • While listening to the fans is always important, companies must ultimately makedecisions based on what is best for the brand‟s overall image. One employee gave some greatadvice on how to approach the brand extension: “We want to keep the brand as family friendly as possible... we often promote how a Lilly Girl loves to party and enjoys her cocktails, but I dont think wed ever go into alcoholic products that would so drastically tie us to that image” Glazer Consulting took that notion to heart and thought about how to get around thisnegativity that may result. One idea brainstormed was to do a partnership with another companythat has a similar existing image and mission. When the team shared this possibility with theemployee, she agreed this was the best angle to take to best combat any negative retaliationtoward the brand.Current Marketing Techniques The company has several different marketing approaches that they take, most with theunderlying theme that they don‟t need to spend much money on advertising expenses because oftheir loyal fans. These techniques include social media sites: Facebook, Twitter, Instagram andPinterest with widgets, sweepstakes, contests, polls etc., brand representatives, guerillamarketing, promotional events, partnerships, and the personal accounts of Lilly Lovers. OnFacebook alone Lilly boasts 477,000 likes, with 67,000 on Twitter, 55,000 on Pinterest and lastly47,000 on Instagram. Their social media sites have had history of successful campaignsincluding Lilly Love, Next State Print, Cracker Tracker, Get the Squeeze, and Lilly Loves Greek.Key Findings Glazer Consulting has concluded the determining factors that must be included in theproduct launch of a new Lilly Pulitzer product offering, in particular this alcohol brand concept.Being consistent with the signature colors and patterns on the bottle‟s artwork will be important.It is apparent fans are definitely interested in having this product, but there are concerns aboutthe negative connotation surrounding the existing “family brand”. Lilly‟s strong social mediapresence and history of online campaigns makes it clear that fans are very engaged online.
  • Proceeding Properly: Analysis Glazer Consulting has come to several conclusions on how to properly precede in the bestinterest of Lilly Pulitzer. First, the alcohol brand extension will be a limited edition, cocktail mixline to prevent from any permanent brand dilution and negative connotation associated withirresponsible drinking. There will be a social media campaign implemented with enticing prizesto encourage participation. While it is recognized that there are concerns about brand image, ifLilly has partnered with Goslings‟ in previous years and come out strong, no issue should beanticipated if this brand extension is strategic in its marketing.Introducing Skinnylilly After much conducted research, Glazer Consulting has found a solution that allows for analcohol brand extension while keeping brand reputation successfully intact. Lilly was able toavoid attacks with Goslings because it was approached appropriately and consumers had anattachment to the Dark‟N Stormy beverage. Glazer Consulting‟s solution for this is to form apartnership with Skinny Girl Cocktails to co-brand and develop a limited edition, low calorie,special product under the name “SkinnyLilly” (Exhibit E). Skinny Girl has establishedthemselves in the industry as sophisticated and classy, not to mention the company is extremelyfinancially stable as the fastest growing “ready to drink” beverage in the spirit industry, seeing388% growth in just 2011 (Hsu).While partnering with an already existing company not onlymakes financial sense, the limited edition aspect and co-brand will prevent any permanentassociations of alcohol to the “family brand” of Lilly Pulitzer. Another key element to this brandextension is the fact that the line has been chosen as a cocktail mix as opposed to hard liquor orbeer which has an entirely different negative connotation. When marketed appropriately,“Cocktail Mix” conjures up an image of older socialite women, casually sipping a drink at afriend‟s garden party.. Launching SkinnyLilly under these two very reputable and establishedcompanies, we believe, will deter the sensitive segment to any attacks on the sub-brand. Inperspective, Lilly Pulitzer already produces several alcohol associated products: cocktail shakers,pitchers, wine glasses, coozies, tailgate coolers, in addition to blatant alcohol named printsincluding scorpion bowl, drinks on me, spike the punch, mint julep, etc. If the brand is alreadytreading so close to the line of promoting alcohol, with little concern to these products, it seemsslightly hypocritical for consumers to lash out.
  • Why Skinny Girl? Skinny Girl has been chosen for a number of reasons as the right partner for this brandextension. It is not just about Lilly having a partner, but it is about having the right partner. Thispartnership seems seamless because of their very similar core and extended values. Both brandspride themselves on being feminine, with a sophisticated, classy, and flirtatious theme. Inaddition, Lilly‟s slogan “Life‟s a Party, Dress Like it”, fits well with Skinny Girl‟s mantra,“Drink like a Lady” (Exhibit E). The Skinny Girl image portrays the idea that if you are going toenjoy a beverage, make sure you act like a lady while you do - and this is continually importantin maintaining the high end image that both brands choose to portray. Not only does Skinny Girlsay to drink like a lady, the celebrity endorsement of very accomplished Bethenny Frankel(founder and previous owner), says be a role model as well. Bethenny is a well-respectedcelebrity chef and socialite who originally gained her stardom being on Bravo‟s RealHousewives of New York City. Since then, she has had 3 of her own TV shows, 4 self-helpbooks, an array of other products under the Skinny Girl brand, an exercise DVD and more. Shealone has almost 875,000 Facebook followers on her personal page not including any of heradditional brands or their presence on Twitter, Blogger, or other sites. Combining two networksof fans with a strong brand affiliation is very positive for SkinnyLilly; fans are going to flock tothis product as many of them are already overlapping customers. And of course, the financialstability and success of Skinny Girl makes the company an appealing partner. Partnering withLilly makes sense for Skinny Girl, as the company will sell to a potentially untapped market ofwomen. This will not only serve as strengthening the Lilly Pulitzer brand community, but as abonus for the Skinny Girl brand that is already on the rise. Getting the product to stores will be ofno issue as Skinny Girl already has accomplished an effective supply chain with establisheddistribution partners, vendors, etc.Marketing SkinnyLilly Marketing a product is the most crucial element in ensuring that any product will besuccessful. Fortunately for Lilly Pulitzer, they take advantage of marketing products throughsocial media because of their well-established online fan base which costs little to no money inadvertising. Glazer Consulting has prepared three marketing suggestions to implement for the
  • marketing of SkinnyLilly Cocktail mix. There will be 3 phases, of which each will have theirown marketing campaign.Phase One: Generating Awareness & Buzz In Phase 1, before Skinnylilly actually hits stores, there will be a Facebook campaignfocused on generating awareness for the product. In order to get fans excited for the launch in thecoming year, Lilly will reach out to its audience asking them to choose what the flavor and nameof this cocktail mix will be (Exhibit G). In order to add another element of fun, Lilly lovers willalso submit a short description/story behind the name of the cocktail and why it is relevant toLilly. The best flavor as determined by other Lilly Lovers will become the name that is used forSkinnyLilly. What this means is that after all entries are received, the Lilly community will beable to actually vote on five of the best entries. Entrants will need to accumulate votes, whichwill involve a plethora of sharing, comments, likes, etc. and even more word of mouth. Thewinner will also receive a Lilly dress of her choice from the summer collection as something tolook forward to. This shows that Lilly really cares about its customers by getting their input andgiving back by rewarding a Lilly dress which is something exciting to a consumer.. Theobjective of this campaign is to generate as much hype and awareness for the product aspossible. If people are excited about the launch, they will talk to others about SkinnyLilly andanticipate its arrival to stores. In addition, providing such a large opportunity for Lilly Lovers tobe so active in brand decisions makes fans feel closer to the brand.Phase Two: Tracking Campaign & Foursquare Specials After SkinnyLilly has been officially launched and reaches stores, it is important tocontinue the buzz and get fans to the stores to buy and try the product. Similar to earliercampaigns with Florida‟s Natural Grapefruit Juice and Barnum‟s Animal Cracker, Lilly willcreate a “cracker tracker-like” (Exhibit F) widget through the Facebook page for consumers tocheck in where they have found the product, maybe add a photo, and share their experience andexcitement. Connecting the widget to the location-based social media app Foursquare will allowthis to be even easier. Anyone can log in to Facebook and then check in through Foursquare,activating a “Newbie” special, notifying all of their friends of their actions and their location.Check-ins with photos and comments will be available to add and will be mapped on the“Cocktail Country” tracker map where anyone can click to see the nearest sighting (Exhibit H).Foursquare operates on location based marketing and brings in clientele through checking in
  • with certain badges and specials. The “Newbie” special is for first time check-ins that usuallycomes with a discount. Retail stores of SkinnyLilly will be asked to activate a 25% off Newbiespecial for anything in the store other than SkinnyLilly, therefore benefitting more sales anddriving traffic to this said liquor store (Exhibit H).Phase Three: Shake it Up: Cocktail Picture Contest The final phase of the SkinnyLilly marketing plan is the Shake it Up Cocktail PictureContest. This part of the plan will go live two months after SkinnyLilly products are in stores.The rationale behind this is that there will be ample buzz from the launch and trackingcampaigns; however, the excitement may begin to wear off after two months. To prevent any lagof sales during this limited edition product cycle, there will be another sales peak provoked afterthe picture contest details are revealed through Facebook. Glazer Consulting is also anticipatingmany fans to go out within the first two months to purchase the product and may not return backto the store as quickly for round two. The picture contest asks for loyal fans to create theirfavorite cocktail using SkinnyLilly and post the ingredients. However this is just part one; fansmust also take a picture of themselves in their favorite Lilly dress while enjoying their cocktailand featuring the SkinnyLilly bottle in the photo. In order to drive traffic back to the stores, asthis picture campaign requires a bottle to be in the picture, fans will be obliged to return to thestore, purchase additional product, and experiment with recipes. By posting different recipes, thiswill give other fans ideas of how to use their SkinnyLilly and provoke more drinks, thus morebottles purchased! As usual, a prize is a large motivator for Lilly Lovers, so cocktail shakers andglassware sets in the SkinnyLilly print will be rewarded to the contest winner.Timeline/Wrap Up Skinnylilly will be in stores from spring through fall of 2014. In order to best market theproduct the following will be the schedule of marketing materials and when they will bedistributed through proper Lilly Pulitzer channels. Phase One will roll out one year prior to thelaunch of the campaign and it will be 5 weeks long which gives enough turn over time forcreative. After the product is in stores, phase two will launch and be available for the length ofthe campaign. The last part of the campaign will be implemented after 2 months and will last atotal of 7 weeks. Winners and 10 runners up will be announced 2 weeks after the competitionends.
  • ExhibitsA.B.C. Accessories Partnerships Lifestyle Products Sorority Line Men’s Clothing Socialites Iconic Classy Preppy East Coast Sundresses Palm Beach Playful Patterns
  • D.E. “Life’s a Party” Flirty Feminine Classy Sophisticated Life of the Party “Drink Like a Lady”
  • F.G.H.
  • AppendicesOxford Industries Income Statement, 2011-2012Lilly Pulitzer 2012 Operating IncomeAnnual Report
  • Works CitedDe La Merced, Michael J. "DealBook." Prep Stays Hot as Lilly Pulitzer Is Sold for 60 Million Comments. New York Times, 21 Dec. 2010. Web. 11 Mar. 2013.Hsu, Tiffany. "Bethenny Frankels Skinnygirl Leads Spirits Growth with 388% Boom." Los Angeles Times. Los Angeles Times, 09 Apr. 2012. Web. 11 Mar. 2013."The Newport Stylephile." The Newport Stylephile. N.p., 5 July 2011. Web. 11 Mar. 2013."Oxford Industries, Inc. – 2012 First Quarter, Quarterly Report." Oxford Industries, Inc. - Quarterly Report. N.p., 06 June 2012. Web. 11 Mar. 2013."Oxford Industries, Inc. - 2012 Second Quarter, Quarterly Report." Oxford Industries, Inc. - Quarterly Report. N.p., 30 Aug. 2012. Web. 11 Mar. 2013."Oxford Industries, Inc. – 2011 Annual Report." Oxford Industries, Inc. - Annual Report. N.p., 30 Mar. 2012. Web. 11 Mar. 2013."Really? Bethenny Frankel‟s Skinnygirl Is Fastest Growing Brand in the US." Really? Bethenny Frankels Skinnygirl Is Fastest Growing Brand in the US. BrandManager, 9 May 2011. Web. 11 Mar. 2013."Skinnygirl Cocktails Are Fastest Growing Liquor Brand, Report Says." NBC News. N.p., n.d. Web. 11 Mar. 2013."Stick to Your Brand Even When the Sky Is Falling." Digital Surgeons. N.p., 23 Aug. 2012. Web. 11 Mar. 2013.