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An Internationalization Strategy for a High-End Fashion Brand

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  1. 1. Aurore PAKIMIM M2 – TDB ANJA GOCKEL LONDON GOES EAST An Internationalization Strategy for a High-End Fashion BrandKatrina PANCHOUT November 2010
  2. 2. I. Anja Gockel’s Business Footprint in Russia 1) Marketing StrategyAnja Gockel is a German brand offering high-end fashion fashion for women. Her style isdescribed as « opulent but noble » for women who have strong personalities and considertheir clothes as a way to express their individualities. The brand is clearly upmarket,targeting women with a high disposable income, who are nither price nor brand sensitive,but want to stand out with clothes that are very original and unique in designs and colours.For Anja Gockel, entering the Russian market implies a new marketing strategy that isadapted to the market. With a size reaching USD 11.1 billion in 2006, the Russian market isthe biggest single womenswear market in Eastern Europe and it is expected to grow indouble-digit numbers. Besides, the sales generated by high-end fashion is expected tiincrease by 30 to 40%. So this market represents a real opportunity for Anja Gockel.The consumer(s)Although the Russian consumer has, on average, a lower disposable income, the budgetdedidacted to clothing is much more important. And people are willing to buy expensiveclothes to demonstrate a status. There is a real culture of conspicuous consumption inRussia, and women give a particular attention to their outward appearance, spendingmoney on expensive fashion items even if they can not afford it. Another aspect tounderline is that the Russians are sensitive to Western trends and lifestyles.Hence the Russian target customer shows some similarities with Anja Gockel’s Germancustomer. They look for originality, or even eccentricity, to demonstrate their individualityand status. These customers care about their self-image and are not price sensitive.Looking at Sinus Milieus for Russia, and considering the one for Germany, it appears thatthe target customer in Russia belongs to the ‘Success- and Career-Oriented’ and the‘Alternative life’ groups, plus the top part of the ‘Entrepreneurial Popular’ that overlapsthe ‘Alternative Life’ group. Besides, we need to keep in mind that Russia is an emergingmarket, so we need to focus on already established groups but at the same time, we mustnot neglect the aspirational groups, who for now try to reproduce the behaviour of ourtarget segment but who on the long term will be our target customer.SegmentationOriginally, Anja Gockel’s target customer in Germany is the 20-60 years olds. But obviouslyits key segment is 30-45 years olds, or the executive woman with a strong personality, whowants to reaffirm herself and show that she is successful. However in Russia, we need todo more detailed segmentation in terms of price, lifestyle and attitudes since there is animportant social, economic and geographic disparity. Hence we might define two profilesof customers : the woman who has a high disposable income and looks for fashion itemsthat refect her status and personality, and the woman who wants to stand out with originalclothes to show a status, even if she has a more modest financial situation. As aconsequence, a development in terms of product range will be necessary.In other words, Anja Gockel needs to develop a range of more affordable items, or a newcategory of products such as accessories.PositioningThe objective on the Russian market is to convince our target customer that Anja Gockel isa brand that enables women to stand out and express their personalities with their clothesbecause Anja Gokel offers an original and very unique style of high-end fashion.
  3. 3. Marketing MixProduct :Anja Gockel is positioned on a premium market, offering high-end fashion items for women(clothing and accessories). Her collections are compsed of two seasons each year (Spring-Summer and Fall-Winter) declined into two product ranges Anja Gockel London and AnjaGockel London Collection. These two categories are mainly differentiated by their prices,but also by the sophistication of the designs and fabrics. The essence of the brand willremain the same, the only adaptation will be in terms of product range, which will be anextension of the current collections. The ide ais to export the brand through differentcollections, but with a cohérence between all of them.Price :Since Anja Gockel’s clothes are upmarket, the price must be set accordingly. The priceembodies the dimension of status, especially in Russia, so both ranges should be highpriced. Nevertheless, as mentionned previously, Anja Gockel London and Anja GockelLondon Collection would offer different price ranges. Anja Gockel London, providing lesssophisticated clothes will be priced slighlty less high than Anja Gockel London Collection,mainly targeting women with high disposable income. As for the accessories, the price willbe high, but more affordable.Place :Moscow and Saint Petersburg are obviously the two cities where Anja Gockel must bepresent. The main distribution channels that would be used are prestigious departmentstores such as GUM, and international trade chains. In the case of GUM, it might be morerelevant to start in independant boutiques and once the brand is well-recognized, we canconsider going on with a single-brand store.Other places-to-be are trade fairs and showrooms. These are important sales channels,with among others the Collections Premières Moscow (CPM), organised by IGEDO, on of thebiggest biannual fashion events. Anja Gockel will have to have a show room in a fashioncenter, where buying agents frequently go to to find collections they are interested in.Promotion :Anja Gockel needs to put a lot effort on marketing, all the more so the brand is not knownat all in the country. Being present in fashion magazines (eg : Vogue, Marie Claire) iscrucial, but we also need to build a strong personal relationship with the customer ; and away to get closer to the consumer, but also to increase this idea of uniqueness is toorganise fashion events or special events dedicated to the end-client or to the buyers. Itcan be private sales/events or pre-collection shows or insights of the upcoming collectionsfor some exclusive clients.Sponsorships and celebrity endorsement are also very interesting means when exporting abrand. A collaboration with BMW for instance would be relevant (German cars, Germanfashion brand) as well as the celebrity endorsement by a personality who would carry bothWestern and Russian dimensions, such as the Russian model Nathalia Vodianova whomarried a British and is now living in the UK.Another way to promote the brand is through TV. As for the German TV show ‘Germany’snext top model’, Anja Gockel, if present on the same type of programs on the Russian TV,would considerably increase brand awareness as well as the global reputation of the brand.2) Back office – OrganisationFor now, Anja Gockel does not posses the resources to penetrate the Russian market. Firstof all, she needs to focus on her core competence, the design, and delegate the rest.Besides, her current organisation and mindset do not fit a perspective of expansion. Whenentrering the Russian market, Anja Gockel will not be able to do the road shows herself to
  4. 4. all the department stores for instance. It is time consuming and not effective in a biggerstructure. And she will need a dedicated team in Russia to deal with the buyers anddistributors.One of Anja Gockel’s main strengths is to provide an excellent customer service, especiallywhen there is a re-order. However, since Anja Gockel is currently not on the priority list ofher suppliers, it will be hard to satisfy her new Russian customers knowing that the delaywill be shorter considering all the manufacturing process is not realised in Russia but inGermany. Hence, a on-order production might be difficult to keep on. Plus, with apresence on the Russian market, she will possibly have much more clients, and so, moreorders. On the medium-long term, Anja Gockel will have to switch to a more importantand standardised production, which will also be a way to wriggle out of the suppliers’pressure and have more flexibility to take the orders.Regarding her marketing activity, it is surrently very little, if none. And marketing iscrucial at this point of her business. Anja Gockel uses a push strategy but must adopt a pullstratgy as well to attract the consumers and intermediaries towards her brand. She needsto build a strong brand to differentiate and stand out as a high-end European fashionbrand. Her designs might be original, the concept, the fabrics and the style are not hard tocopy, it is imitable, and only a strong brand name would make a difference. In addition toher unique style, there is an prestigious fashion background that she can take advantageof. The country of origin of Anja Gockel London is Germany, but she has a strong Britishbackground with a degree from the famous Central Saint Martins School and herexperience with Vivienne Westwood. This European dimension, with both the history andthe production place, has to be incorporated and put forward in her brand DNA.II. Critical Success Factors for an expansion in RussiaTo be successful in Russia, Anja Gockel would need to build a brand, that embodies strongEuropean origins, with originality and uniqueness at the heart of it. It is important to keepthis same image around the world and to be coherent as a brand. But local adaptations areessential, notably with the development of a new category of items and and adaptedcommunication.The dimension of a high-end brand would follow from this brand image, but also with apricing that reflects an upper quality and style.A particular attention to the customer is also a key success factor. The customer servicemust be in line with Anja Gockel’s brand and make the customer feel unique andcontribute to the affirmation of their personality.And finally, in parallel to this Glocal strategy, she will need to reorganise the structure ofher company. A clearer definition of the different tasks and roles, with more delegation,will allow a better efficiency of the whole business.