Virigin Lingerie Market
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Virigin Lingerie Market

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Part of a brand management assignment of brand extension. The brand Virgin were chosen to be extended into the market of lingerie. This presentation looks at the market in terms of trends, competitor ...

Part of a brand management assignment of brand extension. The brand Virgin were chosen to be extended into the market of lingerie. This presentation looks at the market in terms of trends, competitor analysis and positioning.

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  • Virgin is a leading branded venture capital organisation and is one of the world's most recognised and respected brands. Conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow very successful businesses in sectors ranging from mobile telephony to transportation, travel, financial services, media, music and fitness. Virgin has created more than 200 branded companies worldwide, employing approximately 50,000 people, in 29 countries. Global branded revenues in 2008 exceeded £11 billion (approx. US$17 billion). We believe in making a difference. Virgin stands for value for money, quality, innovation, fun and a sense of competitive challenge. We deliver a quality service by empowering our employees and we facilitate and monitor customer feedback to continually improve the customer's experience through innovation. When we start a new venture, we base it on hard research and analysis. Typically, we review the industry and put ourselves in the customer's shoes to see what could make it better. We ask fundamental questions: is this an opportunity for restructuring a market and creating competitive advantage? What are the competitors doing? Is the customer confused or badly served? Is this an opportunity for building the Virgin brand? Can we add value? Will it interact with our other businesses? Is there an appropriate trade-off between risk and reward? We are also able to draw on talented people from throughout the Group. New ventures are often steered by people seconded from other parts of Virgin, who bring with them the trademark management style, skills and experience. We frequently create partnerships with others to combine industry specific skills, knowledge, and operational expertise. Contrary to what some people may think, our constantly expanding and eclectic empire is neither random nor reckless. Each successive venture demonstrates our devotion to picking the right market and the right opportunity. Once a Virgin company is up and running, several factors contribute to making it a success. The power of the Virgin name; Richard Branson's personal reputation; our unrivalled network of friends, contacts and partners; the Virgin management style; the way talent is empowered to flourish within the group. To some traditionalists, these may not seem hard headed enough. To them, the fact that Virgin has minimal management layers, no bureaucracy, a tiny board and no massive global HQ is an anathema. But it works for us! The proof of our success is real and tangible. Our companies are part of a family rather than a hierarchy. They are empowered to run their own affairs, yet the companies help one another, and solutions to problems often come from within the Group somewhere. In a sense we are a commonwealth, with shared ideas, values, interests and goals. Hopefully exploring the activities of our companies through this site demonstrates these ideals well, but if you have any comments or feedback, feel free to post them.
  • The lingerie market has been in steady over recent years therefore there is potential for profit within the market. The market is defined by innovation and creativity of styling which is conveyed most through the lingerie specialists. Price is a key motivator in driving purchases however this can be accommodated by creating varied product lines such as basics through to luxury etc.
  • Lingerie lovers fit Virgin’s target audience as they are regular consumers and participate in hedonic consumption. They are workers with money to spend and look for glamour and luxury in their lingerie. We feel this audience would synergise with the brand image of Virgin due to the fun, sexy and innovative traits of the brand.
  • Option one - low price/low added value (likely to be segment specific) Option two - low price (risk of price war and low margins/need to be a 'cost leader‘) Option three – Hybrid low cost base and reinvestment in low price and differentiation. Option four – Differentiation -(a)without a price premium: perceived added value by user, yielding market share benefits. -(b)with a price premium: perceived added value sufficient to to bear price premium. Option five - focussed differentiation, perceived added value to a 'particular segment' warranting a premium price. Option six - increased price/standard. higher margins if competitors do not value follow/risk of losing market share. Option seven - increased price/low values. only feasible in a monopoly situation. Option eight - low value/standard price. loss of market share. Low Price/Low Added-Value. This strategy is commonly considered to be appropriate only on a segment-by-segment basis. Low Price. This strategy calls for the company to position itself as the 'low cost leader.' The company risks low margins and a price war. Hybrid of Low Price/Differentiation. Here, the company establishes a low cost base and reinvests to keep prices low, while still seeking differentiation. Differentiation. There are two versions of this strategy-with and without a price premium. With a price premium, the company adds enough value to the product to justify its relatively high price and so, increase margins. Without a price premium, the company adds value to the product in hopes of gaining market share despite lower margins. Focused Differentiation. Here, the company adds enough value to the product for a specific customer segment to justify a price premium. Increased Price/Standard Product. With this strategy, the company raises prices without adding value to the product in hopes of higher margins. Unless the product is the de facto industry standard, however, the company risks losing market share. Increased Price/Low Values. This strategy pertains only to monopoly situations. Low Value/Standard Price. This strategy invariably means loss of market share. Source
  • Virgin lingerie will sit between differentiation and focused differentiation as the brand will be a specialist in lingerie. The perceived added value will be high due to the exclusivity already associated with the corporate brand of Virgin and price will be above average in order to communicate the premium quality of the products. The brand will not be completely at focused differentiation nor differentiation due to the fact it is a corporate umbrella brand and is planned to be linked to other Virgin products.

Virigin Lingerie Market Virigin Lingerie Market Presentation Transcript

  • Ladies Lingerie & Underwear Product Extension Laura Bowers and Jodie Turley
  •  
  • Contents Page
    • Virgin Company History/Established Brands
    • The Lingerie Marketplace
    • Consumer Typologies
    • Cliff Bowman’s Strategy Clock
    • - Lingerie Competitor Marketplace
    • - Virgin Positioning
    • Other model linkages
    • Model Limitation
    • Conclusion
    • Recommendations
  • About
    • Virgin is a leading branded venture capital organisation and is one of the world's most recognised and respected brands
    • Virgin stands for value for money, quality, innovation, fun and a sense of competitive challenge
    • The Virgin Group has gone on to grow very successful businesses in sectors ranging from mobile telephony to transportation, travel, financial services, media, music and fitness. Virgin has created more than 200 branded companies worldwide, employing approximately 50,000 people, in 29 countries. Global branded revenues in 2008 exceeded £11 billion (approx. US$17 billion).
  • Virgin Company/Brand Structure
  • The Lingerie Market
    • Women’s underwear grew by 14.3% from 2003-2008
    • Innovation viewed as important
    • Consumers motivated by low prices from retailers such as Primark, Peacocks, Matalan etc.
    • Rise in internet specialists e.g. Figleaves.com
    • Specialists popular among young women M&S, Primark, Asda, Tesco & Matalan hold majority of market share – value retailers
    • Lingerie specialists – 11.5% 2008 (Mintel)
    • La Senza biggest lingerie specialist
  • Consumer typologies
    • Target audience of ‘lingerie lovers’
    • Regularly shop for underwear
    • Glamorous and sexy, look for quality, forfeit comfort over style
    • 15-64 year olds, ABC1C2
    • Married/unmarried, employed
    Marketing message: Lingerie Lovers are a dream group as they are motivated by everything – they’ll use any reason/excuse to buy! Of most note is that they are interested in colour and pattern (they’ll be interested in fashion generally) and buy for a holiday or because their size changed. They are also very into ‘retail therapy’ – four in ten of this group say they buy lingerie to cheer themselves up. (Mintel)
  • Cliff Bowman’s Strategic Clock
    • “ another suitable way to analyze a company's competitive position in comparison to the offerings of competitors. As with Porter's Generic Strategies, Bowman considers competitive advantage in relation to cost advantage or differentiation advantage”
  •  
  • 2 1 8 7 6 5 4 3 Hybrid Low price Price Perceived added value Low High High Differentiation Focused differentiation Low price, low added value Strategies destined for ultimate failure
  • 2 1 8 7 6 5 4 3 Hybrid Low price Price Perceived added value Low Low High High Differentiation Focused differentiation Low price, low added value Strategies destined for ultimate failure
  • Ansoffs matrix/Generic strategies
  • Limitations of Strategy Clock
    • Overly simplistic
    • Constricting to each segment
    • Competitors can move around the clock and enter your market
    • What if the company fits into two different segments, e.g. low price and focused differentiation.
  • Recommendations
    • Strategic clock is reflective of the over-all brand image although not representative of the product line of the brand.
    • E.g. Debenhams has a vast product range which covers the market scope consequently the strategic clock needs to be adjusted to incorporate product image.
  • Conclusions
    • We have identified a gap in the market for Virgin to position their lingerie
    • The gap reflects the brand values and image of Virgin.
    • Research from Mintel suggests that the ‘Lingerie Lovers’ market is profitable and would be the core target market for Virgin.
  • References
    • Bowman, C. and Faulkner, D.; Competitive and Corporate Strategy; Irwin; 1996
    • http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=256978
    • http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=395655