Loewe Presentation Final version_26.06.2012

Alina Rafikova
Andreas Schelter
Andrew Geoffric Hyles
Dimitur Ivanov
Johannes Streibich
Katharina Klug
Preetham Samuel
Sudharshan Sharma Ravi Sankar
Industrial Marketing Management
ANALYSIS OF THE SALES FORCE IN
GERMANY AND THE UNITED KINGDOM

Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Introduction

 Headquarters in Kronach
 Consumer electronics industry
 Traditional manufacturer
 Premium segment
 Paper
 Sales force management process in Germany and the UK
 New challenges
 Family owned retail shops vs. huge electro chains
28.01.2016 2

Agenda
1. Loewe Business Profile
2. Germany:
Market, Sales Process and Organization
3. United Kingdom:
4. Sales Force Comparison of Germany and the U.K.
5. Suggestions for improvement
28.01.2016 4

Loewe Business Profile
 Founded in 1923 by Sigmund and David Loewe
 Radio manufacturing company
 Electrical, electronic and mechanical products and systems
 Consumer and communication technology
 1931 first electronic television
 1979 TV with fully integrated chassis
 1998 first TV with internet access
 1998 first flat-screen television
28.01.2016 5

Loewe Business Profile
 Vision
 Reach sophisticated people
 Establish LOEWE as leading
premium brand for home entertainment
 Mission
 Provide timeless design
 Incorporate latest technology
 Aspiration to be user friendly
 Product portfolio
 Television with different technology and design
 Audio systems
 Speakers
28.01.2016 6

Agenda
2. Germany:
3. United Kingdom:
28.01.2016 7

Germany as a market for Loewe
 GDP per capita: €31,500
 Traditionally strong performance on the German market by Loewe
 Focus on the niche market
 Increasing importance of mass producers in the premium sector
 In 2011 Samsung overtook Loewe regarding market shares of high-price TVs
 Competitors are already able to access the high-end market
 Germany as Loewe’s main source of revenues
28.01.2016 8
German market Foreign markets
76% 24%
30.6%
15.5%
9.8%
Overall LCD TV market in Germany (01-03/2011)
38.4%
€ 2,000+ LCD TV market in Germany (01-03/2012)
10.4%
30.4%

 Niche market entrance by competitors
previously active in only mass market
 Stagnation of the German market of TV
devices
 Changing market structure due to
demographic changes
Threats
 Developing online market sales
 Growth of the 3D TV market
 Further development of comprehensive
entertainment solutions
 Growth in other segments like audio and
sound systems
Opportunities
SWOT Analysis Germany
28.01.2016 9
 High-end quality
 Strong brand recognition
 Customizable products
 Superb picture quality
 Broad partnering network
 Strong contact to the end user
 Flexibility of a medium-size company
Strengths
 High research costs
 Low capacities
 High unit production costs
Weaknesses

Loewe‘s sales concept
 Core brand values
28.01.2016 10
Meaningful
Innovations
Exclusive
Individuality
Minimalist
Design

Loewe‘s sales concept
28.01.2016 11
Superstores
Mail-order
selling
Online sales
Other distribution
channels
Specialist retail On-site service and qualified
advice as one of Loewe’s major
USPs
Indirect, face-to-face distribution
channel
(Direct sales only at Loewe
Galleries at Harrods and Selfridges)
Customers need to be able to experience the products
and to put Loewe’s marketing promises to a test
Overriding importance of the POS experience

Distinct, predefined requirements:
 Exterior store design
 Product range, brand & product
presentation at the POS
…
Loewe‘s retail cooperation pyramid
28.01.2016 12
110
475
607
Galleries
Partner Plus (Reference)
Partner
+Level of
Cooperation
∑ 1192
Cooperation level dependant on:
 Space for Loewe products
 Share in the overall sales of the
respective retailer (“Shop-in-Share”)
Annual revenues
€ 170.4 million

Loewe‘s retail cooperation levels
28.01.2016 13
Partner Partner Plus Partner Plus Reference Galleries
5
TVs / store
10 - 12
TVs / store
20
TVs / store
< 25 %
of store sales
25 – 30 %
of store sales
70 – 80 %
of store sales
Shop fitting expenses
~ € 60.000
50
50
20
80
 5-year business plan:
(Failure rate of 2-3%)

Retailers
Feedback within the sales organization
28.01.2016 14
Loewe Handelssenat
Fairs & road shows
Area Managers

Agenda
2. Germany:
3. United Kingdom:
28.01.2016 15

Porter‘s Five Forces - United Kingdom
28.01.2016 16
Television
market
(United Kingdom)
Rivalry among existing firms
 Nine main competitors
 Highly polarized market
 Shrinking / stagnant market
 Rather similar technologies
Threat of new entrants
 High share of fixed costs
 Significant capital necessary
 Complex retail distribution
grids
Bargaining power of buyers
 No switching costs
 Transparent market
 Product similarities
Threat of substitute products
 Internet entertainment
 Tablets / smartphones
Bargaining power of suppliers
 Limited number suppliers
 Technological dependence
(Sharp)
HIGH
LOW
LOW
HIGH
HIGH MEDIUM

 GDP per capita € 27,700
 Slow, but ongoing growth tendency in 2012/13
 Highly polarized consumer
electronics market:
 No member of the European Monetary Union
Currency difference and risk of potential exchange rate fluctuations:
The GBP depreciated by 35 % between Sept. 2008 and June 2009
 Legal system is based on common law
The UK as a market for Loewe
28.01.2016 17
3rd largest market
in Europe
40.5%
13.9%11.9%
Market size: € 3,12 billion
Overall LCD TV market in the UK (01-03/2012)

 Low market share
 Minor brand awareness
 Weak partnering network
 Limited brand experience
Weaknesses
 High-end quality
 Customizable products
 Flexibility of a medium-size company
Strengths
 Economic slowdown
 Shrinking consumer electronics market
 Exchange rate fluctuations
 Niche market entrance by competitors
previously active in only mass market
Threats
 Online growth via John Lewis
 Significant profit potential
 Growth in other segments like audio and
sound systems
Opportunities
SWOT Analysis United Kingdom
28.01.2016 18

Loewe’s UK retailer pyramid
28.01.2016 19
10
23
32
Galleries
Partner Plus
Partner
Customer
installers
Annual revenues
€ 6.2 million
+Level of
Cooperation
∑ 143
78

Customer installers in the UK
 Installation professionals
 Limited number of annual projects
 Specialization on home automation installations
 No or only small office  Limited POS possibilities
 50 receive direct deliveries, 28 source via nearby Loewe Galleries
 Loewe needs to emphasize other advantages:
Substantial achievable margins
Easy and versatile integration into home automation systems
Exclusive brand image
28.01.2016 20

Department stores as key accounts
 Department stores account for the majority of revenues
in the British consumer electronics market
 Shop-in-shop concept with Loewe staff
 Control of the brand’s transportation, particular
products can be selected
 Flagship-store effect  Brand awareness
 30 stores  6% of consumer electronics turnover
 Employees receive a share of annual profits
 Low fluctuation rates
 Efficient online store (Orders linked to closest store)
28.01.2016 21
Direct sales
Indirect sales

Agenda
2. Germany:
3. United Kingdom:
28.01.2016 22

Recruitment- Sourcing of new talent
28.01.2016 23
Does not contract
recruitment agencies
Contracts recruitment
agencies
6-8 Loewe promoters attract
new potential workforce
Only little promotion
Cooperation programs like
“Loewe academy”
Only few collaborations

Profile of prospective Sales Manager
28.01.2016 24
Ability
to sell
Commercial
background
Experience
Analytical &
Conceptual
Marketing
expertise
Technical
under-
standing
Experience
with
retailers

Selection process
28.01.2016 25
Vacant job
Respective department analyses &
determines
HR department gets involved and selects
applicants for interview
Interviews are conducted by respective Sales
Manager + support by HR department
Sales Manager decides, HR assists

Selection process
 Potential RSM has to pass approximately three different
interviews.
Applies at least to some extent the “law of three”
 New RSM has to pass a six-month probation time
 No formal influence in the recruitment of its indirect
salesforce
28.01.2016 26

Training- Direct Sales Force
 A high emphasis on well-trained sales personnel
 New RSM´s receive a first training in Kronach
 RSM´s are continuously trained during the year in
technological as well as management topics
 Mentor system within the company safeguards that valuable
expertise descends
28.01.2016 27

Training– Direct Sales Force
 First training in the UK, then more intensive trainings at the
Loewe Headquarters in Kronach
 RSM get further trainings through Web sections or get
updated by their supervisors
28.01.2016 28

Training- Indirect Sales Force
 Main representative of the Loewe brand to the end consumer
Receive free standard product training
 Aims to create a new generation of store ownership
&
 “ProCollege”: Ranges from basic training to Bachelor of Arts in
“Retail Management”
 3500 - 4000 attendants/ year
28.01.2016 29

Training- Indirect Sales Force
 Sends at least one person from its retailers to ProCollege
training sections in Germany
 After they were educated in the trainings, they share their
knowledge with their subordinates and colleagues.
 Customer installers are the group of retailers that attends
most trainings from Loewe.
 Retailers are also trained by other retailers
28.01.2016 30

Evaluation of the Sales Force
 Contracts the personal targets according to the area,
opportunities and buyers power of the market
 Main indicators:
28.01.2016 31

Compensation- Direct Sales Force
28.01.2016 32
80%
20%
Renumeration

Motivation - Direct Salesforce
 Nonmonetary rewards are:
28.01.2016 33

Compensation- Indirect Sales Force
 Remuneration = high margin
 Rewards galleries with awards
28.01.2016 34

Geographical sales organization
Area
Manager 1
Area
Manager 2
Area
Manager n
Store 1
Store 2
Store 3
Store n
…
…
…
Loewe’s German sales organization
28.01.2016 35
North / East South / West B-to-B Customers
…
Hotels
Hospitals / Clinics
Loewe Germany
MANAGING DIRECTOR
SALES DIRECTOR
Board of
Directors
Key Accounts
5 % of sales

Customer-oriented sales organization
Loewe’s UK sales organization
28.01.2016 37
Loewe UK Ltd
MANAGING DIRECTOR
SALES DIRECTOR
North
Partner
Plus
Partner
South
Customer
Installers
Galleries
Partner
Plus
Partner
Key
Accounts
International
B2B Customers
Loewe Germany
MANAGING DIRECTOR
20 % of sales

Agenda
2. Germany:
3. United Kingdom:
28.01.2016 42

Online solutions
 Problems e-commerce:
 Totally transparent
 Anonymous internet mass market
 No personal customer contact
 Service issues
 Example: John Lewis
 Link of the online orders directly to the department store
 Online store of retail business partners
28.01.2016 43

Online solutions
 Online store on LOEWE’s website
 Control on presentation and service
 Link to closest business partner
 Distribution grid in Germany
 Advantages e-commerce:
 Possibility to order 24/7
 Possibility to order from any places
 Time saving
28.01.2016 44

Online solutions
 Combination of e-commerce with personal service
 Provision of an online e-mail contact
 Special mobile version of the website
 Use social media
 Free marketing possibility
 Target group
28.01.2016 45

Online solutions
Age distribution of Facebook users in June 2012
Source: http://de.statista.com/statistik/daten/studie/39471/umfrage/Nutzer-von-Facebook-nach-Alter/
28.01.2016 46
13 – 24 years
25 – 34
35 – 44
45 – 54
55+

 Presence at key locations  Also other retail
Enhancing brand awareness in the UK
28.01.2016 47
“The world’s leading international
luxury fashion destination, a one-
stop-shop for the most exclusive
brands in fashion, beauty and food.”
LONDON
BRISTOL
DUBLIN
MANCHESTER
EDINBURGH
BIRMINGHAM
LEEDS
 Department stores in highly
frequented locations
 Specialization on luxury goods
 POS-stands in the entrance hall
 Win-win situation: Dept. stores & Loewe
 Implementation of QR-Codes

 Expand the distribution grid in the UK
Flagship stores / Loewe Galleries at key locations
28.01.2016 48
Region Millionaires Growth until 2020
London and South East 287,000 35%
Midlands 92,000 30%
North West 64,000 35%
South West 56,000 30%
Yorkshire 44,000 28%
Scotland 40,000 38%
Wales 22,000 27%
North East 14,000 46%
Wealth in 2010 and predicted growth until 2020:
5

 Expand the distribution grid in the UK
Flagship stores / Loewe Galleries at key locations
28.01.2016 49
Edinburgh / SCO
 Scottish capital
 UK's favorite domestic holiday
alternative to London
(4m visitors / year)
 “Compact” city center
 Princes street

Alina Rafikova
Andreas Schelter
Andrew Geoffric Hyles
Dimitur Ivanov
Johannes Streibich
Katharina Klug
Preetham Samuel
Sudharshan Sharma Ravi Sankar
Industrial Marketing Management
THANK YOU FOR YOUR ATTENTION

Loewe Presentation Final version_26.06.2012

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