This presentation outlines an international market entry strategy for my International Marketing course at Pepperdine University. The report was completed with three other classmates, and provides an international market entry strategy for Victoria's Secret to South Korea. The content of the report is the result of a collaborative effort, however, I was responsible for the PowerPoint composition. Our Professor, Dr. Frank Sadighian, praised the report, noting that we exceeded the necessary deliverables.

1. SOUTH KOREAN MARKET
ENTRY STRATEGY
VICTORIA’S SECRET

2. VICTORIA’S SECRET SUMMER 2013
ADVERTISEMENT

3. WHAT IS OUR BUSINESS?

4. COMPANY BACKGROUND
• Established in 1977 By Roy Raymond
• Purchased by Limited Brands in 1983
– Also own Bath and Body Works, Henri Bendel
and La Senza
– Well established internationally with a presence in
80 countries
• VS primarily sells lingerie and intimate
apparel but has expanded
• VS has over 1000 stores nationally and has a
presence in Canada and the United Kingdom

5. GLOBAL MISSION STATEMENT
“Limited Brands is committed to building a
family of the world's best fashion brands
offering captivating customer experiences
that drive long-term loyalty and deliver
sustained growth for our shareholders.”

6. CORE GLOBAL COMPETENCIES
“At Limited Brands, we are guided in our
work and our interactions with others by four
core principles – our values: Customer rules,
passion leads to success, inclusion makes
us stronger, and it matters how we play the
game.”

7. WHERE ARE WE NOW?

8. SWOT ANALYSIS
Strengths:
• Strong brand presence and recognition
• Well established nationally
• Strong marketing mediums on various platforms (online, TV,
Catalogs, Fashion show)
• Many mediums of shopping (online, store and catalog)
• Product diversification – many collections
• International presence
• Large customer bases targeting large demographic
• Victoria Secret annual fashion show
• World famous models
• Reasonable pricing and good quality
• Socially responsible company
• Financial Stability
• Success of “Pink” Sub brand

9. SWOT ANALYSIS
Weaknesses:
• Negative body image publicity
• High marketing costs
• Limited international presence
• Working conditions in factories located in
developing countries
• Fake products
• Only appeals to women

10. SWOT ANALYSIS
Opportunities:
• Further expansion internationally
• Potential for other acquisitions such as La
Senza
• Possible reward system promotion plan
• Develop a stronger international customer
base through online shopping
• Focus more health body image campaigns
– plus size campaigns
• Expand into a higher end market
• Digital dressing rooms

11. SWOT ANALYSIS
Threats:
• Negative publicity
– Criticism for negative body image promotion
• Cheaper competitive products
• Fake products from China
• Labor costs increasing
• Increase in new lingerie companies
• Economic instability

12. ENVIRONMENTAL SCAN
Social:
• Women beginning to have
more rights
• Wealthy women
• Large urban areas
• Hierarchical society
• Collectivistic
• Feminine Society
• High Uncertainty Avoidance
• Long term orientation

13. ENVIRONMENTAL SCAN
Economic:
• Macro -> High level of economic growth
– US 7th largest trading partner
• Micro -> increase in spending
– Women have the buying power
• Average cost of spending

14. ENVIRONMENTAL SCAN
• Technological:

15. ENVIRONMENTAL SCAN
Competitive:
• Shin Young
Wacoal Inc.
• Nam Yeung
• Good People

16. ENVIRONMENTAL SCAN
Political & Regulatory:
• US Free Trade
Agreement (KORUS
FTA) with product
manufacturing
• Work conditions of
manufacturing
facilities
• US ties are based on common values of
democracy, human rights, and the rule of law
• South Korea vs. North Korea

17. ENVIRONMENTAL SCAN
Natural:
• Natural Hazards
• Air pollution in large
cities
• Water pollution
– International
agreements
• Ozone Layer Protections

18. HOFSTEDE’S CULTURAL
DIMENSIONS

19. PLAN OBJECTIVES
Financial Goals:
• Annual sales of $1.7 million per year per location
• Increase South Korean market share in the lingerie
industry
• High Return on income
Non-Financial Goals:
• Continue to develop products that are in accordance to
the mission and vision statement
• Establish a larger presence in the Asian starting with
South Korea
• Develop more beauty products
• Continue exploration of new products
• Introduce innovative technology
• Maintain high ethical standards for production

20. TARGET MARKET

21. MARKET NEEDS
• Korean buyers are
looking for reputable
brand names (Banana
Republic, Coach, DKNY)
• Second brands by
prestige brands (Marc by
Marc Jacobs
• Easy, quick access to
goods and services
online

22. GLOABAL BUYER BEHAVIOR
• Household finances
managed by wives
• Changing social mores
involving women and labor
participation
• Lingerie as outerwear, as
well as functional purposes
• Fashion trends such animal
print, and see through top

23. GLOBAL INDUSTRY ANALYSIS
• Apparel and cosmetic markets dominated by large
department store conglomerates
• Success of large high-end fashion companies
• Strong American brand recognition
• Home-shopping (online and television) surging popularity

24. GLOBAL COMPETITOR ANALYSIS

25. WHERE DO WE WANT TO
GO?

26. BUSINESS PORTFOLIO ANALYSIS

27. POINTS OF DIFFERENCE
Product Features Advantages Benefits
Victoria’s Secret
Lingerie
• Many lingerie
options
• Extensive online
store
• Custom fit advice
services
• Less time searching
for product
• Ability to shop from
home
• Buy correct size
more often
• Savings in time
• Savings in Time
• Savings in Time and
$
Shin Young
Wacoal Lingerie
• Extensive style
options
• Lower cost hyper-
market options
• One stop shop for
desired styles
• Products accessible
to average consumer
• Savings in Time
•Savings in $
Nam Yeung
Vivien Corp
• Extensive online
store
• Wide age range
appeal
• Lower cost hyper-
market options
• Ability to shop from
home
• Family shopping
• Products accessible
to average consumer
• Savings in Time
• Savings in Time
• Savings in $

28. PRODUCT MARKET ANALYSIS

29. HOW DO WE GO THERE?

30. MARKETING MIX
Product:
• Some of our
collections
include:
– Pink
– Angels by Victoria’s
Secret
– Very Sexy
– Body

31. MARKETING MIX
Product:
• Bras
• Panties
• Sleepwear
• Swimwear
• Sportswear
• Clothing
• Shoes
• Beauty Products

32. MARKETING MIX
Price:
• Keep the price higher than its competitors
• Prices based on value
– Imported product
– High quality, high fashion
– Victoria’s Secret brand name

33. MARKETING MIX
Price:
• Similar target market and product perception
• Greatest brand power in South Korea lingerie
market

34. MARKETING MIX
Price:
• Large range of prices
• Victoria’s Secret brand name
• High quality = high fashion = high value

35. MARKETING MIX
Promotion:
• Due to popularity
of blogs and
internet, promote
on:
– Me2day
– Daum Blogs
– Egloos
– Blogin
– Tistory

36. MARKETING MIX
Publicity:
• K-Pop spokes
person/Music
video
• Addition of
South Korean
Victoria’s Secret
Angel

37. MARKETING MIX
Promotion:
• Magazines:
– Marie Claire, Cosmopolitan, Elle, High Cut, Instyle
magazines

38. MARKETING MIX
Example of Advertising Etiquette:

39. MARKETING MIX
PR:
• Grand opening
• Organize small
fashion show in
mall
• Celebrity event

40. MARKETING MIX

41. MARKETING MIX
Positioning:
Low cost
Low Quality
High Cost
High Quality

42. TEST MARKET
• Test for:
– A Limited Time: 1 Month
– In a Limited Place: Shinsegae Main Store, Seoul

43. MARKETING MIX
Place:
• Franchise locations at Shinsegae malls (charges
royalty fee of 15-30% on commission)
• VS franchise locations generate about $1.7 million
per store, per year
• In South Korea, location determines brand reputation

44. MARKETING MIX
Place:
• Differentiate
through use of
digital channels
• Adapt to high-tech
South Korean
market
• Virtual dressing
rooms provides
market buzz

45. MARKETING MIX
Place:
• US-South Korea Free Trade
Agreement
• Duties on apparel related items of
8%
• Common trade language
• New shipping arrangements for
our products

46. Virtual Dressing Room Video Demonstration
Robina Town Center, Australia

47. IMPLEMENTATION

48. RESOURCES REQUIRED
• Production:
– Increase current production taking into account
popular products for Korean markets
• Human:
– Wages for production, distribution, sales, PR,
management, advertisers
• Operation:
– Fixed costs related to rent, store display units and
furniture, energy, cleaning, and utilities
• Other:
– Accounting, communication , administrative, and
legal costs (associated with intellectual property)

49. ACTION, TIMING, AND RESPONSIBILITY
Gantt Chart

50. BUDGETING
Cost (as a
percent of co.
revenue)
X
Average Victoria’s
Secret Intl. Franchise
Revenue*
=
Estimated Budget for
Each Cost Category
Profit 6.8% X $1,700,000 = $115,600
Wages 8.4% X $1,700,000 = $142,800
Purchases 62.5% X $1,700,000 = $1,062,500
Depreciation 2% X $1,700,000 = $34,000
Marketing/A
dvertising
15%* X $1,700,000 = $255,000
Rent &
Utilities
5.3% X $1,700,000 = $90,100
Total 100% X $1,700,000 = $1,700,000
*Calculations based on single store costs for 1,000 sq.ft. sales
space
*Data provided by IBISWorld, with adjustment for advertising budget

51. ORGANIZATION CHART
Leslie H. Wexner
Chief Executive Officer, Chairman of the
Board of Limited Brands, Inc.
Martyn R. Redgrave
Executive Vice
President, Chief
Administrative
Officer, Senior
Advisor of Limited
Brands, Inc.
Stuart B.
Burgdoerfer
Executive Vice
President,
Chief Financial
Officer of
Limited Brands,
Inc.
Jane L.
Ramsey
Executive Vice
President,
Human
Resources of
Limited Brands,
Inc.
Douglas L.
Williams
Executive Vice
President,
General
Counsel of
Limited
Brands, Inc.
Charles C.
McGuigan
Chief Operating
Officer, Division
Officer of Limited
Brands, Inc.
Sharen Jester
Turney
Chief Executive
Officer and President
of Victoria's Secret
Megabrand and
Intimate Apparel
Nicholas P.M.
Coe
President and
Chief Executive
Officer of Bath
& Body Works

52. EVALUATION & CONTROL

53. Data to Monitor
Marketing Dashboard
• Monitor:
• Weekly Data(ST)
• Quarterly Data(LT)
In the US

54. MARKETING MIX MODIFICATIONS
• Product
– Standardization
• Price
– Discount coupons and
promotions
• Place
– Cheongdam-dong
– Apgujeong-dong
• Promotion
– Public’s reaction on forums
– Pink product line