Vs international marketing

Batool alhajji
116220482 University College Cork
INTERNATIONAL MARKETING

Tableof Contents
Introduction...............................................................................................................................3
Victoria’s Secret.......................................................................................................................3
The Host Country (Republic of Ireland) .....................................................................................3
The Target Market ...................................................................................................................4
Economic Environment.............................................................................................................5
Economic Growth.....................................................................................................................5
Investment and Consumption...................................................................................................6
Cultural Environment................................................................................................................9
Demographic...........................................................................................................................9
Irish Culture: Language, Religion and Lifestyle......................................................................... 10
Political and legal environment..............................................................................................13
The Irish Political Structure..................................................................................................... 13
Political Stability and Risks..................................................................................................... 14
Legal Environment................................................................................................................. 14
Summary and Recommendations...........................................................................................15

Introduction
Victoria’s Secret
Victoria’s Secret is part of the Limited Brands (LBrands) company. LBrands is an
international company which sells lingerie, beauty and personal products, and apparel
through its top brands Victoria’s Secret, Bath & Body Works, PINK, La Senza and Henri
Bendel. Victoria’s Secret is the largest American specialist retailer of womenswear, prestige
fragrances, beauty body care, accessories and premium lingerie, controlling approximately
35% of the US lingerie market (Lutz, 2015). It operates in more than 1,100 stores worldwide
through wholly owned stores and franchise partnerships (LimitedBrand, n.d). Beyond North
America, more than 200 stores sell Victoria’s Secret’s beauty products and accessories
globally; 83 of them operate in the European market, throughout airports and shopping malls
(ibid). Victoria’s Secret Beauty & Accessories offers customers access to an assortment of
the best-selling Victoria’s Secret beauty products, from prestige fragrances to body care, as
well as an exclusive collection of luxury Victoria’s Secret branded accessories (ibid).
Victoria’s Secret is a top performer among the L Brand company. In 2016, the total sales,
including only company-owned stores in the United States and Canada, reached
approximately 5$ million (LimitedBrand, n.d).
The Host Country (Republic of Ireland)
The Republic of Ireland is located in the North Atlantic. It is the third largest island in
Europe. According to World Population Review (2006), Ireland has an estimated population
of 4.6 million. The capital city, Dublin, is currently home to almost 40% of the Irish
population. There are a variety of reasons for choosing Ireland as a host country. Victoria’s
Secret has been operating only one store in Ireland, which is located in Dublin Airport.
Although it has an online store, delivery to Ireland costs €30, plus import tax. Therefore,
Victoria’s Secret, as a well-recognised brand globally, will be a desirable place to shop,
particularly for young Irish consumers.
Regarding the business environment, Ireland has a very competitive environment for forging
investment, “with foreign entities allowed to own shares of public sector firms during
privatisation programmes” (Euromonitor, 2016), not to mention its high levels of economic

freedom and its favourable tax environment. According to the Irish Times, Ireland ranks
“near the very top for low tax burden, investor protection and personal freedom” (Gleeson,
2013). Ireland has been listed as the fourth best country for business in rankings presented by
renowned US financial magazine Forbes (Badenhausen, 2015). Furthermore, Ireland’s
position as a part of Europe and the Economic and Monetary Union offers many advantages
and benefits, which make it an attractive area for Victoria’s Secret.
The Target Market
Victoria's Secret's target market consists of middle-class women aged 21-49. With Victoria's
Secret's PINK line, the target market is younger women, such as college students aged 16-29.

Economic Environment
As mentioned above, Ireland is part of “Europe and Economic and Monetary Union”, which
provides strength and opportunities for the Irish economy. In other words, having one single
market and a single currency in the Eurozone brings economic stability and growth
(European Commission, 2015). This stability creates security and reduces uncertainty, which
encourages many companies to establish their businesses very easily in Ireland.
Economic Growth
Ireland has a very strong economic position relative to other countries. After the global
financial crisis of 2008-2009, Ireland has recovered significantly, and its economic growth
has improved (Euromonitor, 2016). Ireland’s economy was ranked as the 12th largest in the
EU in 2015 (ibid). According to the European Commission, it is expected that “Ireland's
economy will expand by 4.5pc this year, more than twice the EU average” (Collins, 2016). In
the second quarter of 2016, the GDP constant price reached 65,000 million euros, with an
increase of greater than 4% on the previous period (Figure 1) (Central Statistics Office,
2016).
Figure 1: GDP constant price, in €m (CSO, 2016)
Ireland’s annual real GDP reached its peaked in 2015, at 26.3%, mainly because of the
activity of multinational firms and the growth of exports (Figure 2) (Euromonitor, 2016).

Figure 2: Real GDP growth in Ireland (Euromonitor, 2016)
Because of economic growth, people’s lives have changed significantly; the unemployment
rate decreased to 7.7% in 2016, which is quite a dramatic change when we consider that it
peaked at above 15% in 2011 (Central Statistics Office, 2016). More than 1,000 jobs have
been created per week (Gurría, 2016), with average weekly earnings of €703.83 (Central
Statistics Office, 2016). Considering all of this information, it is plausible to expect that
Victoria’s Secret would enjoy greater prosperity as Irish consumers take a reasonably
positive view of their economic circumstances (Consumer Sentiment), which, in turn, may
prompt spending on essential and non-essential goods.
However, the United Kingdom’s decision to leave the EU (“Brexit”) could have a negative
impact on the Irish economy (i.e. trading, as the UK is a major trading partner for Ireland; the
unemployment rate is expected to increase by 1%; and there will be a 5% reduction in wages,
according to Economic and Social Research Institute estimates) (Barret, 2016). This could
have negative implications for the Irish consumers’ behaviour.
Investment and Consumption
The main driver of Ireland’s economy is foreign direct investment (FDI). A report conducted
by the American Chamber of Commerce Ireland showed that “Ireland is the number one
destination in the world for US foreign direct investment (FDI)” (Taylor, 2015). The strength
of the economic relationship between the two countries has been demonstrated by this report
via such statistics as the following:

US firms have invested more than $277 billion here since 1990. In addition, the 700 US
companies based in Ireland now employ 130,000 people [...] the output from US companies
resident in Ireland now exceeds $80 billion a year and exports from such firms are four times
higher than from China
(Taylor, 2015)
Indeed, Ireland’s FDI-friendly policies are the main drivers of foreign investment. To be
more precise, Ireland has been ranked eighth globally, and second in Europe regionally in the
world rankings for economic freedom (Heritage Foundation, 2016). The 2016 World
Economic Freedom Index gave Ireland a freedom score of 77.3 (an increase of 0.7 points)
(Figure 3). The high economic freedom , such as the strong protection of property rights, a
low level of corruption, efficient business regulations and competitive tax rates means that
Ireland is considered one of the most favourable tax environments, with a tax rate at 12.5
percent (12.5% for trading income, 25% for non-trading income) (Euromonitor, 2016)
Figure 3: Top 20 countries for economic freedom (Heritage Foundation, 2016)
Given the solid economic relations between Ireland and the USA, the large number of
multinational companies in Ireland and the FDI-friendly policies in Ireland, the opportunity
for growth would be very viable for Victoria’s Secret.
Series165
70
75
80
85
90
HongKong
Singapore
NewZealand
Swiitzerland
Australia
Canada
Chie
Ireland
Estonia
UnitedKingdom
UnitedState
Denmark
Lithuania
Taiwan
Mauritius
TheNeatherland
Germany
Bahrain
Luxembourg
World Econmic Freedoom Index
Top 20 countries

From the consumer’s perspective, although the proportion of consumers who have a positive
outlook of the Irish economy has dropped since January, it is still relatively high, at 42%
(The Economic and Social Research Institute (ESRI), 2016). Moreover, more than 60% of
Irish women aged between 20 and 64 are in the labour force, which would suggest that there
is a great target market available (Eurostat, 2016). It has also been indicated that Ireland has a
flexible labour market, which is pertinent to the increase in new jobs available (Euromonitor,
2016).
However, since Victoria’s Secret is a luxury brand which targets the middle-income class,
who can afford to buy its products, the limited disposable income of Irish consumers should
be taken into consideration: “the average household net adjusted disposable income per
capita is USD 22 969 a year, lower than the OECD average of USD 29 016” (OECD, 2015).
According to Euromonitor (2016), many Irish consumers prefer to shop in retail stores with
much more affordable prices, as they find it difficult to spend their limited disposal income
on luxurious products. Moreover, the decline in the consumer sentiment index, which could
have a negative impact on Irish consumers’ purchasing power, is another issue of concern for
Victoria’s Secret. Although the level of sentiment is still relatively positive, consumers have
become increasingly uncertain about the general economic growth and job prospects in
Ireland (ESRI, 2016). According to an ESRI (2016) report, this uncertain economic outlook
is correlated with various incidents, such as Brexit, the Apple tax case and domestic
industrial disputes. Irish consumers’ behaviour will be discussed in more detail in the
following section.
To sum up, Victoria’s Secret has the opportunity to grow in Ireland, as it offers a favourable
business environment which consists of the following elements: an increase in the economic
growth of the country, indicating high GDP growth; high economic freedom; FDI-friendly
policies; a favourable tax environment; and a flexible labour market.

Cultural Environment
Demographic
Ireland has a population of 4,6 million. It is indicated that more than 40% of the population
is under the age of 30 (Eurostat, 2015) (Figure 4). This high proportion of a young population
is a strong competitive advantage for Victoria’s Secret, considering the fact that the
Victoria’s Secret brand is based on targeting young women. Therefore, the majority of
Ireland’s population falls into its target market.
Figure 4: Ireland’s population, by age and gender (CSO, 2016)
According to the European Statistics Agency, 11.8% of Ireland’s population comes from
abroad, which means that Ireland has one of highest proportions of foreign nationals
(McGarry, 2015). Poles make up the largest grouping of non-nationals in Ireland, at 22% (or
118,042), followed by the British 21% (115,658), Lithuanians (7%; 35, 617) and both
Latvians (20,086) and Nigerians (19,727), accounting for 4% each (McGarry, 2015). It is also
indicated that Ireland has strong migration flows. According to data taken from April 2016,
the number of Irish nationals who emigrated is 31,800 (41.7% of total emigrants). At the
same time, the number of Irish immigrants was 21,100, with a 74% increase since last year
(CSO, 2016). Migrants from outside the EU, meanwhile, “[account] for 31,800 (40.1%) of
total immigrants and 18,500 (24.3%) of total emigrants” (CSO, 2016).
Female0
200
Thousa
nds
Population classified by
Age and Gender
Female male

These migration flows have led to cultural and religious diversity in Ireland which could
profoundly impact the lifestyle and shopping behaviour of Irish consumers. This growing
diversity in Ireland could imply a very lucrative market relating to a wide range of consumer
groups. In such a scenario, Victoria’s Secret should adopt diverse marketing tactics that align
with its brand, such as segmenting its products to meet the needs of such diverse groups, as
well as a mix of different communication methods in order to reach people in different racial,
ethnic, cultural or social groups.
Irish Culture: Language, Religion and Lifestyle
Language
Irish (Gaelic) and English are the two official languages of Ireland. Although English is the
primary and dominant language in almost all social, economic and cultural contexts, the Irish
language is still learned by primary and secondary school students, and it remains an
important means of communication in governmental sectors. Given that Ireland is an English-
speaking environment, in the implementation phase of Victoria’s Secret, which is based
primarily on communications, using English would be much easier, as the language burden
would be lessened.
Religion
Regarding religion, Christianity is the predominant religion of Ireland. In 2011, over 84% of
the people in Ireland were believed to be Roman Catholic (CSO, 2011). The following data
was recorded in 2011:

 Roman Catholic: 3,861,000
 Church of Ireland: 129,000
 Muslim: 49,200
 Orthodox: 45,200
 Other Christian: 41,299
 Presbyterian: 24,600
 Apostolic or Pentecostal: 14,000
 Other: 81,000
 No religion: 269,000
 Not stated: 72,900
Ireland has four religious holidays, including St Patrick’s Day, which is Ireland’s national
day of celebration (17th March), Good Friday (April), Easter (April) and Christmas (25th
December). Recognising these dates, Victoria’s Secret could use well-timed promotions
based around those holidays or could integrate itself as a brand into Irish traditions on these
days.
Lifestyle: Shopping and Consumption Behaviour
When the economic crisis emerged in Ireland in 2008, Irish people became more conscious
about their spending power (Euromonitor, 2016). However, as Ireland began to grow again in
2012 (and this recovery has continued up to the present time), Irish consumers recovered
their confidence about the economy, and, therefore, the Irish market has witnessed a great
demand for cars, holidays, dining out and a wide range of retail products (Euromonitor,
2016). For instance, in 2015, the Irish Times highlighted data from the CSO which showed
that there has been a 13% increase in travelling overseas among Irish people in the last few
years (D’Arcy, 2015). It has also been indicated that Irish people who are travelling abroad
have spent much more money than those who came to Ireland for their holidays: “Irish
people travelling abroad spent €14 million more than tourists who came here within the same
time period” (D’Arcy, 2015).

However, Irish people remain value-conscious consumers despite their positive outlook on
their economic prospects. According to The Journal.ie, “Irish shoppers’ thrifty buying habits
have become entrenched after the crash and it could take years before big-spending
consumers make their way back to cash registers” (The Journal, 2014). For instance, a
consumer survey which was conducted for Retail Ireland showed that “40% of shoppers had
put off making big-ticket purchases in the last two years and only 27% were planning a
significant spend in the next year, compared to 46% who were ‘unlikely’ to make a major
buy” (Euromonitor.2016). This could be supported by other data which shows that Irish
consumers prefer to shop in retail stores that offer designer labels at much cheaper prices,
such as TK Maxx (Euromonitor, 2016), although there is still a trend of buying luxurious
brands through outlet shopping such as Kildare Outlet Village (Euromonitor, 2016). In
addition, a 2014 survey conducted by CBRE revealed that, while most Irish consumers use
the Internet to check prices and compare product options, their final purchases take place in
traditional stores (The Journal, 2014). However, since price is the key consideration in
driving Irish consumer behaviour, a 2013 report in the Irish Times stated that many Irish
consumers prefer to purchase their goods online at a cheaper price even when it is available
at a very low price in the store:
Knowing that prices are cheaper online means that even when we see a very low price in the
shops, we still think we can get it cheaper online so we procrastinate and put the purchase off
until later. The shops are where we go to size up the goods, but the internet is where we go to
make the purchase
(Carroll, 2013)
It has also been indicated that Irish consumers are increasingly seeking promotions via
American shopping holidays, such as Black Friday (the last Friday in November) and Cyber
Monday (three days after Black Friday). Many retailers use these days as their most
significant days for promotions (Euromonitor, 2016).
Moreover, by specifically observing the spending behaviour of Victoria’s Secret’s target
market (young people), it has been indicated that a large amount of household spending for
those who aged between 30-44 is devoted to education and child care expenses. Considering
that house ownership is the primary financial goal for Irish people, rising house prices causes

many homeowners to experience a situation of negative equity (Euromonitor, 2016).
According to the government’s Economic and Social Research Institute, “64% of all primary
residential mortgages issued between 2005 and 2012 were in negative equity as of the end of
2014” (Euromonitor, 2016). A significant number of school-leavers go on to higher
education, accounting for 84,800 students in full-time education in 2014, and this trend is
increasing (Euromonitor, 2016). A 2014 survey commissioned by the Irish League of Credit
Unions found that 79% of student’s parents paying €482 per month per child to cover cost of
college; 51% of students work throughout the academic year to fund their third-level
education, working, on average, 19 hours per week (Credit Union, 2014). This could be
supported by another study, conducted by the Education Authority in Ireland during 2014,
which revealed that 18% of students suffer financially (Euromonitor, 2016). This could imply
a significant threat to Victoria’s Secret, as people would be more likely to focus on
necessities rather than luxury products.
The analysis of Ireland’s cultural environment shows that Victoria’s Secret can avail of
possible opportunities, but could also face potential threats. Regarding the former, Ireland has
a large target market, considering its young population, potential profits during religious and
public holidays, and the trend among Irish consumers of buying luxury products. However,
their limited disposable income and consumer reluctance to spend their money on expensive
clothes threaten Victoria’s Secret’s potential profit. To counter this, Victoria’s Secret should
adopt a timed promotional strategy to attract more consumers.
Political and legal environment
The Irish Political Structure
Ireland is a parliamentary democracy and a member state of the European Union. The head of
the government is the Taoiseach. The Tánaiste is the deputy prime minister. The Taoiseach
and the ministers hold executive power, and they collectively form the government under the
Irish constitution.

Political Stability and Risks
It is evident that political stability is a key facilitator of economic growth. According to the
World Governance indicators (WGI), Ireland’s political stability index is 1.07 (-2.5 weak; 2.5
strong), and ranks 23rd in the political stability rankings globally. However, Apple’s tax
affairs in Ireland have threatened the political stability of Ireland, especially after the Irish
government’s plans to appeal the European Commission's ruling that the tech giant should
pay €13 billion in back taxes. Challenging Brussels in the European courts would involve
huge economic and political implications. According to Dan O’Brien, chief economist at the
Institute of International and European Affairs, “it would give other countries more
ammunition to battle for a change in this country in the corporation-tax regime”. Ireland’s
foreign investment could also be placed at risk following this challenge. According to
O’Brien (2016), “it could make Ireland a less appealing place to invest in. Companies could
stay away on the basis that they too might suffer similar investigations and findings”. The
potential political risks could emerge as serious barriers to Victoria’s Secret’s business
activities in Ireland. Another looming issue is Brexit, as mentioned above, which could
negatively affect Ireland with respect to FDI and border- travel.
Legal Environment
The legal system of Ireland is broadly similar to that of the USA system. It is based on
common law, legislation, the Irish constitution and EU law. Economist Intelligence Unit
Report Investing in Ireland: a survey of foreign direct investors (2012), states that the key
legal factors that bring foreign investment to Ireland are the overall taxation system, as well
as the stable legal framework. Ireland’s taxation system contains many incentives to attract
foreign business, as these incentives make it easier to do business in Ireland. Taking
corporation taxation as an example, Ireland, as mentioned above, has a relatively low-tax
platform. Moreover, Ireland has a Double Tax Treaties agreement with 71 countries (the
United States is one of these). This is designed to eliminate the need to pay tax again in
Ireland on the income of international companies that has already been taxed in another treaty
country (Revenue, 2016).
Regarding legislation concerning advertisement in Ireland, the Consumer Protection Act
(2007), based on EU law, forbids any misleading advertising. This act protects consumers

against any false claims that might be made by companies regarding their goods and services.
Therefore, all promotions, including media advertisements and in-store promotions, that are
used to promote certain goods and services should be covered by this act. Moreover, there are
restrictions on using electronic means for marketing, such as email, instant messaging and the
telephone. Accordingly, Ireland has banned “unsolicited direct marketing”, as well as
misleading online advertising, according to Citizen Information (2016). For this reason,
Victoria’s Secret should take these issues into consideration when setting its promotional
strategy.
Summary and Recommendations
It is evident that Ireland promotes FDI investments not only as a means of investment, but
also as a means of social and economic development. Ireland’s investment policy will
provide Victoria’s Secret with a kind of economic stability and legal certainty coupled with
an encouraging environment in which to conduct business, with respect to international rules.
Not only will Victoria’s Secret have the potential benefit of economically viable businesses
in Ireland, but it will also benefit from its location (within the Eurozone), qualified labour
force, and the market size.
Although Ireland’s sufficiently stable economy could promote success for Victoria’s Secret,
the potential political risk in light of the tax situation with Apple and Brexit could influence
this development. Indeed, political risks cannot be avoided, yet effective management of the
political risks would enable Victoria’ Secret to enter Ireland’s market and its favourable
business environment. Therefore, for the best result, Victoria’ secret should integrate a risk
management system to identify the possible impact of the conditions on the company’s
objectives. In this scenario, the risk management team would develop evidence-based data.
Subsequently, they should assess and measure the potential impact and provide a course of
action to manage the risk, including purchasing political risk insurance or negotiating terms
of compensation with the host country.
Another issue which Victoria’s Secret needs to address is Irish consumer spending practices,
which involve a low propensity for excess. To counter this, Victoria’s Secret should adopt a

consumer-centric approach in its marketing strategy, especially in its pricing strategy. For
instance, Victoria’s Secret should adopt a value-based pricing technique. Setting the price of
Victoria’s Secret’s products at their perceived value to the customer could be beneficial. It
would assure consumers that they are making a purchase that is reasonable and not excessive.
In addition to its pricing strategy, Victoria’s Secret should establish deeper, more meaningful,
more profitable relationships with its customers through the use of social media, online stores
and an effective PR campaign. It should provide a unique and authentic experience to its
customers through profound integration with the Irish culture, which could help to sustain
their loyalty, and thus the success of the brand in the country.

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