Creating a Diffusion Line For the Stella McCartney Brand - Essay Example

?Fashion Business-Marketing Creating a diffusion line (Youth Women Fashion) for the Stella McCartney brand in UK. The business benefit to Stella McCartney brand by having defined brand personalities and organized value chains Aaker (1997) defines brand personality as a set of human traits associated with brand like masculine/feminine, old/young, trendier/old-fashioned, conservative. It describes how the brand behaves in terms of age, gender and socio-economic class. Stella McCartney has established itself as favourite brand for young women offering fashion wear, and targeting women aged 16-28 years old. Because of having defined brand personality, Stella McCartney has managed to distinguish its brand from that of its competitors. Chung et al (2001) and Malhotra (1986) explain that brand personality can also be helpful in creating customer loyalty in the saturated domestic market, and this has been true of Stella McCartney. This is achieved through interaction with positive associations with the personalities of the consumers. Abedania (2010) states that this interaction helps a company to gain deeper understanding of the perception of consumers towards the brand. Stella McCartney has been able to tap into the value of its organized value chains to increase its profit margins, and reduce its expenses like transportation. A retail structure should enable a company to reach more target customers with the product and give an insight to their perceptions. An analysis of the company’s retail organizational structure indicates that it serves the needs of the organization. The company operates 17 freestanding McCartney stores situated in Milan, New York, Los Angeles and London’s Mayfair, Manhattan’s Soho, Paris’ Palais Royal, LA’s West Hollywood, Rome and Miami. Currently, her collections are distributed in more than 50 countries through a network of 600 wholesale accounts including department stores and specialty shops. There is also an online shop for customers to purchase products online. This retail structure does not allow the company to have a total control on the delivery of its products. An overview of the supply base of the Stella McCartney brand From the above discussion, it is clear that Stella McCartney has an extensive supply chain. This supply chain serves the needs of the proposed diffusion brand and its proposed buying strategy in various ways. First, the extensive supply chain ensures that high-end designs more and easily accessible to the public. The customers are to be allowed to access lowly-priced but specially designed products for a limited time. Information from IBISWorld (2012) revels that offering products that are moderately priced than the original line will ensure that the devised buying strategy captures customers from less wealthy and younger demographics. This is a group of budget-conscious buyers and thus this strategy is important in ensure that customer demand is sustained all through the business periods, especially when the value of once-elite brands fades and they no longer sell as they used to. There is room for improvements that will help in ensuring that the existing supply chain serves the needs, and buying strategy of the proposed diffusion brand to a better level. One of the recommendations is to enter into lower-priced designer collaborations with many fast selling fashion retailers. Although the products will be offered at different price ranges, this step will result to increased sales and thus a general increase in revenue. The company is able to interact and communicate with customers through various ways through its supply chain. For for example, it uses brochures and direct customer service which ensures that the needs of the customers are always taken into accountability when coming up with new designs. Global distribution strategy for taking the product forward to both the B2B and B2C consumer The company’s distribution strategy for taking the product forward to both the B2B and B2C should be formulated from a multichannel perspective. Generally, the strategy will be formulated with the consideration of various supply channels like wholesalers, distributors, sales teams, sales agents, retailers, dealers, and agents of manufacturer, and price control will be one of the influential factors. In order to reach directly to the B2C customers, the company will have a sales team attending to customer demands through the website, marketing campaigns and retail outlets. The B2B customers will include dealers and wholesalers/distributors who will purchase products and sell them to end-users in their geographic areas. There should also be a sales team to respond to this group of consumers. To capture more of the international market, the company should also enter into an agreement with companies that are good at developing and operating stores for international brands. Jasper(2006) explains that the 2006 successful attempt benefited from this by building around the available wholesale accounts and the same is likely to apply to new carefully selected store developers and operators. The price of the products should be mapped out at each stage to ensure a fair profit for each distribution channel, avoid price conflicts and control the end-user price (marketingmo.com 2009). However, the company should not manage this distribution strategy using the traditional supplier-customer approach. Instead, the company should approach it from a more coordinated and broader perspective. Romano and Vinelli (2001) explain that such an approach to a distribution will facilitate a joint definition and joint management of quality procedures/practices,which in turn, increase the ability of a company to meet the expectations of its consumers. The impacts that corporate social responsibility (CSR) requirements have on the supply chain strategy and the buying and merchandising functions. According to Fry et al (1982), global competition places pressure on multinational corporations to take a CSR perspective and evaluate not only their own labor practices, but also the labor practices of their entire supply chain. This, therefore, implies that CSR should be embedded in every part of the organization, including members of its supply chain, offshore suppliers and international subsidiaries. This could narrow down the supply chain strategy because of the high costs of ensuring and maintaining this in a large supply chain. Basically, the involvement of CSR in the entire supply chain will involve training of employees and sharing of experiences. It will also involve regular auditing of the performance of the company suppliers, training of key personnel working at the supplier level, giving positive incentives to socially responsible suppliers in the form of enlarged purchasing orders and long-term contracts among others (Mette and Tage, 2009) . The supply chain strategy will therefore be limited to activities that will ensure a high attainment of CSR. Suppliers and all other groups involved in the marketing of the product will be required to meet the company’s CSR requirements like environmentally consciousness and management, agreement with the company’s Clean Procurement Policy, compliance with social ethics, laws, regulations and fair trade, and safeguarding of health, safety and human rights of Labor. The selected suppliers should not be using child labor or any other illegal or forced labor force. Eisingerich, A. et al (2011) and Eisingerich and Ghardwaj (2011) explains that a knowledge of this will encourage socially and environmentally conscious customers to buy company products despite other negative information. How the current HR strategy that company follows contributes to the success of both the merchandising and the buying strategies Stella McCartney strives to attract, motivate, hire and retain the best talented people in the market in order to achieve excellence in each and every aspects of its business. In terms of employee selection, the company is committed to a policy of treating all job applicants and all its employees equally. None of these receives favourism or unfair treatment on any grounds like race, gender, disability and other factors. The company believes that all its employees are ambassadors of the company thus it is continuously committed to motivating them (stellamccartney.com, 2012). The company rewards its employees with benefit programmes and compensations. All employees share in this because it is based on target achievement and also a combination of individual and corporate performance. Long-Term Incentive Programmes (LTIP) is used to motivate the company’s executives. Employees are trained frequently on designs or business strategies. All these have impacted positively on the merchandising and the buying strategies. Employees are generally committed to maintaining the highest standards of service, quality and design. They are also committed to meeting their performance targets, marketing the company, and cooperating along the supply chain. References Abedania, C. (2010). “Benefits of Using Brand Personality Through Product Brochures.” Online: http://ezinearticles.com/?Benefits-of-Using-Brand-Personality-Through-Product-Brochures&id=3573425. Accessed on 17th February, 2012. Aaker, J. (1997). “Dimensions of brand personality.” Journal of Marketing Research. (3) pp 347. Chung, K. et al (2001). “The effect of brand personality and brand identification on brand loyalty: Applying the theory of social identification. Japanese Psychological Research. (4) pp 195–206. Eisingerich, A. and Ghardwaj, G. (2011). "Corporate Social Responsibility: Does Social Responsibility Help Protect a Company's Reputation?” MIT Sloan Management Review (March) pp 18. Eisingerich, A. et al (2011). "Doing Good and Doing Better Despite Negative Information?: The Role of Corporate Social Responsibility in Consumer Resistance to Negative Information". Journal of Service Research (February) pp 60–75. Fry, L. Keim, G. and Meiners, R. (1982). "Corporate Contributions: Altruistic or for Profit?". The Academy of Management Journal (1) pp 94–106. IBISWorld (2012). “Diffusion Lines and Designer Collaborations Will Sustain Demand for fashion Designers.” Online: http://www.prweb.com/releases/2011/11/prweb8924786.htm. Accessed on 17th February, 2012. Jasper, S. (2006). Stella McCartney enters distribution agreement in Japan with Unit & Guest. Online: http://www.ppr.com/en/finance/publications/stella-mccartney-enters-distribution-agreement-japan-unit-guest. Accessed on 17th February, 2012. Malhotra, N. (1986). “Self-Concept and Product Choice: an Integrated Perspective.” Journal Of Economic Psychology, (9) pp 1-28. marketingmo.com (2009). “Find new marketing channels of distribution for your product.” Online: http://www.marketingmo.com/strategic-planning/how-to-develop-your-distribution-channels/. Accessed on 17th February, 2012. Mette, A. and Tage, S. (2009) "Corporate social responsibility in global supply chains", Supply Chain Management: An International Journal. (2) pp 75 – 86 Romano, P. and Vinelli, A. (2001) "Quality management in a supply chain perspective: Strategic and operative choices in a textile-apparel network", International Journal of Operations & Production Management. (4) pp 446 – 460. stellamccartney.com (2012). “Stella McCartney.” Online: http://www.stellamccartney.com/default/footernav/careers. Accessed on 17th February, 2012. Read More