Brand Extension Strategy of the Topshop - Essay Example

Introduction Brand Extension is also regarded as Brand Stretching which is a common marketing strategy generally by the marketing company through substitution technique, the specific brand name is advertised in different category of the product. The concept of brand extension is generally adopted to enhance and leverage the brand equity i.e. the net worth and long-term sustainability just from the renowned name. The Brand Extension is based upon the nature of affiliation between the brand and the customers, for this purpose the brand's values and goals shall be well conceived by the customers. Considering another example of Polo, the title of the brand has been employed in wide variety of products including clothing and home furnishings such as bedding and towels, and variety of household products are made of linen, which offers the pleasure of comfort in wide range of products (Jean, 2004). The Brand Extension necessarily requires the provisions for the commonality of the features, which shall not be applicable in some of the cases, for instances the concept is irrelevant for brand offering clothing and food products. The product on which the concept of Brand Extension is applied shall of provisions for synchronization and adaptability. However the scheme of Brand Extension requires time and sufficient budget which is essential for the brand promotion, however it has the potential to minimize the financial risk only because the commonality of the brand is responsible for the enhancement of the perception of the consumer based upon core brand equity (Kai, 2005). The development of the branding strategy requires thorough research and concrete knowledge about the reaction and requirements of the targeted customers. The development process initially requires the classification of the customers, not all the brands are meant for all classes of the public; therefore class identification is major step towards the development of strategy. The development phase requires the formulation of the core values i.e. honesty, integrity, excellent communication, and client satisfaction. The formulation of the brand value is significant because it represents 'the creed for the business and become the cornerstone for developing the brand's proposition' (Jean, 2004). The identification of the core values is significant during this phase, following by comprehensive and objective research based upon the 'the brand's strengths and weaknesses, the target audience, and the level of competition'. The development process requires vigorous understanding of the 'brand's industry, its history, the current market picture, and potential growth and direction' (Kai, 2005), however such features are not requisite in the case of Brand Extension. The development of the brand strategy is practiced at the nascent stage of the brand launch, and such exercise shall be avoided mainly because of the time period it requires, however the brand extension shall be preferred solely because the credibility of the new product will rely upon the standing of the brand. For all already successful products of particular brand, the Brand Extension is guaranteed success, however for the Topshop which intend to offer launch new brand the development of brand strategy shall be good starter (Van, 2003). Current marketing strategy Body is to be regarded as the perfect and historic medium for the revelation of the sexual sprit, and body itself has been the right parameter for the evaluation for the evaluation of the human sexual behaviour and identity. Human body is the reflection of the sexual characteristics possessed by any of the body, and therefore the features attired with the human body including their mentality, approach, zeal, behaviour; in short it has been the sexual identity in terms of body which has been responsible for the proper and appropriate understanding of the human body. Such an observation does not have to be taken strictly, because as highlighted before the technological evolution has been responsible for causing sexual disequilibrium within human society. The significance and the importance of the body associated with the sexual behaviour and sexual identity is never be compromised upon, indeed it is the most reliable and accurate parameter for evaluation of sexual perspective and class of any human. Body is the correct and accurate reflection of the personality of an individual, it was previously the pure reflection of the qualities and feature associated the human body, but the current technological evolution has been responsible for turning the sexual behaviour and identity more figurative, therefore the sexual orientation has lost its credibility (Steven, 2002). Considering a routine example, the wardrobe and the characteristics of the male gender are no longer only prominent among the male gender, rather it has transpired into female gender as well, similarly the qualities and attributes previously confined to feminism has been injected into males through technological and non-technological proceedings. The sexual behaviour and the orientation is considered to be more 'subjectivity, or the existential reality of a person', previously it was not the way it is at the moment. The fixed psychological structures have lost their grip, and the psychological objectivity for the person stand invalid and manipulated, therefore certain elements relevant to psychological structures are still applicable including 'beliefs, attitudes and prejudices that have been acquired, voluntarily or involuntarily, during the process of childhood growth' (Yvonne, 2002), but there is a common possibility of shift and change associated with that structure more due to the human adaptation which is possible due to technological advancement. Previously the human body was responsible for providing 'an element of rigidity to the character and attributes of the person', and the actions of the individual varied and fluctuated on the basis of the sexual affiliation. At the present, the sexual affiliation has emerged as weak link, and it is the personal interest towards particular gender that has varied the sexual orientation and interest of an individual or society, the importance of the body has been ignored and contradicted (Won, 2001). Topshop has successfully translated the sexual element of the human body in its fashion products, and has therefore successfully undertaken the lead of fashion transformation within Europe. Fashion Marketing Media has offered the Topshop with better opportunities to advertise their product. The advent of media and the unlimited access of the public towards media have provided the Topshop to commercialize their products in an effective manner. Media is an icon for the common public that offers entertainment and updates to the public, and these important features have made it quite popular among the public (Leon, 2006). The technological development is responsible for the up gradation of the media, and it has been able to successfully capture the focus and attention of the public. In the present situations, media has adopted diversified roles, and has therefore got immense popularity among the public, the media had offered much beyond entertainment to its viewers and readers, and has included different programs and articles with particular reference to business, modern technology, healthcare, space and many other happenings around the world (Arthur, 2005). The commercialization of the media is regarded as the excessive involvement of the advertisements into product, in the present days very element within the media is in quest to secure maximum financial gains through advertisement campaigns, but such media agencies have been cautious enough not to affect the quality of their product, and therefore such advertisement campaigns are preferred through which maximum financial benefits can be achieved by the media (Tharp, 2001). Techniques and Principles The advertisement plans has adopted a major shift, the focus from the publication of the characteristics of the brand has shifted to the psychological needs of the consumer. The consumer of the specific brand is highlighted for the brand promotion purpose, against the attributions of the brand itself. It is common to observe the photographs of the female models with every brand advertisement, the women body adds more spice to the brand, and be it foods or automobiles. The advertisement industry has observed success in their brand promotion for specific campaigns that involved women models in particular. Several factors have been identified which shall bring about appropriate understanding of the women inclusion on brand promotion i.e. the women itself is source of attraction for the male consumers, therefore the inclusion of the women in any of the advertisement ensures reasonable market shares of the male community. The women portrayed in these brands are glamorous and sexy; such projection is regarded as the convenient method for the brand promotion (Tharp, 2001). The inclusion of the glamorous women also secures the market share of the female community. The sexy and attractive female models become source of inspiration for the female community, and this motivates them to look like these, such concept has been major success in the cosmetic and jewellery industry. The female constitutes more than sixty percent of the entire population, and such figurative and illustrious projection of beauty and glory capsulate majority of the market share (Arthur, 2005). The popular brands have tried to captivate the focus and attention of the readers, and have displayed the photograph of female models. The sense of sensuality and sexuality has been provoked through sexy and mesmerizing photographs of the models in invigorating dress. The vigour and drive towards the brand has been successfully achieved through the colourful and exuberant photographs of the models. The element of contemporary fashion is always transitional, therefore products associated with arts and fashion are expected to experience continuous shuffle with the passage of time, under the influence of technology (Tharp, 2001). The fashion designing has been a subject which has transformed with the passage of time, and the transformation of the products is not subject to the conditions and expectations of the market, rather such reforms have evolved due to the variety of options available through technology for designing industries. The images published in the article are placed at significant positions; therefore photographs are the major highlight of the article. The strategy has served as medium to express and communicate the active state of the company to the readers. From the perspective of many fashion oriented readers, they prefer pictorial communication over textual description, therefore the collection of such photographs and their placement has potential to motivate the reader towards the product, without reading the entire article (Arthur, 2005). The advertisement is the reflection of the fact that product is more meaningful then the text often published and printed in the advertisement for the description of the brand, the brand is itself self explanatory (Larry, 2006). The brand shall therefore try to facilitate the customers in the best possible option, and for that purpose different items has been exposed which are in lieu with the taste buds of the customers. According to the market analysis, the quality of the brand and services offered by the company has shown remarkable improvement, but the brands are further struggling towards personifying the introduced products in such sophisticated manner, so as to attract the focus and interest of the customers (Brain, 2001). The fashion is a message which is never received, but always delivered; therefore in such area the market has the option to invest its thoughts and finances for the fabrication of the goods which are coherent to the likeness of the market and in lieu with the technological advents, not to their need. Fashion is not a need; it has been a source of pleasure which is attainable through inquisitive ideas and uniqueness i.e. the motive of technology (Brain, 2001). The Topshop relevant to such profession are able to secure market share through their deep involvement and commitment towards the market, not to their need. The nature of advertisement is professional, and no glittering and coloured features are related to the advertisement, which is as per the business decorum, which is maintained and practiced when two Topshop are on the course of affiliation. The simple nature of the advertisement is the reflection of the partnership building measure, when any superficial and coloured advertisement is ignored to place the record and the status of the relationship straight and transparent (Ronald, 2006). The culturally shaped body has transformed and exploited. The female models were previously considered to be the projection of peace, fair, tranquillity and love, however now the projection has made major shift. The female models are the representation of sex, nudity, figure and lust. Such transformation has severely affected the social standing and contribution of the females within the society (Ronald, 2006). The projection of cultured women was restricted to wise and sophisticated character, which now includes characteristic features of vanity and nudity. Such projection has affected the health of the female population on massive scale. The projection of the females as icon of beauty, with thin body has although successfully resulted in cash flows for the brands, but it has influenced the female viewers to an extent that women population is struggling for such figure to gain public focus and attention (Brain, 2001). It is important to understand that the deviation from the cultural-shaped body in the post-modern world. The standards of the beauty have been imposed upon the women, and this has primarily resulted in the repeated health issues. The aggressive marketing campaigns have developed strong aptitude of the female towards sexy and attractive outlook, it is therefore important for the female to ignore the ideology branded in the advertisement, and rather focus upon the traditional role of the women. It is known that an average model spend large amount of time and money to achieve desired outlook, which seems impractical for the working women to achieve. The women shall strongly adhere to their cultural role; the current role being publicly advertised is for the sake of brand promotion (Ronald, 2006). The post modern advertisement industry has exploited the role and character of the female, the role and significance of the female is limited to nudity and lust, which negates the cultural perspective associated with the role of the women in the society. The advertisement agencies have branded their products with women, only to capture the attention of the market; however our society has tried to personify these models in their daily life at the expense of their diet plans responsible for adverse health conditions (Peyton, 2002). Profitability The stability, growth and retrenchment are the driving gears of any organization. Topshop has remained stable from financial and marketing point of view, however from management perspective the company has experienced continuous transition as per the policy of the company, and the management of the company is either transferred or retrenched based upon the requirements. Stability is encouraging signal, the signal reflects that the company has smooth sailing and is strengthen and capable enough to bear all the jerks and factor of uncertainties. Growth is positive highlight of any company, the growth is the reflection of the fact that the company has achieved progress, growth is independent of acceleration and therefore the final outcome of the activity i.e. positive or negative, success or failure are the criterion for the marking judgment based upon growth. Retrenchment is another not truly positive indicator of any company's standing; the retrenchment signifies the fact that the company is either over staff or has fewer loads, which is not positive highlight for any company. Topshop has practiced retrenchment on the basis of situation, it is not a common or standard practice or feature of the company, rather the activity is prominent once the results of the company are not so positive. Strategic Management Process The Topshop has been successful in offering convincing experience which has enthralled and delighted the customers, the company instead of coming up to the expectations of the customers, has further enhanced the level of their taste through magnificent offerings. The chairman of the Topshop has agreed and stressed upon the effectiveness of such strategy, 'the one common thread to the success of these stories and the company is that they have to be true and they have to be authentic' (Burt, 2007). As per the current record of the sales, and future prediction of the sales on the basis of current trend are encouraging, by the end of 2012 the sales of the Schultz will be three times higher and will reach the mark of twenty three billion US dollars. The company has revealed a comprehensive plan aimed at the expansion of units, more than forty thousand stores are expected to be launched in the coming few years. The company has decided to create a healthy work environment, which is expected to develop positive consequences on the performance of the company. The importance of the healthy environment in the company can never be underestimated; therefore the company endeavour to offer satisfaction to its employees which will subsequently be transmitted to the customers. The content of the employees is based upon financial results and profitability of the company, and the conducive environment it offers, the company has tried to ensure that it complies by these agenda so that the transmission of satisfaction, comfort and pleasure is smooth, and the positive results through customer feedback is achieved. The administration of the company has requested its employees to redouble their efforts, and at parallel has tried to achieve the status of the small entrepreneurial company. The company has given considerable focus towards its team members, and every employee has been encouraged to contribute and invest their efforts in best suitable manner, for that purpose the company launched employee-concentrated programs, which is in agreement with the diversity theme of the company. The company has established their stature as diversified group, and 'embrace diversity as an essential component in the way business is conducted, and provides a great work environment and treat each other with respect and dignity' (Burt, 2007). Business Model The former Chairman of Topshop Howard Schultz undertook a mission to accomplish the planned and expected endeavours of the company, and has intended to undertake comprehensive strategy aimed at the development of the all features relevant to the company. The company has tried to increase its target of sales level, and for this purpose the areas of marketing and customer services have been explored and improved. The company has tried to facilitate the customers in the best possible option, and for that purpose different items including confections have been introduced. The quality of the brand and services offered by the company have improved, but the company has tried to personify the introduced products in such sophisticated manner, so as to attract the focus and interest of the customers; 'topped with whipped cream and a dusting of toffee sprinkles, Topshop' version of this traditional delicacy is a luxurious tasty treat' (Burt, 2007) is one of the notations associated with the particular product. The Topshop has been successful in offering convincing experience which has enthralled and delighted the customers, the company instead of coming up to the expectations of the customers, has further enhanced the level of their need, aspiration and satisfaction through magnificent offerings. The chairman of the Topshop has agreed and stressed upon the effectiveness of such strategy, 'the one common thread to the success of these stories and the company is that they have to be true and they have to be authentic' (Burt, 2007). As per the current record of the sales, and future prediction of the sales on the basis of current trend are encouraging, by the end of 2012 the sales of the Entice will be three times higher and will reach the mark of twenty three billion US dollars. The company has revealed a comprehensive plan aimed at the expansion of units, more than forty thousand stores are expected to be launched in the coming few years. Deontological Theory: Ethical Perspective As per the deontological theory, "Topshop shall adhere by their ethical obligations and duties when analyzing an ethical dilemma", the expression signify that "the organization shall follow their respective obligations to corresponding society because upholding one's duty is what is considered ethically correct", and Topshop has fully abide by this reality. Topshop has been able to understand its obligation towards respective industrial units, clients and customers. The company has decided to create a healthy work environment, which is expected to develop positive consequences on the performance of the company through revival of advertisement campaign, which has coincided with Entice, this is in lieu with the ethics and moral compulsion associated organizational policies and structure. The importance of the healthy environment in the company can never be underestimated; therefore the company endeavour to offer satisfaction to its employees which will subsequently be transmitted to the customers. The content of the employees is based upon financial results and profitability of the company, and the conducive environment it offers, the company has tried to ensure that it complies by these agenda so that the transmission of satisfaction, comfort and pleasure is smooth, and the positive results through customer feedback is achieved. The administration of the company has requested its employees to redouble their efforts, and at parallel has tried to achieve the status of the small entrepreneurial company. The company has established their stature as diversified group, and 'embrace diversity as an essential component in the way business is conducted, and provides a great work environment and treat each other with respect and dignity' (Burt, 2007). The differences and the notion of the pluralism has been reflected and appreciated, therefore 'Topshop has made a business out of human connections, community involvement and the celebration of cultures', the interpretation of diversity has been promoted and followed in true spirit. All such developments and exercises are in lieu with the objective initially formulated by the company. The company has not relied over the support of any particular age group, rather every member of the society is encouraged and attracted to enjoy the need, aspiration and satisfaction at Topshop, and all this has resulted in the expansion of the class of the customers. At parallel, the company has tried to ensure that the compliance of the cultural and traditional aspirations and the sanctity of the population is preserved and respected; therefore the emotional values have been inspired by the Topshop to achieve good results. SWOT Analysis External Environment - Porter Analysis Brief Background 1. Topshop is Italian based fashion company, which emerged as profitable industry before 2004. Since 2004 onwards the profits of the company has been on the continuous verge of declination. 2. The declination of the profit can be attributed to the economic recession and market competition. 3. Previously the industry reported load factor of seventy six percent, but by the end of 2000, it dropped to seventy percent. 4. In 2004, the Topshop suffered major collapse, and was ranked among the worst performers. 5. The failure of the policy of the cheap and quality aligned quality emerged as a disappointment for the management and shareholders. PEST Analysis on Industry Political Analysis 1. The deregulation in the European market launched by the European Union created hindrances for the fashion industry. The industry was accused of exaggerated profit margins. 2. The stand of European Union has caused implication for the Topshop, the fashion industry therefore found it difficult to continue with the implementation of quality brands at minimum prices. 3. The rising competition in the market has imposed certain barriers on Topshop against the open markets of Asia and North American, therefore the market shares of the rivals increased significantly. Economic Analysis: 1. Fashion industry worldwide in general has played a central role in stirring the growth of the world economy. 2. In the current scenario the major concern for the industry comes from the current economic recession and the rising competition, with looming threat of negative growth rate with European countries. 3. The financial penalties have halted the commercial activities of the company; unfortunately the company does not enjoy enough revenue which can be utilized for such purpose. Social Analysis: 1. The Topshop was penalized on several accounts in terms of high-tax deductions, the company on its part had to provide social justification to avoid misinterpretation from market. 2. The company has significantly lowered its expenses, and has therefore applied charges for the services at the nominal rates, which the competitors do not practice, much because their transportation charges cater of such assessment and demands from the customers. 3. World events like 9/11, terrorism, security concerns, and even natural disasters have put the industry in trouble. 5. Ultimately this will result in the declination of the market share, for this purpose of the Topshop has to ensure that its economic, marketing system is strictly in place, and not vulnerable to any threats or serious violation. Technological Analysis: 1. The industry has come a long way against Gucci and CK, with varying technologies. 2. Topshop has to necessarily compete with other fashion giants, not only on the front of implementation of the provisions for the quality, but has to focus on the area of technological evolution, adaptation and implementation. 3. The reliability of the services is major service, and this can be only ascertained if the latest developments and offers from the fashion industry are incorporated at regular interval. Summary of the PEST The Topshop has to focus on the adoption of the latest technological developments available in the market, and focus upon launch of marketing strategy-revamp. The company should focus on the areas on offer community and social services for free, the services which can be regarded as the right of the customer should be necessarily acknowledged and provided. The economic concerns should be nullified through financial collaborations with the banking sector. Porter's 5-Force Industry Analysis Buyers: 1. Buyers do not have much bargaining power against qualitative fashion brands. This is a valid statement, the Topshop has to ensure that it apply the services, the cost should be shared with the customers, through reasonable rise in the prices. The reaction of the customers has to be melded as per the interest of the company. 2. The buyers understand that Topshop is leading fashion giant, and therefore are willing to transact prices in exchange for the swift availability of quality and uniqueness. 3. The customers on their behalf can only avail the bargaining power if they have developed long term affiliation with the company, which is unlikely in this era of competition which has recently nourished. Suppliers: 1. The bargaining power of the suppliers is low, because of the relief which the technology has offered; the customers are at large familiar with the concept of the efficient and cost effective technology and are less likely to agree over the prices which are often exaggerated. 2. The suppliers have competition among themselves, and therefore the supplier has to compromise and offer bargain else the supplier is likely to lose the contract. 3. Suppliers are to develop their worth through extra efforts, which they have failed to reflect, and therefore if noticeable change in their spirit is not observed the suppliers are likely to face the challenge of bargain from their customers. Potential Entrants: 1. Threat of new entrants is great due to heavy investments; based upon demand and supply chain. 2. The incorporation of the technology is essential and has to be ensured on timely basis. 3. The economic recession has darkened the scope of the fashion industry which was previously liberal and independent. These fashion units are much under severe scrutiny by the government agencies. Industry Competitors: 1. There is high rivalry among the competing units. 2. There are around 50 fashion units in Europe. Key Factors of Success Demand: 1. As Topshop get more involved in business internationally when it comes to investments, supply and production chains and customers, the aptitude towards adoption of fashion often results in demand for fashion products. 2. Tourism has also evolved over the years all over the world particularly in the developing countries as they concentrated on developing resorts and sights to attract wealthy tourists from the world. Competition: 1. The competition has also increased many times and approach of the Topshop has been excessively aggressive towards its competitors. 2. The competition is strong and there are different changes taking place within the industry as well. Capabilities Analysis 1. Topshop has maintained aggressive pricing strategy with the help of its low cost competitive advantage. 2. Company also has the first mover's advantage as an innovative and qualitative brand' this also has established market share with the help of established routes and networks. 3. The company has competitive resources and has already become dependent on ancillary services. Strategy Development 1. The company is facing reduction in yields and so disciplined cost management is the immediate need for Topshop to maintain its cost advantage and low cost advantage. 2. The company has opportunities in the face of EU expansion and could offer further low rates by advanced cost reductions. 3. Ample growth opportunities are available and the market has still potential for further penetration. Another option is to go for consolidations and acquisition. References 1. Sicco Van Gelder. 2003. Global Brand Strategy: Unlocking Brand Potential Across Countries, Cultures. Kogan Page. N.Y. 2. Jean-Nol Kapferer. 2004. The New Strategic Brand Management: Creating and Sustaining Brand Equity. Kogan Page. N.Y. 3. Kai Yang. 2005. Design for Six Sigma for Service. McGraw-Hill Professional. N.Y. 4. Thom Yantek, Joe Harper. 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