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Implanting Case

Essay by   •  June 21, 2013  •  Case Study  •  3,768 Words (16 Pages)  •  1,103 Views

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On one hand Caroll is a French fashion brand that became since a few years a strong brand with influence in France particularly with more than 301 stores but also in other European countries with 64 stores in Spain, 14 in Portugal, 24 in Italy, 22 in Switzerland, 30 in Belgium but they also expand to the rest of the world with 9 stores in Japan. On the other hand there is the Chinese Market, maybe the most attractive one in the world today with more than 1.5 billion people and the greatest growth rate of the emerging countries.

It is clear that any company with the intent to grow rapidly can contemplate the possible outcome of being in China. But China, despite the big hope of growth, is also known as a hard to reach market. There are so many examples of companies' failures in China that before rushing headlong into this market any company should really study the market. Indeed, there so many variables that have to be taking into account: as the culture differences (languages, meaning of colors...), the distribution system, how to sell, the demographic situation...

The most appropriate example to demonstrate this difficulty is the recent war of the French ultra-luxury brand Hermes against its main competitors Gucci & Vuitton. When Gucci & Vuitton used their extraordinary huge renowned brand & simply expand in the Chinese market, Hermes did the exact inverse. They took a lot of time to analyze & understand and instead of implementing their brand they created a new one, Shang Xia, specially studied for the Chinese market and the results are striking: a growth of the turnover of 27% when its two main competitors grow at 17% & 8%.

Therefore, if Caroll wants to expand itself to China it should be rigorous & first well study the market in order to define its best strategy for succeeding in China. Indeed, after a short description of the brand, its history & actual position, we'll use the PESTEL analysis to understand the whole environment of the Chinese market. Then, using the SWOT analysis, we will determine the internal strength & weakness of Caroll as well as its external opportunities & threats. Other marketing tools will help us identify the market needs as the Boston box, the Ansoff matrix, the 4 P's and the 5 forces of Porter.

Once the market & the company's assets are defined, we will try to establish a strategy for the brand to enter this emerging & flourishing market.

1/ Caroll today

a) Presentation of the Caroll's brand

The company has been created in 1963 by Raphael Levy and Joseph Bigio. At that time the brand was called "Les tricots Caroll". In 1988 that Caroll became a subsidiary of the André group, which will be renamed as Vivarte in 2001. Caroll is French fashion house selling clothes for Women and became today a real actor for this segment with more than 300 stores in France and more than a 100 in Europe & Japan. The brand has today more than 1200 employees.

The brand has been known for several reasons: First the quality of the fabric & the conceptions which seemed to be in adequacy with the price. But the brand also succeeded in addressing products for all ages of women whether they were young or older women. The main images of the brand seem to be smart, urban, sensual & femininity. & for its main product: the woman suit. And finally the design & merchandising of the stores are most of the time really appreciated. In other terms, the marketing of this brand has so far been exemplary.

The 70's are marked by a period of strong growth not only in sales but also the course of its shares. The company launches its franchisee program in the early 80's.

In 1988, just after the acquisition of the company by the André Group (which will become Vivarte) the brand "Caroll Paris" is launched. From this moment everything goes faster with the increasing distribution network & the beginning of a worldwide expansion.

b) Caroll's 3 V's

To define Caroll's business model and have a quick overview of the company's offer before analyzing more deeply its marketing mix we will use the 3 V's methods:

* Value of the segment: For urban & medium to upper class active women from 24 to 60 years old. This is a broad range and therefore the brand can have a good traffic in its online or brick & mortar shops with people that have enough money to buy several products.

* Value of the proposition: Caroll offers a wide range of ready to wear high quality products and at a reasonable price. Caroll might have a low margin but is characterized by a strong customer loyalty.

* Value of the distribution: Caroll's distribution network is essentially insured by franchise which has a lot of edges for the vendor's developments & benefits.

c) Caroll's marketing mix

To define Caroll's marketing mix we will use the 4 P's methods:

* Product

Caroll's products could be classified as high-ended. If it's not considered as luxury brand, the quality & design of its product sets it as democratized luxury goods. Indeed, the raw materials have a good quality and the production of the goods are made at 40% in Europe & more than 20% directly in France which is a good point considering that a lot of high-end clothes retailers produce only in third-world countries. The product range goes from couples of shoes to other accessories as bags & belts but the core products are clothes as blouses, suits, sweaters, skirts etc...

* Price

As for its products, Caroll sets its prices for middle to high-end positioning. The handbags' prices for example goes from 100€ to 200€, the coats & jackets goes from 150€ to 300€ and a whole suit will approximately cost between 350€ & 500€. They really differ from cheap cloths & the war for lowest prices as Tati but also from luxury brand as Vuitton or Gucci where the prices are going to be doubled. But they also differ from medium & medium-high brands in favor of the quality of the product. Indeed, in order to compare, if you compare to Zadig & Voltaire with same ranges of prices, the quality is way better & the customer really satisfied. The most common word I found during my research to describe Caroll's price is "reasonable".

* Place

Caroll method of development and shop creation goes along with a strong network of franchisees. The strategy of Caroll



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