Marketing plan Essay

This Report presents the strategic Market entry plan of Victoria Secret in Singapore. Victoria Secret is an American brand owned by Limited Brands Company with retail of Lingerie, Women’s Wear and beauty products with annual revenue of USD 8. 7 billion and market share of over 50 percent in North America. It was launched in 1970 by Roy Raymond who started this chain when he had nightmare experience while showing Lingerie for his Wife. He believed that â€Å"Underwear† is not just an Innerwear but can be converted into a Fashion product by tuning in proper colours, styles and patterns and make a product a sex symbol. As it caters to large market in its home country it has been strongly based but now for better growth and more returns Victoria secret has started International expansion. It is one of the fastest growing Lingerie products under Limited Brands Company Umbrella and contributing more than 40% of profits. 1000 number of Stores give strong presence to Victoria Secret and Online shopping ads to the charm. Victoria Secret invests heavily on Advertising with USD 65 Million average for year. The brand symbolizes romance, class, love, desire and romantic moments. They marketed these products by show casing their products with angel looking models breaking ice of set standards of modelling. It is one of the most watched and appreciated Fashion Shows of the world and features world’s best Supermodel as there showstopper creating a feel of sensation in female gender. The brand also took lines from Dove Advertisements by redefining beauty and showing the product users with boosted confidence and sexier looks. The company has done horizontal integration by expanding product range from Lingerie products only to cosmetics, women wear and cosmetics. The appealing brand image gave quick returns on the new product range and helping Victoria Secret in capturing new markets at higher pace. Also what is helping Victoria Secret is its excellent supply chain and IT collaboration which have helped in cutting down overheads. As companies are looking for growth and stability the expansion into Asian market is unavoidable so is for Victoria secret. Singapore being expanding and booming economy can be next destination for Victoria Secret. Singapore also has high fashion conscious population with high income. Singapore being financial hub and supply chain hub is residence for people who have highest per capita expenditure on luxury brands in all segments. In Asia, Singapore boosts for being top market for growing luxury brands. Country also boosts strong tourism and having largest malls in South east Asia helps cater to being selected as best destination in Asia for expansion. Being business friendly government adds to positive of Singapore. Business environment Factors Demography Population rose 2. 5% in 2012. Total population was 5. 4 Million. The Demography of Singapore consists of mix of Chinese, Indians and Malays which account for 74 %, 9 %, and 13% respectively with maximum population between 20-64. Singapore also is world tourist attractor and counts for approx 12 million tourists a year. Total female population is approx 50% and this results in large market size. Female also play dominant role in the society as they also earn. This results in freedom of females and opportunity for them to satisfy their needs. Political Stability Singapore the synonym for freedom to do business was ranked in top 10 best countries to start business. It takes 3 Days on average to start business in Singapore and this is result of stable political System in the country. It has been ranked among top countries for business environment for consecutive 14 years setting benchmark. Singapore is worlds one of the least corrupt country in the world. It ranks 1’st in corruptions perception Index, 2013. The political Stability in the country has provided the most stable economy in South East Asia. Economy The Economy of Singapore is strong with 5. 1% in 3’rd of 2013. The Gross Domestic Product (GDP) in Singapore was worth 274. 70 billion US dollars in 2012. The Expected Net GDP for Singapore is expected to beat market trends and grow more positively in 4’th quarter. The Economy is supported by FDI, skilled labour and fully planned and excellent Infrastructure. The Rising economy has lead to rising per capita income. With the current economic scenario Singapore will attract more youth and global players which will bring more fashion conscious society which will indeed help growth of luxury segment. Industry With rising brand conscious population and trending international brands today brand is equally important for innerwear as is for outer wear. This was proved by growth of this segment industry even during depression of 2008. The rising economies of scale and large production numbers has led to reduced price of product which has increased demand and purchasing capacity. The following factors have contributed largely for growth of this industry: 1) E-Commerce: With rising e-commerce trend and more sophisticated players coming in picture the market has been taken by storm by these players. The customers have not fallen but E-commerce has attracted more customers because of easy access and getting products sitting home. Singapore boosts well E-commerce network with many local players in market along with international Players. The E-commerce has led to fall in prices of product as it involves lesser overhead costs. Association with global E-Commerce players has helped Victoria Secrets attain marvel in other countries and can do the same in Singapore also. 2) Sophisticated Supply chain: With rising use of Sophisticated IT tools for inventory planning, forecasting, Designing and scheduling has helped to reduce costs and development of industry in total. Many Global Brands with innovation in Supply chain have set example for the world. Singapore boosts excellent supply chain network and being Supply chain Hub is excellent destination. Market Analysis Singapore Market size Increase in Per capita income has led to entry to Luxury and premium brands coming in Singapore. The Size of market is expanding and will have higher success rate in coming years. The Table Below shows the growth of Women’s Inner-ware in Singapore. Source: Euro monitor International from trade associations, trade press, company research, trade interviews, trade sources a) Target Females in Age group of 18-50 which means 200,000 females. Middle and Upper Class Tourists Young and Brand Conscious Generation. Competition Triumph , Aerie , Calvin Kline , Armani , Sorella , Etam , La Perla Adore-Me offers direct-to-consumer lingerie at about half of Victoria’s Secret prices Intimint asks customers to take a quiz and sends them new lingerie selections every month, based on their preferences True ; Co. sends women five bras a month, giving them the option of keeping what they like and sending back what they don’t. Low Price and high variety local Players who have well established network in Singapore c) Porters 5 Forces 1) Supplier Power: LOW, As Victoria Secret has Production facilities in Thailand and India the supplier Power is very low. Buyer Power: HIGH, As Singapore already has high end Lingerie brands in its vicinity the Customers have wider options and can shift their preferences. The market has both lower prices segment and more premium segment. 3) Competitive Rivalry: HIGH, As Singapore already houses Premium Luxury lingerie brands who have worldwide recognition, Victoria Secret has high competition. 4) Threat of substitution: HIGH, The price range plays critical role as Victoria Secret has Competition with lower, same and high price range Products. 5) Threat of New Entry: LOW, Being well established worldwide name has its own fan following which attracts masses. New entries will take time to create impact and in that mean Time Victoria secret can come up with Contingency plan. Landscape a) Independent Women: Singapore being modern and economically sound has Independent women who earn well and spend well. This has led to brand conscious population b) Internet Penetration and Media sensitivity: Singaporeans are always connected to Internet. This has led to Strong E-commerce market here. The Media plays important role as Singaporeans try new western brands more frequently and invest heavily in it if the like the brand . Population Mix: Being strong economy Singapore has attracted  nationalities from various countries which have brought in sense of fashion, demand for authentic classy items. This Demand is of high end products. d) Location: With production plants in nearby countries such as Thailand and India and Strong Supply chain hubs the Location is also ideal. Singapore being small can’t accommodate Production facility so being centre for supply chain helps. ENTRY IN SINGAPORE: MARKET FEASIBILITY STUDY Design Victoria Secret is renowned for its strong designing team which comprise mixture of people around the world to understand each geographic trend. Once they understand the trends they create new trends in the market. It defines Sexiness as youthful, mature, energetic, adorable and intimate. The competitors have targeted another value like Triumph emphasises on Simplicity. Victoria Secret will benefit from point that Singapore is mix of many. The Design Teams have large market size which they can target with larger variety. Bold and Loud Brand Promotion This brand brings sense of comfort and pride among women. This is reflected in there promotion activities. The brand highlights the beauty of every individual and helps concealing imperfections with its unique designs. It is most bought product by models. Their Catalogues feature world’s hottest and sexist women in the world. Singaporeans are vivid about Fashion and Luxury products. With Rising Per capita income and proper promotion by hiring trending models of Singapore Victoria Secret can target masses. The Footfall in malls is one of the highest in Asia which can contribute to high sales if located at proper places. Rapid Growth of High-end Female Market Women are booming rapidly in Singapore who are either in White collar jobs, Leaders, Elites, working in Multinationals, entrepreneurs etc. These women have decent jobs, High disposable income and strong purchasing power. Maximum percentage of Women are highly educated. They are open and eager to accept and use trendy and fashionable Products with good quality. They Care about their Lifestyles, Health and bodies. This is supported by fact that Singapore has low obesity Rate of 7. 3 % in females and ranks much below America where obesity is 35. 5% in females. As women consider themselves independent and delicate it is highly possible for them to spend a remarkable amount of income on underwear and branded lingerie for self rewards. This will help Victoria Secret to enter the market easily and reap Benefits of growing and educated economy. Price Barriers and Distribution Channels Normal bra Ranges from 40-80 USD in US which reduces to almost half during sales. Singapore can also cater to demand with same or lesser Price as there are production facilities in India and Thailand. This will help in taming local players who play games of lower prices. Price would not be a Barrier for Victoria Secret to enter into Singapore. Having strong supply chain network with both these countries and being placed near the demand can be met. The Retail Distribution channels are strong and can be built easily in Singapore owing to small country size and Strong local infrastructure. Being Business friendly environment will help Victoria Secret to Establish Strong Distribution channels in Shorter Periods. Overview Retail market in Singapore is up by 3. 3% in August 2013 is back on track after falling slightly. Total number of Retailers in Singapore is more than 30000 with less than 1% for Lingerie Products. The Scope of market is high. Singapore is heavily sustained on Imports from US, Malaysia, Thailand and Australia. Market Challenges and Opportunities Singapore has tightened foreign nationals working in labour market and this has led to increase in labour markets. The Rentals have gone for toss and are very high. The overheads cost the most for setting up business in Singapore. Being business friendly country the market attracts large number of players who provide cheap products, copied items from various world renowned brands. With challenges are opportunities also, being supply chain hub the country can act as stepping stone to enter bigger markets like of china. The Strong judiciary System and quick decision making helps to curb challenges faced such as intellectual copyrights and those related to design copying. SETTING UP RETAIL OUTLET IN SINGAPORE 1) Documents Required for Registration The following documents/information is required for registering a Singapore branch office: a) A certified copy of the Certificate of Incorporation of the foreign company. b) A certified copy of Memorandum and Articles (MAA) of the foreign company. c) Particulars of the directors of the foreign company. A memorandum of appointment and details of at least two persons resident in Singapore who will act as the agents for the Singapore branch office. e) A memorandum executed by or on behalf of the foreign company stating the powers of the local agents. f) Details of the registered office address in Singapore 2) Registration Procedure and Timeline The professional firm hired to handle the branch office registration will take care of all the necessary registration formalities. No physical visit of company executives is required from headquarters. The registration process consists of two basic steps: 1) Name approval 2) Entity registration. The name for the Singapore branch must be the same as that of the parent company. It will generally be approved unless it is identical to any existing company name or is vulgar in nature. Assuming necessary document are ready and there are no delays in the name approval process, registration of a Singapore branch can be completed in 1-2 days. The company registrar will send an email notification confirming the registration of the Singapore branch 3) Retail Outlets – Key Facts and Requirements a) Business Incorporation: Before one can begin operations, retail outlet must first be registered with the Singapore Companies Registrar, ACRA. This involves just two procedures that can be completed online within 24 hours. It is best if retail outlet offers unique products and services that are not currently available in Singapore’s colourful retail market. b) Approval for Premises: One must ensure that intended business premise is an approved location for retail business. To have retail outlet in a conservation building or private property, approval from the Urban Redevelopment Authority of Singapore (URA) is required for making additions or alterations to the premises. A Fire Safety Certificate from the Singapore Civil Defence Force (SCDF) must be obtained to verify that retail outlet meets all fire safety requirements. If outlet is located in a shopping mall, the landlord may expedite the necessary approvals for you. 4) Licenses for Setting Up a Retail Outlet in Singapore Depending on the nature of the merchandise or products offered by retail outlet, apply for the relevant licenses. If outlet offers products which can affect human health and safety, relevant licenses may be required. To Import and sell cosmetics products domestically, notify the Health Sciences Authority (HSA) before placing the product in the market via the HSA’s PRISM site. The fee for the notification of cosmetic products is pegged to each product’s risks and variation (colour etc). 5) Hiring Staff Starting a retail outlet or franchise means that one may need to bring on board employees from home country to oversee operations. If one intends to employ or transfer employees from home country, apply for the relevant Singapore employment pass on their behalf. The Singapore employment pass is however subject to approval by the manpower authority and must meet Singapore’s new productivity vision. 6) Taxation of Singapore Branch A Singapore branch is generally considered a non-resident company for tax purposes. Non-resident companies are not eligible for tax benefits resulting from available tax incentives and tax treaties meant for resident companies.   Annual Filing Requirements Section 373 of the Companies Act requires a foreign company to file its Annual Report and the audited accounts of its Singaporean branch office within two months of its Annual General Meeting, or within 7 months from the  end of its financial year whichever is earlier. Also, each Singapore branch is required to file a Tax Return on an annual basis. MARKET ENTRY STRATEGY Victoria secret can enter Singapore Market in following ways: American exporters use agents or distributors to serve the Singapore market and other markets in Southeast Asia. Singapore firms are aggressive when it comes to representing new products and usually respond enthusiastically to new opportunities. Singaporean companies are open to joint venture proposals. Price, quality and service are the main selling factors in Singapore. Prospective exporters to Singapore should be aware that competition is strong and that buyers expect good after-sales service. Selling techniques vary according to the industry and product, but are comparable to the techniques used in any other sophisticated market. It is also important for U. S. firms to visit their representatives and maintain a good relationship with them. Victoria Secret has expanded in Maximum countries with 100% ownership strategy expect countries where it is difficult or impossible. As Singapore is business friendly and Provides Option for 100% investment Victoria Secret should come as 100% subsidiary. RECOMMENDATIONS 1) Enter the Singapore with 100 % subsidiary 2) Launch all product range in one go from Innerwear, shoes, cosmetics and clothes. 3) Target Shopping Centres for their retail operations for better Visibility 4) Promotion using both international and domestic models for better appeal 5) Enter with 2-3 Stores in Initial Phase for better understanding and Expand Further after setting customer base 6) Join hands with E-Commerce industry both domestic and International to promote brand 7) Target not only Young but also Middle age and Old age 8) High Variety and Utmost quality to remain Core of Business in Singapore also 9) Customized Marketing using social media and Electronic Platform 10) Customized Designs for Singapore Customers as per their taste and like 11) Customer Engagement using print media 12) Virtual Trial Rooms and trained Women staff for guidance on shape and size