OBJECTIVES


As a person with knowledge of strategic marketing, the author has always brought up to his superiors the viability of strategy formation regarding the analysis of this issue and at times fails to understand the reasons or logic behind certain strategic implementations imposed on it.


By delving into this project paper, the author intends to have better insights into how strategic marketing is thought up, formulated and then imparted down into the subsidiaries of the company or organization. The author hopes to have an in-depth understanding as to how the strategic marketing enables companies and organizations to compete effectively and profitably in this era of internationalization where competition is extremely intense.


In order to reinforce the learning objectives, two key focal issues were focused upon, i.e. innovation and diversity. Innovation was discussed with regard to strategic marketing where it was renowned for its developmental capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to better understand the issues being discussed.


 


 


 


EXECUTIVE BRIEF


This essay utilized Giordano Hong Kong as the model organization to review its present strategic marketing policies and how they dealt with critical situations. From the analysis, key trends in the strategic marketing policies of Giordano Hong Kong were then identified, how it worked and its effectiveness in dealing with critical situations was ascertained. The paper then moved on to assess these strategic marketing policies with regard to its suitability to critical situations, during which the internal capabilities of these strategic marketing policies in relation to the strategy being followed by Giordano Hong Kong was determined also. An overall analysis of the performance and effectiveness of the strategic marketing policies of Giordano Hong Kong was also conducted to assess and compare the capabilities of these strategic marketing policies with those of others. Gaps in the capabilities and environment were then identified.


Finally, several choices of strategies to improve the strategic marketing policies of Giordano Hong Kong as effective means in critical situations were recommended and evaluated in terms of appropriateness to the issues reviewed, feasibility in carrying out the options and acceptability within the key stakeholders and decision makers. Several key implementation issues related to managing strategic change were also addressed as well.


 


 


INTRODUCTION


The fashion industry over the years has developed an efficient and effective process of implementing the policies and tasks necessary to satisfy its consumers and management of companies and organizations. There has been a recent focus on the careful management of the processes involved in the production and distribution of fashionable products and services within the industry (1998).


More often than not, small fashion companies don’t really have the capabilities to implement international marketing strategies. Instead, these companies engage in activities that various schools of management typically associate with implementing integrated marketing strategies. These activities include the manufacturing of creative fashion products, product development, production and distribution.


However, international marketing strategies deal with all operations done within companies and organizations. Activities such as the management of purchases, the control of inventories, logistics and evaluations are often related with operations management. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, international marketing strategies include the analysis and management of internal processes (1999).


Giordano Hong Kong will be the model business entity that will be used in this research based on their history in international marketing strategies.


OVERVIEW OF GIORDANO HONG KONG


Giordano Hong Kong is one of the world’s leading fashion and clothing line companies in terms of profit and sales volume. The company has also the widest presence among all international companies. This is made possible through a positioning strategy of global networking of distributors.


Giordano Hong Kong uses the name of both the company and its mainstream fashion labels, and this strategy has allowed the company to pursue an integrated marketing approach directly related to the company name. There are also a variety of marketing strategies available that Giordano Hong Kong could make use of in order to control all of their promotional activities. When used appropriately, these marketing strategies will be able to help to consistently disseminate the valuable information that they want to convey to their valued consumers.


However, certain points have to be taken into consideration by Giordano Hong Kong regarding marketing strategies. Since their income is relatively higher than most of their competitors, the time for implementation of their chosen marketing strategies would take longer than usual, aside from being expensive. But since the goal of Giordano Hong Kong is towards a long-term dominance and stability in the fashion industry, then the pursuit of these promotional campaigns will be beneficial for the company in the long run.


Giordano Hong Kong SWOT Analysis


Strengths:



  • Giordano Hong Kong has products that boast of a very powerful retail. This includes a reputation for value of money, convenience and a wide variety of products

  • Giordano Hong Kong has grown significantly over the years, and has experienced global expansion.

  • Giordano Hong Kong’s main competence lies on the use of information technology (IT) to fully support its international logistics system. Therefore, the company can see how their individual products perform within the Philippines, or even at stores at a glance. IT also supports Giordano Hong Kong’s efficient procurement.

  • Giordano Hong Kong is able to deliver good customer care, as the limited amount of work would mean plenty of time to devote to customers.

  • Giordano Hong Kong’s lead consultants have established a strong reputation within the market.

  • Giordano Hong Kong can afford to change direction quickly if its management finds that the company’s marketing strategy is not effective.

  • Giordano Hong Kong has little deficits and overheads. Therefore the company can offer good value to customers on a consistent basis.


 


 


Weaknesses:



  • Giordano Hong Kong is one of the world’s largest companies in clothing lines but has a weak control of its empire, despite its IT advantages. This could lead to a decrease in productivity in some areas where they have the least control of.

  • Since Giordano Hong Kong sell products across many sectors, the company may lack the flexibility that some of its more focused competitors possess.

  • Giordano Hong Kong operates globally, but its presence is located in only relatively few countries worldwide.

  • Some of the company’s weaker branches lack market presence or reputation

  • Some of the company’s personnel still lack the essential skills base in many areas.

  • The company is still vulnerable to the temporary losses of its vital staff (e.g. being sick, leaving).

  • The company’s cash flow is unreliable especially in the early stages of a new product development.


 


 


 


Opportunities:



  • Taking over, merging, or forming strategic alliances with other fashion companies while focusing on strong markets like Europe or the Greater China Region.

  • The branches of Giordano Hong Kong operate only on trade in a relatively small number of countries all over the world. Thus, this would open the opportunities for future businesses in expanding various consumer markets, such as those in China and India.

  • The opening of new locations and branches offer Giordano Hong Kong the opportunities to exploit market development. This could lead to the diversification of the company’s branches from large super centers to local-based sites.

  • Opportunities exist for Giordano Hong Kong to continue with its current strategy of establishing large branches worldwide.

  • Giordano Hong Kong is continuously expanding, with plenty of future opportunities to exploit for success.

  • The local councils of Giordano Hong Kong are in the process of encouraging local businesses with work whenever possible.

  • The competitors of Giordano Hong Kong may be slow to adapt to new luxury goods especially the ones that the company releases.


 


 


Threats:



  • Being number one means that Giordano Hong Kong is the target of competition, the company to beat, both locally and globally.

  • Being a global retailer means that Giordano Hong Kong might be exposed to political problems in the countries where the company has operations.

  • The production costs of most consumer products have the tendency to fall because of lower manufacturing costs. Manufacturing costs fall because of outsourcing to low-cost regions around the globe. This phenomenon could lead to competition in prices, which in turn would result in the deflation of prices in various ranges. Intense price competition must definitely be considered a threat (Rosenberg, 1984).

  • The latest developments in information technology which could possibly change the markets might challenge the company’s ability to adapt to these changes

  • A slight shift in focus of a large competitor might wipe out any market position that Giordano Hong Kong has achieved over the years. This could force the company to specialize in rapid response but good value services to local businesses. This would put so much pressure on the company’s consultancy staff to keep informed with the latest changes in technology where possible.


 


MARKETING MIX ANALYSIS


A. Product


Giordano Hong Kong’s dedication to quality for almost three decades now has led to the satisfaction of millions and millions of its customers worldwide. Giordano Hong Kong was created by a group of people who pursued the best quality and craftsmanship in terms of fashionable clothing lines. The Giordano clothing line that its customers wear today is still being manufactured using nothing but the original and unparalleled raw materials discovered three decades ago by Jimmy Lai. Giordano’s delicate yet strong fabrics, bright colors and cost-effectiveness are obtained by using only the purest raw materials.


The raw materials used in the production of Giordano clothing are able to meet the high quality standards and specifications. The packaging materials where Giordano clothing is sold are also being subjected to strict quality standards.


In line to Giordano Hong Kong’s policies in product safety, appropriate measures are taken in the manufacturing process of Giordano and all of its brands to prevent the possible corruption of the products. Giordano manufacturing plants implement the principles of the HACCP (Hazard Analysis and Critical Control Points) system as a testament to their dedication to quality.


B. Price


Giordano Hong Kong bases its pricing strategies on several key trends that continuously shape the global marketplace of fashionable clothing. One particular trend is labeled as “premium-tization” (1991). This phenomenon causes the polarization of different markets. This would then trigger the consumers to demand and pay much higher prices for perceived quality. However, discounting in prices is also simultaneously taking place, therefore squeezing out the middle range. More often than not, clothing companies undergo internationalization which leads to a tighter squeeze for shelf space. This will in turn leave Giordano Hong Kong as a winner. It is for this reason why Giordano Hong Kong values the “premise sector” so much because this would allow consumers can to try their brands at low risk and price.


In terms of market segments, premium and specialty clothing of Giordano Hong Kong have a disproportionate share of volume growth at an estimated 4-5% per year, as against the 2-3% overall growth rate. These rates come up as a result of both the rise in GDP among developing markets and consumer demands for higher value propositions, which is obviously dominated by international brands. Therefore, Giordano Hong Kong has to increase its portfolio and operate globally to overcome the home market. Giordano Hong Kong practically operates on a relatively fragmented market, with the top four clothing companies accounting for 22% of global volume five years ago and only about 28% today.


C. Promotion


Giordano Hong Kong has been able to maintain its reputation as one of the world’s leading clothing companies for more than 2 years now. It is able to face the challenges in many of its markets directly. This is made possible by the effective promotional and positional strategies aimed to deliver not only profit growth, but also on building down the foundation of Giordano’s brands and business.


The promotional campaigns and strategies of Giordano Hong Kong are focused mainly on driving the growth of its brands and improving the company’s financial performance. These campaigns have also helped secure significant acquisitions and partnerships. And more importantly, these campaigns have led to the release of the potentials of the company’s employees, thus building a quality performance- based culture.


The promotional strategies of Giordano’s local products are practically reinforced by the local employees themselves. These moves certainly allow the company to improve even more without the costs of introducing new technologies. These efforts have resulted in increased financial gains for the company and have allowed the establishment of distribution networks for both the local and international Giordano products.


 


D. Place


Giordano has grown and expanded virtually around the entire globe. This was made possible by their strong efforts to acquire smaller breweries and firms from other countries. Over the years and decades, Giordano has slowly but surely established an empire, with strong segment markets established in Asia Pacific, Australia and the Middle East.


In the Philippines for instance, Giordano Hong Kong was able to achieve a broad market leadership through various acquisition deals over the years. The company also exerts efforts to communicate with their customers in every local culture about Giordano products and their impressions. And this is no easy thing because Filipinos have different tastes in fashion and clothing. For example, some Filipinos from remote provinces are still so accustomed to their ancestral native clothing. Therefore, Giordano clothing might not really have an appeal to them. This critical information gathered by Giordano Hong Kong paves the way for them to make the right decision regarding the appropriate strategies to pursue.


Giordano Hong Kong has even solidified its empire by adding Malaysia as one of its markets in the Asia Pacific Region just recently. And this move is a sure sign that there will be more acquisitions and mergers that Giordano Hong Kong will be involved in the coming years.


ETHICAL ISSUES


It is a common knowledge that the fashion industry is still a relatively new industry in Hong Kong and is still in its early stages of development. However, it has shown signs of rapid growth and it is being estimated that there will be more than a million fashion products that will be shipped within the year. And it is further being expected that within the next years the tremendous growth and technological advancements will continue in the fashion industry. Mobile commerce and multimedia terminals are just some of the technological advancements already being expected. Therefore, the continued growth and development will also make it imperative for localization to occur in the fashion industry in Hong Kong in the years to come (1981).


The development of style for the Giordano clothing line in Asia certainly will become the target for localization because of its dynamism. There are still plenty of styles and designs that Giordano can use. But since development cycles are much shorter in the fashion world, Giordano may need to rush the release of its localized versions of clothing. By doing this measure, they will be the first to launch Giordano signature fashion wears in various Asian markets, thus putting more pressure on the localization process. Also, the redesigning and streamlining of both clothing development and the localization process will become imperative if this scenario happens.


A majority of the localization projects of Giordano for its Asian clothing lines are part of various deals. Giordano Hong Kong often partners with smaller companies to ship its fashion products. Hence the huge customer influence on localization projects and fashion design is undeniable. Changes are also frequently made to the documentations and the overall look of the signature clothes. Therefore, this will require the localization process to be a lot more flexible than in other situations localizers are used to dealing with.


 


There is also an issue of Giordano’s lack of experience in dealing with the Asian consumers in both the fashion and localization industries. Thus, there is still no knowledge base from where to get the troubleshooting tips. Since most projects require both the fashion and localization industries to sign non- disclosure agreements, fashion designers who are working on a project and encounter problems won’t be able to go outside Giordano to ask for assistance. Thus, they would have to find answers and solutions to their problems by themselves. Their solutions also may never be shared with others. Clearly, there is an immediate need for a knowledge base that will guide all those in this field.


The points discussed so far bring out the necessity of having cooperation between Giordano and the Asian localization vendors. Both should strive hard in order to establish streamlined processes for localization. Close collaboration will help guarantee successful localization for Giordano clothing lines.


 


 


 


 


CONCLUSIONS AND RECOMMENDATIONS


Giordano Hong Kong has been able to remain one of the world’s leading clothing companies for more than a century now primarily because of the execution of the company’s branding and positioning strategies to perfection. Add to the mix the company’s dedication to high quality of service and the formula for success is at hand.


However, I am not totally convinced that the branding and positioning strategies Giordano implements currently would be as effective as before. For one, consolidation and globalization are taking place across most industries, and the clothing industry is not excluded. Giordano, as a leader in their industry, has implemented various strategies to fully adapt to the need to go global.


 I suggest that Giordano should implement a more sober approach to maintain consumer loyalty with their local brands. There is nothing wrong with building new loyalties with the other global consumers. But there are instances, for example, in the Philippines, where the local market is often neglected. As a result, local consumers will tend to develop a bad impression about the company and its products. While it is good to acquire new clothing businesses, it is even better to keep and maintain the older and more established markets. This way, the empire of Giordano will remain unscathed amidst the advent of consolidation and globalization.



Credit:ivythesis.typepad.com


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