For more information
Call 1-800-351-0222
Call 1-800-351-0222
WOMEN'S LINGERIE INDUSTRY.
Term Paper ID:29963
Essay Subject:
Micro & macro- environment analysis of the industry, and issues & trends.... More...
14 Pages / 3150 Words
13 sources, 36 Citations,
APA Format
$56.00
More Papers on This Topic
Paper Abstract:
Micro & macro-environment analysis of the industry, and issues & trends. Growth of industry & consumer base. Characteristics of lingerie market & marketing concepts. Product adaptation to diverse customers ; new products. Competition & major firms including Victoria's Secret, Calvin Klein, Donna Karan Intimates and others, and European products. Distribution. Ecological issues (fibers). Technological & cultural trends. Demographics. Table of Contents. Appendix: 1 Table of discount retail data.
Paper Introduction:
Table of Contents
Page
Executive Summary 2
Task (micro) Environment Description 3
Markets 3
Customers 4
Competitors 5
Distribution 6
Macroenvironment Description 7
Demographic 7
Economic 9
Ecological 10
Technological 11
Text of the Paper:
The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper.
Murphy and Fallon (2 ) have noted that the Internetoffers European manufacturers an opportunity to reach an American marketthat they have had difficulty in entering in the past. It is also important to note that the highly lucrative Americanlingerie market is being targeted by European and Latin Americanmanufacturers. The first relates to distribution channel functions and isconcerned with the ultimate impact of the Internet on the ways in whichproducts are distributed to end users or purchasers. Barron's online: Victoria's beauties.Barron's, 8 (17), 55-57. Lingerie industry's growth doubles to $12bsince 1987. Political/Legal As noted above, stiff (3 percent) import duties have negativelyimpacted upon European and other companies that are seeking to enter theAmerican mass lingerie market (Waterhouse, 2 ). (1999). In 1987, lingerie was a $6billion business, but by 1998 the market had grown to 11 billion (Earnshaw,2 ). Status daywear and status sleepwearis expected to decline in terms of sales, but designer intimates areexpected to continue increasing (Monget, 2 ). Business First-Columbus, 17(12), A36. Ecological One of the main ecological issues impacting upon the lingerieindustry is related to the use of natural fibers. There are the discounters,which have been identified by Cardona (2 ) as beginning to takeover asubstantial portion of market share once held entirely by the majordepartment stores. A "Wish List" offers a registry-type roster in whichpredesignated gifts can be e-mailed to select recipients. (2 ). Waterhouse, V. Called Christmas Dreams and Fantasies, thesite has added features aimed at streamlining the online shoppingexperience. Frederick's of Hollywood, which foryears was the primary purveyor of sexy lingerie, has been superseded byVictoria's Secret and Jane's World Boutiques, which are more exclusive andoffer sexy products with a touch of class. Waterhouse (2 )maintains that European products tend to include sheer and opaquecombinations of toole and latex, as well as seamless microfibers.Synthetics of this sort are gaining in popularity, but many consumerscontinue to seek out products made with natural fibers such as cotton andsilk. As noted earlier, discounters are now selling currentfashions coupled with value-price fully stocked basic areas and increasingsupplies of trendy or fashion-forward merchandise (New styles push...,1999). Italians eye U.S. Earnshaw(2 ) claims that the most upscale segments of the market are willing topay $4 and more for a single luxury bra, but with the average Victoria'sSecret bra selling for more than $3 , price differentials between marketsegments are rapidly disappearing. Reda, S. Table of Contents PageExecutive Summary 2Task (micro) Environment Description 3 Markets 3 Customers 4 Competitors 5 Distribution 6Macroenvironment Description 7 Demographic 7 Economic 9 Ecological 1 Technological 11 Political/Legal 12 Cultural 12Additional Application of Core Marketing Concepts 13Appendix 15 Discount Retail Data 15References 16 Executive Summary This report provides a microenvironment and macroenvironment analysisof the women's lingerie industry. The arrival of more fashion-forward shoppers of various ages and physical types is driving the marketdramatically. Finally, the major marketing core concept identified in this industryis related to market targeting through concentrated marketing indiscounters. Dolbow, S. (2 ). Getting intimate at mass. Earnshaw, A. This represents perhaps the greatest challenge of all in thatthe winners in the competitive struggle for market position, markettargeting, and brand equity, are being required to master cyberspace inshort order. Intimate Brands reported an increase in net sales of 15percent for the first quarter of 2 (Earnshaw, 2 ). Economic The major macroeconomic developments impacting upon the lingerieindustry include increasing national income, coupled with high rates ofemployment. Anappendix depicting the growing influence of discount retailers on theindustry is also included. Finally, as Braunstein (2 ) has noted, the culture in whichlingerie is being sold is also being shifted to the electronic world ofcyberspace. At the present time, however,many potential segment "stars," including new innovative and fashion-forward Italian products, are competing in the U.S. Intimate Brands Inc. Table I Discount Store Lingerie Data 1996 1998 Business Share: 28% 3 .2 % Dollar Sales: $1 billion $1.3 billion Price/Item Increase $5.99 $8.99 Price Range/Current: $4.99 to $25.99 Price Break Compared to Department Stores: $8.99 - $9.99 for comparable $25+ 1998 Year-to-Date Gains in Total Sales: 8% to 3 % Stock Carried: Basics, Luxury, Fashion-Forward, Plus Sizes, Teen/Tween Specialties, Sports References Armstrong, L. By creating products that have a desirable marketing mix, theItalian and other European manufacturers are developing branding strategiesdesigned to convince American consumers that European is "better." Forthese firms, new free trade protocols are anticipated as having thecapacity to reduce the high cost of doing business in the United States.Currently, there is a 3 percent import duty on luxury lingerie imported tothe United States (Waterhouse, 2 ). Other important megabrands include Europeanproducts such as Lily of France and Bali Corp, which also markets a line oflingerie to discount stores as well (Cardona, 2 ). In addition, evenaffluent consumers are shopping for value in ordinary products. Lily of France pulls lingerie out of the drawerwith color accents. Earnshaw (2 ) hasstated that the industry is now about luxury and many women will spend moreon luxurious undergarments today than in the past. The report describes markets, customers,competitors, and distribution in this multi-billion dollar innerwearindustry and then addresses macorenvironmental issues such as demographic,economic, technological, political/legal, and cultural trends that directlyimpact upon the industry and its major players. An industry analysisconducted by NPD Group found that in the bra category alone, developmentssuch as cleavage-enhancing products have increased bra sales by as much as5 percent over the past five years. at a very real economicand pricing disadvantage. Lingerie is no longer a commodity business. This makes it difficult for many ofthe European status manufacturers to target an undifferentiated Americanmarket and necessitates concentrated marketing to that market segmentsophisticated enough and affluent enough to purchase products that canrange up to 1 to 3 percent more than comparable American-made products. Murphy, R. This in turnrequires that alternative uses of synthetics be made, and may further leadto increased consumption of potentially toxic and environmentally unsafeand/or damaging materials by the industry. Manufacturersare recognizing that they must respond to this new opportunity. In part, the market is being shaped bythe development of innovative apparel products. WWD,June 19, 14B. This is a direct challenge to big-time players suchas Victoria's Secret. Bali brings out discount lingerie line.Advertising Age, 712(7), 2 -21. This is apparently whatcustomers want today and what they are willing to pay for. Customers The customers of the lingerie industry are as diverse as productlines within the industry itself. Maidenform and Hanesare other players, each with about a 3 percent share of the market (DesMarteau, 2 ). Finally, the market is also being shaped by intensified competitionbetween image-oriented megabrands and less-expensive products targeting thelower end of the market. Discount Store News, 38(6), A16-A18. The secondtechnological issue could be considered related to total product concept inthat innovative products are in great demand as are products that offerexcellent fabrication such as seamless bras and comfortable underpants thatare sized to meet the needs of a diverse assortment of consumers (Gettingintimate..., 1999). Comfort and cotton areintimately associated in the minds of most consumers, giving very realadvantages to firms such as Jockey, Hanes Her Way, and Hanes Sport and JustMy Size (Cardona, 2 ). The campaign advertises freedom ofmovement in cotton panties and depicts women who are physically fit inathletic activities. European brands areoften associated with high style and new fashion trends. (2 ). Stores, 82(7), 54-57. Twitchell, E.E. Technological Two major technological trends are impacting upon the lingerieindustry. Another cultural shift impacting on this industry was identified byMonget (2 ). The market ischaracterized by both rising prices and quality with a virtually unlimitedgrowth potential for the future. Another example of how advertising and promotion are being used isoffered by Dolbow (2 ). Monget (2 ) reported that enhanced advertisingthroughout the United States is seen by industry analysts as facilitatingthe willingness of consumers to spend more on high quality products. Consequently,shoppers appear willing to pay more for these products and able to do sobecause of the Internet. The manufacturers oflingerie products are addressing this issue and responding by producingfashion items in larger sizes. Finally, a related trend identified by Monget (2 ) is the demandfor more status brands at both department stores and at the discounters.Discounters who shop regularly at stores such as JC Penneys, Wal Mart,Montgomery Wards, and K-Mart, will pay more for products with a designerbrand or logo. Business Week,3684, EB92-EB94. The report includes anadditional application of core marketing concepts which further illuminatethe status quo and the future of this highly competitive industry. However, the lingeriebusiness has far more visibility than these data would suggest, due inlarge measure to the stellar public relations efforts of major players suchas Intimate Brands, Incorporated, parent company to one of the majorplayers in the industry, Victoria's Secret. The most recent figures availablereveal bra sales rose 8 percent in 1997 to $3.9 billion while unit salesadvanced 6 percent to 415 million (Getting intimate..., 1999). Part of the problem that many lingerieproducers face when they create Web sites is that they have done littlemore than create electronic catalogues. While business is strong andindustry analysts see double digit increases in the bra and panty businesswith a shift toward mass market distributors and retailers, this age groupwill become a more important focus as American society and culture itselfundergoes a major change (Getting intimate..., 1999). AsMonget (2 ) has commented, American women are aging and moving into bothmiddle life and later years. Reda(2 ) has pointed out that Victoria's Secret paved the way in using theInternet to reach out to customers directly, thus reducing their relianceupon direct-mail marketing. Cardona, M.M. Consumers are apparently willing to spend premium dollars forupscale products with status brands. WWD, February 28,16B. Hanes Her Way, which sells primarily stretchcotton and satin bras and panties has invested $2 million into a newversion of its "Be You" campaign. The new promotionalstrategies employed by companies such as Victoria's Secret and Frederick'sof Hollywood include a strong emphasis on relationship marketing throughthe Internet (Armstrong, 2 ). and Fallon, J. Europe's lingerie makers slowwith online plans; while innerwear firms determine their best course incyberspace, some countries are outpacing their continental rivals. There are also the small boutiques, which specialize inhigh-ticket items and which tend to offer only designer megabrands to theirclientele (Earnshaw, 2 ) Direct mail or catalogue sales constitutes the fourth distributionchannel and is one which has been used to great advantage by companies suchas Intimate Brands and its best selling products, the Victoria's Secretproducts (Intimate Brands, Inc.,..., 2 ). As has been discussed above, department stores and discounters arelosing ground albeit slowly, to online sales sites. The promulgation of newfree trade mechanisms based on the North American Free Trade Association(NAFTA) and the World Bank's support for enhanced trade, all may combine toeliminate this barrier to market penetration. The message isclear: if a lingerie firm wishes to benefit from the Internet, it must nottreat the medium as nothing more than an electronic catalog and must offerpotential customers something more exciting and more innovative than theprint materials they are accustomed to receiving in their mail boxes(Armstrong, 2 ).Macroenvironment Description Demographic The major demographic development which poses an opportunity to firmsin the lingerie industry is the aging of the American population. This firmis part of the Intimate Brands, Incorporated parent company which also ownsJane's World. Fabrications coupled with newproducts - such as bras that enhance the cleavage - may be a dominanttechnological trend in coming years. Part of the reason for market expansion is that discounters haveentered into the luxury or upscale lingerie market in increasing numbers.Discounters are able to make higher-end products at a competitive price incomparison to traditional department store prices. (2 ). Several examples of advertising,sales promotion, and public relations strategy will be offered at thispoint to further identify shifts in the lingerie industry. Coupons and discounted prices of multiple packs of underwear willbe included for in-store promotions. These higher priced brands,including Warner, tend to position their products either in boutiques or inupscale department stores. Brandweek, 41(29), 75-76. Braunstein (2 ) described Victoria's Secret redesign of its high-profile Web site, at Victoria's Secret.com, to specifically offer newpromotions to holiday shoppers. However, Armstrong (2 ) has pointed out that the Internet did notsave mass marketer Frederick's of Hollywood from bankruptcy in 2 .Frederick's was first to get on the Web, followed closely by IntimateBrand's Victoria's Secret. Other major players in the lingerie industry include image-orientedor status brands such as Calvin Klein, the licensed Ralph Lauren Intimatesat Sara Lee, and Donna Karan Intimates and DKNY Underwear (Monget, 2 ).These ego sensitive brands are being challenged by new licensees such asTommy Hilfiger Foundations, which are produced by Bestform Group, JockeyInternational, and the Natori Company. Though synthetics are fashion-forward inorientation, it is possible that these trend-setting products may notnecessarily maintain their appeal in view of Generation X and Y and theirown insistence on natural fibers and environmental or ecologicalresponsibility. Discount stores nowcommand 3 .2 percent of the bra business, up from 28 percent in 1996. Other firms have joined in, using the Internetto present fashion shows with live models and to provide for onlineshopping as well. Thetotal bra market rose from $3.6 billion in 1996 to $4.2 billion in 1998(New styles push..., 1999). The arrival of more fashion-forward shoppers into massstores has directly impacted upon this particular market (New stylespush..., 1999). The report presents a substantial listing of current referencematerial and identifies branding strategies and distribution channelfunctions along with advertising strategy and approaches as among the mostcritical marketing concepts affecting the industry.Task (micro) Environment Description Market Last year, Americans spent $12 billion on undergarments, not quite 7percent of the $181 billion retail apparel sector. Distribution There are essentially five distribution channels for lingerie. Interestingly, theupscale customers shopping for price at discounters are also demandingquality, creating yet another dilemma for retailers. Discount Store News, 38(16),A2 -A22. (2 ). growth. Products are being created to meet theneeds of smaller-breasted and larger women as well as the pre-teen or"tween" market (New styles push..., 1999). Business Journal-Portland, 17(25), 27-28. (2 ). (2 ). Megabrand stake begins to weaken. It is anticipated that between television and print,the advertisements will reach 95 percent of women between the ages of 18and 49. Consumers are willing topay for status brands as long as value is perceived as attached to them.Generation X and Y shoppers are easily bored, but apparently committed topaying upscale prices for fashion-forward intimate apparel (Monget, 2 ). With Victoria's Secret perhaps the best known brand in the market,other competitors are challenging this firm aggressively. Reda (2 ) has commented that the Internet is likely tobecome the most important new sales and marketing strategy in the lingeriesector as more and more firms create their own Web sites and use the mediumto offer customers an interactive as well as entertaining shoppingexperience. Frederick's of cyberspace. They are affluent consumers willing to payhigh-ticket prices for fashion-forward, large-size lingerie. For example, plus size lingerie products have exploded inrecent years and now command 3 percent of the total business in mostvenues, including discounters. WWD, March 6, 14-2 . Consumers are also demonstrating a willingness to pay more forproducts that enjoy an excellent reputation. (1999). (2 ). Victoria's Secret site set for Yule.Women's Wear Daily, November 2, 17. This is a difficult and challenging task for which some firmsappear poorly prepared.Additional Application of Core Marketing Concepts Several core concepts have been addressed in the foregoingdiscussion, including marketing concept and mix, market targeting andpositioning, brand equity and strategies, distribution channel functions,and global product/promotional strategy. Thereare the traditional department stores, which have begun to lose significantground to both discounters and direct sellers. (2 ). Many of the newer products being developed by mainstream retailersare relying on blends of fabrications that incorporate cotton and Lycra orother synthetics (Getting intimate..., 1999). New fabrications are seen as of increased importance (Dolbow, 2 ).Brand strategies include providing clients with multiple options (e.g.,color, size, fabrication, and multiple use products). Here, Victoria's Secret stole theshow by creating interactive Web sites with real-time events that itpromoted both in print and in its direct-mail catalogues. The brief chart, essentially a summary of data on the discountportion of the retail market, which appears under the heading of "Appendix"serves to illustrate the increasing influence of discount merchandisers tothe lingerie industry.Appendix The following data, taken from a recent article in Discount StoreNews (New styles push..., 1999) offers an overview of the influence of thediscounters. Technology team brings Victoria's Secret Webcastto huge audience. New styles push up bra sales. (2 ). Europeanmanufacturers and American companies alike are producing innovativeproducts and using cyberspace as a new and important distribution channel.High tariffs on imported products, along with technological innovationsimpacting on fabrication and design as well as distribution are othermacroeconomic trends that will continue to shape the future of thisindustry. Direct marketing throughcatalogue sales is considered responsible for having introduced Victoria'sSecret to a substantial number of American and European households,particularly those located in geographic areas which do not have a localcompany-owned Victoria's Secret outlet in a local mall. Ideological as well as ecological concerns also are seen,to a degree, in the insistence of some Generation X and Y consumers onproducts made in countries where labor and work conditions are approved;Third World manufacturing is not as widely recognized (though it occurs) asoccurring in this industry as it once did in the athletic shoe industry,where marketing giant Nike lost significant market share because of itsThird World labor policies. Murphy and Fallon (2 ) also believe that a major demographic trendshaping the market is that more and more women are willing to shop online.Companies that do not have an online presence may well be missing out onthe new market of shoppers who are either too busy to visit mall ordepartment store retailers or who simply prefer the convenience ofelectronic purchasing. (2 ). However, one of the major international macroeconomic developmentsimpacting upon this industry is increased competition from abroad.Waterhouse (2 ) claims that Italian manufacturers of high-end innerwearare gearing up to increase their market share in the U.S. The Internet is useful for specialpromotions, standard catalog sales, and for building rapport with repeatcustomers. by cashing in onthe growing demand for quality underwear, intimate apparel, and at-homewear. With more and more Americans and Europeans loggingonto the Internet and secure online credit card transactions a reality,this demographic trend is likely to be of increased significance in thefuture. Armstrong (2 ) contends that both Victoria's Secret andFrederick's of Hollywood offer a frequent buyers club online that offersdiscounts to regular customers. Cultural Marketing and promotional strategies in this industry areincreasingly tailored to older consumers many of whom are larger than theidealized feminine figure of 36-24-36. For retailers who are being asked to stock a wide assortmentof products, this represents something of a challenge. Earnshaw (2 ) notes thatwhile intimate apparel is growing rapidly, it takes just the right approachto remain at the head of the class. Monget, K. Competitors Victoria's Secret owns 14 percent of the overall market. It also includesa "Gift Search Service," in which items can be located based on suchparameters as price range and style preferences and which also provideselectronic gift certificates. Industry analysts believe that women'ssizes are changing as America's population ages. Each of these sales channels is now being threatened by the emergenceof the Internet as a distribution locus of increasing significance. Braunstein, Peter. Product life cycles are declining while demands forinnovative products in a variety of styles, sizes, and fabrications isincreasing. Basic findings include a recognition that the industry is growing butits consumer base is aging and requiring both fashion-forward merchandiseas well as products able to fit comfortably among the population of majorwomen.
If this paper is not what you are looking for, you can search again:
or
We can write a Custom Essay just for you.
Browse Essays by Subject