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George Armani
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Giorgio Armani is the one largest Italian designer group. Currently, they hold a billion dollars a year company in the fashion market. Their customers are mostly well-educated and wealthy individuals. Although they are doing pretty well with their current target market, it is not big enough to restore their lost market share. Their new target market will by Generation X (Armani Exchange). This segment is composed of 21% of total US population with annual disposable income of 125 billion per year. TABLE OF CONTENTS I. CURRENT MARKETING STRATEGY A. INITIAL PURPOSE B. CORE COMPETENCIES C. CURRENT/POTENTIAL CUSTOMER/PRODUCT D. KEY MARKET RESEARCH FINDING II. PRODUCT FEATURES AND BENEFITS A. PRODUCT POSITIONING B. PRICING C. CUSTOMER SERVICE D. PROFITABILITY E. DISTRIBUTION CHANNELS F. IMAGE G. PROMOTIONAL III. S.W.O.T. ANALYSIS A. KEY COMPETITORS B. RELEVANT MACRO ENVIRONMENT IV. SEGMENTATION, TARGETING, AND POSITIONING I. SITUATION ANALYSIS & HISTORY A. INITIAL PURPOSE “Giorgio Armani began a free-lance design business in 1970 with the encouragement of his close friend Sergio Galeotti, and established his own men's wear label in 1974. He gradually adapted his designs for women and added the women's wear line in 1975, in partnership with Galeotti.?(Krebs, 10-97) B. CORE COMPETENCIES There are many core competencies that Giorgio Armani possesses. Its main core competency is its bond with its customers. Being that it is the top Italian fashion designer promotes a strong positive image of its products, because of its product’s quality and the ability to design innovative features quickly. C. CURRENT/POTENTIAL CUSTOMER/PRODUCT Giorgio Armani offers a variety of fashion lines with high quality and both custom-made and prete-a-porter. The exclusive lines are: ?Armani Alta Moda (haute couture) ?Borgonuovo 21 ?Giorgio Armani ?Le Collezioni (diffusion), since 1979 ?Mani (diffusion) ?Emporio Armani (diffusion, younger customer, worldwide), since 1984 ?A/X Armani Exchange (basics, United States only) ?Giorgio Armani U.S.A. (lower priced) ?Armani Jeans ?Armani Neve (winter sportswear), since 1996 ?Armani Golf (sportswear), since 1996 ?Classico, since 1996 D. KEY MARKET RESEARCH FINDINGS Eg. There are many different types of Armani customers. Median Age: N years Median household income: $K Median personal income: $K Male: N% Married: N% (single N%, widowed /divorced N%) Household with Children: N% College graduate or some college education: N% II. PRODUCT FEATURES AND BENEFITS A. PRODUCT POSITIONING Giorgio Armani’s products are highly positioned. As a high-end fashion group where high dividends come in at an extremely high cost, the wide line of products cover up all niches for the high-end target market. B. PRICING The price of Giorgio Armani is not cheap. The suggested retail prices range from about $100 to $100,000. C. CUSTOMER SERVICE The fashion shows are held throughout the world are not only for fashion magazines journalists to get together but for customers too. This also enables Armani executives to interact and get suggestion from customers to improve their products. D. PROFITABILITY Sales of the Armani-Group in 1998 amounted to 2540 billion Lira ($1574 million), up 12.4% from 1999. Garments accounted for about 1700 billion Lira ($1054 million), and accessories for about 840 billion Lira ($520 million). In 2001, the group sales, including sales from licensed products rose to about 3500 billion Lira ($2.3 billion). The Armani-Group also includes the Sportswear Company Simint, which handles all of Armani's informal lines. Armani himself holds 53% of the Simint assets. Simint was rated the best performing stock at the Milan exchange, with an annual increase of 219% with respect to the stock price. While Simint produces the Armani Jeans line, the Armani Junior label and the Emporio Armani men's wear, the Emporio women's clothes are produced by the Antinea (sales in 2001: 300 billion Lira), a 100% Armani offspring. Giorgio Armani S.p.A. develops the Armani labels. In 1998, Giorgio Armani S.p.A. showed a 30% growth in sales to 1390 billion Lira ($884 million), thus doubling its sales figures of 1997. Two years later sales were at 1920 billion Lira ($1180 million), increasing another 25% to 2400 billion Lira ($1556 million) in 2001. Pre-tax profits for the Giorgio Armani S.p.A. marked 650 billion Lira ($422 million). (Krebs, 10-02) E. DISTRIBUTION CHANNELS “The biggest export market for Armani is the United States, where Armani labels are sold at 12000 points of sale. In 1995, Armani had 36 outlets carrying the exclusive Giorgio Armani and Borgonuovo-21 lines. Emporio Armani outlets numbered 119 in 1995, with 54 in Italy and 22 in Japan. This figure rose to 145 stores in 2001 and is planned to be increased by 8 in the near future. A/X Armani Exchange used to be sold only in the United States. In 1994, the A/X-stores were taken over by Club 21 USA, Inc., but continuously struggled to compete with lower-priced competitors like Banana Republic. Today, Armani intends to open up even more A/X-outlets, also introducing them to customers in Asia for the first time.
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