1. Executive Summary4
3. Findings 6
3.1 An Analysis of Mexico6
3.2 Topshop Market Entry into Mexico 7
3.3 The Target and Positioning Strategies8
4. The Marketing Mix9
4. 1 Product9
4.2 Place & Distribution10
5. Conclusion 14
1. Executive Summary
This report is to investigate Topshop, a women’s apparel and accessories retailer based in the United Kingdom and to assess potential market opportunity in Mexico. Areas include,
* An analysis of Mexico
* Topshop market entry in to Mexico
* The targeting and positioning strategies
* The Marketing Mix: Product, place & distribution, pricing and promotion. The main finding and recommendations from the analysis of these main areas include, * Mexico has a large, young, growing population
* There is a high level of poverty and low level of education * Government policies support FDI
* There is a competitive retail environment in Mexico
* Mexico’s infrastructure is poor but improving and is high on the political agenda * Topshop has recently sold 25% stake of the Topshop and Topman chain, making them debt free and open to investing in global expansion * There is a growing middle class
* The target demographic is middle class females between the ages of 15-34 * A joint-venture with a department store is recommended initially to test the environment and reduce risk while building strategic partnerships and relationships * Franchising is recommended once the joint-venture has been successful, once brand recognition has increased and brand image has been implemented * Brand recognition and loyalty need to be built, achieved by advertising and conscientious pricing strategies * Important to build brand image as an affluent, Western brand * Must build relationships with local distributors, this is helped via relationship with joint-venture partnership * The product will be highly standardised, although some aspects will be differentiated, such as, fit of clothing to better fit Mexican body shape * Initial penetrated pricing strategy is recommended
* Standardised and differentiated advertising recommended through e-commerce, m-commerce, print media and radio.
The objectives of Topshops entry in to the Mexican women’s retail market are, * To achieve 10% market share within the first 24 months. * To compete with but to avoid price wars with our main international competitors who are already in Mexico – Zara, H&M, Next, as well as domestic retailers. * To spread the Topshop brand name and to increase brand recognition by 20% by 2014 * To build strategic trusting partnerships with local sources in distribution, to be measured by 95% accuracy rate and less than 2% shrinkage by 2014.
3.1 An analysis of Mexico
Mexico is a thriving emerging country, which boasts a growing population, improving infrastructure, is a member of the NAFTA (the North American Free Trade Agreement), and has seen economic growth, growth in GDP as well as a decrease in inflation rates (Mexico Retail Report Q1, 2012). Mexico has a growing middle class and there has been a growth in telecommunication infrastructure which has seen a huge increase in the use of the internet as well as smartphone usage (Mexico Telecommunications Report Q1 2012).However, many Mexicans live in poverty, education levels are low and there is a high level of corruptness. The economy is heavily linked to the US economy and the weakness of the US economy is having an impact so there is a relatively weak outlook for economic growth (Mexico Retail Report Q1, 2012), (See appendix 1). The key factors of consideration for effective entry are,
* Consideration of market size and growth -...