Victoria’s Secret in China

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Hong Kong Baptist University
Bachelor of Commerce in Marketing
Global Marketing

Victoria’s Secret in China

Prepared by:
Lai Tin Long, Stanley
Lau Wan Fung, Jason
Lam Ka Kit, Ian
Cham Im Fan, Otila
Yeung Ka Man, Destiny
Kwok Hoi Kin
Law Ka Ho, Jackson
Liu Ho Lok, Andy
Date: 18 April, 2011

Table of Contents

Executive Summary
Objective
Goals
Quick Review

iii iii iii iii 1 1 1 2 2 3 3 4 5 6 7 7 8 9 9 9 10 10 10
i

Business Profile
About Victoria’s Secret
Aims and Objective
Distribution Channel
Production Categories

Market Environment in China
Political-legal Environment
Economic Environment
Social-cultural Environment
Technology Environment

Situation Analysis
Customer analysis
Competitors Analysis

SWOT Analysis
Strengths and Opportunities
Weakness & Threats

Targeting and Positioning
Targeting segment
Positioning

Marketing Strategy
Product Strategy
Pricing Strategy
Distribution Strategy
Promotion Strategy
Customer Relationship Program

11 11 12 12 13 14 15 16 17 18 18 18 19 20 21

Implementation & Control
Financial Analysis
Reference
Appendix
Corruption Perceptions index 2011
Exchange Rate(US to RMB and Hong Kong Dollar)
VS estimate Trading and Profit and loss Account 2011
VS estimate Balance Sheet 2011
Financial Equation

ii

Executive Summary
Objective
The hugh population, urbanization, and shapely growth of economy compose favorable market to all industry. Victoria’s Secret need to directly invest to Chinese market in order to share the pie. The Objective of this report is to provide the marketing environment factors and influences. Analysis and Marketing Strategies are recommend to Victoria’s Secret for entering the China market.

Goals
The goal of this report is to (1) achieve full-year retail sales of at least 4 million RMB per outlet in the retail channel, (2) reach the break-even point for China operations within 15 months and (3) achieve 40 per cent gross profit margin in our second year of operation.

Quick Review
Benefit by the Open-door policy and taking part in the World Trade Organization, foreign companies are now more easy to enter the China market; nevertheless, there are challenges which make them stop. In dramatics growth of economy stimulate the urban development, the political and legal system and citizen education are far behind. The legal loophole, over control of government, corruption and bribery, and poor protection of property right are the major challenges. The traditional culture would effect the consumer purchasing behavior. The universal of Internet would be the good news because companies are now able to interact with consumer by cheap, diversify, real-time channel. The market size - group of educated, young, and independent female, is growing. Standardization strategy build consist image. Product design with Chinese element can be favor to customers. Some tactic to be done. Fashion show creates brand awareness. Social network service intercommunicate and receive feedback from customer. Membership program establish to intense loyalty. Regular analysis and research helps Victoria’s Secret on implement and control. Financially, entering to the China Market is profitable. Thus, it is favorable for Victoria’s Secret to enter China Marketing.

iii

Victoria’s Secret

Business Profile
About Victoria’s Secret
Victoria's Secret is an American retail brand of women’s wear, lingerie and beauty products, owned and run by the Limited Brands. Victoria’s Secret generates over US$5 billion of sales and $1 billion of operating income in recent years. Victoria’s Secret was established in San Francisco in 1977 by Roy Raymond. Raymond saw an opportunity in taking “underwear” of the time and turning it into fashion. Products were different from the traditional white cotton pieces, which offered by most department stores, with various colors, patterns and style that...
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