Posted at 11.13.2018
Hilfiger made a decision to establish higher price in European countries than in the U. S. because the customer's preferences and preferences are different in both market segments. Hilfiger has experienced some different countrywide preferences. They do not brain to pay more $50 more than the highest priced Hilfiger's t-shirt in the U. S. So price strategy of Hilfiger must be place by concentrating on the local responsiveness. Hilfiger has modified its product to the European preference for thinner looking skinny jeans and smaller logos on tee shirts. Hilfiger has generated a line of more luxury items such as leather jackets and cashmere sweatshirts for Italian market. Additionally transportation cost of the merchandise also makes an escalation in the Hilfiger's product price in Western european market.
When Hilfiger has higher price in Western european than in the United States, it may face with the problem of greyish market. Lower price products in the U. S. are transported to Western by other traders to market and it could break the positioning strategy of Tommy Hilfiger brand in European countries market.
If Hilfiger wants to move more upmarket in america, they may face with determining its targeted customers of the new segmentation and modifying all the marketing activities accordingly. They need to understand customer's likes and personal preferences of the segment of up scale market in the U. S to have ideal design. Also they have to understand the elasticity of demand to price for up scale fashion product. They should consider if the current distribution system is fit for the up scale fashion product or not. And finally there is a high likelihood that the positioning of Tommy Hilfiger brand has been fixed in customer's mind at not a advanced brand.
To get this to strategy successful, Hilfiger should perform market research to identify who will be the targeted customers of upscale market, what are their preferences and tastes, who will be the competitors in the forex market segment. When it is understood plainly about the prospective markets, it will give attention to a differentiation strategy to create a special and unique product, style and conception. To avoid preconception about Tommy Hilfiger brand position, a new brand should be created. That is experienced through the truth of Toyota and Lexus cars, Mabeline and Lancґme aesthetic. Since the new releases participate in upscale fashion, Hilfiger must redesign the distribution channel network to fit to the new targeted customers.
According to Lisa Lockwood (2007), there have been many successful cases of clothing brand such as:
- Puma: it didn't be so athletic.
- Burberry: a classic case of reinvention
- Discipline: successfully reinvented itself with an upgrading of merchandise, more contemporary designs
However there were many clothing brands which encountered up with problems and then failure such as: Levis, Gap, St John I want to explain through the situation from Levis with their failure of the Silvertab brand in 2001 regarding to Matt Haig (2003). In early on of the years 2000s, Levis wished to diversify its product to have significantly more brands with different features for various different sub-segment in stead of only 1 traditional "red label" jean. The Silvertab products were launched in to the market as the cheaper selection of jean with orange tags. The Silvertab brand promoted in 2001 was the most hated in recent background. Ad age claimed it as "lacked branding". In this case, the lesson which Hilfiger can learn is if you want to diversify we ought to intensify, do not multiply. We should focus on our strength and don't look down our original brands.
Followings are some advice for clothing companies outside France and Italy to triumph over the positive images of "made in France" and "manufactured in Italy":
- Establish a design middle in France or Italy so that the product will be described as "designed in France" or "design in Italy".
- Use some famous folks in Europe such as celebrities or famous singers to market for our products.
- We might produce some components with lower costs in another countries and then transfer the finishing components to France and Italy to complete the finish products.
For the situation of Hilfiger, they have a certain market talk about in European market, so they need to fortify the advertising and promotion activities in Europe by getting ultimately more and even more famous persons utilizing their products. Hilfiger also needs to consider to invest production facilities in France or Italy to consider benefit of the positive image of "manufactured in France" or "made in Italy".
REFERENCE: Daniels, Radebaugh, Sullivan (2009). International Business
http://bakerretail. wharton. upenn. edu/documents/TheInsandOutsofBrandReinvention. doc