C Current Potential Customer Product Giorgio Armani example essay topic

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.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 pret e-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 e.g. 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. (Krebs, 10-02) "The first freestanding store for Giorgio Armani's Mani by Giorgio Armani and Collezioni Giorgio Armani collections has been opened in London.? (Fallon, 11-10-01) "Collezioni and Mani represent 27 percent of the company's profits? (Fallon, 11-10-01) "The London store is owned by Club 21, the retail empire of Christina Ong that owns the Emporio Armani and Giorgio Armani stores in the UK.?

(Fallon, 11-10-01) "The fundamental reason for the opening the Collezioni stores is that we wanted to present this collection of clothing and accessories for men and women together in its own unified space, he said. Collezioni customers are made up primarily of young professionals who often have little at hand to shop. Therefore a store that offers a big variety of compatible, high quality products obviously is very convenient for customers.? (Fallon, 11-10-01) "The freestanding London store is at 43-44 New Bond Street, near to the new cK Calvin Klein store as well as the upcoming Versace Jeans Couture and Tommy Hilfiger stores.

Other designer shops nearby include Polo Ralph Lauren, Emporio Armani and Ermenegildo Zegna.? = Donna Karan (Fallon, 11-10-01) F. IMAGE "Armani's fashions have set the tone for a global dressing down. In the corporate America of the late 20th century, he was perhaps the only man who could challenge dress-for-success guru John Molloy and win. And it is from the springboard of Armani designs that fashion will leap into the next century. If French designer Gabrielle Chanel liberated women from stays and long dresses, it was Armani who offered them professional fashion equality without bending their gender.? Griffin, 5-5-00) "What made Armani a star among designers was his unp added, unstructured jacket.

At a time when Italian men still were battling a stereotypical "greasy" image, Armani single-handedly cleaned up the look.? (Griffin, 5-5-00) "After years of rummaging through 20th-century styles to turn out retro-inspired trends, fashion designers have run smack into the designs most women still have in their closets: power suits.? (Griffin, 3-20-00) "Now they " ve taken a flying leap into the mid-1980's, era of the career woman, with strong suits, high heels and pricey accessories.? (Griffin, 3-20-00) "Women probably will not be able to recycle what's left in their closets from the '80's, however.

Key changes, sometimes ever so slight, make all the difference in the look.? (Griffin, 3-20-00) "Next, he translated the jacket for a woman's body, then tossed it over easy skirts and trousers. It gave modern woman an alternative to uptight luncheon suits with peplum's and stiff fabrics. While the shoulders, lapels, vents, fit, lengths, fabrics and closures all the design elements of the jacket have changed through the years, the words "Armani jacket" instantly conjure an image in the minds of the fashion cognoscenti.? (Griffin, 5-5-00) "There are no warpaint, feathers or beads, but men's clothes tell everyone what tribe they " ve in.? Teliga, 2-25-98) "EMPORIO ARMANI: The less expensive label of the Italian designer Giorgio Armani, renowned for his elegant soft tailoring and deconstruction of the stiff business suit.

Colin Bertram, menswear manager, Emporio Armani: ? (Teliga, 2-25-98) "The look: "For menswear it's very straightforward, nothing overtly 'fashiony' yet more body-conscious (this season). It is always Armani so it is always going to be understated". The customer: "Anyone between 18 and 70 who is interested in fashion and style but wants to wear the clothes rather than the clothes wearing them. Tends to be an urban customer - advertising executives to merchant bankers".

? (Teliga, 2-25-98) G. PROMOTIONAL MATERIALS "The crowning coup of his advertising strategy this sprung will be to underwrite the entire issue of Time Atlantic's 75th anniversary edition, slated to hit newsstands March 2 and reach more than 625000 readers in Europe, Africa and the Middle East.? (Forden, 2-20-98) "This operation is in the Armani tradition of taking dominant or exclusive positions in key issues of important magazines.? (Forden, 2-20-98) "Armani appeared on the cover of the magazine in April 1982 and aha advertised there over the years to reach a broad readership, particularly men, who are mote difficult to target with traditional positions in fashion magazines.? (Forden, 2-20-98) "The Time project is the kingpin in a veritable blitz of ventures across Europe in which Armani is the sole advertiser.

Last fall, he took the entire section of The Sunday Times of London. In Italy last month, Armani appeared as the exclusive advertiser in weekly news magazine L'Espresso, Milan financial Il Sole 24 Ore, daily newspaper La Republic ca and its weekly weekend magazine D. Armani bought an entire issue of Le Monde last month to the opening of the Emporio Armani boutique and caf? in the legendary Public is drugstore site on Paris? Left bank.? (Forden, 2-20-98) "Time has agreed to send the issue to a VIP list of some 10,000 people, including heads of state in Europe, the Middle East and Africa; chief executives officers of Fortune Global 500 companies; members of the European Parliament, and senior managers across Europe.? (Forden, 2-20-98) At the 70th Academy Awards, "Armani dressed Matt Damon and Ben Affleck, Oscar winners for best original screenplay for Good Will Hunting.? (Williams, 3-25-98) "Nabbing these two was clearly a coup for Armani.

Affleck and Damon could be the Gen X's version of Paul Newman and Robert Redford.? (Williams, 3-25-98) II.S.W.O.T. ANALYSIS STRENGTHS? Strong positive image of the product? WEAKNESSES? Inability to access secondary markets.? OPPORTUNITIES?

Aiming for the smallest consumer segment of all- the individual? THREATS? Fashion industry is not a stable market.? A. KEY COMPETITORS Giorgio Armani's main competitors are Italian and French houses of design. "He is known as a workaholic, who can sometimes be rude and arrogant.

His dislike of fellow Italian designers Gianni Versace and Valentino has recently been suppressed for the benefit of the international press.? (Krebs, 10-97) "The freestanding London store is at 43-44 New Bond Street, near to the new cK Calvin Klein store as well as the upcoming Versace Jeans Couture and Tommy Hilfiger stores. = Donna Karan (Fallon, 11-10-97) "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.? (Fallon, 11-10-97) B. RELEVANT MACRO ENVIRONMENT "Price has become important in the 1997 Italian fashion market. The Italian lira is at a 20% high rate because of its re-entry in Europe's Exchange Rate Mechanism.

Italian consumers have also become value conscious and fashion designers Giorgio Armani and Gianfranco Ferre plan to decrease their prices accordingly. Armani will decrease prices 10% to 20%.? Conti, 12-1-96)? Italy and the EU partners agreed last month to fix the lira at 990 against the mark? a rate that is still competitive, but not as much as before? The French, who had lobbied in Brussels last month for an even stronger lira, said their Italian competitors had an unfair edge when it came to exports.? (Conti, 12-1-96) "In fact, some fashion houses are looking at the bright side of the new lira.

Imports such as leather, cotton and silk will cost less, companies will no longer have to play a guessing game about the lira's exchange rate when they fix their prices for the next year, and the Italian economy as a whole will be perceived as more stable.? (Conti, 12-1-96)? EU nations taking part in the European Monetary Union, scheduled for Jan. 1, 1999.? (Conti, 12-1-96) IV. SEGMENTATION, TARGETING AND POSITIONING MISSION e.g. Giorgio Armani's mission is to build a trusting relationship with its business partners.

MARKETING GOALS CONSISTENT WITH MISSION e.g. The main marketing goal of Giorgio Armani is spreading. In order to support their mission, they need to achieve the following: satisfy customer desires, strengthen their relationships with customers, and improve the quality of their designs as well as keeping up with the increasing demand. "With a group of well-diversified customers, Giorgio Armani has a highly differentiated market segment. Each product is designed according to the needs and desire of their customers, in order to fit them within their segments. Armani wants to expand the number of his stores significantly. Most visibly, he opened up two huge flagship stores in New York City on Madison Avenue, one for the top line and one for Emporio Armani.

Armani seemingly pursues the establishment of a lifestyle brand "Armani". This movement is reflected in the various attempts to offer a wide variety of products under the Armani-label. Such as the in 1996 introduced Armani Neve winter sportswear line, the Armani Golf sportswear line (both produced previously by Skin ea and now by Simint), and the introduction of custom-made bridal gowns, as part of the Borgonuovo-21 line. Also, Classico, a new luxurious and costly line for men and women will be introduced.

Here, Armani wants to offer modern interpretations of classic designs. In addition, Armani sells a wide range of home accessories under the Emporio Armani-label. In 1997, the first Armani Jeans store in Rome, Italy also included a Armani book shop, selling publications about various artistic subjects, like fashion and photography.? (Krebs, 10-97) "Top Italian fashion houses plan to expand sales and distribution by moving into secondary markets outside of the key fashion centers. Giorgio Armani and Versace, for example, plan to open boutiques in cities to sell toned-down fashions priced 30% to 40% less than their top lines.?

Forden, 2-24-98) "Many of Italy's major apparel houses are working on ways to further penetrate their traditional markets in Europe and the US by moving into secondary cities.? (Forden, 2-24-98) "It also means they can achieve a more capillary penetration in areas where the top collection can't go.? (Forden, 2-24-98) PRICING e.g. When considering what pricing strategy to use, there were several steps that needed to be followed in order to come up with a price that would satisfy both the target market and Armani itself. When identifying pricing constrains, I took into consideration that there is an increasing demand for Armani cloths.

DISTRIBUTION e.g. Giorgio Armani has an indirect channel distribution where licensed dealers act as the intermediary between the manufacturer and its customers. PROMOTION Traditionally, Giorgio Armani has somewhat only used traditional advertising to market their lines. This would reach only a selected group of customers, mainly those who are very enthusiastic about fashion. The goal is to target a whole new segment of possible fashion enthusiasts, Generation X. To do this they need to change the way they have been advertising their products. Armani has rarely used television and radio for promoting their products. I agree in continuing with that concept, to an extent.

In targeting the generation X, they need to find a medium which the Xers use frequently. Television is the biggest medium for this group. However because Armani should not lose their mysterious image, they should not use commercials. Instead they should use a more "slick? way. I thought about using prime stars from TV shows such as "Friends? "Sein field? and "ER? those that generation X watches, to project the "ideal?

Armani image. The popularity of the shows and the role that these shows play in shaping the lives of people is tremendous. Xers identify themselves with the people that they see on television. The actors have made certain hairstyles popular, and even the type of clothes they wear popular. Therefore, by having the cast wearing their designs in the shows, should encourage Xers to want to own a Harley too.

The other medium is magazines. The magazines that I would use to target this segment are: Sports Illustrated, GQ, Cosmopolitan, Esquire, Business Week and so on.

Bibliography

Krebs, Jost Giorgio Armani. Hyper Fashion - October 1997 Ed.
web Conti, Samantha GFT license for Armani women's lines not settled. WWD - April 23, 1997.
vs. 173 n 78 p 17 (1) Daily News Record, Armani, GFT weigh name change for NY-based unit. - Sara Gay Forden, July 16th, 1997.
vs. 27 n 85 p 15 (1) WWD, Armani, GFT weigh new name for Giorgio Armani Fashion Corp. -Sara Gay Forden, July 15th, 1997.
vs. 174 n 10 p 12 (1) WWD, It's time for Armani ad blitz. - Sara Gay Forden, Feb. 20th, 1998.
vs. 175 n 33 p 12 (1). Daily News Record, New Sunshine Boys, The, Stan Williams. -March 25, 1998.
n 36 p 8 (1) Houston Chronicle, Accent Armani: The man behind the jacket, Linda Gillan Griffin. May 5, 1997.
p 3. Houston Chronicle, Welcome back WONDER WOMAN. -Linda Gillan Griffin. March 20, 97. p 1 Sydney Morning Herald. Tribes Man. Jane De Teliga. Feb. 25, 97. p 12 WWD. Italian's far-reaching plans. -Sara Gay Forden. Feb. 24, 1998.
vs. 175 n 35 p 4 B Daily News Record London store sets new marketing direction for Armani; first freestanding unit for Collezioni and Mani collections. James Fallon. Nov. 10, 1997.
V 27 n 135 p 2 WWD Italian fashion houses beset by higher lira, tight-fisted shopper. Samantha Conti, Dec. 31, 1996.
vs. 172 n 123 p 1. C. HISTORY Late events: "Giorgio Armani Fashion Corp (Armani USA) is entirely controlled by GFT, as well as the overseas distribution of the men's and women's diffusion collections, Giorgio Armani Le Collezioni, and the men's bridge line, Mani.? (Forden, 7-16-97) "Turin based GFT, also manufactures for Valentino, Calvin Klein, Emanuel Ungaro, Joseph Abboud and Nino Cerruti, among others.? (Forden, 7-16-97) "The Giorgio Armani business represents around $264 million of GFT's total sales. GFT's US Armani business totals around $185 million.? (Forden, 7-15-97) "Talks of the change comes when the industry is rife with speculation over the future of Armani's women's license with GFT, which has been up for renewal since March 1997.
Forden, 7-15-97) As rumors indicate, "Armani was beefing up capacity at Antinea, his directly owned manufacturer. The facility currently produces the Emporio Armani collection and there is speculation that it could also take on production of the women's diffusion collection next year.? (Forden, 7-15-97) "GFT managing director, ... , announced the formation of Gruppo Industrial Marotto, which will be GFT's new parent company.? (Conti, 4-23-97) GIM (Gruppo Industiale Marotto), was "created from the fusion of HPI - - an industrial holding that contains GFT and Fila - - and Marotto.? (Conti, 4-23-97) "Armani is GFT's most important licensee.? (Conti, 4-23-97) "The main Armani lines are produced by Italy's largest manufacturer of designer garments, Gruppo GFT. Armani garments account for about 30% of GFT sales and are therefore GFT's most important license. In 1994, Armani tried to take over GFT with the help of American investors, presumably to help out Armani's sportswear affiliate, Simint, which had gotten into financial trouble at the time.
Simint is now recovering, after cutting its staff, changing its distribution structure, and concentrating its production in Italy. An economic turnaround could be achieved, which resulted in 1995/1996 in sales of 255 billion Lira ($160 million) and turning a loss of 24 billion Lira ($16 million) in the previous year to a net profit 5.
4 billion Lira ($3.5 million). Sales for the fiscal year 1996/1997 are expected to be 180 billion Lira ($117 million).