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Copy of Copy of Shanghai Tang

MKT1003X project presentation

Shi Hui

on 16 September 2014

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Transcript of Copy of Copy of Shanghai Tang

Market analysts: Still unable to mark itself internationally (lack international flavor)

Start from Western market
Where the international fashion hubs are situated

Chinese market
International brand recognition -Tang stand a better chance with the Chinese market
More than 70% of Chinese luxury brand consumers saw luxury brands as a way to demonstrate their status and success

Mkt 1003x
W2: Group 4


1. Introduction to Shanghai Tang
SWOT analysis
2. Product benefits
3. Sources of brand equity
4. Future targeting and positioning
5. Evaluation of expansion plans
6. Conclusion
7. Q & A
Faustina Tan
Germaine Tan
Jasmond Tan
Kenneth Tan
Teo Qian Hua


First Chinese fashion luxury brand

David Tang Wing Cheung in 1994

An emporium of traditional Chinese apparels where affluent tourists can buy souvenirs

Showcase Shanghainese tailors’ workmanship

Brand philosophy and concept
“Never describe it as ‘East-meets-West’ because it’s not, it’s Chinese. We make traditional Chinese clothes and we modernize them”, David Tang Wing Cheung

Brand identity is associated with a new and modernized China

Problems experienced in its early days
Shanghai Tang set up a boutique in Madison Avenue

Fashion was costumery, non wearable and irrelevant to modern lives

Lack of constant renewal of designs

Mismatch between sales revenue and expenses

Raphael le Masne Chermont (CEO) & Joanne Ooi (Creative Director)
SWOT analysis
1. Unique Selling Point

High Chinese style infused with traits of modernity
Unpredecented in the market dominated by Italian and French designer brands

2. A “Made in China” brand

Better understanding of the psychology of Chinese consumers
Chinese consumers can easily relate themselves to the designs of the apparels

3. Located in the low-cost manufacturing center in the world

Louis Vuitton's zip production example

Chinese government protective care towards home grown brands and domestic businesses

SWOT analysis
1. Insufficient brand recognition

Lack of international flavor

Preference for Chinese Culture inspired apparels and goods is highly subjective

Louis Vuitton’s monogram example

2. Product suitability

Chinese traditional apparels targets a specific segment of consumers

SWOT analysis
1. Changes in Income  & changing consumer spending patterns

Increase in the middle class and affluent individuals

China is predicted to overtake Japan as the world’s top consumer of luxury goods by 2015

Signs of success, wealth and upward social mobility
Product benefits
Three types:

Core benefit products
What is the consumer really buying?
What makes the product valuable?
Self esteem
Prestige, exclusiveness, status

Actual product benefits
Derived from physical, tangible product

Design – Oriental themes, different from European luxury brands

Quality – finest material and craftsmanship

Augmented product benefits
Non-physical attributes that add value
Mandarin Collar Society
Exclusive invites to private functions
Shanghai Tang Café

Brand equity
Positive differential effect on consumer response to product or service
High brand equity leads to strong market position

Targeting and Positioning
Target 1: Western Market
Product positioning

Target 2: Travelers
Product positioning

Target 3: Elites of the upper class
Service positioning
Targeting and Positioning
Future targeting
Current segment sales – equal split between Western and Chinese customers
Expansion – China

Current positioning
Product positioning
Leading Chinese luxury lifestyle brand
Infuses oriental Chinese styles with traits of modernity

Differentiate itself from other luxury brands
Long-run objective to establish international brand recognition
Targeting and Positioning
Product differentiation

Report: Cannot tell the difference between Tang’s pieces from other oriental Chinese fashion stores

Objective: Differentiate itself from other Chinese oriental fashion stores

Targeting and Positioning
Product differentiation
Add in more international flavor (change in fabric choice)

Targeting and Positioning
Product differentiation
Add in more international flavor
(Introduce western trends but maintaining some oriental Chinese elements)

Target segment 2: Travelers

Bringing Shanghai Tang to the world

Travel Retail
1. Size & Growth:
High expected profitability from high end tourists
Projected 30% of turnover by 2014

2. Structural Attractiveness:
Risk diversified nature of business

3. Company’s objectives: International Brand Reputation
Travelers as brand’s ambassadors
Word of mouth equity

Product Differentiation
Positioning: Limited Edition Pieces in Ready - To Wear Collection
Design elements distinctive of country
Retain traditional chinese theme

Qi Pao cutting
Mandarin collar
Middle East - Dubai

Target segment 3
Elites of the upper class
Affluent Target Segment
Current Target Group for imperial tailoring
Structural Attractiveness: Power of buyers
Acquired taste for fashion, craftsmanship, exclusivity
Owns entire collection

Positioning: Service Differentiation
Door to door imperial tailoring
Socialization events
1. Increase Brand Equity among loyal customers
2. Social engagement between customers
3. Premium experience with the brand
4. Capture share of the customer

Shanghai Tang's Global Expansion Plan

Overview of expansion plans
10 more boutiques in China

3 more boutiques in Singapore

Diversifying into other sectors by opening a Shanghai Tang Cafe

Increasing affluence of customers

Per household disposable income of urban consumers will double from 2010 to 2020

Strong Competition

Increasing affluence led many other brands to flock to China

Shanghai Tang is a late entrant into the luxury market, hence not as recognised.

Chinese consumers view International label as signs of success and wealth.

However, being a Chinese brand, Shanghai Tang is has an advantage over others.

Proliferation of counterfeit goods in China

Undermines Shanghai Tang as a “made in china” brand.

Rising affluence
High economic growth, Singaporeans are more willing and able to spend on luxury goods.

In fact, 57% of Singaporeans own at least one luxury item worth more than 500 USD

Strong competition
Luxury market is saturated in Singapore with internationally renowned brands.

However, Shanghai Tang’s uniqueness as a Chinese brand and its different style of apparels still serve as a selling point for Singaporeans aiming to be different from others.

Shanghai Tang seeks not only to serve Singaporean consumers but also the influx of immigrants that are coming to Singapore in recent years.

Counterfeir goods
Shanghai Tang Cafe
Short term – attract customers by providing a unique dining experience and ambience.

Long run- high prices and taste of food will deter consumers from eating there. Most people will only treat it as a once in a lifetime experience.

What targeting and positioning would you recommend for Shanghai Tang in the future?
Not to dilute Tang’s value proposition
Western fashion trend should not overpower the overarching seasonal oriental Chinese theme

The rite of the phoenix S/S 2012
Love/Restraint Spring 2010
SWOT analysis
1. Late entrant into the luxury good market

Immense competition from international players who already had a major presence

China as the key driving forces behind their international business

2. Similar competing brands

Low barrier to designs and technology

Similar designs and competitive price

E.g Blanc de Chine

Muslim Conservative Culture

Too revealing?
Too Chinese
Product Differentiation

Adding cultural meanings to travel retail products

Length and Cutting
Hijab / Abaya
1. Unique selling proposition for tourists:
Each item mentally transporting wearer to someplace exotic, transcending time & geography
2. Different pieces in each country as novelty souvenirs
Increase value for customer
Larger market share in travel retail
Beyond intimate dinners:

Sports Tournaments
Arts Appreciation
Full transcript