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Diesel - Presentation 04/05/12
Transcript of Diesel - Presentation 04/05/12
analysis Suppliers- Intermediaries Publics Company- organizational health to customers Matrix Partners preso! Harvard Business Review How to lower the cost of enterprise sales? DIESEL By inventing a new high-end ready-to-wear product with a fresh look, which attracts our young casual wear enthusiastic customers in order to strengthen their individuality and unconventional being. SKILLS
& VALUES VISION... HOW? To reach these goals
we develop... e For Successful living DIESEL _ _ _ _ _ _ _ _ _ _ _ _ FROM MARKET SEGMENTS MARKET sEGMENTATION Think about 2) VALUE PROPOSITION The Cost to Acquire a Customer (CAC) exceeds the Life Time Value (LTV) a customer brings us. This is my third go-around selling to large enterprises, SkyStream, Kontiki and now Qumu.
I like to explain to you the problem the way I see it, the changes I suggest to avoid making the same mistake again. and Travels to Clients Travels to clients to get to know them
Build report over lunch, dinner & golf events
Uses Social Media to find new leads
Closes deals face-to-face to relay commitment TO STRATEGIC SEGMENTS ACTORS CLOSE TO THE COMPANY $ ` DIESEL This model appears to fail for all but a few companies ELEMENTS OF EXTERNAL ANALYSIS Tools Organize Latest in asynchronous selling tools To create an apparel line perfect for individual people who follow their own unique path in life and for those style-makers who express their individuality by the way they dress R This
marketing plan does not want to MARKET DEFINITION BE STUPID "create tendency rather then follow it" Customer groups customer functions Values MILESTONES Analysis of the
macro environment Marketing strategy Segmentation Targeting Positioning FROM SELLING PRODUCTS TO
PROVIDING SOLUTIONS 1978 : Renzo Rosso created the Diesel brand in 1978, choosing the name because it is easy to understand, pronounced the same way around the world, and has a rugged feel about it; at that time, Diesel was also considered an “alternative energy” so it was representative of an alternative taste in casual wear. 1990 : Diesel launched its first ‘For Successful Living’ advertising campaign , instantly establishing a reputation for innovative marketing. 1991: The brand’s first flagship stores,
in New York, Rome and London 2000: Diesel acquired Staff International, an Italian manufacturer and distributor of international designer labels. 2008: Diesel is part of the holding Only the Brave, which also incorporates 55DSL - a brand strongly linked to street wear and urban culture, Staff International – an Italian company that manufactures and distributes brands such as Diesel Denim Gallery, Maison Martin Margiela, DSquared2, Vivienne Westwood, Victor & Rolf, Just Cavalli and Marc Jacobs Menswear - and controlling majority of stakes in Maison Martin Margiela and Viktor & Rolf. Dsquared Victor&Wolf Vivienne Westwood Roberto Cavalli SEXY BUT NOT VULGAR HEDONISM CHARMING PROVOCATIVE IRREVERENT UNUSUAL URBAN CHIC To make it easier and more consistent, our analysis will only relate to the denim market in Italy (the global denim market being too vast to be studied in its entirety and consumers differing from one country and culture to another, even more than within the same country). DEMOGRAPHIC
ENIVIRONMENT THE SOCIAL-CULTURAL
ENVIRONMENT The ready-to-wear clothes market is one of the most important in our Western economy. Jeans are omnipresent there: everyone has at least one in his wardrobe. This clothing has made great strides these past five years. Basic or customized, it remains a symbol of youth and modernity, especially as the cuts offered are very innovative. It works well in all situations of daily life: at home, with friends, at a party and even at work… TRENDS the search for particular cuts
which emphasize the body the search for originality, rarity
to stand out •the will to remain young Well-being: to feel good in ones clothes
in all situations. Jeans ambivalence: practical and fashionable, cool and smart, grunge and luxury, at the same time Images of beauty slim even skinny THE TECNOLOGICAL ENVIRONMENT The development of the Internet makes it possible for ready-to-wear brands to reach a wider clientele and to increase their market, via on-line retail and their own websites. Diesel’s site, for example, comprises 2,000 pages and welcomes a million surfers per month. THE ITALIAN TEXTILE INDUSTRY 2008: decrease in turnover of 15% 2009-2011: much positive trend THE INTERNATIONAL FRAMEWORK increase consumption of BRIC countries in Japan, the economy is still stagnant Goldman Sachs has estimated that China in 2018 will become the first international luxury market in the meantime is expected the return of confidence of American and,
above all, European consumers COMPANY, DEPARTMENTS, PROCESSES Washing Fading Scratching Ageing by sandblasting Potassium treatment Wear and tear Schredding Oven treatment Dyeing Label and numbering Treated Cloth Factory for cutting, assembling
and finishing Diesel's marketers cannot promise us unique items unless its operations department delivers superior product quality.
Such a production process requires high technology factories, highly qualified chemists as well as high quality material. Moreover, the price of fabric has risen steeply from 5 to 12 euros in a few years.Thus, it is evident that the production cost of a pair of Diesel jeans largely exceeds the price of ordinary denim. Therefore, the factory gate price of a pair of branded Italian jeans is a third of its final price, which is to say a little more than 50 euros. ...People demand unique pieces. The objective of this hyper-production is to give to each season and each consumer, the impression of the “customisation”... MARKETING INTERMEDIARIES:
Sales outlets and distributors Over 6000 sales outlets StyleLab Stores (3 worldwide, top-of-the-range) Flagship Stores (8 worldwide, the most fashionable The Diesel Stores (traditional stores) Independent stores specialized in fashion Departments in high end distribution chain stores: Galleries Lafayette, Printemps Mail-order selling: catalog Redoute, 3 SwisS
Online sales, on the official Diesel site or other ready-to-wear sites… It is also necessary to add: The brand chooses its sales outlets
carefully, so as to ensure that its
products remain relatively rare and
appear only in stores corresponding
to their image of luxury. THE ROLE OF DISTIBUTORS IS CRUCIAL!!! COMPETITORS Diesel, one of the most in-vogue brands at the moment, has been present for several years in the denim market and it is difficult to find another label which could surpass it.
Its products are extremely stylish, elegant and meticulously designed with a rather luxurious appearance; they are elaborate with a lot of know-how and originality but are much less affordable than LEVI'S jeans (the firm has had a monopoly on the denim market for several years, and remains the leader in the vast market of jeans). However, there are many potential competitors. The pioneering brands Lee, Wrangler and Levi's are still appreciated by the youth.
Nevertheless if the age bracket 15-34 years represents a large market, nowadays, many of the brands do not target only young people in general, but young and trendy consumers. a) Inter-segmental competition (BROADLY) Jeans became an essential part of the contemporary dressing. In this rapidly developing market, competition is important mainly because it offers products responding to the same expectations of consumers in search of artificially used, perforated, personalized, creative and original jeans.
Thus, so as not to lose their customers, certain labels do not hesitate to launch top-of-the-range lines which correspond to the market: With its X-line collection targeting 17-25 year olds, Lee offers a more daring range, with lanky and sexy shapes for girls just like the brand Miss Sixty. 2) Inter-product competition (NARROWLY) It is an in-vogue German brand aiming at a stylish and fashionable design, of a high level of finishing and differentiation not only in manufacture and style but also in the cut of the jeans. Today, G-Star has a turnover of 400 million euros and a growth of 30% per annum. Energy is an Italian brand whose collection primarily relates to the style and design of jeans. It also has products intended for the more relaxed youth.
They cater to both men and women, with 80% being men’s jeans while the female line is still modest. it is important “not to be Italian”: i.e. exuberant (nothing ostentatious, no technical details). The inspiration comes from work or sports clothes
The idea is to mix and match the genres true dynamics in terms of design
Focus on quality and comfort (cc) photo by theaucitron on Flickr VALUED CUSTOMERS CHECKLIST FOR MARKETERS ON THE
THREE V 's children of couples with strong purchasing power or wealthy families and also teenagers that save up their money to afford the high price tag for fashionable jeans, loving fashion and thrill of exploration and wanting to stand out among their peers 3.“FALSE YOUNG”(40-60) 2.“FRESH ADULTS”(18-35 years) 1.Diesel KIDS (2-8 and teens 6-14) young , active and urban people with average incomes and significant purchasing power, seeking originality more than fashion mature, elite customers, with higher disposable incomes, who feel still young and are also stylish. They prefer the luxury line representing in this way a challenge for Diesel to legitimize its label in the luxury market. <<The main idea behind the “For Successful living “ concept, is based on the manner in which most of the other companies approach their consumers, especially in the fashion industry.In short , their messages are more than often:” If you use our products, you will become more successful, smarter, more beautiful; instead , we tried to create surprising, thought-provoking, engaging, entertaining, humorous and true-to-ourselves advertising”. >>
Renzo Rosso, Founder and President of Diesel, about POSITIONING The reason Diesel has grown its products offering is because it knows it is about a lot more than selling nice jeans. Diesel is a lifestyle: if that lifestyle appeals to you, you might like to buy the products. Renzo describes this as an end of the ‘violence’ towards the customers forcing them to buy and rather an involvement in the lifestyle.The strength of Diesel is its ability to maintain strong control of the entire product value chain (from production to point of sale , everything belongs to Diesel, there is no intermediate). So today, Diesel is present on five continents. If all the vintage was bought in Italy in the flea markets, and jeans are manufactured exclusively in that country, other products in SMEs across the globe, all with a common denominator: consistent quality, carefully monitoring. In addition each collection consists of a generic theme and four sub-themes. For example, for the winter 2003 collection, the theme revolved around the concept of work, the collection focused on various forms of physical labour. This theme was inspired by Peru, and was as follows: “Working in the rain, working in the sun, working underground” …thus, foreach, a whole range was prepared, in different colours and materials, from the mantle to the sock. For each theme, the designers engaged in a lot of work on the raw materials. "Fit your attitude" is the name and concept of the new Spring / Summer Diesel. Denim as an essential must-have, designed to enhance the femininity and express their personality through 4 different fit. EXAMPLE: Free spirited
-NEW YORK Brave and Chic
- TOKIO CITIES ATTITUDE PRODUCT CUSTOMIZATION-ORIENTED Regarding the positioning of Diesel in relation to its competition, Diesel’s prices are higher especially in the case of jeans ( twice more expensive than Levis ) showing a high strategic price positioning and positioning in high-end sector. Thus, the price is a factor indicative of the company strategy: never do anything like the other. This division was carried out taking into consideration the similarities in dressing habits within this age groups The age bracket of 15-34 years (the most interesting for manufacturers and retailres of jeans) accounts for 22,4% of the Italian population being approximately 13,5 million individuals MAIN TARGET GROUPS IN DEMOGRAPHIC TERMS SPENDING PATTERNS DISTRIBUTION The distribution network is a reflection of the strategy of Diesel and has a huge impact on the success of the business. Thus, customers can find Diesel products in the chains and multi-store formats. Today the brand has 6,000 outlets, including 300 stores of its own. However in recent years Diesel’s distribution policy has changed consisting of a limited number of its sales outlet in order to keep only the most prestigious. This strategy allows it maintain the image that the brand whishes to convey and to grow its high-end image, buy refocusing on its own stores. Employees in each of the stores all know the campaigns intimately and are very aware of the image they should put across the customers entering the stores. Their retail partners such as the department stores are a crucial link in the chain. Diesel work closely with these partners to ensure they express the same level of passion when offering their products. This is done through separate and individual campaigns. These provide visitors with a unique experience which encourages them to get involved with the Diesel lifestyle as opposed to forcing products on them. This approach to distribution can be seen as a mix of exclusive and selective distribution over intensive distribution. Selective distribution involves using a small number of retail outlets and partners to maintain the quality of presentation and communication to the customer . Exclusive distribution involves limiting distribution to single outlets. EXAMPLES •Flagship Stores (8 in the world, most fashionable): is the store that tells the story of the season. This is where the theme and sub themes of the season are pushed to the extreme. It is also a chance for Diesel to showcase its creations to everyone. This is also where the events around the publicity of the brand creations are staged. FLAGSHIP STORE
NY, 5th Avenue • Stylelabs Stores (3 in the world, the most high-end) : New York, Osaka and Paris. Established six years ago, is a special case of the Diesel brand. These are the "showcase" stores of the brand: the collections are limited and very expensive, the objective is not profit. This store is unwilling to be known to the public, only to a narrow clientele target of privileged connoisseurs, explaining the lack of communication around the Stylelabs. STYLE LAB
LONDON, COVENT GARDEN Finally, the stores are divided into two parts: on one hand, we have the world for women, and on the other, the world for men . The store is classified according to the different product families offered by the brand. However , the restricted exposure of its jeans in stores is likely to reduce its brand awareness among the general public, a crucial factor in the success of a brand. TRADITIONAL STORES
DEPARTMENTS IN HIGH DISTRIBUTION CHAIN DIESEL POINT,
PARIS, G. LAFAYETTE INTERNET AND DISTRIBUTION Slowly, Diesel has tried to capture more of the value chain by reducing the amount of non-diesel retail stores and starting to control all aspects of the offering.
Now that it is expanding worldwide and is seeing two-digit growth Diesel is starting
to take control of the channel by shrinking the amount of non-diesel outlets to 5500
from 10000 and expanding its owned stores. Doing so it aims to control the way the
user interacts with the brand in a controlled scenario. At the same time it is controlling the way user accesses the brand itself and its campaigns by investing in rich interactive applications on the web. For years it has always engaged potential customers with its
campaigns, that more than presenting a product they were able to transmit a message
that in a way connected with its audience and made it think about and try to understand the message even most of the times it is uncertain and ambiguous.
They also provide the store as a virtual channel where their customers can shop, instead of going to other retailers’ web sites (Nordstrom, Urban Outfitters,...) online store
Virtual channel PROMOTION Promotion and marketing at Diesel takes a very different route to many other companies. It is always about engaging with the customer as opposed to selling at them: creating an enjoyable two-way dialogue as opposed to a hollow one-way monologue. All elements of Diesel’s promotion aim to engage the customer with the lifestyle. If they like the lifestyle, they might like the products.
Diesel’s communication policy is based on an even-driven publicity campaigns intended to challenge the public and cause controversy. Diesel’s communication strategy aims to can make itself none. Its goal is to increase sales without falling into the mass market, allowing the brand, in the background, to maintain a constant image of set against that of other brands. To reach its audience Diesel uses humorous, and even provocative communication, which at times tests the limit of decency. The passion and energy embodied by the Diesel lifestyle is communicated through a mix of above-the-line and below-the-line approaches of reaching consumers. Above-the-line marketing is aimed at a mass audience through media such as television or radio allowing Diesel to target its young audience. Below the- line marketing takes a more individual, targeted approach or offline media communication using incentives to purchase via various promotions. In this case passion again acts to blur and gel the boundaries between the two approaches. PROMOTION The passion and energy embodied by the Diesel lifestyle is communicated through a mix of above-the-line and below-the-line approaches of reaching consumers. Above-the-line marketing is aimed at a mass audience through media such as television or radio allowing Diesel to target its young audience. Below the- line marketing takes a more individual, targeted approach or offline media communication using incentives to purchase via various promotions. In this case passion again acts to blur and gel the boundaries between the two approaches. ABOVE-THE-LINE DIESEL "only the brave"
TV SPOT Diesel Fragances
TV SPOT ARTICLES IN FASHION
MAGAZINES BELOW-THE-LINE DIESEL FACEPARK
EVENT GUERRILLA ADVERTISING STREET MARKETING BILLBOARDS PEOPLE Besides the fact Renzo has, let’s say, done alright for himself, he has inspired thousands of people who proudly work to build the brand through a shared passion and contagious ambition.
Looking at the structure within which all those people work can help us to understand just why they are so happy to be there.
Renzo realized people and their ideas from the heart of the company. So that everyone’s voice can be heard and each person working for Diesel has an equal say, the company adopts a flat hierarchy.
This means there are very few layers of management and everyone is encouraged to communicate with each other: sharing ideas, solving problems and trying to communicate that energy with people outside the company – the customers.
When decisions are made in this flat hierarchy they are made as a team. The team as a whole can then track the progress of that idea and monitor the results. Feedback is important because if everything has gone to plan, the achievement has to be acknowledged so that everyone can take pride in what they have done. If something has not gone to plan, group feedback allows an evaluation of why and the ability to learn for the future. Importantly, this acknowledgment or learning happens equally across the company so everyone is kept up to speed on the ups and downs of business. This sense of belonging both to a team but also to a particular responsibility is very important for employee motivation. The better you understand your work and your environment, the happier you are likely to be with your job.
The happier you are, the less likely you are to want to leave and so this open approach has the very positive company-wide effect of high employee satisfaction and a low staff turnover. Specifically in the fashion industry this means that the people working for Diesel have a stronger sense of identity and a deeper understanding of the brand making them even better at what they do. BRAND (R)EVOLUTION... SELECTIVE DISTRIBUTION LONG INDIRECT MARKETING CHANNEL RETAILING MULTICHANNEL SHOPPER BOTH WHOLESALES AND RETAILERS MAIL ORDER RETAILING SPECIALTY GOODS PULL STRATEGY VALUE PROPOSITION VALUE NETWORK VALUED CUSTOMERS OUR VALUED CUSTOMERS KUMAR APPROACH Because of its size, growth rate and actionability, this target group is the most suited for our sales and profits objectives OUR UNHAPPY (POTENTIAL) CUSTOMERS People with limited spending patterns who are fashion-addicted but are not willing to pay a price too high, thus move to low price competitors. I WANT BUT I CAN'T UNEXPLOITED OPPORTUNITIES AND WEAKNESSES FOR DIESEL LOSS OF A POTENTIAL
PROFIT SOURCE INCREASED POWER FOR
"FAST FASHION" COMPETITORS WHAT CUSTOMERS ASK FOR... YOUTH ORIGINALITY SLIMNESS BE FASHION EMERGING WHAT DIESEL ANSWERS RARITY UNIQUENESS SELF-CONFIDENCE CUSTOMIZATION EXCLUSIVENESS HEDONISM EXCELLENT FIT VALUE NETWORK INCREASED SALES VOLUME
AND PROFITS COHERENT DELIVERING INCREASED BRAND EQUITY
INCREASED CLV CUSTOMER PERCEPTIONS
COMPLIANCE MICRO MARKETING customer-oriented delivering CUSTOMER
SATISFACTION CAN WE DELIVER AND EARN
PROFITS? YES,BUT HOW? $ $ TURNOVER: 477.741.966 GREATING TOO HIGH! STRATEGIC "Fit your attitude" 2012 Campaign FREE SPIRITED
-New York SEXY
-TOKIO MARKET VOICE PARTICIPATION CUSTOMER INTIMACY HIGH VALUE PRODUCT SOLD IN HIGH EXCLUSIVE STORES UNCONVENTIONAL CLOTHES PROMOTED BY
UNCONVENTIONAL ADVERTISING HIGH PRICE=HIGH QUALITY VALUE CUSTOMERS MARKET FOCUS SEGMENT BETTER PROBLEMS ANALYSIS
BETTER END-TO-END SOLUTION VALUE NETWORK FROM stand-alone product TO modular products FROM in house manufacturing TO partnership with best providers TO BE PRODUCT AGNOSTIC! FROM limited supply chain complexity TO interdependent players requiring
high coordination FROM Products sold by many channels TO become value added resellers SALESPERSONS NOT JUST ORDER TAKER, BUT CONSULTANT
VALUE BASED PRICING
INDUSTRY EXPERTS, NOT JUST GEOGRAPHICAL COVERAGE C O M M E N D A T I O N FROM DECLINING TO GROWING DISTRIBUTION CHANNELS OFF-LINE CHANNELS FROM Traditional localization
malls TO GEOINTELLIGENCE Geomatching
Basin of attraction ON-LINE CHANNELS FROM DIESEL SITEWEB
Pioneer in 1995
Buy more quickly and cost effective
Also communication instrument TO GLOBAL INTERNET RETAILING PARTNERS
Renzo Rosso increases its share in the capital of Yoox portal, from 6.22% to 8.4%
Possibility to reach a wider range of potential customers = ANYWAY LEVI'S Does not longer ingnore the advances of mass merchiandisers such as Tesco and Wallmart FROM BULLDOZERS BRANDS TO GLOBAL
DISTRIBUTION PARTNERS The brand is known but it is not yet fully integrated and for this reason it would require a significant expansion. Latin America, too, is part of the development plan, with the growth, positioning and optimization
of the distribution channel. In most advanced cities of emerging markets, en fact, like Shanghai or Beijing, a new era in luxury consumers has developed.
Luxury consumers who approached shopping for years, thanks to the Internet, have started to wonder why they have to pay exorbitant prices when they can have equivalent products at prices definitely more convenient. EMERGENT
MARKETS USA GLOBAL
CHAIN In order to optimize Diesel supply chain for global efficiency, it could be important to open flagship stores, in the biggest department stores worldwide. Here, Diesel could launch contemporary collections with a retail price that could be roughly half of the luxury bracket. The retail partners such as the department stores are a crucial link in the chain. Diesel still now, works closely with these partners to ensure they express the same level of passion when offering their products. Competitors inside:
-Moschino FROM BRAND ACQUISITIONS
TO BRAND RATIONALIZATION CORPORATE BRAND OPEN MIND PEOPLE UNCONVENTIONAL BUT NOT ECCENTRIC LIFESTYLE BRAND AVANT-GARDIST SUB-BRANDS 2) The Diesel Kids line is targeted at kids who did not want to be treated like kids. 1) The 55DSL line represents “a strong and independent sportswear collection inspired by a sense of adventure and freedom”. 3)StyleLab is “a laboratory of surprising styles” for customers attracted more by innovation itself than by the diktats of fashion. •no precise definition of the target segment for StyleLab. Anybody interested in this lifestyle could become a target customer
•No clear nature of the relationship between Diesel and StyleLab. customers are confused because they don’t understand the differences between the two brands and tend to prefer the core brand.
•Contribute less than other brands to company profitability•A too high a diffusion would erode the exclusive and unconventional image of the core brand. why? Evaluate the possibility of DELETING NON CORE BRANDS. which one? STYLELAB! FROM MARKET-DRIVEN
TO MARKET DRIVING •Are new ideas routinely imported from the outside? "The secret is never to look to other brands to look for inspiration, we are inspired
rather by what we see on the street or in clubs, new movements, from the boys. To succeed, we must be able to ride the wave of change. " R.R. •Do we tolerate failures and have processes in place to learn from failures? "No matter wrong, in fashion is the response time that makes the difference is that's what I like even let my managers make mistakes, because I know that the only way develop the antibodies necessary to what is increasingly a daily struggle. " RR 7% OF TURNOVER IN RESEARCH "We search of all, specialists in collaboration with partners from different fields: fiber and fabrics, types of printing and washing, labels, buttons, zippers. And again, it means 800 different models of jeans every six months" s FROM STRATEGIC BUSINESS UNIT TO CORPORATE MARKETING MAIN LEVERS The simplification of all marketing processes Investing in digital advertising The online presence The development and training of the marketing team This point is undoubtedly the most developed in Renzo Rosso’s company. One of the main objectives on which the Diesel team focuses, is the "conquest" of the consumer and the development of appropriate techniques to create lasting and faithful relationships with customers. This goal is achieved through a deep understanding of potential customer needs. FOCUS ON: OPERATING ACTIVITIES CUSTOMER ANALYSIS INNOVATION AND CUSTOMER INVOLVEMENT THANK YOU FOR
ATTENTION ALESSANDRA CAPOGROSSO MATTEO CANGIANO ROBERTA RUTIGLIANO ILARIA SUPINO