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HARRODS REPOSITIONING STRATEGY
Transcript of HARRODS REPOSITIONING STRATEGY
FOCUS ON CHINESE LUXURY TOURISM MARKET
INCREASING ATTENTION TO GENERATION Y
MASSIVE USE OF SOCIAL MEDIA PLATFORMS TO ENGAGE CONSUMERS AND COMMUNICATE HARRODS' S CHANGES
SUBSTANTIAL INVESTMENTS IN REVAMPING KNIGHTSBRIDGE DEPARTMENT STORE
By the year 2015, China
is predicted to become the largest market for
luxury goods in the world, growing between
10% and 20%
per year (American Chamber of
Commerce in Shanghai, 2006).
POP UP STORE FORMAT
PROMOTE UNCONVENTIONALLY THE BRAND
ENTERTAIN AND INFORM CONSUMERS --> INCREASE CONSUMER ENGAGEMENT
BOOST BRAND VALUES, BRAND IDENTITY AND BRAND IMAGE
MARKET RESEARCH: POP UP STORES ARE USED TO TEST THE MARKET BEFORE COMMITTING INVESTMENTS
1. Align the employed Internet medium to increase Harrods’ share of voice among Chinese consumers with a physical “in-store” experience, a well-known key feature of the brand.
2. Boost brand values and increasing brand identity and image along with brand awareness in Chinese market.
3. Evaluating the Chinese market by a pre-entry stage for an eventual and permanent penetration.
(Dawson et al, 2006).
4. Eventually, boosting retail sales, though it is not the main purpose.
CROSS CULTURAL ANALYSIS TO IDENTIFY THE FOREIGN MARKET
Cross cultural studies determine to what extent the consumers of two or more nations are similar, providing an understanding of the psychological, social and cultural characteristics.
(Schiffman and Kanuk, 2010).
The greater similiratity between nations, the more flexible it is to use a relatively similar marketing strategies.
If the cultural belifs, values and customs of secific target countries are fond to differ widely, a highly
marketing strategy is indicated.
Hofstede`s model of cultural indices/dimensions to define cultures into individualistic and collectivistic
Image credit: www.seemslegit.com
products are particularly appreciated and employed as a way to “show off” the social status.
For this reason, Asian consumers are more likely to buy a visible Chanel bag, for instance, rather than a good that is less visible (e.g. underwear). (Schiffman and Kanuk, 2010).
In collectivist countries consumers are more responsitive to
Increasing the number of Mandarin speakers among its staff
Introducing Chinese UnionPay terminals
Are clearly symptoms that going international is Harrods’ long-term focus and China is one of the main markets the brand wants to enter massively (Ormrod, 2013).
Launching a WeChat Chinese account
According to China Daily, Harrods has been in private treaty with Shanghai municipal government for opening a store in the city since 2010, nevertheless nothing more has been declared by the brand (Ying, 2010).
Harrods’ managing director, Michael Ward, in 2011 announced that Harrods was not ready to open in China because they had..
A HUGE AMOUNT TO LEARN
” (Barrett, 2011)
According to consumer behaviour differences, Harrods should opt for a “
format extension compatible country of origin strategy
”, where home market format is reproduced applying specific alterations to satisfy the peculiar idiosyncrasies of the regional market (Bruce et al, 2004).
Asian luxury market is predominantly characterized by an exacerbation of the hedonistic consumer behaviour approach to flatter self-esteem by showing off.
MAINLY INCOME BASED
LIMITED PRODUCT RANGE
LUXURY AND TOP-END
FAMOUS LUXURY BRANDS
HOW? WHERE? WHEN?
90 days pop up store, following the model of "Harrods Porto Cervo" in Sardinia throughout Summer 2013
Hong Kong: invariably chosen by many international luxury brands as "WINDOW FOR CHINA"
(Bruce et al, 2004).
It will serve the purpose of
strategically evaluating the market before penetrating.
Hong Kong is an increasingly competitive market: risk of fashion retailing saturation.
As the market has already been massively penetrated by other UK retailers, innovation and diversification must be persuaded even more fiercely.
Only by providing
strong brand identity and image
effective product mix
(Bruce et al, 2004) and
adapting its home format
to the new commercial environment (Dawson et al, 2003) Harrods will successfully achieve the goal.
JULY- OCTOBER 2014
Starting in conjunction with Hong Kong SS 2014 Fashion Week in mid July.
2013 Fashion Week attracted 17,259 visitors (Hong Kong Trade Development Council) --> exploiting tourism opportunity.
Moreover, for climatic conditions, September and October are "hot periods" for visiting Hong Kong.
"THERE IS ONLY
Creating an Online Harrods Pop Up store
Consistent and massive use to social media platforms:
Online Contest #HarrodsHongKong
CREATING A BUZZ ONLINE..
Hong Kong Pop Up store will increase Harrods' share of voice among Chinese tourists, comporting that Harrods physical limitation weakness of having only one flagship store will be further accentuated.
As Chinese tourists are rapidly increasing (expected to top 200 million by 2020) Harrods could not sustain properly the growing demand.
C, BARRETT. (2011) ‘Harrods cashes in on Chinese terminals’,
, [Online] Avavilable: http://www.ft.com/cms/s/0/4839c09c-830c-11e0-85a4-00144feabdc0.html#axzz2wBIgn25t [Accessed: 18.03.2014]
A, CURRY. (2013) ‘What are the new sources of growth?’,
Available: http://www.warc.com.arts.idm.oclc.org/Content/ContentViewer.aspx?MasterContentRef=b3879f78-6874-41e8-86f1-90d6ed10974f&q=harrods&CID=A100175&PUB=MKT [Accessed: 18.03.2014]
M, BRUCE ET AL. (2004)
International retail marketing: a case study approach
, Oxford: Elsevier.
J, DAWSON ET AL. (2003)
The internationalisation of retailing in Asi
a, Oxon: Routledge Curzon.
J, DAWSON ET AL. (2006)
Strategic Issues in international retailing
, Oxon: Routledge Curzon.
K, ORMROD. (2013) ‘Future opportunities lies outside UK’,
, [Online] Available:
https://service-verdictretail-com.arts.idm.oclc.org/verdict/companies/department-stores/harrods/outlook/article31093.ece [Accessed: 18.03.2014]
K, PARK ET AL. (2010) ‘Luxury shopping in tourism’,
International journal of tourist research
, (12) p. 164-178 [Online] Available: www.interscience.wiley.com [Accessed: 20.03.2014]
L, G, SCHIFFMAN AND L, L, KANUK. (2010)
, 10th edn, New Jersey: Pearson.