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Individual Global Marketing Report

  • 17 Pages
  • Published On: 1-12-2023
1.0 Executive Summary

The aim of this report is to develop a global marketing strategy for The New Look, which is planning to enter India. The market and competitor’s analysis demonstrated that Indian economy has shown immense growth potential. With a total population of 1.38 billion and the rising middle class in the country has propelled increased consumer demand and spending on fast fashion apparels. However, the competition in the Indian fast fashion market is ascertained to fierce due to the presence of both international and domestic brands.

The external environment analysis further indicated that the government in India has introduced several reforms to create a business friendly environment for the foreign firms. Even though COVID 19 pandemic has negatively influenced the economic growth rate and the customer demand for fast fashion apparels but it has been noted that the Indian economy is recovering faster than the predicted earlier. Besides, the government has also reduced corporate tax from the previous 30% to 25% to encourage the foreign firms to invest and enter into the Indian market. Nonetheless, the demand for sustainable fast fashion products is identified to be growing across India.

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Notwithstanding, the SWOT analysis of The New Look postulated that the company has substantial resources and capabilities which can help the company to succeed in the Indian fast fashion market. However, the company is identified to have limited international experience and lacks adequate knowledge and insights by the Indian customers. Hence, it has been suggested to select a joint venture as a foreign market entry strategy to enter into Indian market. Moreover, it has been suggested to the company to target young fashion conscious women aged 16-35 years from urban areas in India.

Moreover, it has been argued that offering a wide range of stylish and fashionable women’s wear based on the needs of the local customers can help the company to better meet the needs of the young Indian customers. At the same time, adopting price penetration strategy and provider fast fashion apparels at lower cost than the competitors can help the company to capture greater market share. Moreover, it has been suggested to the company to engage in aggressive marketing and promotion strategy and use a multi-media channel to increase brand awareness and appeal to target customers. Furthermore, delivering products through both physical outlets and the online e-commerce sector is identified to increase the ability of the company to tap the opportunity provided by the rapidly increasingly online community in India. Finally, it has been recommended to the company to embrace adaptation strategy instead of standardisation strategy owing to the differences in the culture and weather of India to succeed in the Indian fast fashion market quickly.

2.0 Introduction

Founded in 1969, as a single fashion store, The New Look has grown to become a leading fast fashion multi-channel retailer operating across different segments including clothing, footwear and other accessories. The mission of the company is to become “the chosen brand for an inspiring accessible fashion experience”. The vision of the company is to “stand by brand values; keep it simple, be brave, think customer, act with pace and take responsibility” (New Look Retailers Limited, 2021)

The company mainly operates in the UK but it also has international presence where it operates through its online websites and third party partnership. The company currently has 519 stores in the UK and Ireland and it ships its products to more than 66 countries across the world, which accounts to 20% of its total sales (New Look Retailers Limited, 2021). During the fiscal year 2018-2019, the company generated total sales revenue of £ 1,161,600000 while the underlying profit of the company during the same year was estimated to be £ 30,206000 (New Look Retailers Limited, 2019). The company has been successful in adapting to the changing market condition, which is evident from the fact that the company has a significant presence across all major social media platforms including Facebook, Instagram, Twitter and Pinterest, with the content focussed on its target customers and brand personality (New Look Retailers Limited, 2019). The company introduces more than 800 new products online every week so as to ensure that each time the customers visit newlook.com, they are offered something new. Even though the company offers fashion apparels for both men and women, the products designed for the women have been a major success for the company in the UK (New Look Retailers Limited, 2021).

The aim of this report is to develop a global marketing strategy for The New Look, which is planning to enter India one of the BRIC countries. The development of this project proposal focuses on women fashion apparels offered by The New Look for its entry into the Indian fast fashion market.

3.0 Market and Competitor Analysis

The target market that The New Look will expand its fast fashion business is India. Accordingly, it has been noted that India presents a great promise for the fast fashion companies. It has been observed that India has emerged as a focal point for the global fast fashion industry. Notably, the growing middle class followed by dramatic improvement in its manufacturing capabilities in the recent years has generated greater impetus among the fast fashion brands that are looking to expand their business beyond their domestic boundary to the international market. With an estimated population of 1.38 billion, the country’s middle class is India is propelled by strong macro-economic growth with a projected GDP growth rate of 8% from 2018-2022. At the same time, the middle class in India is expanding at 1.4% annually, which is at par with other emerging markets like China and Mexico. It has been further estimated that the fast fashion apparel market will be worth $59.3 billion by 2022, which will make India the sixth largest market for the fashion apparel in the world. Additionally, the numbers of internet users in India also growing rapidly which is estimated to reach 900 million by the end of 2021 which has fuelled the demand for online shopping in the country (Amed et al., 2019). Moreover, the steady economic growth has immensely contributed to the rise in the per capita income of the people in India, particularly those living in the urban areas. The rise in the per capita income of the people in India has been noted to transform the lifestyle of the Indian consumers (Dugal, 2019). Traditionally, the consumers within the fashion industry were highly price sensitive but this trend is changing and consumers today are increasingly becoming brand sensitive and are identified to prefer quality over quantity (Mukherjee et al., 2012).

However, the on-going COVID 19 pandemic has severely impacted the global economy and Indian economy has also been adversely influenced by the pandemic. Particular, the fashion industry across the globe including India has been hit hard by the COVID 19 pandemic. An important reason behind the adverse impact of COVID 19 pandemic on the fashion industry is due to the disruption of global supply chain and fall in the demand (Bhattacharjya, 2020). Nonetheless, the impact of COVID 19 on the Indian economy is anticipated to be short-term in nature and Indian economy is projected to bounce back quickly. Hence, despite the challenges of CPOVID 19 pandemic India remains an important market for the brands to ignore.

As far as the competition is concerned, the Indian fast fashion market is highly competitive and there are numbers of national and international brands currently operating in India. However, the major competition for The New Look in India is more likely to arise from other international brands like Zara, H&M and Uniqlo (Tandon, 2017). In order to develop a more precise understanding regarding the competition prevailing within the fast fashion industry in India, Porter’s five force model has been applied.

Bargaining Power of Buyers

The bargaining power of the customers in the fast fashion industry in India is high. The high bargaining power of the customers in the industry is due to the presence of numbers of international as well as domestic brands in the country (Tandon, 2017). Besides, switching cost is low for the customers in the industry.

Bargaining power of Suppliers

As far as the bargaining power of the suppliers in the fast fashion industry in India is concerned, the supplier’s power is moderate. Accordingly, India has a well-developed textile industry and there are numbers of suppliers of quality fabrics (Textile Infomedia, 2021). Furthermore low wage of the labour weaken the supplier power in the industry.

Threat of New Entrant

The threat of entry within the fast fashion industry in India is high. The rapid growth of Indian economy and the rise of the middle class in the country has made India a lucrative market for international fast fashion brands to enter and expand their business in the country (Amed et al., 2019).

Threat of Substitute

India has a distinct culture from the countries in the West, which is also visible in terms of the clothing and apparels. There are several outlets selling traditional khaadi outfits and women’s wear in India, which present a threat to the international brands like The New Look. However, the threat emanating from these outlets is comparatively low because the growing population of India, particularly in urban areas are shifting towards designer clothing and apparels. .

Rivalry among Existing Competitors

As mentioned earlier, there are several international and domestic fashion brands operating in India. Correspondingly, the rivalry among the existing competitors is high and thus The New Look is also more likely to face intense competition from the existing competitors in the industry (Tandon, 2017).

4.0 Environmental Analysis
4.1 External Environmental Analysis
Political Factor

The political environment of India is largely stable. Moreover, in recent years, the government of India under the leadership of Prime Minister Narendra Modi has introduced several reforms towards ease of doing business in India. Accordingly, India has adopted liberal investment policies for foreign investment in the fashion and apparel sector (Nayyar, 2021).

Economic factor

Until recently, India has been one of the fastest growing emerging economies in the world. Although the COVID 19 pandemic has negatively influenced the economic growth rate of the country, the post COVID economic recovery rate is claimed to be faster than it was predicted earlier. Accordingly, the consistent support from the government and financial sector in the time of COVID 19 pandemic has facilitated in financial stability and fairly positive growth rate in the years to come (Livemint, 2020)

Socio-Cultural Factor

The economic boom witnessed by India in recent years has seen millions of Indian entering the middle class. Moreover, the income of the people in Indian has risen and their consumption and spending have also increased. This is followed by improvement in the lifestyle of the people in India and the rise in demand for fashion apparels in the country. Particularly, the young customers in India are identified to be increasingly involved in purchasing fast fashion apparels and accessories. Fast fashion apparels have become widely popular among the young customers in the metro cities of India and many competitors such as Zara and H&M are identified to have made heavy investment to tap the growing demand for the fast fashion apparels in these cities (Tandon & Agarwal, 2013).

Technological

India has constantly shown improvement in adoption of new and innovative technologies. Accordingly, India ranked 48th in Global Innovation Index in 2020, the highest rank that it has ever achieved (Kumar, 2020). Moreover, the number of internet users in India is increasing rapidly and is anticipated to 907 million by the end of 2023 (NDTV, 2020). The huge population of internet users has further led to the rapid growth of e-commerce business in India. Today, increasing numbers of Indian consumers are identified to hop online through various e-commerce websites such as Amazon and Flipkart.

Legal

India has a well-developed legal and regulatory framework. Accordingly, The legal and regulatory framework in India ensures adequate protection to the foreign companies operating in the country. The Companies (Amendment) Act, 2017 and 2018 which replaced the previous Act dated back to 1956 is the primary Act governing the functioning of the foreign and domestic companies operating in the country. Although there are some challenges with respect to taxation laws in India which is viewed by foreign companies and investors to be quite complex but the government in the recent years have introduced several reforms such as introduction Good and Service Tax (GST) and has also reduced corporate tax from previous 30% to 25% (Mehta, 2018).

Ecological

Over the last few decades, consumer concerns for environmental protection and conservation have surged significantly worldwide including in India. Accordingly, it has been noted that the increased concern towards nature and ecosystem is also apparent in the fashion and apparel sector in India (Raghuwanshi, 2020). As a result of which there has been growing demand for sustainability within the fashion and apparel industry in India. Additionally, the government of India has also enforced rules and standards related to environmental protection which the foreign companies are required to strictly comply with in order to avoid any legal consequences (Ghoshal, 2020).

4.2 Internal Environmental Analysis

To analyse the internal environment of The New Look, a SWOT analysis model has been applied below.

Strengths

The New Look has several strengths that contribute its resources and capabilities. In this regard, string brand image is one of the major strengths of the company. It has developed a strong reputation for delivering value for money and offers a wide range of fashionable apparels. Skilled and experienced human resources within the company also serve as major strengths of the company. The employees of the company are committed and dedicated towards the accomplishment of the company’s vision (New Look Retailers Limited, 2021).

Weaknesses

As far as weaknesses are concerned, The New Look products lack experience to operate in international markets. This is because The New Look has limited present in beyond its home country UK, particularly in developing Asian countries like India. Moreover, unlike other international brands, The New Look does not spend much on promotion and advertising which is critical for the success of the company in fast fashion markets such as India (New Look Retailers Limited, 2019).

Opportunities

There are significant opportunities for The New Look to expand its business to emerging markets like India. Particularly, in the current situation, which characterises the COVID 19 crisis expanding in emerging markets like India can help drive its performance and growth. At the same co-branding with manufacturers of the fast fashion apparels also offers an opportunity to increase its profit margin.

Threats

The major threat that The New Look faces is from the competitors. There are several international brands operating in the fast fashion industry which offers a major threat to the company. In addition, fluctuation in currency as well as sluggish economic growth can also hamper its profit earning capabilities. Additionally, pandemics such as COVID 19 can also disrupt its supply chain and pose significant threat to the company’s operation (Livemint, 2020).

5.0 Market Entry Strategy and Segmentation, Targeting, Positioning
5.1 Market Entry Strategy

Indian market is different from other markets in the West, which is due to the fact that India is an emerging economy unlike many other advanced countries in the West and also because of the differences in the culture, lifestyle, customs and values. Accordingly, the market entry strategy adopted by the firms to enter advanced economies in the West may not be suitable for The New Look for entering into the Indian fast fashion markets. Hence, it is suitable for the company to enter into Indian fast fashion market by forming a strategic alliance or joint venture with the local company. There are various reasons behind the selection of joint venture as preferred entry mode strategy for entering into Indian fast fashion market. In this regard, one of the major reasons behind the selection of this entry mode strategy is that The New Look lacks international experience to operate in foreign markets such as India. Moreover, The fast fashion market in India is highly competitive in nature and it is challenging for the new entrants to succeed quickly through other forms of foreign market entry mode strategy. Besides, the unique culture of India and other challenges such as bureaucratic red tape and corruption creates several hurdles during the initial phase of market entry for the foreign firms (Anshuman & Vishnoi, 2017). Hence, entering into a joint venture with a local firm in India can help the company to use their experience and expertise in dealing with the bureaucratic red tape. Besides, The New Look can also take advantage of the knowledge and understanding of the local partner about the customers to deliver personalised products and services as well as their distribution network. Finally, partnering with the local firms can also help the company to deal with the liability of foreignness often experienced by foreign firms in new markets (Glaister et al., 2005).

5.2 Segmentation, Targeting, Positioning (STP)
Segmentation

The New look market can be segmented based on four bases that include demographic segmentation, geographic segmentation, psychographic segmentation and behavioural segmentation.

Demographic segmentation: with respect to demographic segmentation, The New Look’s women fashion apparels will meet the needs of young women aged 14-35 years that are fashion conscious and want to look stylish.

Geographic segmentation: Considering the geographic segmentation, The New Look’s women fashion apparels will serve the needs of the customers living in urban areas. More specifically, it will initially cater the needs of the customers living in the four major metropolitan cities of Indian including New Delhi, Mumbai, Chennai and Kolkata.

Psychographic segmentation: As far as the psychographic segmentation is concerned, The New Look’s women fashion apparels will serve the customers that are fashion conscious, fitness freak and want to look stylish and fashionable.

Behavioural Segmentation: With respect to behavioural segmentation, The New Look’s women fashion apparels will meet the needs of customers that are brand conscious and prefer quality over quantity.

Targeting

The primary target audience of The New Look’s women fashion apparels will be young fashion conscious women aged 16-35 years from urban areas in India. This target market has been selected and considered to be profitable for The New balance in India because the women in the urban areas are independent, and forms a major part of urban workforce in India. Besides, the young women in India are fashion conscious and often want to look stylish and fashionable.

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Positioning

The women fashion apparels that will be offered by The New Look will be positioned as ‘independent fashion’. Accordingly, the company will offer high quality fashionable women apparels at affordable price to accommodate the needs of young and elegant Indian women.

6.0 Marketing Mix Plan and Implementation

Product: The New Look will offer a wide range of stylish and fashionable women’s wear to the target customers in India. The company will engage in contract manufacturing instead of manufacturing the fashion apparels by the company itself. In this regard, the company will develop strong relationships with the local suppliers as well as contract manufacturers, and use their expertise and knowledge to develop customised fashion apparels to meet the specific needs and style of young Indian women in India. In other words, the company will pursue an adaptation strategy to suit the local needs of the young Indian Women (Ryans et al., 2003).

Price: With respect to the pricing strategy The New Look will apply price penetration strategy for its women’s wear product in India (Spann et al., 2014). Accordingly, the company will initially offer the products at lower price than its key competitors in order to capture the greater market share in the Indian fast fashion market. However, once the company is able to capture the large market share, it will adopt a competitive pricing strategy so as to compete effectively with the competitors in the market and attain continuous growth and success in the Indian fast fashion market.

Promotion: The New Look will engage in using multimedia channel for the promotion of the women wear in India. Accordingly, the company will use both print media and digital media for promoting its product and generating brand awareness among its target customers. The company will launch social media marketing campaign “Empower Yourself With Fashion” targeted to the young women customers in India to appeal them to purchase the product offered by the company. Moreover, sales discounts will be provided to the customers on festive seasons such as Diwali and Dussehra the two important festivals in India and the time when people at shopping spree.

Place/Distribution: The New Look’s women fashion apparels will be distributed both through physical outlets and through its e-commerce websites. Accordingly, the physical stores of the company will be located in prime locations across the four major cities of India. However, customers from other cities and areas of India can also shop the women’s wear online through its e-commerce website, www. newlook.in.

7.0 Conclusion and Recommendations

In conclusion, this report presented the global marketing strategy proposal focusing on women fashion apparels offered by The New Look for its entry into the Indian fast fashion market. Accordingly, it has been observed from the analysis that the steady economic growth and rise of the middle class in India has led to the improvement in the lifestyle of the people in India. Furthermore, the improvement in the economic condition has led to increased spending on fashion apparels and accessories and many international brands have penetrated the fast fashion market in India to exploit the existing opportunity in Indian fast fashion market. Additionally, the fast fashion market in India thus offers a huge opportunity for The New Look to enter and expand its business beyond its domestic market in the UK to Indian market. However, the fast fashion market in India is observed to be highly competitive in nature. Therefore, to enter and expand successfully, it has been recommended to the company to choose joint venture market entry strategy. Accordingly, the adoption of joint venture market entry by the company would allow the company to take advantage of knowledge and expertise of the local partner and meet the needs of customers more effectively. At the same time, it has been recommended to the company to follow adaptation marketing strategy. This is because culture and tradition as well as weather in India are different from those in Europe, which has the potential to impact the sales of the company. Hence, adopting adaptation strategy and offering the customers with fashion apparels based on the local needs and preferences can have a positive impact on the sales and success of the company in the Indian fast fashion market. Finally, it is recommended to the company to have a low pricing strategy because the customers in India are price sensitive and the competition is high. Hence, low pricing strategy can help stimulate the demand, capture greater market share and increase the ability of the company to compete effectively.

References

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NDTV. (2020). India Will Have Over 900 Million Internet Users by 2023, Cisco Report Claims. [Online] Available at: https://gadgets.ndtv.com/telecom/news/indian-will-have-over-900-million-internet-users-by-2023-cisco-report-claims-2182566 [Accessed 26 January 2021].

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Raghuwanshi, S. (2020). Fast fashion industry wants cheap, disposable & trendy clothes, but it comes at a price. [Online] Available at: https://economictimes.indiatimes.com/small-biz/sme-sector/fast-fashion-industry-wants-cheap-disposable-trendy-clothes-but-it-comes-at-a-price/articleshow/77032023.cms?from=mdr [Accessed 26 January 2021].

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Tandon, S. & Agarwal, S. (2013). Fast fashion catches fancy of Indian consumers. [Online] Available at: https://www.livemint.com/Industry/ll0DswclMpprlxZaYs4GjO/Fast-fashion-catches-fancy-of-Indian-consumers.html [Accessed 26 January 2021].

Tandon, S. (2017). Can Japan’s Uniqlo make it big in India? [Online] Available at: https://qz.com/india/1138468/can-uniqlo-win-with-basics-in-an-indian-market-obsessed-with-zara-and-hm/ [Accessed 26 January 2021].

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