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Currently Michael Kors branding is receiving recognition for its stability
and accomplishments within the entire American apparel industry. Michael
Kors is a global luxury lifestyle brand with a jet-set aesthetic that combines
elements of style, elegance, and sport. Established in 1981, Michael Kors
himself is now known as a prominent fashion designer based in New York
City. The product lines include accessories, footwear, watches, jewelry,
means and womens ready-to-wear, eyewear and a full line of fragrance
products. The business operates in three different segments: retail,
wholesale, and licensing. Their goods are sold in company operated retail
stores, leading department stores, specialty stores and through carefully
selected licensing partners. Michael Kors stores are operated, either directly
or through licensing partners, in some of the most prestigious cities in the
world, including New York, Beverly Hills, Chicago, London, Milan, Paris,
Munich, Istanbul, Dubai, Seoul, Tokyo, Hong Kong, Shanghai and Rio de
Janeiro.
Michael Kors is the founder, designer and Honorary Chairman and Chief
Creative Officer for Michael Kors Holdings Limited (KORS). A fashion icon who
not only designs clothing and accessories, but also known for his
appearances as a judge on the Emmy-nominated Project Runway. Behind this
Product
The product line I will be focusing on is called, MICHAEL Michael Kors
composing of small leather goods, such as: accessories, clutches, wallets,
wristlets and cosmetic cases. Specifically handbag/purses that are the most
popular and profitable for the company. The marketing plan will consist of
segmentation/targeting, New Product Development, Marketing
channels/distribution framework, Marketing Synchronicity, and types of
fixed/variable costs connected in the scope of this product. Simplicity, luxury,
and comfort are Michaels foundation principles to this product line. His
influences may vary from season to season, like this falls upscale but
unabashedly western-inspired looks. On the contrary Kors Clothes reflect a
feeling of timelessness that is the essential component of investment in
clothing. If anything, his emphasis on luxury is evident in fabrics that range
from cashmere to leather to fur and have grown stronger over the years. As
of right now, luxury sportswear is as much about practicality as it is about
indulgence, says the ever-pragmatic Kors.
Segmentation/Targeting
Michael Kors succeeded because it was the first retailer to hit the
markets sweet spot, people with money to spend but who arent rich, quoted
by Ashley Lutz in Business Insider. This explains Michael Kors target market
to the core. Between $100,000 and $250,000 income levels roughly. Michael
and his team went through these seven criteria before selecting the target
segment; Measuring the market size through buying/consumption capacity,
adequate to generate revenues, logistically reachable so as to serve,
competitive position, expected growth, cost of reaching segment, and
compatibility with organizations objectives and resources. The product line is
differentiated with multiple products targeted at one market segment. Some
variables for segmenting the market to meet the middle class income level
were: Demographics, Psychographics, and Geographic/Regional.
Kors customers include working women, society ladies (and in many
cases their daughters), as well as celebrities ranging from Sharon Stone to
Gwyneth Paltrow, Elizabeth Hurley to Barbara Streisand. Theres also no
secret that his clients love him as much as they do his clothes and there is
little doubt that his legendary charm has contributed enormously to his
success. His signature looks are as easy to sew as they are to wear, which is
why it may be hard to believe that Kors himself does not sew.
Michael Kors is the most searched for fashion brand online, beating out
its competitors by a long run. The lifestyle brand overcame heavyweights like
Calvin Klein, Marc Jacobs, and Ralph Lauren, according to a report by Digital
Luxury Group. Kors became the most searched for brand on the internet
because they offer a lower priced diffusion line that appealed to an even
wider range of consumers.
stage, the fashion industry needs to become more tech savvy as well. Not
only through their products but their marketing strategies as well. Moreover,
Kors digital marketing strategy reflects the brands dynamism with respect
to changing trends. Understanding the importance of the internet in
engaging its customers, and the brand is aggressively active of various social
media platforms. Being active on many different apps as well for promotions
will help your image. The company also ensures that the brand is stamped
on all tweets, thus ensuring that its brand identity remains consistent in all
communications. The new sisterhood brand is patented by Michael Kors on
all social media platforms.
pricing, and delivery. They have relationships with various agents who source
their finished goods with numerous manufacturing contractors on their
behalf. Although their relationships with their agents are generally
terminable at any time, they believe to have a mutually satisfactory
relationship again with them. Kors primarily uses foreign manufacturing
contractors and independent third-party agents to source their finished
goods, which poses legal, regulatory, political and economic risks to their
own business operations.
Michael Kors operates its business in three segments: retail, wholesale,
and licensing. They have strategically controlled global distribution network
focused on company-operated retail stores, leading department stores,
specialty stores and select licensing partners. In the fiscal year 2013, their
retail segment accounted for approximately 48.7% of their total revenue. As
of March 30, 2013, the retail segment included; 231 North American retail
stores, including concessions, and 73 international retail stores, including
concessions, in Europe and Japan. In the Fiscal 2013, our wholesale segment
accounted for approximately 47.3% of the total revenue. AS of March 30,
2013, their wholesale segment included; Wholesale sales through
approximately 2,215 department store and specialty store doors in North
America and Wholesale sales through approximately 1,034 department store
and specialty store doors internationally.
A small number of the wholesale customers account for a significant
portion of net sales. Net sales to the five largest wholesale customers
represented 29.3% of total revenue for Fiscal 2013 and 27.9% of total
revenue for Fiscal 2012. The largest wholesale customer, a large, nationally
recognized U.S. department store, accounted for 14.0% of total revenue for
Fiscal 2013 and 13.3% of total revenue for Fiscal 2012. Remaining revenue is
generated through the licensing segment, through which they license to third
parties certain production, sales and/or distribution rights through
geographic licensing arrangements. In Fiscal 2013, the licensing segment
accounted for approximately 4.0% of total revenue and consisted primarily of
royalties earned on licensed products and their geographic licenses.
Michael Kors partners with leading wholesale customers, such as
Bergdorf Goodman, Saks Fifth Avenue, Neiman Marcus, Holt Renfrew,
Bloomingdales, Nordstrom and Macys in North American and Harrods,
Harvey Nichols, Selfridges and Galeries Lafayette in Europe. These strong
relationships enable them to access large numbers of their key consumers in
a targeted manner. In addition, they are engaged in wholesale growth
initiatives that are designed to transform the Michael Kors displays at select
department stores into branded shop-in-shops. By installing customized
freestanding fixtures, wall casings and components, decorative items and
flooring, as well as deploying specially trained staff, they believe that their
shop-in-shop provides department store consumers with a more personalized
shopping experience than traditional retail department store configurations.
These initiatives, among many others, have helped increase total revenue for
the rich can buy this luxury brand, but a wide range of medium income levels
as well. The brand has gone from being known from 0%-71% in just the first
year and 71%-89% the following years. With this significant milestone, Kors
is also expanding its network of retail stores rapidly in Europe and Japan.
Through its classy branding and impeccable marketing strategies, Kors has
gained recognition as a global lifestyle brand that promises unique designs
backed by high standards of quality.
Michael Kors marketing strategy is to deliver a consistent message
every time the consumer comes in contact with the brand through all of their
communications and visual merchandising. Their image is created and
executed internally by their creative marketing, visual merchandising and
public relations teams, which helps ensure the consistency of their message.
In Fiscal 2013, they recognized approximately $41.9 million in advertising
expense in North America and internationally. In conjunction with promoting
a consistent global image, they use their extensive customer database and
consumer knowledge to best target their consumers in an effort to foster
marketing efficiency. Engaging in a wide range of direct marketing programs,
including, among others, emails, print advertising, catalogs and brochures, in
order to stimulate sales in a consumer-preferred shopping venue. As part of
their direct marketing strategy, their catalogs are sent to selected
households to encourage consumer purchases and to build brand awareness.
With their growing number of visitors to their michaelkors.com online store
provides an opportunity to increase the size of their database and to
wholesale customers. The amounts reserved for retail sales returns were
$3.1 million, $1.7 million, and $2.3 million at March 30, 2013, March 31,
2012, and April 2, 2011, respectively. To arrive at net sales for wholesale,
gross sales are reduced by provisions for estimated future returns, based on
current expectations, trade discounts, markdowns, allowances, operational
chargebacks, as well as for certain cooperative selling expenses. Selling,
general, and administrative expenses consist of warehousing and distribution
costs, rent for our distribution centers, store payroll, store occupancy costs,
(such as rent, common area maintenance, real estate taxes and utilities),
information technology and systems costs, corporate payroll and related
benefits, advertising and promotion expense and other general expenses.
Depreciation and amortization includes fixed and definite-lived intangible
assets. Income from operations consists of gross profit minus total operating
expenses. Interest expense, net represents interest and fees on their
revolving credit facilities and amortization of deferred financing costs. Offset
by interest earned on highly liquid investments (investments purchased with
an original maturity of three months or less, classified as cash equivalents),
the amounts of which are not material for all periods presented.
Conclusion
Based on the information that was provided to me on my findings on
Michael Kors Marketing, I have found that their marketing research
developers such as Michael himself have done a great job in segmenting
their target market of customers. That step was combined while Michael was
designing his luxury line of just clothing. He then continued the marketing
research with his company to appeal to a wider group of consumers, by not
limiting himself to only the richest people. Developing a wide range of
products at reasonable designer prices was the key to success in Michaels
later work in the product line called, MICHAEL Michael Kors. His new
product line has flourished with all of the marketing campaigns and
advertising that has been applied. This clearly communicates how innovation
and implementing new products into your product line can make your
revenue boost drastically when done correctly. From targeting consumers
demographics to designing affordable items and pricing them where they
make a great profit.
Works Cited
"Michael Kors Strategic Marketing Plan." Michael Kors Strategic Marketing Plan. N.p.,
n.d. Web. 29 Nov. 2014.
"About Us | Michael Kors." Michael Kors. N.p., n.d. Web. 30 Nov. 2014.
"The 85 Richest People In The World Have As Much Wealth As The 3.5 Billion
Poorest." Forbes. Forbes Magazine, n.d. Web. 02 Dec. 2014.
United States. Securites and Exchange Commssion. Washington, DC. Michael Kors
Holdings Limited. N.p.: n.p., n.d. FORM 10-k. Web. 30 Mar. 2013.
<http://www.sec.gov/Archives/edgar/data/1530721/000119312513239625/d494652
d10k.htm>.