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Abercrombie & Fitch (Australia) Marketing Plan

Compiled by: Benjamin Aryanto (537679) & James Hare (539779)

Abercrombie & Fitch (Australia) Marketing Plan

Contents
1.Executive Summary..3 2.Introduction.4 3.Internal Analysis.. 5 - 7 3.1 Business Philosophy 3.2 Vision Statement 3.3 Mission Statement 3.4 Organisational Culture 3.5 Goals and Objectives for 2013 4. Market Analysis Summary for Australia.7 - 14 4.1 PEST Factors analysis 4.2 Industry analysis 4.3 Competitor analysis 4.4 Consumer analysis 4.5 Segmentation, Targeting & Positioning 4.6 SWOT analysis 4.7 Market entry strategy 5. Marketing Mix Customization.. 15 5.1 Standardization vs. Customization 6. Marketing Mix (Product).. 15 -21 6.1 Product Offering 6.2 Product Mix 6.3 Product Strategy 6.4 Branding Strategies 6.5 Brand Benefits

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan 7. Marketing Mix (Price)21 22 7.1 Pricing Objectives 7.2 Pricing Methods 7.3 Pricing Strategies 8. Marketing Mix (Promotion)23 28 8.1 Promotion Objectives 8.2 Integrated Marketing Communications 8.3 Message Content 8.4 Promotional Frequency Decision 8.5 Execution of Conventional Promotional Activities 8.6 Execution of Guerrilla Marketing 9. Marketing Mix (Place)..29 31 9.1 Channel Length & Intensity 9.2 Multi-Channel Distribution 10. Marketing Mix (Physical Evidence & People).32 33 11. Implementation..34 36 11.1 Timeline of Objectives 11.2 Deadlines of launch 11.3 Results monitoring 11.4 Contingency Plan if failure occurs 11.5 Future Expectations 12. Reference....37 39 13. Appendix ...40 47

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan

1) Executive Summary
The following marketing plan will provide an in-depth internal analysis of Abercrombie & Fitch co., analysis of Australias retail clothing market, marketing strategies to bolster the expansions success, implementation of the strategies and a forecast of Abercrombie & Fitchs future business expansions.

In the heavily competitive market in the U.S, A&F should use a bypass and position defense strategy and enter the Australian market as it presents itself as an attractive market due to its positive economic factors, minimal psychic distance from the US market. A&Fs target market in Australia is similar to the one in the US, 14-28 year old males and females who are seeking casual luxury products. To enter this market, it is recommended for A&F to choose between acquisition, Greenfield investment or strategic alliance. In order to be successful in Australia, A&F must customize their marketing mix to a slight degree to adhere to the Australian culture but maintain the synergy of their brand values. The following marketing plan created a marketing mix consisting of product, price, promotion, place, physical evidence and people strategies that will maximize market acceptance and favorability in Australia. A timeline has been created to guide A&F in terms of implementation of the marketing mix and to provide a benchmark to compare actual outcome to desired outcomes. A contingency plan has also been conjured for A&F to implement in case of market rejection or failure.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan

2) Introduction
Abercrombie & Fitch co. is a publicly listed American retailer that operates stores and direct-toconsumers operations, specialising in casual apparel for men, women and children (Reuters 2013). Under its brand portfolio, it controls 4 subsidiary brands of Abercrombie & Fitch, abercrombie kids, Gilly Hicks and Hollister. Recently, Abercrombie & Fitch co. has been seeking entry to global markets to heighten their international presence and improve their global competitiveness as it is beginning to experience unsuccessful operations in their home market of the U.S.A, with the shutdown of more than 130 stores over the past several years (Hoovers 2013). However Abercrombie & Fitch has successfully established themselves in new international markets of Western Europe, Canada, Hong Kong, Japan, Korea and Singapore (Abercrombie & Fitch 2013). In order to further fortify Abercrombie & Fitch co.s international awareness, an expansion into the Australia should be considered as the market presents favourable characteristics for its subsidiary brand of Abercrombie & Fitch to flourish.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan

3) Internal Analysis
3.1 Business Philosophy
The philosophy behind Abercrombie & Fitch co.s business model is to provide high quality and durable casual clothing but more importantly, to create an admired lifestyle and an exclusive club for their customers to be associated with; this lifestyle derives from the concept of exclusivity and idolization of the popular social cliques in an American college culture (Elemental Design 2007).

3.2 Vision Statement


We see our commitment to sustainability and corporate responsibility as an on-going effort that adds accountability to all of our business decisions. While it is important to know where we stand today with our initiatives, it is equally important to define where we see our programs going and how we will initiate positive change to become an even better corporate citizen (A&F Cares 2011)

3.3 Mission Statement


At Abercrombie & Fitch, we are firmly committed to increasing and utilizing the diversity of our associates and management team across the organization. Those differences are supported by a culture of inclusion, so that we better understand our customers, capitalize on the talents of our workforce and have an inclusive mind-set that values every dimension of diversity (Abercrombie & Fitch Careers 2013).

3.4 Organisational Culture


Hines (2012) reports that the organizational culture within Abercrombie & Fitch co. is of a highly autocratic nature as employees must adhere to a 47 page manual which strictly enforces guidelines to store maintenance, employee appearance and mannerism written by the CEO, Michael Jeffries. A floor manager Abercrombie & Fitch of Singapore explained that this culture is embedded in the management of each and every store worldwide with the most recognizable characteristic is a narrow chain of command with a top to down communication process (J Toi 2013, pers.comm.,5 May). She also pinpointed the managements strong emphasis on cultural diversity in their front-line staff members as it is a part of their localization strategy.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan

3.5 Goals and Objectives for 2013

Abercrombie & Fitch co.s annual report (2012) plans to achieve the following for 2013: Experience direct-to-consumer sales growth Increase in-store productivity and efficiency Widen the selling margin for each products under each subsidiary brand Minimize store and distribution expenses as a percentage of net sales Reduce marketing, general and administrative expense as a percentage of sales Expect Annual Equity per Share to experience 15% growth Achieve global net sales beyond $4.511 billion USD Improve gross profit of $2.817 billion USD The latter sections of the report will also consist of specific marketing objectives for each respective aspect of the marketing mix.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan

4) Market Analysis Summary of Australia

The following information is summarizes the assessment of Australias market characteristics favoring market entry by A&F, based on PEST factors analysis, industry analysis, competitors analysis, consumer analysis, market segmentation and targeting analysis. A recommendation for mode of market entry will also be provided. For more of an in-depth analysis for this section, please refer to the Appendix Section.

4.1 PEST factors analysis


Economic (Refer to Appendix A): The Australian clothing retail industry is expected to grow 1.1% annually until 2018 (IBIS World, 2013). Australia is currently experiencing an exponential trend in economic prosperity high GDP, consumption levels and low unemployment Australia is ranked 10th in the world for conducting business within (Doing Business Australia, 2013). It is recommended for A&F to acquire a physical store in Australia and establish the local distribution networks and production facilities which will use local materials to produce the products based on designs sent from headquarters in the U.S

Social (Refer to Appendix B): Australia and the United States share a very low psychic distance based on Hofstedes cultural dimensions (Hofstede Centre, 2013). Australias culture can be characterized as, low power distances giving informal communication methods and accessible superiors, highly individualistic cultures, considerable masculine societies with their competitive natures, average uncertainty avoidances giving relaxed attitudes and acceptance of new ideas, and short-term orientations providing a drive for consumers to have quick and successful results (Hofstede Centre, 2013)

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan

Technological (Refer to Appendix C) There has been a 4.3% increase in online retailing within the Australian market over the last 5 years and it is expected to increase further in the near future (Euromonitor, 2013) The establishment of an online Australian store that provides consumers with direct access to in-store products, and efficient local shipping, will be critical to Abercrombie and Fitchs success.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan

4.2 Industry Analysis


Force Competitors Threat High Details

High number of competitors Low market concentration Market growth is Steady Exit Barriers are Low Product Differentiation is Low Fixed costs are Low New Entrants High Cost of entry is Low Distribution channels are Interchangeable New entrants have High retaliation Limited unmet needs within the market Substitutes High Technology is Current Usefulness of substitute is High Price of substitute is Low Switching costs to substitute is Low Suppliers Low Suppliers are Less concentrated than buyers Cost of switching suppliers is Low Suppliers offering is Undifferentiated Threat of forward integration is Low Threat of backward integration is Low Buyers High Buyers are More concentrated than suppliers Buyers switching costs are Low Importance of product to buyer is Low Threat of backward integration is Low Table 1 - Porters 5 Forces for the Australian Clothing Industry (University of Oregon, 2009)

A&F can differentiate themselves in this competitive industry through the reinforcing strong brand associations of luxury and the uniqueness of its products. Although the threat of new entrants is high, only a few international brands (ZARA, Topshop, Gap) have established themselves within the market, so there is still a large opportunity for Abercrombie and Fitch to firmly establish a market share before the entry of many other brands. As supplier power is low, this empowers A&F to dictate contract and pricing agreements with its local production facility.

*Refer to Appendix D for more detailed analysis.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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4.3 Competitor Analysis


(Refer to Appendix E) The two main competitors of Abercrombie and Fitch, within the American market, is Aeropostale and American Eagle Outfitters who target a similar consumer segments, have a subsidiary brand for kids, and positions themselves relatively similarly (Refer to Table 2 and 3). Objectives Current Strategy Current Resource Base Expected Future Strategy Provide high-quality, active-orientated fashion at value Design, source, market and sell all its own merchandise Specialty retail stores in the US, Canada and Puerto Rico and operate licensed stores in the Middle East, Asia and Europe Possibly license stores to Australia

Table 2 - Aeropostale Competitor Analysis (Aeropostale, 2013)

Objectives Current Strategy Current Resource Base Expected Future Strategy

Provide retro/vintage cost effective clothing Design and produce all of their own products Specialty retail stores in US, Canada, Puerto Rico, Egypt, Japan, China, Mexico, Poland and Russia, and franchise to Middle East Possibly franchise to Australia

Table 3 -. American Eagle Outfitters (AEO, 2013)

In the heavily competitive market in the U.S, A&F should use a bypass and position defense strategy and enter the Australian market. By diverting efforts to another market, Abercrombie and Fitch avoid the potential wastage of funds in attempting to gain market share off of Aeropostale or American Eagle Outfitters in the US, when they could be gaining profits in another market that has an unmet need for casual luxury.

By entering the market before its competitors, Abercrombie & Fitch can achieve first movers advantage

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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4.4 Consumer Analysis


(Refer to Appendix F) Research conducted by Euromonitor (2012) indicated that: Australian women spent $396 per capita on clothes in 2011 and, $29 per capita was spent on swimwear because of Australias large beach culture. Australian men are seeking the appearance of success which accounts for their continually purchasing of dress shirts and formal wear. Australians are becoming more sophisticated due to increasing disposable income, which has entailed in an increase in demand for international luxury brands of late. All of these factors would aid the adoption of Abercrombie and Fitch into the Australian culture and result in a significantly profitable section of the market share.

4.5 Segmentation, Targeting & Positioning


(Refer to Appendix G) An industry report by IBISWorld(2013) analyzed that:

14-28 year olds in Australia contribute the largest portion towards sales in the Australian clothing retail industry. This segments profitability will increase over time due to increments in disposable income as they get older. This segment is parallel to A&Fs target market in the U.S; which is advantageous to A&F as they can transfer their demographic behavior knowledge onto the Australian market. High possibility for A&F to achieve brand salience and resonance in this segment.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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4.6 SWOT Analysis


Appendix H will provide a greater insight to the SWOT and competitive advantage analysis for A&F:

Strength

Weakness
1. Weak brand equity in the US market 2. History of criticism and negative brands associations 3. Sensitive product line to economic recessions 4. Poor product differentiation without brand logo

1. Establishment

of Gilly Hicks in Sydney would provide key insights of the Australian market and consumers 2. Management is experienced in developing new and successful product line

1. Significant growth potential in Australia Differentiation factor (experiential) from competitors 2. Prevent entry of other US competitors into Australia

1. Weak brand protection from counterfeiting 2. Current international brands in Australia are expanding and possibly preventing the entry of Abercrombie and Fitch

Opportunities

Threats

Diagram 1 Abercrombie & Fitchs SWOT Analysis

Diagram 2 Abercrombie & Fitchs Competitive Advantages


** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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4.7 Market Entry Strategy


Abercrombie and Fitchs entry into the Australian market would require strict control because of consumer and company preferences. As Australian consumers prefer specialty retail stores because of the experience and advice available (Euromonitor, April 2012), using an indirect or direct exporting technique would not allow for the maximum gain of market share. Correspondingly, to compete within the market a large supply of products and varieties would need to be available to consumers, so domestic-based sales representatives or a foreign sales subsidiary would not suffice. Abercrombie and Fitchs desire for full control over the stores operations mean that no contractual arrangements, franchising or licensing would suit, and the importance of brand equity and identification mean that a joint venture would not work. Therefore there are three modes of entry available, shown in Table 4.

Greenfield Investment

Strategic Alliance

Acquisition

Pros Easily matches desired brand mantra of experiential positioning Strict control over operations available Selective placement of store and distribution channels available Cons Very high investment cost Slow market entry process Pros Better relationship with local organizations Minimized risks Allows for A&F to catch up to other international brands e.g. ZARA Shared resources and knowledge increases efficiency Cons Trust required between both parties Confrontational levels of control and decision making Disagreements on profit and store distributions can be costly Pros Rapid entry into the Australian market Easy distribution and contact with local consumers Cons High investment cost Backlash possibility from employees and consumers

Table 4-. Pros and Cons of market entry strategies available for Abercrombie & Fitch

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan Greenfield Investment provides the complete level of control that Abercrombie and Fitch desires, it is however, a very expensive and slow process, as detailed previously in the economic costs of starting a business. Therefore the acquisition mode of entry would be better, however the employees, consumers and current distribution channel of the previous retail store could protest against the establishment of Abercrombie and Fitch and refuse cooperation. Despite this, new employees, consumers and distribution partners can easily be found so the acquisition mode of entry is very suitable. The other option is to form a strategic alliance with another brand that has a similar mantra. As Abercrombie and Fitch target young adults (eighteen to twenty-eight years olds) seeking casual luxury, they could possibly form a relationship with a well-known alcohol brand promoting sophistication and class. This mode of entry would minimize risks and increase Abercrombie and Fitchs adoption into the Australian culture which heavily focuses on drinking. In conclusion; if a strategic alliance could be formed with a well-known alcoholic beverage brand that would significantly increase the rate of adoption of Abercrombie and Fitchs into the Australian culture and clothing market, however if that is not possible the acquisition mode of entry also provides an economically sustainable option.

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** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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5) Marketing Mix Customization


5.1 Standardization vs. Customization
Despite the minimal psychic distance between the U.S and Australia, Abercrombie & Fitch is still required to slightly customize its marketing mix to adhere to the Australian culture to generate market acceptance. Customization prevents Australian consumers from perceiving Abercrombie & Fitch as an ethnocentric American brand that threatens the Australian culture. Only a slight degree of localization is required as this is to prevent deviation away from its original brand values and identity (Refer to Diagram 3).

Diagram 3 Abercrombie & Fitchs position in terms of Standardization vs. Customization

6) Marketing Mix (Product)


6.1 Product Offering
Core Product:
Casual Luxury Clothing

Expected Product: High quality, durability, comfort, brand image of luxury, athleticism and sexuality, social status of being cool
Augmented Product: Loyalty programs, Subscription to A&F updates, In-store experience, Flexible return or exchange policy.

Diagram 4 Abercrombie & Fitchs product offering


** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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6.2 Product Mix


Abercrombie & Fitchs products are categorized under casual luxury, with designs being influenced by its American East Coast traditions and Ivy League heritage to evoke a sense of a preppy and youthful All-American lifestyle (Abercrombie & Fitch co. 2012). In order to increase product relevance within the Australian market, Abercrombie & Fitch should increase the depth of their swimwear and flip flops range to adhere with the strong Australian beach culture (Euromonitor 2012). Abercrombie & Fitch should also increase the depth in mens range of formal wear and dress shirts as research shows that young Australian males are seeking attire that evokes a sense of success (Euromonitor 2012). Abercrombie & Fitchs product mix for the Australian market should be as follows:

Mens
T-shirts Polo shirts Shirt Hoodies & Sweatshirts Sweaters Outerwear Shorts Jeans Sweatpants Pants Swimwear Flip Flops Accessories Underwear Body Care Cologne

Womens
T-shirts and Tank-tops Fashion Tops Shirts Polos Hoodies & Sweatshirts Sweaters Outerwear Shorts Jeans Sweatpants Dresses & Skirts Swimwear Yoga attire Flip Flops Underwear Bodycare & Fragrance

Table 5 Abercrombie & Fitchs product mix

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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6.3 Product Strategy


Co-creation: An Abercrombie & Fitch community website should be developed to allow consumers to co-create new products for the brand. Dover (2011) reports that many global companies experienced international success by co-creating with consumers under the age of 30, which should be highly beneficial for Abercrombie & Fitch as this includes their target market. An online social platform should be developed where consumers create profiles to upload their personal designs for future seasons and comment and rate on other designs. The perks for consumer contribution is that the most highly rated designs will be chosen by Abercrombie & Fitch included in Abercrombie & Fitchs product mix and a certain percentage of profits from that design will be allocated to the designer. The benefits of this strategy are listed in Table 6 below.

Product Strategy Co-creation

Benefits Increased customer loyalty as A&F consumers feel empowered as their contributions and thoughts are being acknowledged by A&F and other consumers. Consumers will perceive higher switching costs to other brands after developing a sense of intimacy with the online community and the brand. Abercrombie & Fitch can reduce R&D costs as consumers will be volunteering to help design. Increase quality of employees as it will be easier to identify top design talents A&F can gain access to consumers personal information and analyse their purchase behaviour without the expense of hiring external research companies.

Table 6 Benefits for Abercrombie & Fitch if Co-creation is utilized

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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6.4 Branding Strategies


It is pivotal for Abercrombie & Fitch to integrate Kapferers Brand Identity Prism into its brand management strategy. Keller (2012) purposes that this model will help Abercrombie & Fitch translate its brand identity to brand image conjured in the minds of its Australian consumers in the most accurate manner possible. A Brand Identity Prism has been developed to prevent positioning strategies to deviate away from Abercrombie & Fitchs brand identity (Refer to Diagram 5). Table 8 consists of the recommended strategies to boost brand awareness and image.

Diagram 5 Brand Identity Prism developed to guide Abercrombie & Fitchs positioning strategies

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Brand Aspect Brand Awareness (Depth) Brand Image (Strength)

Strategy Increase prominence of logo display on Abercrombie & Fitch products Intensive and creative promotional campaigns across broad range of advertising mediums (Refer to Promotion Section). Establish a strategic alliance with Absolut Vodka due to its sophisticated nature, target market of young adults and sex appeal of the brand (Brodrecht 2008). Absolut Vodka can launch an A&F themed bottle, so consumers can recall the A&F brand in alcoholic purchases and consumption situations. Emphasize on the association of A&Fs athleticism due to strong sporting interest and traditions in Australia (Oxford University Press 2010) as it is highly relevant to the target market Incorporate associations of Australian beach culture into the A&F brand through promotional, products and physical strategies to generate brand relevance in Australia. Strengthen connotations of sophistication and luxury through promotional, pricing, product and placement strategies as Australian consumers are increasingly favouring international luxury brands consumption to achieve self-image of success (Euromonitor 2012). Establishing A&Fs main point of difference of being an enticing sex symbol. A&F can borrow the viral fame and sex symbol status of Australian athlete, Michelle Jenneke and endorse her or make her a brand ambassador to strengthen A&Fs associations of sexuality, success and athleticism. (Martinez 2013 Appendix ?) Her Australian heritage will generate greater recognition and acceptance of these associations by Australian consumers.

Brand Awareness (Breadth)

Brand Image (Favourability)

Brand Image (Uniqueness)

Table 7 Reccomended branding strategies for Abercrombie & Fitch

A positioning map was developed to guide A&Fs marketing department to correctly portray and create brand associations for A&F (Refer to Appendix I)

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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6.5 Brand Benefits


If Abercrombie & Fitch implements the aforementioned brand image strategies, it can help its customers achieve the following benefits through the consumption of the A&F brand (Refer to Diagram 6):

Function Benefits: Fashionable, Comfortable and Durable clothes

Symbolic Benefits: User image of sexuality, athleticism, coolness and luxurious

Experential Benefits: Self-confidence boost

Diagram 6 Benefits consumers will receive through the consumption of A&Fs brand

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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7) Marketing Mix (Price)


7.1 Pricing Objectives
1. 2. 3. 4. 5. Gain market share Short run profits Entry Deterrence Product Positioning Quality Assurance

7.2 Pricing Method


It is highly recommended that A&F utilize demand-based pricing for their price determination method. This involves understanding the customers' perceived value of A&Fs offerings and their price sensitivity. Crane (2013) identified the primary driver for determining the best price for A&Fs offering should be the target consumers. This method would allow A&F to determine the best pricing strategy that caters for the consumers' needs, which would entail a higher chance of profit maximization once the brand is established.

7.3 Pricing Strategies


The recommended pricing strategy would be price skimming; this involves A&F charging the highest possible price that its target market is willing to pay, based on their perceived value. The choice behind price skimming is justified by the following factors: A report by Citigroup (2011) identified that the consumers within the Australian clothing retail market are price-inelastic. This would allow A&F to charge premium pricing and set high profit margins to cover the initial expenses of market entry into Australia through acquisition or forming a strategic alliance. Consumers usually associate expensive products with a sense of high quality, especially in scenarios when they are new to a brand (Pride et al. 2012). This strategy reinforces the message that A&F uses high quality material to produce their products. Consumers also associate high prices with a sense of prestige which would befit A&Fs intended positioning of being luxurious. Table 8 Justification behind the price skimming strategy
** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan It is of great importance for A&F to note that price is the least effective strategy in the long run as competitors can react more readily to price than the augmented features of A&Fs product range. A&F should not lower prices and engage in price wars, as it would tarnish the luxury perception of the brand but will also lower net profits.

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** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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8) Marketing Mix (Promotion)


8.1 Promotion Objectives
1. Increase brand awareness 2. Stimulate consumer demand for A&F products 3. Minimize deviated interpretation of brand image 4. Identifying potential consumers 5. Encourage product trials

8.2 Integrated Marketing Communications


In order to achieve the aforementioned promotional objectives, Integrated Marketing Communications (IMC) should be utilised which involves using a variety of promotional methods to reinforce each other. The IMC will also ensure maximum informational and persuasive impact on its target audience (Fletcher & Crawford 2011). The recommended promotional mix is listed in Table 9. Promotional Platforms for A&Fs promotional activities Outdoor advertising and billboards Broadcast television Cable television YouTube video advertisements Social Media : Facebook , Twitter, Instagram Magazines Guerrilla Marketing

Table 9 Recommended promotional mix for A&F

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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8.3 Message Content


The key to a successful IMC campaign lies within its message content, as it must achieve synergy in the brands positioning message across all promotional platforms. Based on the Brand Identity Prism that was developed for A&F (Diagram 5), the recommended message content that A&Fs promotional activities should convey is:

Abercrombie & Fitch is an exclusive club for individuals who are successful, admirable young, and aesthetically attractive.
In order to effectively convey this message in Australia, A&F must consider Australias communication factors (see below) to prevent any noise from occurring during the marketing process. Australia is a masculine and highly individualistic culture (refer to Appendix B) that engages in low context (Barrett 2006) communication styles. Gundlach (2013) identified the factors for A&F to effectively communicate to Australia consumers: Focus on the verbal or textual element within the advertisement Verbal element should be voiced and delivered in a blatant and alpha-male-like manner. Explicitly communicate on A&Fs brand benefits (refer to Diagram 6) which will boost the consumers self-esteem Visual elements should clearly define gender roles

To further enhance the effectiveness of A&Fs promotional message content, the Purchase Motivation Framework and the Elaboration Likelihood Model should be utilised. As the target market actively seeks to be perceived as aesthetically attractive and living a luxurious lifestyle through the consumption of products, the Purchase Motivation Framework identifies this as a positive purchase motivation and recommends the peripheral route of persuasion (Pride et al. 2012). This involves using imagery, symbolism and emotional evoking techniques to persuade the target market of the validity of A&Fs brand positioning and the promise that A&F can deliver what the target market seeks. As A&Fs products can be classified as high involvement due to their expensive nature and associations of high social status, the target market will perceive these products as risky. The Elaboration Likelihood Model recommends utilising the central route of persuasion which uses informational techniques to assure the target market that A&Fs product offering and brand association is worth the price; this technique should be used prevent cognitive dissonance from occurring (Pride et al. 2012).

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan A&F should also communicate the ethical aspect of their brand within the message content, especially regarding their acts of philanthropy, cultural diversity initiatives and environmental sustainability programs. This is to counter-balance any criticism or controversy that may arise from promoting the sexuality aspect of A&Fs positioning but also to shed any profit-oriented corporate associations of A&F.

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8.4 Promotional Frequency Decision

Diagram 7 Exposure Efficiency Model (Pride et al. 2012)

This model suggests two options for frequency of promotional exposures for A&F to advertise in their promotional mix minimum effective frequency and maximum effective frequency. Any exposures beyond n+y will generate negative outcomes for A&Fs brand image. A&F would need to consult professional advertising agencies to determine a numerical value of n and n+y. Type of effective frequency Minimum Effective Frequency (0% n) Maximum Effective Frequency (n n+y ) Activates audience behaviour and receptiveness Most cost-efficient Most effective in igniting purchase behaviour, consumer excitement and acceptance towards a brand High costs Characteristic

Table 10 Characteristics of Effective Frequencies

Fletcher and Crawford (2011) suggest that in order to effectively retain a message in the minds of consumers; A&Fs exposure frequency should be spread across the promotional mix instead of focusing on a few promotional platforms. 17 May 2013

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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8.5 Execution of Conventional Promotional Activities

Promotional Platform Outdoor Advertising / Billboards Cable Television (Foxtel)

Details Place billboard advertisements known traffic congested areas in Australias CBDs Locate the areas of all major Australian universities and colleges and purchase billboard space that is visible en route to the schools. Advertise on major Australian channels such as Channel 7, 9, 10 during prime-time hours of 7:30pm 10:00pm (One 30 seconds advertisement per 2 hours due to costly nature) Increased advertisement frequency on youth-oriented channels such as 7Mate, 11, Go! And Gem during prime-time hours 7:30pm 10:00pm (One 30 seconds advertisement per hour) Emplace advertisements during prime time on fashion and youth oriented channels. Fashion channels include E! Entertainment and Style. Youth-oriented channels include Fox8 and MTV. Utilise YouTubes AdWords programs where A&F can buy popular search words and have its advertisements pop up when users enter them; ability to reach 6 million Australians a month (Lee 2009) Create official accounts on Facebook, Twitter and Instagram for A&F Australia. Encourage users to contribute photos or thoughts that are related to brand associations of luxury, sexiness and success on A&Fs official page. In order to contribute or post on the official social media; users must hash-tag AbercrombieAus. Administrators will decide the best contributions that accurately depict the associations and post it on the official page. Create print-advertisements for both male and female magazines that is fashion and grooming oriented that is catered to our target segment Example: GQ & Mens health for male segment within target market. Cosmopolitan, Vogue, and Cleo for female segment.

Free-To-Air Television

YouTube advertisements Social Media (Facebook, Twitter and Instagram)

Magazines

Table 11 Execution of conventional promotional activities

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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8.6 Execution of Guerrilla Marketing


In the present age where the media environment is highly saturated and consumer attention span is low, Guerrilla marketing is of significant effectiveness due to its rapid ability to spread a message and raise awareness (Cressey 2012). It uses the element of surprise to engage and entertain consumers, and with the help of social media, the engaged consumers will share it within their social network which can result the message being viral. Three strategies have been developed to raise A&Fs brand awareness over the timeline from pre-opening of the flagship stores till opening day.

Diagram 8 Timeline of Guerrilla Marketing Activities from pre-opening to opening day

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

17 May 2013

Abercrombie & Fitch (Australia) Marketing Plan Guerrilla Tactic (Refer to Diagram 8) 1. After the completion of the physical store renovation, A&F should not reveal any external displays around the store that indicates it is an A&F store or provide any media release regarding the store location 2. The tactic would be to play loud clubbing music behind closed doors and emit its signature A&F fragrance around the entrance 3. This would spark curiosity amongst pedestrians who will walk past the closed mystery store; these pedestrian would be tempted to uncover the reasoning behind the music and the random scent 4. Ultimately, what this tactic is trying to achieve is for curious consumers to ask their social networks either through physical or social media means to find out about the identity or brand behind this shop name. This in turn will spark a viral curiosity as to what this store is about. 1. After generating enough curiosity regarding the mystery store, A&F would reveal a curtain-concealed window display section of its flagship store. This window display will only be unveiled during times where is there congested human traffic along the route near the store. 2. The window display will reveal a peep show concept within a 2. Window peeps backdrop that displays A&Fs brand prominently, there will show of topless A&F be 5 physically enticing topless male A&F models posing like male model mannequins, only wearing their signature red A&F sweatpants. 3. The eccentric nature of human beings posing like mannequins and the enticing physical aesthetic of the models will capture the attentions of pedestrians. 4. This will generate viral exposure and brand awareness again as there is a high possibility of many pedestrians taking photos and posting it on various social media and online discussion platforms 3. Top 25 best A&F 1. After brand awareness has been established, A&F will make models from all its media releases regarding the event of having an intimate global stores will pose photo-taking and meet and greet session with the Top 25 in front of the Abercrombie male models on the opening day (refer to Australian store on Diagram 9) opening day for a 2. This will ensure media coverage of the opening day especially photo taking session with the hype that step 1 and 2 intends to generate but more importantly, this will bring in curious and interested consumers into the physical store to meet the idol-like Abercrombie & Fitch models and engage in first point of contact with the A&F products Table 12 Execution of Guerrilla promotional activities Step by Step Execution Outline

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1.Closed store playing loud club music and emitting A&Fs signature scent

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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9) Marketing Mix (Place)


As our target market is becoming increasingly time-restricted due to their employment or academic responsibilities, it is important for A&F to incorporate the following factor into their place strategies (ACRS 2010). A&Fs distribution channels should be structured to create superior perceived value over its competition and for management to have a strong degree of control over it. A&Fs channel structure will aim to create value for the target market through the reduction of: 1. Opportunity / Time costs to research or obtain A&F products. 2. Physical effort to purchase A&F products

9.1 Channel Length & Intensity


As indicated by the market analysis of Australia and suggested mode of entry (Refer to section 4.7); A&F should acquire a contract with a third-party clothing production facility in Australia because of the costs and time constraints of importing products from the U.S. This will also prevent any supply shortages to occur if importing delay occurs. A&F headquarters (in the US) would only need to transfer intellectual property and designs to this factory online, for production to proceed. However it is important for A&F to dispatch a management team to collaborate with the production facility to ensure quality control and maintenance of the consistency of product offerings that would not deviate away from A&Fs brand values. A&Fs recommended distribution channel is structured to be short to reinforce managements autocratic desire for quality control and A&F can provide high service components to reduce target consumers cognitive dissonance during the post-purchase stage.

Abercrombie & Fitch co. Headquarters

Local clothing production facility

Abercrombie & Fitch outlets in Australia

Consumers

Diagram 9 Recommended channel length for A&F.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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It is recommended for A&F to implement an exclusive distribution strategy of implementing a few flagship stores in the metropolitan areas of Melbourne and Sydney in Australia. The method of distribution will fortify A&Fs intended brand positioning of prestige and luxury. Melbourne and Sydney should be chosen for the location of A&F flagship stores as many Australians believe that both cities share the fashion-capital status (Joye 2012). Research by ACRS (2010) further supports this notion as it identified that consumers in Melbourne and Sydney are more likely to spend more of their disposable income on luxury fashion items. The metropolitan area should be of geographical focus because of the high levels of human traffic and ease of accessibility for consumers due to the intensity of public transport available in the city.

9.2 Multi-Channel Distribution


A&F is required to provide distribution channels that is beyond the physical store as a publication by McKinsey & Company (2009) indicated that consumers who shop for fashion apparels in a variety of channels spend about four times more annually than those who just shop in one (Refer to Diagram 10).

Diagram 10 Research on average Annual Dollar spent per customer by channels (McKinsey & Company 2009).

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Based on aforementioned information, it is pivotal for A&F implement an online store platform that is exclusive for Australian consumers which has the following features: User friendly product range browser which provides information regarding product aesthetics, materials used, price and availability. News updates regarding any A&F promotions Platform for sales or product enquiry Secure online payment system that accepts a range of payment methods Company information and context Store locator Quick and free delivery service for the purchased goods online. Warranty and after-sales support section

It is also advisable for A&F to create a mobile phone application extension that provide the same aforementioned features to its distribution channels as more than 10 million Australians are smartphone users (Moses 2012). This mobile application should be exclusively targeted to Apple IOS and Android phones as it is the two most commonly used operating system (refer to Appendix J). A&F could look to provide extra value to its consumers by creating an innovative payment system for this mobile application that is linked to the users mobile banking application. The online store platform and mobile application are of paramount importance to A&Fs success and competitive edge , this is because many retail stores in the Australian clothing industry are increasingly inclining towards online retailing in the near future as identified in Australias market analysis (refer to Section 4.1)

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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10) Marketing Mix (Physical Evidence & People)


A report by University of Oregon Investment Group (2012) identified that A&Fs key marketing strategy relies on its in-store experience; every aspect within the store (scent, music, lighting, furnishing and sales associates) is meticulously controlled to communicate its brand identity and values. As every A&F store around the globe consists of standardized interior design and instore experience, A&F stores in Australia must follow suit to strengthen A&Fs brand positioning globally. It should be noted that the people aspect of A&Fs marketing mix is incorporated with the physical evidence aspect to fortify their in-store experience. A&Fs instore experience is a form of sensory branding that utilizes music, lighting, interior design, scent and service delivery of its model sales associates to communicate its brand image to consumers and to provide sensory and emotional gratification.

Diagram 11 Exterior design of an A&F store, (Selldorf Architects 2011) The A&F stores in Australia should comply with A&Fs global architecture standards which strictly follow a classic yet contemporary theme (Elemental Design 2007). Selldorf Architects (2011), the company who designed the U.S flagship stores, identified that the exterior design of the store must be of steel and glass faade which contains wood louvered shutters (Refer to Diagram 11). This design aims to evoke a sense of luxury and aesthetic appeal which aligns with the brands positioning.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Diagram 12 Interior design of an A&F store, (Selldorf Architects 2011) There are two important features that A&F Australia should incorporate within the store dim lighting and upbeat clubbing music. The faint glimmers of atmospheric lighting (Elemental Design 2007) serves to entice consumers to enter the store because of the intimacy that it creates and to suggest sexual connotations that the A&F brand carries to consumers (Refer to Diagram 12). The upbeat background music within the store is specially chosen to heighten consumers experiential benefits and favourability towards A&F; as research by Zwaag, Westerink and Broek (2011) identified that songs consisting of a fast-paced tempo evokes feelings of arousal and confidence within people. The people aspect of A&Fs marketing mix revolves around the model sales associates and their service delivery. These models are often idolized by many due to their chiselled appearance, optimal physical traits and characteristics of being well-versed, amicable and attentive (Elemental Design 2007). They are the A&Fs brand ambassadors who are supposed to symbolize the ideals of coolness, sexual enticement and status hegemony. Therefore it is imperative for these sales associates to be efficient in their service delivery and enthusiastic in striking conversations with consumers. Consumers will gain an experiential sensation of social validation and confidence as these idol-like figures are initiating sincere conversations with them.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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11) Implementation
11.1 Timeline of Objectives
Due to the current favourable economic conditions, particularly a high Australian GDP (Refer to Appendix A), and few international competitors present in the Australian clothing market (see Market Analysis); the sooner A&F enter, the quicker they could fortify their place within the market and withstand any future economic problems or strong competitiveness in the Australian market. Similarly, reported by IBIS World (2013), is that the Australian retail property industry is facing low demands as a result of weak consumer confidence; therefore retail operators are expected to forego short-term profit. This analysis reinforces the concept that the sooner A&F enter the Australian market the better, with IBIS World (2013) expecting the industry to grow at a compound annual rate of 3.5% over the five years through 2017-18. Marketing Mix Factor Place Objectives Acquisition of a contract with a third-party clothing manufacturer, that is capable of meeting the time, quality and design standards of A&F co. Acquisition of a retail store in the metropolitan areas of Melbourne and Sydney Development of an functional online store with required features (see Place implementation section) Develop a mobile phone application for smart-phone users with the same features as the online store Increase the range of swimwear and flip-flop products Increase the range of men's formal wear and dress shirt products Develop a co-creation community on the A&F website Increase prominence of A&F logo on products Aid Absolut Vodka in the bottle design of an A&F themed Absolut Vodka drink Endorsement of Michelle Jenneke as the Australian brand ambassador Timeline The filing and servicing of a commercial contract takes 7 days (see Economic Analysis), however the searching for a suitable third-party manufacturer and retail store may take weeks. Therefore allow (=) at least 30 days Currently having a US online and mobile store with the desired features, transference to an Australian version should be quick. = 14 days

Product

Dependent on the third-party manufacturer adhering to the time constraints of A&F's contract, the releasing of extended product ranges should be the standard time. = 14 days for each product line Development of a co-creation community online requires technological ability. =14 days Contractual arrangements with Michelle Jenneke and Absolut Vodka. = 7 days for each contract Developing a bottle design and suitable endorsement campaign. = 7 days each 17 May 2013

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

Abercrombie & Fitch (Australia) Marketing Plan Implementation of the price skimming strategy, developed from the demand-based pricing method Promotion Use of imagery, symbolism and emotion to reinforce the validity of A&F's brand mantra Use of outdoor billboards, television (free and cable), YouTube, Social Media and Magazines to increase brand acceptance and igniting purchase behaviours in consumers Use of guerrilla marketing to increase hype around the opening of an A&F store, and increase interactivity with consumers Table 13 Timeline for marketing mix implementation Price Ability to set the prices of products based on competitor prices requires little research. = 1 day

35

Develop creative advertisements for each of the promotional mediums desired, with the use of imagery, symbolism and emotion techniques. = at least 30 days Guerrilla marketing technique requires patience to build hype. = at least 21 days

11.2 Deadlines of launch


Based on all of the factors above, A&F could enter into the Australian market in around 200 days, with production and retail sales launching within a year of the decision to enter.

11.3 Results monitoring


The public availability of annual reports allows A&F to compare annual net sales to international competitors within the Australian market, therefore deducing estimated market share. Internally, A&F would have many analytical staff members capable of monitoring results to determine the profitability of the Australian market currently and their expected future growth.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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11.4 Contingency Plan if failure occurs


If failure of the proposed entry occurs many steps could be taken to reduce the possibility of complete withdrawal from the Australian market; Reduce or terminate all promotional activities to redirect funds towards researching clothing trends and the designing of successful product lines Slightly lower the price, in alliance with the demand-based pricing, to attract price-sensitive consumers Research into the use of another, cheaper, third-party manufacturer Increase after-marketing efforts to assure consumers of the products' functional, symbolic and experiential benefits to increase repeated purchases and consumer loyalty

11.5 Future Expectations


With entry into the Australian market, it is expected that A&F will strongly establish themselves as an international luxury brand and resonate with consumers' desire for casual luxury if marketing operations are adhered to this marketing plan.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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12) Reference
A&F Cares 2013, Abercrombie & Fitch co., New York viewed 9 May 2013,
<http://www.anfcares.org/>

Abercrombie & Fitch 2013, Abercrombie & Fitch co., New York viewed 9 May 2013, <http://www.abercrombie.com/webapp/wcs/stores/servlet/StoreLocator?catalogId=10901&l
angId=-1&storeId=11203>

Abercrombie & Fitch Careers 2013, Abercrombie & Fitch co., New York viewed 9 May 2013, <http://www.anfcareers.com/Page/Diversity> Abercrombie & Fitch co. 2012, Annual Report 2012, Abercrombie & Fitch co., viewed 12 May 2013, <http://phx.corporateir.net/External.File?item=UGFyZW50SUQ9NDk5MzUwfENoaWxkSUQ9NTM5MTE2fFR5c GU9MQ==&t=1> ACRS 2010, Australian Consumer Trends, The Australian Centre For Retail Studies, Viewed 15 May 2013 Aeropostale 2013, Aeropostale Inc, New York viewed 12 May 2013, <http://www.aeropostale.com> American Eagle Outfitters 2013, American Eagle Outfitters, Pennsylvania viewed 11 May 2013, <http://www.ae.com> Brodrecht, R 2008, Absolut, Vodka Buzz, Viewed 10 May 2013, <http://vodkabuzz.com/vodkas/absolut/> Citigroup 2011, Whats In Store? Issue 34: The Mystery Phenomenon of Price, Citigroup, Viewed 15 May 2013, < http://www.scca.org.au/Pdf%20links/2011PDFLinks/WISIssue%2034-Price%20Inflation%20Measures-MG-110210.pdf> Cressey, A 2012, Why Guerrilla Marketing Is Still Relevant in 2012? ,Branding Magazine, Viewed 15 May 2013, <http://www.brandingmagazine.com/2012/03/05/why-guerilla-marketing-is-stillrelevant-in-2012/> Doing Business 2013, Ease of Doing Business in Australia, The World Bank, viewed 11 May 2013, <http://doingbusiness.org/data/exploreeconomies/australia/> Doing Business 2013, Ease of Doing Business in United States, The World Bank, viewed 11 May 2013, <http://doingbusiness.org/data/exploreeconomies/united-states/>

Elemental Design 2007, Brand Communications at its best, Abercrombie & Fitch, Elemental Design, United Kingdom, viewed 4 May 2013, <http://www.elemental.co.uk/newsletters/news_01_07/PDFS/brand.pdf>
Euromonitor 2012, Distribution of Retailing Options in the Clothes Industry, Euromonitor International, Viewed 9 May 2013
** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Abercrombie & Fitch (Australia) Marketing Plan Euromonitor 2012, Consumer Lifestyles in Australia, Euromonitor International, Viewed 11 May 2013

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Farfan, B 2013, Quotations from Mike Jeffries, Controversial CEO of Abercrombie & Fitch Stores, About.com, USA, viewed 9 May 2013, <http://retailindustry.about.com/od/frontlinemanagement/a/AbercrombieFitchMikeJeffriesqu otes.htm>
Fletcher, R & Crawford, H 2012, International Marketing (An Asia-Pacific Perspective Edition) , Pearson Australia, New South Wales. Gundlach, H 2013, Communication Decisions, Lecture notes distributed in Global Marketing at The University of Melbourne, Parkville, Viewed 11 May 2013 Gundlach, H 2013, Market Entry, Lecture notes distributed in Global Marketing at The University of Melbourne, Parkville, Viewed 11 May 2013

Hines, A 2012, Abercrombie & Fitch CEOs Corporate Jet Rulebook Reveals Cult-Like Secret World, The Huffington Post, 18 October, viewed 9 May 2013, <http://www.huffingtonpost.com/2012/10/18/abercrombie-fitch-ceo-corporate-jetrulebook_n_1980960.html>
Hofstede, G 2013, National Cultures (Countries), The Hofstede Centre, Viewed 11 May 2013, <http://geert-hofstede.com/australia.html >

Hoovers 2013, Abercrombie & Fitch co. Company Record, Hoovers Inc, Texas, viewed 5 May 2013, <http://cobrands.hoovers.com.ezp.lib.unimelb.edu.au/company/Abercrombie__Fitch_Co/hyr kif-1-1njhxf.html>
IBIS World 2013, Clothing Retailing in Australia, IBIS World, Viewed 11 May 2013 Joye, P 2012, Melbourne chic v Sydney showy, The Sydney Morning Herald, Viewed 14 May 2013 Keller, K 2012, Strategic Brand Management, Pearson Education Limited, New Jersey Lee, J 2009, YouTube introduces search keyword advertising in Australia, The Sydney Morning Herald, Viewed 12 May 2013, < http://www.smh.com.au/technology/biz-tech/youtubeintroduces-search-keyword-advertising-in-australia-20091029-hlv0.html> Martinez, F 2013, How the Internet made Michelle Jenneke an international sex symbol , The Daily Dot, Viewed 13 May 2013, <http://www.dailydot.com/entertainment/michelle-jennekesports-illustrated-cover/> McKinsey & Company 2009, The Promise of Multichannel Retailing, McKinsey & Company, Viewed 14 May 2013, <http://www.mckinsey.com/insights/consumer_and_retail/the_promise_of_multichannel_reta iling>

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

17 May 2013

Abercrombie & Fitch (Australia) Marketing Plan Oxford University Press 2010, Sport and Physical Activity in Australian Society, Oxford University Press, Viewed 14 May 2013, <http://www.oup.com.au/titles/no_class/9780195573862/08_RUS_QSPE_3pp.pdf> Pride, W, Ferrell, O, Lukas, B, Schembri, S & Niininen, O 2012, Marketing Principles (Asia Pacific Edition), South-Western, Cengage Learning, Melbourne.

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Reuters 2013, Company Profile: Abercrombie & Fitch Co (ANF), Thomson Reuters, viewed 10 May 2013, <http://www.reuters.com/finance/stocks/companyProfile?symbol=ANF>
Saner, E 2012, Abercrombie & Fitch: for beautiful people only, The Guardian , Viewed 13 May 2013, <http://www.guardian.co.uk/fashion/2012/apr/28/abercrombie-fitch-savile-row > Selldorf Architects, 2011, Selldorf Architects, Manhattan viewed 15 May 2013, <http://www.selldorf.com/projects/commercial/abercrombie-and-fitch-flagship-stores/> University of Oregon Investment Group 2009, Abercrombie & Fitch Report, University of Oregon, Viewed 12 May 2013 Zwaag, M, Westerink, J, Broek, E 2011, Emotional and psychophysiological responses to tempo,mode and percussiveness, Musica Scientiae, vol.15, no.2, pp.250-269

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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13) Appendix
Appendix A
Economic (PEST) The Australian clothing retail industry has struggled recently with cautious consumer spending, lower prices, higher rents and the global financial crisis, which is evident in the drop in revenue by 2.2% (IBIS World, 2013). However still boasting industry revenue of $12.2 billion and an expected annual growth of 1.1% until 2018, to reach $12.9 billion revenue, the industry remains a highly profitable and sustainable market for Abercrombie and Fitch to enter into. Australias is currently experiencing an all-time high in its GDP, its economic prosperity and strength is of a beckoning nature as it has experienced an exponential increase in GDP since 2004 (Refer to Figure 1). This indicates that there a high levels of consumer sentiment and consumption, economic stability and low employment rates which provides A&F an enticing factor to enter the market. Australia is also ranked tenth in the world for conducting business within (Doing Business Australia, 2013). Table 14 outlines favourable characteristics to expand into Australia: Category of Business Customer Income Starting a Business Construction Permits Gaining Electricity Registering Property Gaining Credit Paying Taxes Import Costs Export Costs (from US) World Ranking High 2nd 11th 36th 37th 4th 48th 44th 22nd Details US$ 65,477 GNI per capita 2 procedures, 2 days, 0.7% income cost 11 procedures, 112 days, 13.4% income cost 5 procedures, 75 days, 8.7% income cost 5 procedures, 5 days, 5.1% income cost Legal rights of the Business = 10/10 11 payments per year, 47.5% of profit 7 documents, 8 days, US$1,120 per container 4 documents, 6 days, US$1,090 per container

Table 14 -Ease of Doing Business in Australia (Doing Business Australia & United States, 2013)

As there are 23 procedures and 194 days are required to complete the registration of a new retail store, its development in a suitable location in Australia would be a very costly and lengthy process. Therefore the acquisition of an established property would be much more time efficient and cheaper, but it may not have the internal store layout or location which A&F desires. 17 May 2013

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

Abercrombie & Fitch (Australia) Marketing Plan The other economic decision is for Abercrombie and Fitch to import their products from the US to the Australian stores, or produce them locally using an acquired distribution channel that are able to produce clothing designs sent to them from the US headquarters. Since the exportation and importation processes require 11 documents to be completed, 14 days for quarantine inspection and a total of US$2,210 per container which does not include the time and costs for cargo transport between the countries, it would be much more cost efficient to use the local distribution networks, with local materials, and ensure that they follow the designs sent to them online.

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Figure 1 Australias GDP, Source: http://www.tradingeconomics.com/australia/gdp

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Appendix B
Social (PEST)

Figure 2 - Hofstedes Cultural Dimensions comparing Australia & the US (Hofstede Centre, 2013) As shown in Figure 2 (above), Australia and the US both have; low power distances giving informal communication methods and accessible superiors, highly individualistic cultures, considerable masculine societies with their competitive natures, average uncertainty avoidances giving relaxed attitudes and acceptance of new ideas, and short-term orientations providing a drive for consumers to have quick and successful results (Hofstede Centre, 2013). From this analysis, Abercrombie and Fitch can deduce that their success within the US market and those consumer cultural preferences will likely correlate to the Australian market, therefore providing further encouragement for market entry because of the minimal psychic distance and changes needed to adapt to the Australian culture.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Appendix C
Technological (PEST)

Figure 3- Percentage of Australian Sales for each Clothing Retail Option (Euromonitor, 2012) As shown in Figure 3 (above), around 86% of Australian clothing sales are created through retail stores and specialty good retailers (store-based, non-grocery, specialist, and mixed), with only 7% through mass merchandisers such as Kmart and Target, 3% is through department stores such as Myer and David Jones, and only around 4% is done online (Euromonitor, 2012). There has been a 4.3% increase in online retailing within the Australian market over the last 5 years and it is expected to increase further in the near future (Euromonitor, 2013), therefore the establishment of an online Australian store that provides consumers with direct access to in-store products, and efficient local shipping, will be critical to Abercrombie and Fitchs success.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Appendix D
Industry Analysis: Despite the existence of many threats in the Australian Clothing Industry, as seen in Table 1, most can be significantly reduced to give Abercrombie and Fitch a viable market to enter. Any profitable market it is expected to contain many competitors, however Abercrombie and Fitch can differentiate themselves from competitors and substitutes by the uniqueness of their casual luxury products. Reinforcing the strong brand associations within consumers minds, of Abercrombie and Fitch to casual luxury, the product differentiation, protectability and importance of the brand to consumers can all be dramatically increased. Although the threat of new entrants is high, only a few international brands (ZARA, Topshop, Gap) have established themselves within the market, so there is still a large opportunity for Abercrombie and Fitch to firmly establish a market share before the entry of many other brands. Maintaining the idea of Abercrombie and Fitch acquiring a local distribution network of suppliers for local production in the Australian market, is the fact that supplier power is low giving an ease of switching to a new Melbourne supplier if there are any disagreements.

Appendix E
Competitor Analysis: As Aeropostale, American Eagle Outfitters and Abercrombie and Fitch all strongly compete within the US, Canadian and Puerto Rico markets, using significant marketing and advertisement costs to gain market share, Abercrombie and Fitch should use a bypass and position defence strategy and enter the Australian market. By diverting efforts to another market, Abercrombie and Fitch avoid the potential wastage of funds in attempting to gain market share off of Aeropostale or American Eagle Outfitters in the US, when they could be gaining profits in another market that has an unmet need for casual luxury. By entering the market before its competitors, Abercrombie & Fitch can achieve first movers advantage and experience the benefits of establishing a dominating market presence, creating high barriers of entry for Aeropostale and American eagle and most importantly develop a positive consumer bias towards Abercrombie & Fitch because of its first mover status.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Appendix F
Consumer Analysis: A recent study on consumer lifestyles in Australia have shown that main streets and shopping centers are the main areas of clothing retail sales (Euromonitor, 2012), and Australian women spent $396 per capita on clothes in 2011. Of those women, $29 per capita was spent on swimwear because of Australias large beach culture. Meanwhile Australian men pride themselves on being casual and laidback, resulting in $37.40 per capita spent on jeans, but also seeking the appearance of success which accounts for their continually purchasing of dress shirts and formal wear (Euromonitor, April 2012). The research produced by Euromonitor (2012), suggests that Australians are not culturally inclined towards the concept of luxury but are becoming more sophisticated due to increasing disposable income, which has entailed in an increase in demand for international luxury brands of late. All of these factors would aid the adoption of Abercrombie and Fitch into the Australian culture and result in a significantly profitable section of the market share.

Appendix G
Segmentation, Targeting & Positioning A segmentation analysis by IBISWorld (2013) reports that the segment of 14 28 year olds represent the largest portion of consumers within the Australian clothing retail industry as they consume 39% of sales; the analysis also forecasted an increase of consumption levels in the near future as this segment will be entering into the workforce and earning a larger disposable income. Based on this analysis, Abercrombie & Fitch should target this segment based on its potential profitability but also the fact that it is the same target demographic group of 18 22 year olds who seeks aesthetic attractiveness and a casual yet luxurious lifestyle in its U.S home market (Saner, 2012). This is highly advantageous for Abercrombie & Fitch as they can transfer their experience and knowledge of expertly communicating and connecting with to its target demographic in the U.S onto this target segment in Australia. With this advantage and a slight alteration of the marketing mix to adhere to the needs of the target segment, Abercrombie & Fitch can easily achieve brand salience and resonance amongst this profitable segment.

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Appendix H
SWOT Analysis: The analysis of Abercrombie and Fitch, seen in Diagram 1, provided many key insights to the challenges facing the brand as well as the opportunities that they are able to capitalize on if they enter the Australian market. Having many negative brand associations in the US, with many legal cases, and a unstable market share due to the instability of the US economy affecting consumers willingness to purchase luxury goods, it would be wise for Abercrombie and Fitch to divert funds to a more stable economy that doesnt have those strong negative associations. Competitively, the sooner Abercrombie and Fitch enter the Australian market the better, because of the increasing strength of other international clothing retail brands such as ZARA, Topshop and Gap as well the threat of its main US competitors, Aeropostale and American Eagle Outfitters, entering the market and establishing a market share through a similar brand mantra. Finally, Abercrombie and Fitch already have a subsidiary brand, in Gilly Hicks in Sydney, that would be able to provide information on Australian consumers and aid in the development of their brand within the Melbourne market, and they already have strong brand equity in Australia so limited marketing would need to be carried out to attract consumers.

Appendix I
Positioning Map

Figure 4- Positioning Map for A&F 17 May 2013

** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

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Appendix J
Multi-Channel Distribution:

Figure 5-Top 8 Mobile Operating Systems in Australia from Feb 2012 Feb 2013, Source: http://www.egov.vic.gov.au/focus-on-countries/australia/trends-and-issuesaustralia/statistics-australia/mobile-statistics-for-australia-february-2012-february2013.html

Appendix K

Picture of A&F Singapores successful meet and greet session with the models, Source: http://designyoutrust.com/2011/12/abercrombie-fitch-models-go-shirtless-forsingapore-store-opening/
** The subsidiary brand, Abercrombie & Fitch will be denoted as A&F in the following marketing plan to avoid confusion with its parent company of Abercrombie & Fitch co.

17 May 2013