Research Topics: LVMH Case Studies

Strategic Marketing Management of Moët Hennessy – Louis Vuitton (LVMH)

Strategic Marketing Management of Moët Hennessy – Louis Vuitton (LVMH)   Executive Summary             The current outstanding performance of Moët Hennessy – Louis Vuitton or LVMH in the international marketplace necessitates effective marketing management strategy to maintain its competitive position. Also, the continuous growth in the sales and profits of the Company supported by its existing strengths and competencies needs to be protected from harmful business trends that may affect its constant development. Thus, there is a need to come up with practical and valuable strategies that will sustain market performance. In this report, there are three objectives namely: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Objective 1.   To maintain the continuous increase in sales and surpass last year total revenue. </li> </ul>   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Objective 2.   To strengthen social responsibility and environmental protection in terms of design and manufacturing of products. </li> </ul>   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Objective 3.   To uphold the luxurious image of the brand and decrease the cases of counterfeiting. </li> </ul>   Provided by these objectives, there are various strategies that are planned to be implemented like: for O1, marketing strategy through increased research and development (R&D) in market research, segmentation, and marketing mix; for o2, marketing communications strategies aside from advertising such as sponsorship and public relations; and for O3, brand development strategy focusing on innovative and hardly imitable product line. The implementations of these strategies are dictated by an individualized action plan. Further, the projected profits are undetermined yet positively established in significant percentage while losses are considered negligible granted that these strategies are properly executed. There are also controlling mechanisms that will regulate the implementation of these strategies such as feedback system, evaluation process, and performance objectives,   Analysis of Current Situation             Considered as world’s leading luxury goods company and home of most expensive and sought after brands, Moët Hennessy – Louis Vuitton or LVMH[1] remarkably established its upscale market position since its was founded in 1987. This French holding company consists of over 60 globally celebrated brands in five key sectors in which their products and services are categorically grouped namely Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics, Watches & Jewelry, and Selective Retailing. In their recently publicised revenue report for the third quarter (Q3) this year, LVMH continuously develop and sustain its global market position particularly in Europe, US and Asia in terms of financial performance. The past three year’s revenue signifies growth and recorded €15, 306 million in 2006, €13, 910 million and €12, 481 million in 2005 and 2004 respectively. During the third quarter of this year, LVMH reached €4, 034 million and added with the two previous quarters with €3, 804 million in Q1 and €3, 608 million in Q2 will result to a total of €11, 446 million. The thriving financial and market performance of LVMH is credited to the 61, 000 employees worldwide and a retail network of more than 1, 800 stores.             In details, the Q3 performance of the Company emphasizes on the following highlights:   Essential to the concept of a luxury product is a degree of scarcity which in turn justifies the high price (2004). Today, LVMH incessantly excel in the chosen field of industry by using its brand development strategy and uninterrupted expansion of its international retail network.   SWOT Analysis Strengths <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> LVMH with its mission to symbolize the most sophisticated qualities of Western “Art de Vivre” around the world with both creativity and elegance as battle cry, their products and the cultural values they embody combine both tradition and innovation and stimulate dream and fantasy (LVMH 2007).</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> In terms of brand identity, LVMH is the world’s largest business firm that caters to luxury items. Exclusivity and degree of scarcity determines LVMH products from the rest of its competitors and justifies its high prices.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Management wise, Bernard Ault’s leadership and management technique ( 2001) and focus on the fundamental values shared by all Group stakeholders such as (1) Be creative and innovate; (2) Aim for product excellence; (3) Bolster the image of our brands with passionate determination; (4) Act as entrepreneurs; and (5) Strive to be the best in all we do (LVHM 2007) is equated to corporate success.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The ability of the company to go with technological innovation and outstanding research and development (R&D) efforts in relation to development of new products (e.g. cosmetics) is also considered as strength.</li> </ul> Weaknesses <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> LVMH distinctively have high prices on its products and brands and also in its raw materials needed.</li> </ul> ·         Gendered marketing may also serve as a weakness for gender hinders the purchasing decisions of the potential clients (e.g. affluent women as clients). <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%"> A large marketing budget to develop brand awareness in the international markets is at hand. </li> <li class="MsoNormal" style="line-height: 200%"> The struggle to continually appear to be cutting edge in the chosen industry is a pressing issue.</li> </ul> Opportunities <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The growing international market for LVMH brand suggests the opportunity to expand its business operations yet sticking to the company’s identified corporate competitive advantage. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> With the continuous innovation and the support that it shows to different managerial and environmental, and more importantly societal and humanitarian issues and concerns, LVMH can gain loyalty from their customers to make them more competitive in the marketplace.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The continuous initiatives of LVMH in diversification of its revenue resources also open new opportunities to make the business become stronger to outgrow all its rival companies.</li> </ul> Threats <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> The proliferation of counterfeiting poses the biggest challenge to LVMH. </li> </ul> ·         The increasing advocacy against the use of animal skins in products posed a great risk especially on Fashion & Leather Goods. ·         The expansion of its operations to other areas means adjusting to the trade policies and political problems of the locality. ·         In terms of production and manufacturing, LVMH may encounter cost inefficiency in its procedures. ·         Other threat includes the changes that might occur within the area of operations such as economic changes, varying customer preferences, changing lifestyles, and other relevant factors. <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Competition defined by new brand products and prices is always present.</li> </ul> Objectives <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> To maintain the continuous increase in sales and surpass last year total revenue.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> To strengthen social responsibility and environmental protection in terms of design and manufacturing of products. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> To uphold the luxurious image of the brand and decrease the cases of counterfeiting.</li> </ul>             Strategies              (2000) defined strategy as a plan that combines all the essential elements of an organization including goals, policies, decisions and sequences of action to work as cohesive whole and implemented to any of the functional areas of management such as production, financial, marketing, personnel and corporate sectors. For the given objectives, the following strategies are considered: Objective 1             The need to innovate and create new products that will cater to the varying needs of the market is among the strategies that are being considered. LVMH is determined for artistic creativity and technological innovation. This is done through the impeccable research and development (R&D) initiatives of the Company and its people. The structured method of marketing research has enabled countless of producers and consumers alike to better understand their relationship (1995;2004). Generally, the role of marketing research in every business environment is to provide information that is necessary in the decision-making processes for the development and benefit of the company. Market analysis focusing on consumer, demographics, and geographic considerations must be established. Another strategy is market segmentation. The basic idea in marketing is the definition of the target market. In marketing LVMH brands, the management should fully recognizes that buyers of any product or service category need, desire, want and expect different performance characteristics from products or services in the category. Market segmentation recognizes that buyers of any product or service category need, desire, want and expect different performance characteristics from products or services in the category (1998). It helps the company to position the product properly and prepare marketing strategies to satisfy a more focused range of consumer needs and wants (1988). This is a product of market research and an important factor in effectively using limited marketing resources, identifying unique market niches, improving profitability and helping to retain consumer loyalty. The basis for the market categorizations of clients and customers include the demographic characteristics, the geographical location, consumer behavior, and psychographic characterizations (2002) as all these are technically included in market research and development (R&D) actions and initiatives.             Utilizing the marketing mix is also seen of strategic importance. The marketing mix principles is controllable variable that is why it can be adjusted on a frequent basis to meet the changing needs of the target market and other dynamics of marketing environment (1991). For the case of LVMH, they already have strong and competitive product line as well as responsively effective promotional strategies. The management should pay particular attention on the issue of price and place of distribution. LVMH is identified for its high prices on products, granted that it is a luxury brand; there is a need to device an appropriate pricing strategy. In place of distribution, as LVMH continuously increases its retail network, there should be a clear market positioning standards. All these suggestions are inherent to the results of research and development (R&D) efforts.   Objective 2             The social responsibility and environmental protection of LVMH is definite and long-standing one. However, with the increasing advocacy on animal welfare and rights that poses a great danger on one of its products (Fashion & Leader Goods), LVMH needs to strengthen these two important aspects of corporate management. This could be done through a definitive marketing communications strategy. Before the consideration of marketing communications tool to be used, it is recognized that LVMH already uses advertising (traditional or online) as primary marketing communications strategy. Thus, the strategies to be used on these two key issues are no longer advertising. In social responsibility, the management is recommended to increase participation on relevant socio-cultural activities like art exposition, youth programmes, contests, and humanitarian and public health initiatives. This could be done through sponsorship. Marketing-related sponsorships are closer to advertising than to any other marketing communications instrument. The main objectives of sponsorship are similar to those of advertising (e. to build brand awareness for new and existing products in the short and the long run, to build and improve the brand or company image, and to reinforce brand familiarity and use). Although sponsorship, just like advertising, can be used to serve short-term goals, like product trial and market penetration, its main strength lies in the long-term support of brand awareness and brand image, and other IMC tools are needed to stimulate buying behavior in the short run (1997). In environmental protection, the management should launch a global campaign that reinforces its long withstanding protection to the environment and life. This is to be done using sponsorship and public relations. Similar with the actions on social responsibility, the sponsorship to relevant environmental activities is simple yet strategically acceptable and yield positive results. Public relations, on the other hand, mostly and directly handle the task of image building. Although advertisers use mediums to instill their planned image to the society, public relation officers literally publicize every good deed the organization did, face to face with the audience. According to Lamb and Mckee (2005, p. 1), it provides the opportunity for the organization to successfully monitor, interact, and react with other key groups within the organizational environment. In response to the issue of animal welfare, the management should convince that audience that the Company is environmentally responsible in the design and manufacturing of products. In implementing these recommended strategies,  (1997) claims that efficient and effective communication must be based on strategy. The firm must look for two outcomes. First, purely economic in nature, is the shifting of economic resources to the direction of the seller. The second outcome is the continued permission to operate. It sustains economic potential through maintaining the company’s reputation with direct influence among social and political forces.   Objective 3             The Louis Viutton brand is also implementing its worldwide battle against counterfeiting. Being the most counterfeited brand, the efforts of its management to prevent such criminal acts increases its worldwide marketing status (1994). As given case, the Wikipedia.org reports that Louis Vuitton fake products accounted for 18% of counterfeit accessories apprehended in the European Union in 2004. With the excellent brand development strategy and the effective application of globalization trends, the Group holds a relatively prestigious and profitable standing. Thus, it is recommended that the Company should engage in innovative and hardly imitable product line. There is also a call for insistent bearing of its trademark signature – the Monogram Canvas.     Action Plan Objective 1 <li class="MsoNormal" style="line-height: 200%"> Marketing audit and planning is indispensable.</li> <li class="MsoNormal" style="line-height: 200%"> Identify problems and establish an array of potential solutions.</li> <li class="MsoNormal" style="line-height: 200%"> Specify major or minor, long-term or short-term goals, target location and the applicable strategies.</li> <li class="MsoNormal" style="line-height: 200%"> Define financial and human resources to be used.</li> <li class="MsoNormal" style="line-height: 200%"> Construction of strategic business units that will pay attention to a specific segment of the Company and operations.</li> <li class="MsoNormal" style="line-height: 200%"> Constant communication and information flow among stakeholders.</li> <li class="MsoNormal" style="line-height: 200%"> Increased marketing efforts as dictated by the demands of the market.</li> <li class="MsoNormal" style="line-height: 200%"> Market assessment is crucial.</li>   Objective 2 <li class="MsoNormal" style="line-height: 200%"> Identify the most appropriate channel of communication.</li> <li class="MsoNormal" style="line-height: 200%"> Present a comprehensive plan with definite period of implementation. </li> <li class="MsoNormal" style="line-height: 200%"> Define financial and human capital.</li> <li class="MsoNormal" style="line-height: 200%"> Design effective messages for general audience.</li> <li class="MsoNormal" style="line-height: 200%"> Upper management approval is sought.</li> <li class="MsoNormal" style="line-height: 200%"> Evaluation after the introduction of the marketing communications programs should be served without delay.</li>     Objective 3 <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Conduct comprehensive market research focusing on how to make or what products should be made to decrease the cases of product counterfeiting in specific geographic locations.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Focus on resource-based core competencies.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Provide budgetary allocation for anti-counterfeiting mechanisms.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Establish linkage with anti-counterfeiting organizations and support international laws or business policies against this issue.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Maintain constant evaluation of actions that are implemented and to be implemented.</li>   Projected Profit and Loss             With the effective implementation of all the strategies recommended, it is intelligently supposed that LVMH will acquire positive growth in its financial performance. There is no specific amount to be stated yet it hopes to increase in significant percentage. There are no losses indicated, provided that the said strategies are properly executed as it yields potentially beneficial results. Everything is directed towards optimistic achievement of all mentioned objectives and eventual increase in corporate sales and profits.   Controls             The company will provide a monitoring team that will ensure the profitability and growth of the Company as this marketing plan has been initiated. The establishment of feedback system, evaluation process and performance objective is essential. Feedback mechanism could be in the form of consumer suggestions, comments and other information-based inquiry. The website is a potent avenue for consumer feedbacks. Similarly, evaluation process is done by a research team. To further evaluate the reactions and comments of the consumers, LVMH is responsible for the analysis and interpretation of the feedbacks and other performances inside and outside the Company and its operations. The result of the evaluation process should be integrated in strengthening the competitive advantages of the Company. Finally, performance objective must be verified. The quantifiable element that would control and monitor the marketing plan will be the effects on corporate productivity and profitability. With the given positive results, the company is assured that the marketing plan is under control and that the Company will surely become successful.   Credit:ivythesis.typepad.com

Strategic Marketing Management of Moët Hennessy – Louis Vuitton (LVMH)

Strategic Marketing Management of Moët Hennessy – Louis Vuitton (LVMH) Executive Summary The current outstanding perform...

An Analysis of International Market Expansion of Taiwanese Fashion Brands Compared with the International Expansion of Western Brands

2.6 Taiwan Fashion Industry & International Market According to the  (2004), the Taiwanese fashion industry is yet to make its mark in the international market. This is because of the divided opinion among fashion designers and critiques of the direction that Taiwanese fashion should go in internationalization. On one hand, some believe that Taiwanese fashion should stick with its oriental roots and make this as its selling point in the international market. On the other hand, others also believe that the fusion of Taiwanese designs with international designs would propel the entry of Taiwanese fashion brands in the global market, particularly with most Taiwanese fashion designers educated in foreign fashion schools, necessitating a mixture of design influences. After a year, the  (2005a) reported that two designers, Shawn Pan and Chien Yu-feng who use their names as brands, were the first people to present their clothing line during the Paris Fashion Week. This constitutes a step forward for Taiwanese fashion brands as firms and designers realize the possibility of existing alongside international fashion brands. Moreover, Taipei Times (2004) also reported that global perception over Taiwan is a venue for international designer brands. Local fashion brands need to make that effort to change global perception from Taiwan being a fashion hub for international brands, to a fashion hub for Taiwanese brands with high degrees of acceptability in the global market.   3.0 Methodology 3.1 Research Design To accomplish the aims of the study, the research will utilize the descriptive research approach. This is a type of study that tries to explore the causes of a particular phenomenon, present facts concerning the nature and status of a situation, as it exists at the time of the study, and portray an accurate profile of persons, events or situations (1997; 2003). The purpose of employing the descriptive method is to capture the nature of a situation, as it exists at the time of the study and to explore the cause/s of particular phenomena ( 2002). The approach undertaken for such type of study is appropriate for a number of reasons. The descriptive approach is quick and flexible giving rise to three advantages: first, when new issues and questions arise during the duration of the study, this approach allows a further investigation. Secondly, when there are unproductive areas from the original plan of the study, the researcher can drop them; and thirdly, the approach is more practical in terms of time and money. To derive required data, the qualitative research method will be utilised. This method used to elicit detailed verbal and written descriptions or accounts of characteristics, cases and situations. (1995) This approach is appropriate for the study because the research aims to elicit accounts of the physical education activities of schools particularly the physical activities to determine effectiveness in promoting health consciousness. This supports the derivation of comprehensive research data by covering the immeasurable aspects of the research such as the perceptions, attitudes and motivations of students, teachers and school administrators. (2004) Qualitative research approach is used to answer particular issues such as understanding what is happening, determining complexities and limitations, and assisting in the interpretation of situations. This approach works effectively in areas involving an in-depth look into implications or impacts not susceptible to quantification. Another benefit of the qualitative approach is the gaining of understanding on the parties affected by situations and the extent of the effect of certain elements. Still another benefit is the provision of reasons for the occurrence of situations and the respective impacts. Lastly, this approach also supports the derivation of conclusions and recommendations on the manner of enhancing systems. ( 2002) 3.2 Data Requirements Data requirement for the research covers both primary and secondary sources.  Secondary data comprise of concepts, definitions, past statistics, and research results contained in raw data and published summaries to serve as the foundation and context for the research. Secondary data fall into three main subgroups: documentary data, interview-based data, and those compiled from different sources. Documentary secondary data are derived from primary data collection methods while interview-based secondary data are collected through questionnaires that have already been analysed for their original purpose. Primary data comes from the results of the semi-structured interview with the fashion designers with brands in their namesake or the top managers of the Taiwanese fashion companies. Secondary data works as foundational support for the research while primary data serves to confirm the validity of the hypothesis, invalidate existing knowledge, and confirm some aspects but invalidate other separable aspects of theories based on the context of empirical evidence.  3.3 Data Gathering Method For this study, the semi-structured interview method will be used to gather pertinent data. Interview is a data-gathering tool that elicits insights, expands the understanding of concepts, searches for exceptions to general rules, and document personality and experience differences. (Rubin & Rubin, 2005) Semi-structured interview, that involves using a questionnaire as guide but allowing participants the opportunity to expound on significant answers, is a strategy that allows a researcher to have more control over the research process while at the same time obtaining wide-ranging data (Schostak, 2006). The semi-structured interview method will be used to achieve a comprehensive qualitative and descriptive data on the performance and brand strategies of Taiwanese fashion firms and international fashion houses to derive effective means of introducing Taiwanese brands into the global market. Data will be collected by holding one-on-one semi-structured interviews with two designers or the top managers of Taiwanese fashion brands and the managers of two leading international fashion brands in Taiwan. A set of questions will be prepared to serve as guide in the interview process but secondary questions will be asked to confirm the information given or to obtain clear, rich and in-depth data to obtain answers sufficient to address the research aims and objectives. 3.4 Data Analysis Data analysis will be accomplished by looking at patterns and emerging themes, as points of comparison, from the responses and eliciting the implications of these patterns and themes on the research problem. Deviations from the patterns and themes would also be determined together with the factors that explain the atypical response. Interesting answers and ideas would also be noted and the manner that these help in clearing up the research predetermined problem. The implications of the patterns to the possible need for additional data as well as the extent that the answers corroborate the experiences of Taiwanese fashion brands will be considered. 4.0. Results 4.1  History of Taiwanese Fashion 4.1.1 Early Taiwanese Fashion Taiwan has inherited the Chinese tradition of textile development, embroidery and the integration of symbolism into the designs. However, despite the Chinese legacy of traditional clothing and designs, tradition-inspired clothes comprise the most abandoned fashion on modern Taiwan. This is because western fashion has been widely embraced by the Taiwanese for everyday use such as in schools and the workplace because of the attachment of the benefits of modernity and efficiency to western clothing when compared to the restrictiveness of traditional clothing. Clothing fashion in Taiwan is trapped in between traditional and modern fashion so that modern clothing worn by the younger people and the traditional clothing worn during special occasions or ceremonies. (1998) In terms of fabric or clothing material, Taiwanese clothing tradition used natural materials such as cotton, hemp and silk. Hemp and silk have been widely cultivated in Taiwan for use in clothing. Hemp was the popular material for clothes since silk as highly valued and reserved for royalty or the wealthy. With the onset of trade with India, Taiwan adopted cotton as an alternative fabric to the hemp. Cotton clothing experienced massive demand requiring the need to import cotton fabrics and clothes from India and the United States. (1987)   In terms of design, earlier clothing in Taiwan were deigned for utility and durability  with men’s clothing coloured in black or blue with simple designs while women’s and children’s clothing were more elaborately coloured or designed. Since majority of the Taiwanese population belong to the working class, the demand for comfortable and efficient clothing led to the demand for hemp and cotton working clothes. People working in the agriculture, fishing or manufacturing industries primarily don black or blue clothes made of hemp or cotton with jackets buttoned in the centre or right side. Due to limited capability to purchase clothing, very little amount was allocated for clothing so that a single set of clothing was considered sufficient. Although, people in Taiwan also inherited Chinese clothing tradition, the limited land space of the island spurred Taiwan to import fabrics from China, particularly from Zhejiang or the Eastern Guangdong provinces. The fabrics then undergo dying, cutting and sewing in Taiwan. (11987)  In terms of patterns, earlier clothing was patterned after the preferences of the sub-ethnic groups in Taiwan that differ from the colours and patterns of groups in mainland China. Traditional clothing used for special occasions or celebrations were made of brighter colours and colour combinations. The sub-ethnic group are identifiable by the difference in the weaving patterns and appliqué techniques used in the clothing. Taiwanese traditional fashion are more colourful and elaborately designed when compared to the everyday wear of the people. (1987)  In terms of the cut and stitching, traditional and earlier Taiwanese clothing involved minimal cutting or stitching since clothing design involved clothes to hang from the shoulders and tied with a sash at the waist. Garments were mostly loose and undraped to fit the body. Clothing consisted of a skirt, trousers and tunic simply designed with little stitching. The cut and stitching as well as the amount of fabric used depended upon the class of the individuals. Working class individuals had to contend with a skirt or trouser and jacket combination but the wealthy class demanded greater complexity in clothing construction that involved distinct and embellished designs with matching accessories. (1987)       With regard to embellishments, embroidery constituted the primary mode of decorations. Embroidery is highly valued as a skill in women. There are eight basic stitches used to create any design. These are usually used in combination to capture in detail objects or things. Embroidery designs and techniques were handed down the generations of women. Embroidery has close links to symbolism so that certain plants and animals represent the different wishes or ideals. There are also objects used to symbolize status in life or hopes such as long life and happiness. (1987)  In relation to colour, there is a common recognition of the symbolism of colour regardless of economic class, even if the working class have limited means of expressing their colour symbolisms. Blue, the most common colour represents neutrality and dignity. Powerful symbolism is accorded to the colours white and red. Red represents auspiciousness particularly the events related to life and fertility such as births, weddings, New Year and festivals. White is the symbolism for sorrow and death. In relation to accessories, traditional practices involved the adornment of trimmings primarily for protection. Bells are tied directly to the clothing or to a string attached to the clothing to ward off evil spirits. Gold and jade charms are also worn for protection by children and as clothing accessory for adults. (1987)    4.1.2 Modern Taiwanese Fashion Modern Taiwanese fashion emerged only in the 1980s with the decrease in import tariffs. The Taiwanese population embraced western fashion, mainly coming from Italy and Hong Kong. In the 1990s, imports from Japan intensified with Sogo, a Taiwanese-Japanese retailer opened a store in Taiwan to offer average priced clothing fitting the younger crowd. The positive response of the Taiwanese population of western fashion prompted American, European and Japanese fashion brands to introduce exclusive retail stores or sell their clothing through retailers such as department stores. Shopping centres in Kaohsiung, Tainan and Taichung retailed different western fashion brands. As air-conditioning systems became popular, working people also found the heavier western corporate attire acceptable drawing corporate clothing brands into Taiwan. (1996) Exposure to various western fashion, has spurred the interest of Taiwanese fashion designers to enhance their involvement in the industry. A number of Taiwanese designers studied abroad and established foreign names as brands. With international styles, Taiwanese fashion designers draw inspiration from both the Chinese tradition as well as global designs albeit in varying degrees. Consumers have also become more experimental in fashion with the relaxation of strict clothing guidelines in schools. (1996) Many designers have come back to Taiwan to introduce their brands while other initially introduced their brands in the international market. These efforts have met various results with some designers faring better than other designers do. However, despite failures the direction of Taiwanese fashion brands move towards the international market. 4.2  Case Study of Taiwanese Brands & Their International Expansion 4.2.1        Shiatzy Chen 4.2.1.1  Brand History Shiatzy Chen, one of the most successful Taiwanese fashion brand came about in 1978 with the establishment of the Shiatzy International Company Limited by the fashion designer Shiatzy Chen and her textile entrepreneur husband. The company remains fully controlled by the couple. The brand came about due to the artistry of Shiatzy Chen, who uncommonly was not schooled in fashion design. She got into the business while working at her uncle’s dress shop. It took the company ten years of work to establish successfully the brand in Taiwan. By 1994, the company has achieved a client list of 25,000 individuals a number of whom belong to high society such as the wives or mistresses of diplomats and government officials. The brand drew a market base of women within the 41 to 50 years age range. However, since then the company has sought to capture the younger crowd in Taiwan as well as expand into the international market starting with China and Japan. Today, Shiatzy Chen is recognized as one of the most successful Taiwanese fashion brands in Taiwan and even in China, Japan and in European fashion centres. (2007) 4.2.1.2  Business Strategy Competitive advantage is hoped to be achieved by the Shiatzy Chen brand through differentiation or the achievement of an edge based on the market perception that the company offers a different value from its competitors and this differentiating factor is preferred over the offer of its competitors. The unique value that the company offers is clothing for modern Chinese women, who are confident and proud of their ethnic heritage but animated by what the future brings. Shiatzy Chen appeals to women who recognise their past and hopeful for the future. 4.2.1.3  Brand Expression The Shiatzy Chen brand is captured by the phrase “neo-Chinese chic” (2005b). This expression pertains to clothes in tune with modern culture but retaining that distinct cultural inspiration that reflects the feminine spirit. Shiatze Chen collection includes full clothes or pieces usually made of silk and satin that can be mixed and matched to suit the taste and occasion. Vibrancy is achieved through the inclusion of neon colours such as pink, yellow and green with Chinese motif patterns. The Chinese inspiration can be found in the tops, vests or jackets buttoned on the side or in front and pieces with Chinese collar. Femininity is ensured with pieces that flatter the human body such as silk or satin mini skirts, nifty blouses and chic dresses. The integration of Chinese inspiration into clothes reflecting the feminine spirit makes Shiatzy Chen clothes modern and sophisticated. 4.2.1.4  Marketing Overall, the marketing goal set for the brand is to target the younger generation of women around the world since it has already gained the patronage of women in the 40 and above age group. The brand is directed towards this goal by concentrating on the clothing line, the price range, the channels of distribution, and the promotional activities. In relation to product, Shiatzy Chen adopts a respectful attitude in its clothing line reflected in the delicate fusion of western design, structure and processes to preserve the diminishing Chinese artisanship and skills into clothes, shoes, bags and accessories. The ability of the brand to capture that delicate fusion makes the product line unique. To achieve fusion, the company obtains artists and skilled workers locally and internationally to create brocades and embroideries uniquely designed for every piece of clothing or clothing line. Skilled artists contribute quality and sophisticated patterns and design converted into wearable clothing items. Designs and patterns coincide with the chosen theme for every season. With regard to price, Shiatzy Chen brand has been positioned to compete with domestic brands in Taiwan as well as international brands in Taiwan and around the world. To achieve this, price has been set to match its marketing as a luxury brand but affordable to its target market of modern and sophisticated women making its price higher that the low price of massively marketed clothes and slightly lower or equal to the price of international brands. In terms of promotion, Shiatzy Chen relies upon the Chinese business strategy of networking ( 2001) to achieve its customer base. To date, there are 25,000 Shiatzy Chen patrons around the world. This was achieved through the introduction of the company in 1994 of a membership program, the Shiatze Chen Art Club with members ranging from the different walks of life. Membership was offered to customers making purchases in any of its flagship stores or retail stores. In considering demographics, 98 percent of the members are women belonging to the 30 to 45 age group. Majority of members are professionals with high purchasing power followed by homemakers with high earning husbands or from wealthy families, and the remaining group are young students and professionals. Due to its wide network of loyal customers, positive feedback is spread by word of mouth or publications by members working in the communications industry. The company also hosts its Creative Fashion Show held twice a year in Taiwan to pleasure its customers with new designs. With regard to place, Shiatzy Chen sells in 48 channels around the world constituted of 23 exclusive boutiques and 25 department store counters. To strengthen the brands global presence, the company opened a shop in Paris in 2001 located near the Louvre. It has also entered China by establishing a shop in Jinjiang, Shanghai in 2003. In the same year, the company opened its flagship store in a high-end location at Zhongshan N. Road. The company was able to open another shop in Beijing and a new shop at the Peninsula hotel in Hong Kong in the same year. By 2005, the flagship stores in Shanghai and Hong Kong at the Lee Gardens were established. (2007)         4.2.1.5  Brand Perception Building Shiatzy Chen as a brand commenced with the underlying principle of aggressive marketing instead of just depending on the clothes to communicate to consumers. Ina way, the company succeeded in marketing the brand since it has achieved positive response from consumers and fashion critiques. In Taiwan, the brand has drawn positive response from the market. This recognition is expressed in the status that the brand has achieved since the company was able to collaborate with the Taipei Palace Museum for the launching of its spring collection at the Jhih Shan Garden in 2004. In the international market, the brand has also achieved positive ratings in different countries. In 2004, the London Financial Times voted it as one of the most popular fashion brands. However, there were also negative responses such as the article featured in  (2007) that the fashion brand may be too sexy for the Taiwanese market so that the company eyes international expansion. This was spurred by the fashion show featuring its spring collection with models wearing miniskirts despite the wintry weather. Although, this does not constitute supported negative perception, this probably emanates from the traditional segment of the market preferring the traditional garb to the sophisticated fashion of Shiatzy Chen.   4.2.1.6  Brand Recognition In Taiwan, Shiatzy Chen is a highly recognized brand by women, especially professionals wanting to imbibe sophistication through their choice of fashion. This is expressed through its 25,000 loyal members regularly shopping in its boutiques and department store shops. Apart from this direct consumer recognition, the brand also achieved recognition through channels such as collaborations with other known companies such as its venture with Adidas for the latter’s Y3 collection. The brand has also been recognized by Vogue through the statement that “there is nothing in any market with her style at the international designer level.” ( 2005b) This means that the loyal customers of Adidas and readers of Vogue recognise Shiatzy Chen brand.      4.2.1.7  Consumer Behaviour In 2004, Shiatzy Chen earned NT0 million for the year. This constitutes a 15 percent increase from its turnover rate in the past five years ( 2005b). This means that more people are purchasing its clothing products or its loyal customers are perking up their purchases or both. Regardless of the reason for the increase, the increase in revenue means that the company is thriving as a business, with its sales coming from contributions of different markets, particularly in Taiwan, China and Paris. This further implies that the company has enough resources to support its international expansion. Another salient implication is the success of its local and global brand strategy in capturing the domestic market as well as consumers in other countries. 4.2.2  Jamei Chen 4.2.2.1  Brand History Jamei Chen started the label in 1987 as a single owner operated business. Brand development passed through different stages before eventually becoming a cohesive label. Apart from offering designs to the local market, the company ventured into costume design for Hong Kong movies such as ‘Red Rose, White Rose’ giving the designer exposure into theatrical or costume outfits. In addition, Jamei Chen was also engaged in Paris and New York fashion weeks. The company was first launched in a foreign market, through a store in New York in 1995. However, with conditions not meeting the expectations of the company, the New York shop was closed and the company concentrated in the Taiwan market. (2007) 4.2.2.2  Business Strategy Jamei Chen pursued differentiation as a strategy for competitive advantage. She has studied fashion design in international venues such as Paris and New York making her designs international. By introducing an international flare into the Taiwanese market, she expects to gain competitive advantage by being different relative to the oriental fashion brands in the market. 4.2.2.3  Brand Expression Jamei Chen as a brand is presented as ‘simple and elegant’ using precision cuts and well-selected fabrics. This is the value sought to be communicated by the Jamei Chen brand to its target market of modern women. This message is justified through clothes that are cut in a manner to fit precisely a woman’s body, made with fabrics of simple texture, and with elegant colour and colour combinations. Jamei Chen clothes are fit for casual or formal occasions so that the brand is attracting young professionals. ( 2007)   4.2.2.4  Marketing The marketing goal of Jamei Chen is to widen its market base to the older age group of professionals as well as to reintroduce the brand in the international markets of Paris and New York. In terms of product, Jamei Chen adopts the modern and international perspectives. Modernity is expressed through her clothes using simple but elegant fabrics, textures, colours and cuts greatly expressive of the technology available in creating new fabrics and designing cuts. Internationalism emanates from the global appeal of the clothes because of the faint expression of traditional Chinese design into the clothes. Chinese influences are observed through the value of disciplined precision observable through the clothes but the designs and patterns hold an international appeal.  In relation to price, Jamei Chen belongs to a price range above the mass produced clothes in the Taiwanese market. Since the brand has already been established in the market, it falls under the price range similar to other established Taiwanese brands such as Shiatzy Chen as well as international brands. With respect to place, Jamei Chen has established ten channels of distribution including exclusive boutiques and department store stalls. The company has established four exclusive boutiques and six department store distribution channels. The channels of distribution were strategically placed to cover the northern, southern, western and eastern areas of Taiwan to reach out to a greater portion of the Taiwanese market. In terms of promotions, the company holds a fashion shows every season to apprise consumers a preview of the clothes for the season. Apart from this, the company has also branched out the brand to cover cafes and tea houses so that people can enter the store without being pressured to make the purchase but still this allows the brand greater degree of exposure in the market. In addition, the brand also enjoys exposure in the local versions of international magazines such as Vogue, Cosmopolitan, GQ, Bazaar and Figaro. 4.2.2.5  Brand Perception Jamei Chen has been viewed positively by the market. This is indicated by the extent that the brand and clothing collection has been picked-up by popular fashion magazines. These media channels would not have featured Jamei Chen clothes if they perceived that the readers or the market in general would have a negative impression of the brand or the clothes. Moreover, the government also have a positive view of the brand since Jamei Chen was trusted to design and make more fashionable the uniforms of the Taiwan High Speed Railroad Corporation (THSRC). In addition, the brand has been in the market for twenty years and there is no indication that the market is tiring of the designs instead every fashion show is packed with fashion critiques and customers alike. 4.2.2.6  Brand Recognition The Jamei Chen brand is highly popular among young professionals within the age group 25 to 35 because of its modern, simple and elegant designs. It is also recognized as an established Taiwanese brand alongside other prominent local brands. The brand is also associated with Rein-Ai and An-Ho roads where renowned fashion houses have established boutiques. Its boutique strategically located in the intersection of these two roads has been featured as an architectural piece that houses the exquisite clothing that materializes the brand. 4.2.2.7  Consumer Behaviour  (2007) reports that the Spring-Summer collection of Jamei Chen was packed with a vibrant audience. Janet Hsieh the host of Fun Taiwan as well as the model  also visited the fashion show. Although the Jamei Chen website does not provide exact values of annual turnover, consumer behaviour is reflected in the fact that Jamei Chen is horizontally expanding into baby or infant apparel as well as into unrelated ventures of cafés and teahouses. 4.3  Case study of Western Brands Going Into Taiwan 4.3.1 LVMH (Louis Vuitton-Moet Hennessy) 4.3.1.1 Brand History LVMH was established in 1987 with the merger of Louis Vuitton and Moet Hennessy to propel the brand and the company into a top international seller of luxury products. LVMH holds the benefit of inheriting the brand renowned for craftsmanship and quality products such as Louis Vuitton for exquisite leather products and Moet & Chandon for delectable wines. At present, LVMH is a group brand representing 60 different brands covering fashion and leather products, watches and jewellery, cosmetics and perfumes, and wines. The brand has been present in East Asia, including Japan, Korea, China, Hong Kong and Taiwan since the early 1990s. ( 2007a) 4.3.1.2 Global Strategy Like other international brands, LVMH capitalizes on differentiation to enhance brand equity in the European market and establish the brand in the international market. Since LVMH is a generic brand covering different individual brands representing different products, the individual brands hold their own brand equity. However, LVMH integrates these brands through representation of all these brands under the description of luxury or high-end products. (2007c) 4.3.1.3. Brand Expression LVMH is all about quality artisanship and luxury. For fashion and leather products, the material representation of this brand communication is through the LV logo and monogram canvas seen in its popular leather bags and travel luggage. It is through these material representations that define the luxury-character of its leather products. Louis Vuitton clothes also express luxury and elegance with rich fabrics, plain colours and precision cuts.   4.3.1.4 Marketing Overall, the marketing strategy of Louis Vuitton is the saturation of international markets with its high-end products so that its appeal is towards the higher income groups in different markets. In terms of products, the company is expanding with 60 individual brands under the LVMH brand involving both vertical and horizontal expansion. Vertical expansion includes the merger of individual fashion brands such as Givenchy and Marc Jacobs with LVMH while horizontal expansion involves the integration of brand for different products such as Moet for wines, Kenzo for perfumes, and Berluti for watches and jewellery. All the individual brands embody artisanship and luxury. With regard to price, the target market segment comprises the higher income groups so that the price matches the value of luxury offered by the company. The company does not offer price cuts or place items on sale so that every item purchased by customers retains their value throughout the next seasons. This contributes to the high-end price of LVMH goods. In terms of place, LVMH distributes its products through exclusive boutiques and high-end department stores with the stalls independently managed with LVMH providing their own manager and sales personnel to handle department store retailing. This was established as the mode of retailing to meet the issue of product piracy. Encouraging customers to visit its exclusive shops and high-end department store retailers assure consumers assured of the originality of the products they purchase. With regard to promotions, the company had a head start of decades to establish their brand in the international market. The promotion of the brand is attributed to the patronage of well-known wealthy families and celebrities publicly documented in fashion magazines, feature articles in newspapers, movies, and awards. The brand is also active in fashion shows for every season. At present, it has become a brand known by consumers in different international markets such as Taiwan.     4.3.1.5 Brand Perception LVMH has achieved positive response from the international market including Taiwan with the brand gaining popularity among high-income professionals and the wealthy class. At present, there are only limited LVMH boutiques in Taiwan managed by the LVMH fashion group in Taipei. These boutiques are situated in the high-end fashion districts in the cities in Taiwan to provide greater accessibility to its target consumers. To date, the company or brand has not received any significant negative feedback from the market. In fact, it has even maintained the consistency of the view of the company, the brand and its products as high in quality and elegance.   4.3.1.6 Brand Recognition Looking at the brand logo and monogram immediately results to the instant recognition of the brand. The company has developed a distinct brand expression through the value communications attached to the logo and monogram, making the brand easily recognizable when seen in the streets, events, television shows, fashion magazines, awards, and movies. The only issue that arises in brand recognition is informing consumers on how to recognize the original logo and monogram. To address this problem, the company has arranged exclusive distribution of its products as well as limited distribution on high-end department stores.   4.3.1.7 Consumer Behaviour Based on the financial reports of the company in the past three years, it has experienced consistent increase in its global operation. Profit increased from €1.31 million to €1.47 million and then to €1.63 million in 2004, 2005 and 2006 respectively. Out of its global profit, 20 percent comes from Asian markets including China, Hong Kong and Taiwan as the greatest contributors. To date, LVMH has also established 954 stores in 2006 located in different international markets. (2007b; 2007d) This implies that the company is experiencing increased patronage from consumers. In addition, the fact that Louis Vuitton and other LVMH brands has experienced the greatest degree of piracy indicates increase demand from consumers, especially the market segment with limited means to purchase LVMH products but wanting to don luxurious goods. The extent of demand is expressed through the statistic that 99 percent of Louis Vuitton products circulated in the markets, particularly in China, Hong Kong and Taiwan are counterfeit while only 1 percent are original and sold at exclusive boutiques or limited distribution in high-end department stores. 4.3.2 Calvin Klein 4.3.2.1 Brand History Calvin Klein is a fashion brand owned by Phillips-Van Heusen (PVH) Corporation since 2003 together with 18 other brands. Prior to this, Calvin Klein was established as a brand named after its primary fashion designer. The brand was inspired by the urban youth in New York. The clothing company was formally established in 1968 with its line of sportswear products. As the brand pickup-up popularity, the brand expanded to include jeans, underwear, casual weal and formal wear. The sleek designs of Calvin Klein achieved appeal with Hollywood stars that some of its patrons include Julia Roberts, Gwyneth Paltrow and Helen Hunt. Prior to the brand’s acquisition by PVH, it has achieved the status of becoming a leading lifestyle fashion company. ( 2007) 4.3.2.2 Global Strategy Calvin Klein is geared to become not only a leader in lifestyle design but also a top marketing company. To facilitate its global marketing expansion, its headquarters is located in New York and regional operations is coordinated though its offices in Paris, Milan, Tokyo and Hong Kong to reach European and Asian markets. Global marketing of the Calvin Klein brand is supported by the development of extensive networks of licensing agreements extended to qualifying companies in different markets around the world. (2007) 4.3.2.3 Brand Expression Calvin Klein is all about providing a total lifestyle for its customers through its simple but sleek designs of clothing line and home comforts. Total lifestyle is represented by the expansion of the brand to cover comprehensively designs for underwear, casual and formal wear as well as accessories, toiletries, and home comforts such as bedspreads, pillows and towels. The designs are simple founded upon the adage ‘less is more’ and sleek because of the precision integrated into the cuts, patterns and designs.   4.3.2.4 Marketing Overall, its marketing strategy is to acquire licensing agreements with companies holding the capacity to optimize market saturation in a particular region or country together with the maintenance of the value attached to the Calvin Klein brand. In terms of product, Calvin Klein balances both the provision of sleek fashion with a complete fashion line of everyday wear. With minimalist designs, the brand is able to provide products that are comfortable, functional and at the same time classy. It was able to provide the rare balance between comfort and classiness. With regard to price, Calvin Klein draws a bigger market segment with the introduction of its affordable clothing line under CK. Its target market includes people from the middle class up to the wealthy class. In relation to place, the brand is marketed through a combination of exclusive distribution in its boutiques, retail agreements with department stores, and licensing agreements. This allows its products to achieve greater market accessibility relative to other international fashion brands. Calvin Klein can be purchased from a wider range of channels, which is consistent with its goal of achieving a wider reach of the international markets. With regard to promotions, the brand primarily communicates to consumers through fashion shows as well as product endorsements by Hollywood and local celebrities and product features in renowned magazines.      4.3.2.5 Brand Perception Generally, Calvin Klein has received positive responses from the American and international markets. Perhaps its most significant negative feedback came in 1995 when it brought out a print advertisement for jeans with its models evocatively posed. Its ad campaign received negative comments from President Bill Clinton and a Catholic organization that it withdrew its advertisements. In the international market, it has received positive feedback from markets around the world especially due to its more affordable line. (1995) In Taiwan, Calvin Klein are also coveted by the younger and older age groups because its sleek corporate and formal wear appeals to the working professionals while its classy jeans and casual wear appeals to teenagers and professionals alike.    4.3.2.6 Brand Recognition Calvin Klein is a globally recognized brand. It has achieved a certain degree of recognition to be differentiated from other brands. Consumers are aware of the brand and differentiate the brand in terms of the products and price of competing brands. ‘Calvin Klein’ or ‘CK’ for its clothing line is a recognized brand for shoppers while its named perfumes and cosmetics have also received positive response from customers.   4.3.2.7 Consumer Behaviour When PVH acquired Calvin Klein in 2003, the company had great hopes for the optimization of the brand. In 2005, the company reported that the licensing agreements for Calvin Klein contributed million to the operating finances of the company constituting an 18 percent increase from the previous year. In the same year, global retail sales reached billion indicating market patronage. (2007)  5.0 Analysis and Evaluation (Comparison) 5.1 Global Expansion Status In terms of global expansion strategy, the Taiwanese brands and the international brands differ in their global expansion status. With regard to the Taiwanese brands, Shiatzy Chen is on the way to becoming an international brand with shops established in China, Hong Kong, Japan and Paris while Jamei Chen remains a local brand. Although both brands are successful in Taiwan, they differ in international status. The difference in status is attributed to the variance in the initial establishment of these brands in the international market. Shiatzy Chen established and strengthened brand equity in Taiwan before looking towards the international market but in the case of Jamei Chen, brand expansion into the international market simultaneously happened together with the strengthening of the brand locally. It was the status of brand strength that marked the difference in the result of the internationalisation venture of these two Taiwanese brands. In relation to the international brands, both Louis Vuitton and Calvin Klein were brands established and strengthened in their market of origin, which are France and the United States respectively, before going into the international market. This implies that the success of the international brands in entering the Taiwanese market and the initial success of Shiatzy Chen in the international market is attributed to the establishment and strengthening of brand equity in the market of origin before going international while Jamei Chen failed to become an international brand during the initial attempt in the early 1990s. This further means that the establishment of a brand in a local market serves as the platform or foundation in developing an international branding strategy.   5.2 Global Branding Strategy 5.2.1 Business Strategy Business strategy involving the different Taiwanese and international brands hold more similarities than differences in terms of business strategy on competition. All the brands utilise differentiation to gain competitive advantage relative to recognized and targeted competitors. Shiatzy Chen and Jamei Chen are established brands distinguishable with other brands in the Taiwanese market while Louis Vuitton and Calvin Klein, despite being considered as international brands differ in the value communicated and delivered to the public. This means that to achieve a strong presence in the Taiwanese or any other market around the world, the brand should express a unique value to draw the interest of the market, influence their decision to prefer the brand to other fashion brands, and draw people to actually purchase fashion items carrying the brand. If the brand were not distinguishable in the local or international market, it would be difficult for the brand to compete with established brand. However, in terms of the degree of distinction, Shiatzy Chen is a stronger brand relative to Jamei Chen in the international market, because of the difference in brand expression. 5.2.2 Brand Expression The different Taiwanese and international brands vary in expression. Shiatzy Chen brand communicates the value ‘neo-Chinese chic’ because of the fusion between Chinese traditional and international modern design inspirations. Fusion was the direction that the brand is targeting because of the strong foundation in Chinese design and cuts by the designer behind the brand. Jamie Chen brand communicates ‘simplicity and elegance’ that is inspired by the exposure of the designer behind the brand to international fashion, particularly French designs. Although concentrated in Taiwan, the brand offers the value of international and modern designs using the precision cuts drawn from disciplined Chinese art. However, it does not offer a similar strength of brand value that would distinguish this from other international brands so that even if Jamei Chen is a strong brand in Taiwan, it is not carry a high distinction relative to other international brands with the same expression. The brand needs to either ride on the international reputation of the designer or evolve into a communication to the market that draws consumers to distinguish the brand from other brands with the ‘simple and elegant’ tagline  Louis Vuitton brand offers the value of ‘luxury’ to the high-income market segments, which comprise its target market. Calvin Klein brand centred on the message ‘total lifestyle’ and provides a wide array of useful or practical but sleek designs in underwear, jeans, casual clothes and formal wear together with different accessories. Individually, these brands were able to communicate unique messages. In relation to competitor brands, the extent that these values meet the target market, whether locally or internationally, determines the success of the brand. In Taiwan, these brands all express different values targeting different market segments. Shiatzy Chen targets the wealthy, traditional, older age group, Jamei Chen focuses on the young professionals, and Louis Vuitton attracts the wealthy, modern group, while Calvin Klein meets the needs of both the younger and older age groups with its range of products. In the international market, Shiatzy Chen is distinguishable because of its classy, Chinese culture-inspired clothing line. This area of differentiation determines the success of global brand strategy.   5.2.3 Marketing Marketing strategy of the Taiwanese and international brands have similarities and differences. In relation to the product represented by the brand, Shiatzy Chen has a different value that the brand can offer to the international market materialised through clothes with Chinese inspired designs, cuts and colour but executed to appeal to the modern and international taste. Jamei Chen is materialized through the casual and formal wear with precision cuts and designs but this does not offer a strong enough difference relative to other brands with a similar branding trend. When lined with other simple and elegant clothes, Jamei Chen clothes may not necessarily stand out to differentiate the brand. Louis Vuitton became a coveted brand internationally including the Taiwanese market because of its offering of the value of luxury into its leather bags, apparel and accessories as well as other clothing designs made of rich and expensive fabrics such as silk, chenille and cashmere. Donning a Louis Vuitton design in Taiwan is a status symbol. Louis Vuitton products are recognizable through the logo and monogram. Calvin Klein achieved popularity in Taiwan due to its sleek but practical clothes particularly designer jeans patronized by the younger age groups as, trendy watches and other accessories, and fragrant perfumes. Calvin Klein is identified by the name spelled in full or the acronym CK. With regard to price, the different brands fetch different prices in Taiwan. Among the four brands, Louis Vuitton has the highest price followed by the three other brands but the lower end clothing line of Calvin Klein offers more affordability compared to the other brands. Calvin Klein has an advantage in terms of market saturation based on price because of its high and low-end clothing lines targeting a wider range of market segments. In internationalizing the brand, the Taiwanese brands have the option of offering a great differentiating value for the brand to establish a high price in the international market or achieve competitive advantage relative to other international brands by offering their clothes at a lower price. In relation to place or the channels of distribution, all the brands are distributed through exclusive boutiques and/or department stores. The Taiwanese brands utilize both these modes of distribution in different cities in Taiwan. Calvin Klein also utilizes these modes but international retailing is through licensing. Louis Vuitton primarily utilizes exclusive boutique distribution but retails through high-end department stores in independently managed shops or stalls. In international expansion, the Taiwanese brands should consider the mode of distribution that fits their target market. A limited target market such as that for Louis Vuitton involves exclusive distribution channels while a wider target market requires mass distribution channels such as department stores. 5.2.4 Brand Perception In Taiwan, all the four brands are held generally in a positive light by the Taiwanese market. One issue that arose against one of these fashion brands is the audaciousness of the designs considering that the brand is local and inspired by the Chinese tradition. Shiatzy Chen, in its attempt to widen its market segment to the younger age groups have expanded clothing designs to bright coloured silk mini skirts and some revealing tops to meet the demands of the adventurous younger-aged market. Its 2007 Spring-Summer collection received positive reviews from the Taiwanese and international media but it was also criticized as a little too sexy for the traditional market segment. This was the basis for the speculation that perhaps the reason why the brand is aggressively making its way to the international market is the company’s exhausted of the Taiwanese market. However, only a small segment of the market carries this perception. In fact, a new Shiatzy Chen flagship store has just been established in the past year indicating that the company still expects an increase in demand from the market in the next years to decide to invest in another exclusive boutique. The brand’s expansion into the international market is a long-term goal that every local company seeks to do, especially in this era of globalisation when it is relatively easier to enter international markets. The company believed that it was time for expansion and it is by meeting contemporary demands that it will be able to reach out to the international market. Timing is another key to success. Another issue faced by luxury brands is price. Louis Vuitton is a luxury brand specifically targeting the high-income groups in Taiwan so that the brand has become a status symbol in the market. While a large segment of the market want to own Louis Vuitton goods, the price is not affordable for a large segment of the market. Although the positive reception of the market is good for the company in enhancing its brand equity and maintaining a market base of wealthy Taiwanese individuals, this has caused brand piracy making Louis Vuitton one of the most copied if not the most pirated brand in the Asian and European market. This has caused the brand the market perception of doubt over the authenticity of the Louis Vuitton products in the market. If consumers are not aware that Louis Vuitton products is sold only in exclusive boutiques and high-end department stores, they might believe that the Louis Vuitton products retailed are genuine based on the claim of the seller. This has also affected, to a certain extent, the position of the brand as a status symbol because people would always wonder whether the products donned are genuine or pirated. LVMH has invested in a team to deal with its piracy issue.   With regard to the other brands, Calvin Klein also faced the issue of piracy in the Asian market including Taiwan. However, since the brand includes clothing line for the lower-end group, piracy of Calvin Klein is executed in a lower extent because a greater number of people can afford the brand. This means that there is also a relatively lower degree of doubt placed upon Calvin Klein brands worn by individuals. Brand integrity is another success factor. Jamei Lee is a distinguished brand in Taiwan especially among the younger professional group. However, it has not achieved that level of distinction that allows the brand to reach the international market. This is perhaps because of the subtlety of the brand communication. It expresses the Chinese-inspired value of balancing the concepts of simplicity and elegance in the designs. Since the materialisation of this value is through modern fabrics, patterns, designs there is that restrained degree of differentiation that the brand can offer to the market through its products. This means that the brand is enhanced through other means. Since the brand is also the name of the designer behind the clothing line, the reputation of the designer in the international market could be built to translate into greater brand equity. Enhancing the value offering of Jamei Chen may be necessary for the brand to succeed in its second attempt at internationalisation. 5.2.5 Brand Recognition The extent that brands are recognised in the market is linked to the extent of presence of the brand in international markets. Louis Vuitton has eight distribution channels in Taiwan. The Tainan Mitsukoshi boutique in Tainan, SK Mitsukoshi and Taichung Global boutiques in Taichung, Kaohsiung Hanshin boutique, Taipei Mall 97 and Taipei Tun Hua boutiques in Taipei, and the flagship Taipei 101 and Taipei Building stores. Its operation in four cities has made the brand well recognised in Taiwan. Its flagship stores, designed like the monogram canvas of its leather products is easily recognised as a Louis Vuitton store even if the company does not place a sign on the building. Local brands seeking internationalisation could benefit from using its products and goods logos to achieve recognition.   Calvin Klein has spread in Taiwan as an international fashion brand appealing to the market due to its brand-licensing scheme resulting to the development of fashion items responsive to the current demands of the market. Designer Holdings Ltd. became a Calvin Klein licensee in 1994 and since then engaged in a bridge business campaign to bring the brand to Europe and Asia. This was the first company to bring the brand into Taiwan. In 2003, Club 21 became a Calvin Klein licensee and plans to introduce fifty new distribution outlets in the country. Due to the interlocking operations of the different brand licensees seeking to exhaust the market, it has achieved a high rate of brand recognition in Taiwan. Brand recognition is supported by the popularity of the logos Calvin Klein or CK. Internationalising brands could also learn from this brand introduction strategy capitalising on the widening of distribution channels. Shiatzy Chen is a fully established brand in Taiwan with presence in all the major cities. In the international market, the brand is represented in China, Hong Kong and Japan in Asia and Paris in Europe. The brand is internationalising through a ripple effect with the foundational base of the brand remaining in Taiwan but as the brand achieves popularity in adjacent countries, the brand is brought into that market. At present, China is the brands biggest developing market. However, depending upon the feedback of the store in Paris, the brand could further expand its presence in this European city. The brand was able to spread through its membership program and targeting of international markets with high appreciation for alternative fashion as well as a population of Chinese descent and Asian immigrants carrying the brand with them or able to relate to the brand. Shiatzy Chen has a pool of 25,000 patrons in different markets. Strategy plays an important role in brand internationalisation. Jamei Chen was introduced previously in New York but this endeavour failed primarily because of the difficulty in launching the brand as distinct from existing brands in the market. This was because the clothing under the brand evolved from Chinese outfits for Hong Kong movies to theatre costumes. It was only after the brand was reintroduced in Taiwan that the brand achieved a certain degree of focus. Currently, the brand is still in the troughs with regard to its internationalisation plan since the company is focusing on expanding the product line to include infant wear as well as entry into other industries such as cafés and teahouses. Based on the experience of Louis Vuitton, Calvin Klein and Shiatzy Chen, as long as the brand is evolving, it would be difficult to engage in internationalisation because of the lack of a foundation for launching the global brand strategy especially when like the case of Shiatzy Chen, the initial market segment in the international market is comprised of Asians who recognise the brand or relate to the brand because of cultural or regional alignment.     5.2.6 Consumer Behaviour Consumer behaviour is measured through actual sales translated into the revenue and profit reports of the companies for brand performance. Louis Vuitton reported a 9 percent revenue growth in 2006 for its fashion and leather goods. Although it does not have any separate data on brand performance in Taiwan, reports on the Asian market show that China, Hong Kong. Taiwan and other Asian countries contribute 17 percent to total global revenue in the sales of fashion and leather goods. Asia is the fourth largest contributor next to the United States, France and Japan. Revenue generated by the Asian market increased by 19 percent. In terms of expansion, the brand is being built up for further expansion in China with Taiwan and Hong Kong remaining as stable markets. (LVMH, 2007d) The performance of Louis Vuitton proves that despite its battle with piracy, it was still able to obtain a sizable amount of revenue in Asia, where brand piracy is most rampant. Brand success is attributed to the consistency of the brand in providing the value that it represents to customers. Calvin Klein is retailed worldwide through licensing. This means that there are different licensees operating in Taiwan. Consumer behaviour is indicated by the vibrancy of licensing approvals, which implies that businesses still see a growth in demand in the succeeding years for the brand. PVH Corporation earned million from licensing while global sales reached billion in 2005. Brand performance in Taiwan remains positive and growing. This mode of distribution could be an important marketing strategy for internationalising fashion brands. Shiatzy Chen is a family-owned company so that it does not have reports on investor relations. However, growth is reflected in the continuing expansion of the brand in Taiwan and in its current markets. Flagship stores are increasingly being built in Taiwan, China, Hong Kong and Japan, indicating that the brand is being given greater interest by these markets. However, the focus of the global brand strategy is in Asian markets. Again, the company is actually taking its time in internationalisation grabbing opportunities as these arise but carefully weighing options before acting. Shiatzy Chen expects to achieve internationalisation as a long-term goal much like the process that Louis Vuitton and Calvin Klein went through before becoming international brands. Jamei Chen remains a strong fashion brand in Taiwan with the company continuing to establish the brand in the fashion as well as in other industries. This means that the brand will not be going into the international market       6.0 Conclusion Brand internationalisation is a complex and protracted feat achieved through a corresponding global brand strategy that occurs in a cyclical manner. This means that it is acceptable for companies to fail once or a number of times before finally obtaining an international status for its brands by repeating but enhancing its strategy or engaging in a new strategy. This also means that there are a number of direct and intervening factors that companies need to consider in developing and implementing their global brand strategy. Nevertheless, theoretical guides particularly the global brand strategy cycle provides a framework of the considerations for companies engaging in the international best practices based on the experiences of successful international companies. Theoretically, global brand strategy comprise of several stages commencing with the determination of the overall business strategy of the company particularly competitive direction followed by brand expression, marketing, brand perception, brand recognition, and consumer behaviour. These stages represent the process in developing a brand for internationalisation. This means that if the company has optimised these stages in a single cycle, it should be able to achieve a successful brand. Empirically, best practices derived from the experiences of successful international fashion brands as well as lessons from brands that failed in the international market provides helpful insight to companies seeking brand internationalisation. Jamei Chen is a Taiwanese brand that failed in becoming an international brand through expansion in New York, the fashion city in the United States. Although, there may be other reasons for the failure of the brand to conquer the New York or the United States market, the primary reason for the failure is the weakness of brand perception and expression. Brand perception refers to the extent that the brand responds to the needs of the market so this is expressed through the positive feedback that the brand receives from the public. Jamei Chen started as a brand covering traditional Chinese outfits for Hong Kong movies. However, even if these movies may have been successful in the international market, the US market was not ready for Chinese traditional fashion. Brand expression refers to the message and the manner that the message is conveyed to the market. In the early 1990s, alternative or fusion fashion was scarcely seen on the runway with fashion weeks dominated by American or European brands. When Jamei Chen came into the market during this time, there was disparity between the value that the brand is offering and the market is asking. The brand was not able to reach out to the American market. This highlights the importance of knowing the market and determining its needs that forms part of the brand perception and expression stages.   Shiatzy Chen is a Taiwanese brand in the process of internationalising with the brand represented in Japan, China, Hong Kong and Paris. Its initial success in entering foreign markets is the strength of its brand value. It was able to provide a starkly different value that captivated different markets. Brand expression of ‘neo-Chinese chic’ appealed to the market because of its unique Chinese inspiration materialised in modern designs, cuts and patterns. The brand represented the modern but culturally grounded woman that many women around the world can relate. Apart from this, early 2000 marked the entry of a number of Asian films in the international market indicating the right timing for international expansion because of the openness of international markets to alternative or fusion fashion. A combination of a strong brand and marketing strategy contributed to the success of the brand in reaching out to several international markets. Louis Vuitton and Calvin Klein took decades to become international brands. Key to their success is their unified approach to brand internationalisation. This means that brand expansion into the global market does not only rely on a single component such as the product, channels of distribution, the reputation of the designer whose name constitutes the brand, or the logo. Internationalisation involves strength in the different stages of the global brand strategy cycle. A clearly defined business strategy directs the direction of the other stages. Brand expression and perception involves precision in the brand’s ability to respond to market demands in fashion. Marketing involves the consideration of product development, pricing, product accessibility and brand linkages to consumers. Knowledge of consumer behaviour allows companies to develop a brand that will likely derive market patronage. These international brands developed overall brand strength by considering the cycle as an aggregate strategy and not merely focusing in one component to derive strength. Thus, brand internationalisation is not just creating products and a logo but also the strategic marketing of these products and logo that constitutes the strength in brand value.    Appendices Table 1.1 International Fashion Brand History Background Period Established Brand Generation Representative Brand Management Methods 1800-1899   Hundred years Brand Hermes, Loewe, Bally, Louis Vuittons, Burberry, Cerruti 1881,Kent& Curwen, Alfred Dunhill   Manage only by designer. 1900-1960       Historic Brand Chanel, Trussadi, Prada, Salvatore Ferragamo, Lavin, Balenciga, Charles Jourdan, Gucci, Hugo Boss, Fendi, Nina Ricci, Coach Christian Dior, Celine, Emilio, Pucci, Pierre Cardin, MaxMara, Chloe, Givenchy, Missoni, Krizia, Valentino, Yves Saint Laurent     Manage by designer or family business 1961-1989               Trendy Brand Ralph Lauren, Calvin Klein, Comme des Garcons, Emanuel Ungaro, Helmut Lang, Sonia Rykiel, Alaia, Bill Blass, Issey Miyaky, Yohji Yamanoto, Karl Lagerfeld, Giorgio Armani, Jil Sander, Katharine Hamnett, Escada, Jean Paul Gualtier, Kenzo, Blumarine, Joan& David, Gianni Versace, Gianfranco Ferre, Paul Smith, Romeo Gigli, Vivienne Westwood, Dolce & Gabanna, Kenneth Cole, Moschino, Donna Karan, Tommy Hilfiger, Ann Demenulemeester, Dries Van Norten, Christian Lacroix, Martin Margiela, BCBG               Manage by designer and brand manager 1980-2006       Global Brand Include above International fashion brand and the new designer brand such as: Alexander McQueen, Victor & Rolf, Junya Watanabe, Hussein Chalayan, Jeremy Scott, Julien MacDonald, Veronique Branquinho, Emma Cook, Stella MaCartney Manage by designer, brand manager and financial corporate organization or companies       Table 1.2 the Situation of Taiwan’s Designer Brand onto International Market Brand Year Established First Launching Market Operating Situation Shiatzy Chen 1978 Paris, 1991 First specialist shop open on 2001 Lufong Chih 1982 Shang-hai, 1993 Close the shop and return to Taiwan Sofhie Hong 1985 Paris, 1996 Developing Jamei-Chen 1987 New York, 1995 Close the shop and return to Taiwan     Figure 1: Global Brand Strategy Cycle Source: (2003). Global Brand Strategy: unlocking brand potential across countries, cultures and markets.   Figure 2: Brand Environment Source: (2003). Global Brand Strategy: unlocking brand potential across countries, cultures and markets.     </div> Credit:ivythesis.typepad.com

An Analysis of International Market Expansion of Taiwanese Fashion Brands Compared with the International Expansion of Western Brands

2.6 Taiwan Fashion Industry & International Market According to the (2004), the Taiwanese fashion industry is yet to make its mark in...