PRINCIPLES OF MARKETING: MARKETING PLAN

Victoria’s Secret

Done by: Hannah Grey (37), Jasmine Oh (23), Fatin Nathasya (25), Mikayla Joy (22) & Lee Min Qi (3) 1. Executive Summary

2. Preliminary Information and Analysis a. Situation Analysis – 3Cs

 Company

Victoria's Secret is the largest American retailer of lingerie and was founded by Roy Raymond in 1977. The company sells lingerie, women’s wear, and beauty products through its catalogs (sending out 375 million a year), website, and its U.S. stores.

Eight years prior to founding Victoria's Secret, Raymond was embarrassed when purchasing lingerie for his wife at a department store. Newsweek reported him looking back on the incident from the vantage of 1981: "When I tried to buy lingerie for my wife," he recalls, "I was faced with racks of terry-cloth robes and ugly floral-print nylon nightgowns, and I always had the feeling the department-store saleswomen thought I was an unwelcome intruder.

Over the course of Victoria's Secret's evolution, the company "has gone from being value-driven to creating a luxury-shopping experience and an aura of fashion associated with its product" which has been driven by marketing.

Victoria's Secret is known for its catalogs and its annual fashion show, the Victoria's Secret Fashion Show, and has been credited with transforming "America's conception of lingerie" by pioneering "sexy underwear as fashion" and "lingerie mainstream entertainment." The societal manifestation is "the increased cultural acceptance of shopping for undies" in the United States.

Victoria's Secret is credited with "transforming lingerie from a slightly embarrassing taboo into an accessible, even routine accessory." In 2006 The New York Times reported that traditional fashion was influenced by intimate apparel "in part because of the influence of Victoria's Secret – and ubiquitous, sexually charged come-hither marketing.”

 Customers

The company focuses on captivating women and girls in America. These days, Victoria’s Secret regionalized which made the brand more dominant. Victoria’s Secret has come to Singapore and they are determined to stay.  Competitors

In 1998, Gap launched a direct competitor to Victoria's Secret: GapBody. The Gap’s success has often been attributed to its ability to design and market clothing to a young, affluent demographic and to produce advertisements that emphasize its “coolness.” While it has certainly been successful, especially from a marketing perspective, the Gap Body is simply not particularly unique. Effective at capturing the current zeitgeist with regard to fashion, but not “unique” in the sense of setting itself markedly apart from its competition.

La Senza Corporation is a Canadian fashion retailer based in Dorval, Quebec that sells lingerie and intimate apparel. La Senza is relatively young, at least in terms of brand. Since the opening of its first store in 1990, the company has grown to include more than 300 stores in Canada. A further 487 stores under the La Senza brand operate in 45 other countries worldwide via licensing, franchise, and cooperation agreements. In 2006 La Senza was purchased by Limited Brands of Columbus, Ohio for $628 million in cash. La Senza's products focus on lingerie and nightwear but also include loungewear, daywear, and accessories. The concept is similar to that of Victoria's Secret, which is also owned by the Limited Brands Corporation.

Gilly Hicks is a lifestyle brand, from American company Abercrombie & Fitch (A&F), specializing in women's underwear. Marketed for the female consumers of its parent brand, Gilly Hicks is officially labeled as "the Cheeky cousin of Abercrombie & Fitch.” The brand was the fifth from A&F, and was initially known as Concept 5. The Australian theme of Gilly Hicks was originally inspired by the phrase "Down Under". In saying, it is the only brand from Abercrombie & Fitch with a non-American image. Gilly Hicks is primarily set to compete with large lingerie chains Victoria's Secret, Frederick’s of Hollywood and Aerie. However, on November 5, 2013, it was announced that all of the Gilly Hicks retail stores would be shut down by the end of first quarter of 2014. The decision followed declining sales in the U.S. and UK stores.

In February 2006, American Eagle launched the Aerie lingerie sub- brand, targeting the American 15- to 21-year-old female demographic segment. In addition to lingerie such as a wide variety of bras and other undergarments, the Aerie line also sells dormwear, active apparel, loungewear, accessories and sleepwear. Aerie REAL is a body image campaign launched by Aerie in spring 2014 in response to American Eagle’s announcement in January 2014. AEO released news that it was going to discontinue using supermodels and digitally retouching its models to encourage positive self-image. The Aerie REAL campaign features models in all sizes, along with their beauty marks and tattoos. Triumph International is a multinational family-owned underwear and lingerie manufacturer founded in 1886 in Heubach, Germany. It expanded into the United Kingdom, Japan, Australia, the Philippines and others in the 1960s and 1970s. 6 The company is one of the largest producers of bras and underwear, particularly in Japan and Germany. It began with a staff of six people under the name Wirtschaftlicher Verein Spiesshofer & Braun, Familienverein in 1902, the company took on its current name, Triumph, with the Arc de Triomphe in Paris as its namesake. The first Triumph bra was created in 1922. b. The Statement of Need or Statement of Problem

 We have identified two problems that Victoria’s Secret is facing – the first problem being having body image issues and the second problem being having overpriced products.

 Here are some facts/data that supports the existence of the problem(s):

Body Image Issues – Article #1 In this article from eonline.com, it tackles the controversy on Victoria’s “Perfect Body” ad campaign. With all their models having skinny and toned physiques and calling it the “perfect body”, it is definitely something that will cause people to have self-esteem issues as they will feel pressured to change how they look like just to look “perfect”. The message of their ad campaign suggested that unless you had that “perfect body”, you are seen as imperfect or abnormal otherwise.

Body Image Issues – Article #2 In this article, it tackles the same subject as the previous article about the “Perfect Body” campaign. In this article, it mentions, “No attempts at body diversity were made in the image and worse still the clear suggestion was that models were what should be seen as “perfect bodies”. This displays such a negative message to the public, especially women, as it is implying that we would only be considered perfect if we had the same or similar bodies as the models. Instead, they should be depicting the message that women should be comfortable in their own skin and should not feel the need to alter their appearance just to be “perfect” because they already are perfect. Further on in the same article, it suggests that this was not the first time that Victoria’s Secret had a “body image issue”. The article mentions, “but if they are serious about tackling their body image problem, they might want to start by diversifying their Angels”. From this statement, we concluded that Victoria’s Secret can start tackling their body image problem through the suggested solution mentioned above (diversifying their Angels) and there can be more than just one solution for this problem and many focal points to start from. However, the change can only take place once VS starts making a move and fixing this problem of theirs. There can only be so many solutions, but what are these solutions if nobody wants to take the first step? Overpriced Products – Article #1

From this Yahoo! Answers forum, a user asked why Victoria’s Secret products are expensive. Several responses suggested that it would only be right for the products to be expensive since it is a designer brand. However, the respondents expressed similar thoughts on purchasing other products, that are cheaper, similar to the one’s in VS elsewhere (e.g, Target, Carson’s, etc).

Overpriced Products – Article #2 From this article from BuzzFeed, the words ‘expensive’ and ‘overpriced’ were used to describe VS Products.

 Need Statement

With the aid of these evidences and data, the problems that Victoria’s Secret has that we have identified is body image issues and overpriced products.

According to Victoria’s Secret, their mission statement is the same as its parent company, Limited Brands, and it is, “Limited Brands is committed to building a family of the world’s best fashion brands offering captivating customer experiences that drive long-term loyalty and deliver sustained growth for our shareholders.

As mentioned in their mission statement, Victoria’s Secret continues to “offer captivating customer experiences”. However, if the existing problems that we have identified are not given a solution, this may affect Victoria’s Secret negatively in the long run. The company could lose their revenue and make losses instead of profits, and they may also lose their customer loyalty if their body image issue problem still persists. c. Product or Service Offering

What does Victoria secret provide their customers? Can they offer what their competitors can’t? Victoria’s secret has a few ways of attracting customers and defeating their competitors.

1. Making Money Victoria secret unfortunately does not allow re-selling of their products to other retailers and does not allow any modifications of their products as they are more concerned about the safety of their products

One example would be Victoria’s secret caught employees from wal- mart for selling re-used underwear.

"Our top priority is our customers' satisfaction and safety. The actions you describe are a clear and significant violation of our policy. We take this situation very seriously and are taking immediate action to re-educate all of our associates on the proper way to handle returns."

2. Saving Money

Victoria’s secret does allow it’s customers to save money in many ways. Below are the example of 3 ways Victoria secret allows customer to save money

Freebies: The “Free Panty” coupons a) Victoria’s Secret sends these out every month to all of their customers, and they purchase is necessary to use the free coupon. Therefore, people love this particular offer because they can receive a free panty just by walking into the store and handing over the coupon.

How does this help Victoria’s Secret? Giving away a free item gives customers a reason to go into the store. There aren’t too many people who will just go in the store, get their free item, and then walk out. This actually helps Victoria secret gain more profit as more customers will walk in their store

Exclusive, Limited-Time Coupons b) Another one of their great techniques is when they send coupons for “10 dollars off any Pink purchase.” In this situation, customers would receive $10 off any Pink brand item bought in the store. Pink is extremely popular for Victoria’s Secret, and there’s a wide selection in this line.

How does this help Victoria’s Secret? They may provide $10 off, but they’re getting you to spend money there. Again, the incentive gets customers through the door and the sought-after merchandise urges them to stick around and do some more shopping. c) Exclusive, Limited-Time Coupons: Another one of their great techniques is when they send coupons for “10 dollars off any Pink purchase.” In this situation, customers would receive $10 off any Pink brand item bought in the store. Pink is extremely popular for Victoria’s Secret, and there’s a wide selection in this line. There’s something for everyone. Why not see if you can save on a higher-priced item you may have had your eye on?

How does this help Victoria’s Secret? They may provide $10 off, but they’re getting you to spend money there. Again, the incentive gets customers through the door and the sought-after merchandise urges them to stick around and do some more shopping.

3. Saving time

Organizing their products Victoria’s secret has sectioned and organized their products into different sub-brands or collections. Each sub-brand focuses on a certain theme. for e.g Victoria’ secret sub-brand called pink targets at 19 years old woman and the “Very sexy for him and her” are new fragrances for men and woman. Each of these collections are offered in various styles based on the extent of coverage by the bra, configuration of the bra-strap or even its entire silhouette. The customer also has the choice to shop by fabric type such as cotton, smooth and stretch, lace, embodied and satin.

How does this help Victoria secret? it benefits them as it save customers the time in their decision-making process, making their purchases faster, thus, making their buying experience easier for them. This make shopping for them a better experience.

Incremental Incentives: Not every patron sees the appeal of waiting in lines for the best prices. That’s why they incorporate online-only deals. For example, they may give a $15 discount for every $100 spent, $30 off for every $150 spent, or maybe even $75 off, which helps save customers more for $250 spent. This incremental technique is another way for the store to gain new business.

How does this help Victoria’s Secret? Incremental incentives encourage people to buy more for a price break or discount. This also help customers to saving time in waiting in line as they can buy items online and get better deals without having to queue. This also, in a way help customers to save money as they get discounts.

[email protected] SWOT & PEST

SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a business venture. This is our SWOT Analysis for Victoria’s Secret:

Strengths (internal, present) Weaknesses (internal, present)

 Brand Value/Customer Loyalty  Product Quality

Victoria’s Secret (VS) has been described in VS has been sued for one Business Insider article as, “the most consumer fraud, when they popular apparel brand in the world” (Lutz, had terminated a contract 2013). This may not be the case, but there with their hosiery supplier, certainly seems to be buzz surrounding the Zephyr. They carried on to brand. Victoria’s Secret, La Senza sell a lower-quality version of (Canada), and Pink are the three leading the same product, using the brands in the global lingerie market (Limited same packaging (Monget, Brands Inc., 2013). VS managed to retain its 2012). While it may be pricey customers and turn out an increased gross to fix their relationship with profit despite increased costs of production their Italian-sourced supplier, they faced last year, particularly for cotton, they should make efforts to which may be a testament to the value of improve quality control their brand (Euromonitor International, 2013)

 Marketing through Social Media  Race(ist) Problems Whilst VS spends a lot on marketing, they increased their return on investment (ROI) In 2012, Victoria’s Secret by using social media platforms such as shocked everyone with a Facebook, Twitter, and Pinterest, to redirect conscience over their their consumers to their main website – a blatantly racist ‘geisha’ strategy to encourage online consumer costume (modeled by the behavior (Euromonitor International, 2013; ultra blonde and very- Jane, 2012). Having more than 24 million definitely-not-Asian, Candice fans to date, VS currently ranks as the Swaenpoel). 2 months after second most popular retail Brandon that incident, they upped the Facebook. Furthermore, customers with the ante by putting the very VS credit card can accredit “social points” by Midwest and most-certainly- connecting their Angel Cards with their not-Native-American, Karlie social media accounts and sharing Victoria’s Kloss, in an Indian costume. Secret news (Victoria’s Secret Inc., 2014) Just as the saying goes, once is an accident, twice is  Sales a coincidence, but 3 times is pattern. On the third time, in Last fiscal year, VS generated US $1.5 2011’s Victoria’s Secret billion through its online channel of Fashion Show, they distribution alone, amassing US $4.0 billion crammed all the black total from all of its distribution channels models into one ‘tribal’ (Euromonitor International, 2013). VS sequence. At the very least, accounted for the majority of net sales and the company has more than operating income for its parent company, enough money to spend on Limited Brands last year (Eurmonitor diversity consultants or International, 2013). Moreover, Victoria’s customer focus groups or Secret is estimated to account for 41.7% of even a book or three on the stock price for Limited Brands, which racial stereotyping. Yet it makes them their most valuable division appears they do none of (Trefis Inc., 2014). Also, they have reported those things prior to consistent record sales for every quarter in spending thousands (if not the last three years (Lutz, 2012) millions) of dollars on making and manufacturing these  Fashion Shows explicitly racist costumes. This makes some people VS holds a yearly runway show, which has wonder if they either don’t become a popular televised event, with care or if they’re deliberately many famous models and guest trading on racist controversy performers. Back in 1999, an advertisement to bring some attention to the aired during the Super Bowl XXIII brand. There could be a announcing 72 hours until their webcast possibility that ictoria’s runway show resulted in 2 million visitors to Secret doesn’t intend to their website, and one million within an hour avoid being racist either. And from when the advertisement was aired one can only be ‘accidentally’ (Farrell, 1999). racist so many times before other people begin to wonder what exactly is going on.

 Website Navigation

The e-commerce website can improve the resolution of their images, so that one can hover over a product and see a closer and more accurate representation of the product design and fabric. Having high contrast, images appear quite static often, and do not provide accurate images of what can be expected from the product. Additionally, they do not always have images of the product options available (i.e, the colour shown in the photo is not the colour being sold). They can also make use of better history-saving technology, creating a more convenient experience if ever customers are interrupted from online shopping and re-visit their website at a later time.

 Corporate Social Responsibility (CSR) Initiatives

In 2012, VS’ major producers of fair-trade cotton have been discovered to be using child labour and forced labour (Simpson, Ekow & Bliss, 2102). The US government banned taxpayers spending on cotton from various regions, Burkina Faso included, Victoria’s Secret main supplier of cotto (Simpson, 2012; Simpson, Ekow & Bliss, 2012). However, despite this, the brand continued to remain financially strong the following fiscal year, and managed to retain its customer base even once the price of cotton has risen. (Euromonitor International, 2013). However, as discussed in class, today’s customer is smarter, and more demanding. Disregarding to see CSR initiatives as critical branding strategies is certainly a weakness.

Opportunities (external, future) Threats (external, future)

 Plus-sized market  Competitors

Victoria’s Secret can extend their product Apparel brands like American line of intimate apparel, as well as focus on Eagle and Gap

marketing efforts to promote their products have branched into intimates to the plus-sized market. Victoria’s Secret market. Victoria’s Secret is has not shown much body diversity in their faced with competition, since brand and only have products that cater to other options become more females with skinnier and smaller physiques readily available to compared to ‘real women’s bodies’. This has customers. Since other been a controversy to most women, competitor brands would especially with the recent Bright Young naturally be more affordable Things ad campaign. Thus, to avoid that Victoria’s Secret problems such as this, Victoria’s Secret products, customers might should just extend their product line to the opt out for the cheaper plus-sized market already. Women should option instead of buying from not have to feel pressured into changing Victoria’s Secret. how their body looks just to be able to Furthermore, Victoria’s purchase Victoria’s Secret products. Secret may be seen as a Instead, women should be comfortable in luxury lingerie brand to most. their own skin and still be able to purchase Therefore, not everyone Victoria’s Secret products if they wanted to, would be able to purchase it and this could only happen if they catered to and may decide to just the plus-sized market. purchase from other brands instead. Their international  Corporate Social Responsibility Initiatives stores are also faced with domestic brands. It would be nice to see a strong brand like Victoria’s Secret participate in a corporate  Foreign Competitors social initiative. One platform could be through their Pink brand through a corporate Strong domestic lingerie philanthropy initiative in the form of brands that hold majority scholarships, bursaries or grants awarded to market share in Europe and college students, which is in line with their even in Asia may be difficult collegiate brand image. They can also to beat, especially given the partner with the American Heart Association differing customer attitudes (AHA) for a VSX (Victoria’s Secret’s active- and expectations within this wear line)-sponsored “get fit campaign” or market. For example, the something along those lines. They may also most common lingerie want to consider breast cancer as a cause brands in Singapore are to support through a corporate social Triumph, Sorella, Wacoal, La initiative (ie.: customized bras for women Senza, E2, etc. who have had mastectomies, with proceeds Singaporeans would usually from product purchases to fund cancer buy their lingerie products in prevention). There is so much that Victoria’s these brands rather than Secret can do as part of their corporate Victoria’s Secret as these social responsibility. All they need to do is to brands are the ones that they start. are more used to, cheaper and more readily available for them to purchase.

 Further International Expansion (in Asia)  Exchange Rate Risk Victoria’s Secret has expanded so much When dealing with within the United States. As of 2010, there international business, are 1,000 Victoria’s Secret lingerie stores Victoria’s Secret may run into and 100 independent Victoria’s Secret extraneous costs in their Beauty Stores in the US, mostly in shopping global efforts that were not centers. In 2010 Victoria’s Secret expanded anticipated due to exchange with franchises internationally. The first rate fluctuations between Victoria’s Secret store in Singapore only different currencies that opened in 2010 at Resorts World Sentosa make temporary changes to and there are also a couple of other stores the cost of distribution. that are opened in malls and such. There is a huge target market in Asia that Victoria’s Secret can look into in order to go through with further international expansion. In this way, they would gain more revenue through their sales as well as make their brand even more well-known than it already is.

PEST analysis is an examination of the change in a brand’s Political (P) Environment, Economic (E) Environment, Social (S) Environment and Technological (T) Environment. This is our PEST Analysis for Victoria’s Secret:

I. Political Environment

 Concentration of power in few hands: politics and government take a strong place into the business.

 Protectionism: government protects local market and companies against unfair competition

II. Economic Environment



III. Social Environment

IV. Technological Environment

d. Market Description

e. Market Segmentation 3. Description of Target Market

Product Victoria’s Secret Geographics

 Location

Singapore is a small, heavily urbanised, island, city-state in Southeast Asia, located at the end of the Malayan Peninsula between Malaysia and Indonesia.

 Size of the area

Singapore has a total land area of 714.3 square kilometres (275.8 sq mi).

 Density  Climate zone of customers

Singapore is 1 degree north of the equator. Singapore's climate is classified as tropical rainforest climate, with no true distinct seasons. Owing to its geographical location and maritime exposure, its climate is characterized by uniform temperature and pressure, high humidity and abundant rainfall. So it is almost always warm and wet.

Generally, there is much more rainfall on the western side of the island than on the eastern portion of Singapore, owing to a rain shadow effect. Thus, the eastern side of Singapore is much drier and slightly hotter than western Singapore.

Demographics  Age

 Mostly of women in their early 20's.

 Women aged 18 to 34.

 Teenagers for PINK.

 Gender

The male and female populations are broken down into 5-year age groups represented as horizontal bars along the vertical axis, with the youngest age groups at the bottom and the oldest at the top. The shape of the population pyramid gradually evolves over time based on fertility, mortality, and international migration trends.  Income

Singapore Average Monthly Wages

Wages in Singapore decreased to 4314 SGD in the third quarter of 2014 from 4445 SGD in the second quarter of 2014. Wages in Singapore averaged 3046.98 SGD from 1989 until 2014, reaching an all time high of 5108 SGD in the first quarter of 2014 and a record low of 1302 SGD in the second quarter of 1989. Wages in Singapore is reported by the Statistics Singapore.

 Family Compostion

 Family Size

 Occupation

 Education of your customers

Among residents aged 25–39 years, the percentage of university graduates increased from 23.7% in 2001 to 45.9% in 2011 while that who had attained a diploma or professional qualification increased from 15.9% to 22.9% over the same period. Psychographics  The general personality

 Consumers of Victoria’s Secret are usually fond of pursuing the individualized life and act confidently.

 Young and sophisticated personality

 Lifestyle

 Mostly women living in urban areas

 Benefits sought by your customers

 Allows women to exude their inner sexy

 Empowers women to feel sexy and good about themselves

Behaviours  The rate of use (Usage Situation)

 Valentine’s day

 Wedding ceremonies

 Birthday gifts

 Attitude of customers  Customers are willing to spend more money on quality and luxury items 

4. Competitor’s Analysis

The table below highlights numerous direct and indirect competitors and products that compete with Victoria’s Secret. The main direct competitors are GapBody, La Senza, Gilly Hicks, Aerie, Triumph, Hanes and Etam. Indirect competitors include other offerings by direct competitors and other establishments that provide clothing. Substitutes are…

Product: Victoria’s Secret Direct Competitors and Indirect Competitors Substitutes Products and Products GapBody: Lingerie Other offerings by direct competitors – Sleepwear, Loungewear, La Senza: Lingerie, Calvin Klein: Women’s Intimate Apparel Underwear, Fragrances Gilly Hicks: Women’s Underwear Aerie: Lingerie, Sleepwear & Loungewear Triumph: Underwear, Lingerie Hanes: Women’s Undergarments, Hosiery Etam: Undergarments

The table above identifies 6 direct competitors, …