How Can the Japanese Specialty Retailers of Private-Label Apparel (Spas) Go Into the German Fast Fashion Market?

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How Can the Japanese Specialty Retailers of Private-Label Apparel (Spas) Go Into the German Fast Fashion Market? HowcantheJapanesespecialtyretailersofprivate-label apparel(SPAs)gointotheGermanfastfashionmarket? Västerås,MälardalenUniversity Tutor: CarlThunman MIMA-InternationalMarketing Group: 1987 MasterThesis: EFO705 Authors: KaYuSeto790613 Date: June04,2008 OlenaZastezhko790922 Abstract Date: 2008May28 Course: MasterThesis Authors: KaYuSetoandOlenaZastezhko Tutor: CarlThunman Title: HowcantheJapanesespecialtyretailersofprivate-labelapparel(SPAs)gointothe Germanfastfashionmarket? Introduction: Japan is one of the largest and most sophisticated clothing markets in the world,anditsfashiondesignsandproductsqualityenjoyhighreputationfromworld-wide. Becauseofkeencompetitioninthedomesticmarket,fashionretailchainsfinditnecessaryto searchfornewmarketsAsia’spotentialhasbeenalreadyextensivelyexploitedfordecades. Thus, in order to further expand, Europe should be considered for the next step in internationalization.Germanyseemstobeagoodchoice,sinceithashugepopulation,large market value and is located in the centre of Europe. There has been a number of studies published about foreign retailers entering Japan, however, only few researches consider movesoftheJapaneseretailerstoothercountries,toAsiainparticular.Inordertofillinthe information gap the current study was conducted. It focuses on investigating the German menswearandwomenswearmarketsfromtheperspectiveofpotentialfortheJapaneseSPAs. Purpose: ThepurposeofthethesisistodescribeGermanapparelmarketandtoexaminehow the Japanese SPAs can enter it. The research is limited to the German menswear and womenswearmarkets,whichtargetmenandwomenaged15andabove.Finally,theresearch isaimedatprovidingrecommendationsfortheJapaneseSPAsregardingplanningmarketing strategieswhenenteringtheGermanmarket. Method: Primary: Theprimarydatawasreceivedthroughconductingthreesemi-structuredinterviews with experts in fashion industry in Germany, who can give professional overview of the Germanfashionmarket.Theaimwastoobtainthelatestinformationrelatedtothefashion marketconditions,consumers’expectationsandtheirpurchasinghabits,aswellasfactorsthat arenotcoveredbythepreviousstudies,butarecrucialforthecurrentresearch. Secondary: The secondary data was collected mostly via Internet; however a number of printedpublications wasusedas well.Market reportsby such marketingagenciesasCBI, Datamonitor,ACNielsonandEuromonitorbecamethebasisfortheresearch.Otherscientific sourceswereretrievedthroughelectronicdatabasessuchas ABI/Inform ,EBSCO,Emerald, ELIN@Mälardalen , Google and Google Scholar. Journal of Fashion Marketing and Management andbooks FashionMarketing:ContemporaryIssues (Hines&Bruce,2007) and Fashion Design (Jones, 2005) provided latest insights into current trends in fashion marketing,aswellasintroducedmainconceptsofthestudiedarea. Theoretical Model: Existing studies contribute a lot to identifying crucial variables concerning fashion marketing. However, there is no available model that can fulfill the purposeofthecurrentresearch.Thatiswhyanewmodelwasdevelopedinordertoachieve theaimofthethesis.SincethepurposeistodescribetheGermanfastfashionmarketfour factorsinfluencingitwereidentified.Theyarecategorizedasfollows:MarketEnvironmentin Germany,Competition,ActivitiesintheMarketandGermanCustomers.Withineachfactora set of variables was distinguished and analyzed. Market Environment in Germany factor coversmacroandmicroenvironments;Competitionfactorisanalyzedintermsofpositioning and branding of the major competitors; Activities in the Market factor discusses 4Ps and customerservice;andGermanCustomersfactorrevealsconsumerbehavioraspectsaswellas attitudesofGermanstobrandingandcountryoforigin.Germansizesarealsocoveredwithin this factor. The created model helps identify market situaton the Japanese SPAs will face whenenteringtheGermanfastfashionmarket. Analysis and Conclusion : The study revealed that though the German apparel market is highlycompetitiveitisalsoanattractiveoneforapparelcompaniesandthereisaplacefor newcomerswhocandifferentiatethemselvesfromthemajority.Sincethereexistsomegaps inthemarketsupplyintermsofquality/priceandfashion/qualityratios,thoseJapaneseSPAs who will be able to cover these gaps can have good potential in the German fast fashion market.ThismeansthatthoseJapaneseSPAswhocansupplyapparelofgoodquality,with fashionabledesigns,butatthesametimeatcompetitivepricescanfindfavorablepositionsin themarket.Inaddition,asnewcomerstheJapaneseSPAsneedtoensurethattheycansatisfy quickresponserequirementwhichiscrucialtothefastfashionindustry,andthiscanbecome achallenge.Also,theresearchrevealedthattheGermancustomersarebrandconscious,thus itisimportantfortheJapaneseSPAstobuildbrandawarenessandbrandreputationamong Germans.Moreover,theJapaneseSPAsneedtoidentifytargetsegmentswhichtheycanserve attheirbest.Asetofrecommendationsprovidedinthethesisregardingmarketingstrategies shows how the German market conditions can be used for creating advantages for the JapaneseSPAs. TableofContents 1. Introduction .................................................................................................................... 1 1.1. Thebackgroundoftheresearch ............................................................................... 1 1.2. Purpose ................................................................................................................... 2 1.3. Disposition .............................................................................................................. 3 2. Methodology .................................................................................................................. 4 2.1. TheCreationofTheoreticalFramework .................................................................. 4 2.2. Methodofcollectingdata ........................................................................................ 4 2.2.1. Collectionofsecondarydata ............................................................................. 4 2.2.2. Collectionofprimarydata ................................................................................ 5 2.2.2.1. SelectionofInterviewees ........................................................................... 6 2.2.2.2. Methodofconductinginterviews: ............................................................. 8 2.2.2.3. Placeofconductinginterviews: ................................................................. 9 2.2.2.4. Durationofinterviews: .............................................................................. 9 2.2.2.5. Interviewguide: ........................................................................................ 9 2.3. Methodofanalyzingdata ....................................................................................... 11 3. AnalysismodeloftheGermanFashionMarketinGermanfortheJapaneseSPAs ......... 13 3.1. FactorsofModel .................................................................................................... 14 3.2. VariablesoftheFactors .......................................................................................... 15 3.2.1. MarketEnvironmentinGermany .................................................................... 15 3.2.2. CompetitionintheGermanFashionMarket .................................................... 16 3.2.3. ActivitiesintheGermanFashionMarket ......................................................... 17 3.2.4. GermanConsumers ......................................................................................... 18 4. TheApparelSectorinJapan .......................................................................................... 21 4.1. TheRetailingoftheJapaneseFashionMarket ........................................................ 21 4.2. ProductDesignsoftheJapaneseSPAs ................................................................... 22 4.3. SupplyChainoftheJapaneseSPAs ........................................................................ 23 4.4. InternationalizationoftheJapaneseSPAs ............................................................... 24 4.5. BrandingoftheJapaneseSPAs .............................................................................. 25 5. FindingsandImplications .............................................................................................. 26 5.1. MarketEnvironmentinGermany ........................................................................... 26 5.1.1. MacroEnvironment ......................................................................................... 26 5.1.1.1. DemographicCharacteristics .................................................................... 26 5.1.1.2. EconomicCharacteristics ......................................................................... 28 5.1.2. MicroEnvironment ......................................................................................... 30 5.1.2.1. MarketSizeandMarketgrowth ................................................................ 30 5.1.2.2. MarketStructure ...................................................................................... 31 5.1.2.3. CulturalDimensionsofFashion ............................................................... 33 5.1.2.4. FashionTrends ......................................................................................... 37 5.2. CompetitionintheGermanFashionMarket ........................................................... 39 5.3. ActivitiesinGermanFashionMarket ..................................................................... 44 5.3.1. Product ...........................................................................................................
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