Fall 08 Fall 14 RALPH LAUREN LUXURY ACCESSORIES BRAND AUDIT KELLY BOGAN – ALLISON BOWLES – POORVA RAUT – RACHEL RELYEA Objective of Brand Audit A GREAT SHIFT OCCURRED IN APRIL 2014 (START OF RLC FISCAL 2015) WHEN VALERIE HERMANN WAS APPOINTED PRESIDENT OF LUXURY COLLECTIONS FOR RALPH LAUREN. IN THIS NEWLY CREATED ROLE, MS. HERMAN WILL JOIN THE FOUR-MEMBER OFFICE OF CHAIRMAN TO LEAD THE GLOBAL LUXURY DIVISION. MR. LAUREN STATES “THIS IS A VERY EXCITING MOMENT FOR OUR COMPANY. LUXURY EPITOMIZES THE ASPIRATIONAL AESTHETIC OF THE RALPH LAUREN BRAND, AND WE FELT THAT IT WAS TIME TO CAPITALIZE ON THE SUCCESS WE HAVE ACHIEVED BY LEVERAGING THE COLLECTIVE STRENGTHS OF OUR LUXURY PORTFOLIO AND PLACING THEM UNDER A SINGLE LEADER” (JONES, 2014) WHEN AN IMPORTANT SHIFT IN STRATEGIC DIRECTION HAPPENS IT IS IMPERATIVE FOR THE COMPANY TO TAILOR MARKETING PROGRAMS TO FOLLOW THE NEW DIRECTION. TO HELP DEFINE THE NEW DIRECTION OUR TEAM OF TEXTILE BRAND MANAGEMENT AND MARKETING GRADUATE STUDENTS HAS CONDUCTED THIS BRAND AUDIT / TEXTILE BRAND ANALYSIS. PRIMARY AND SECONDARY RESEARCH WAS CONDUCTED TO PROVIDE A BALANCED VIEW OF THE RALPH LAUREN CORPORATION AND OF THE LUXURY ACCESSORIES MARKET. THE RESEARCH OF THE TEXTILE BRAND ANALYSIS FOCUSES ON THE GLOBAL LUXURY ACCESSORIES MARKET AND THE RALPH LAUREN LUXURY ACCESSORIES DIVISION. PRIMARY RESEARCH FROM INTERVIEWS WITH RALPH LAUREN SENIOR EMPLOYEES SUPPORTS OUR SECONDARY RESEARCH FROM MARKET INDICES, SCHOLARLY JOURNALS, MARKETING ARTICLES, CONSUMER AND FINANCIAL REPORTS (PUBLICATION DATE RANGE OF 2010-2014). THE CORE OBJECTIVE OF THIS REPORT IS TO EXAMINE THE CURRENT STATE OF THE LUXURY ACCESSORIES DIVISION OF RALPH LAUREN CORPORATION AND ITS POSITION IN THE GLOBRAL LUXURY ACCESSORIES MARKET IN 2014. THE REPORT DOES NOT CLAIM TO BE COMPREHENSIVE, FOCUSING ON KEY INDUSTRY CATEGORIES, BUT RATHER SEEKS TO OFFER AN INDEPENDENT ANALYSIS OF THE BRAND AND PROVIDE RECCOMMENDTIONS FOR EXISTING AND NEW BRAND STRATEGIES FOR THE NEW DIRECTION OF THE RALPH LAUREN LUXURY DIVISION. YZ THE INTEGRATED TEXTILE BRAND ANALYSIS / BRAND AUDIT OF RALPH LAUREN LUXURY ACCESSORIES WAS PREPARED BY: KELLY BOGAN – ALLISON BOWLES – POORVA RAUT – RACHEL RELYEA NDER THE DIRECTION OF R ANCY ASSILL U D . N C THE COLLEGE OF TEXTILES – NORTH CAROLINA STATE UNIVERSITY - FALL 2014 Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 TABLE OF CONTENTS CHAPTER 1: Ralph Lauren Corporation Overview 5-9 RALPH LAUREN CORPORATION OVERVIEW 5 MR. RALPH LAUREN 6 RALPH LAUREN CORPORATION – Brief History Timeline 6 COMPANY GOALS : Grow Luxury Business 9 CHAPTER 2: Luxury Accessories Industry Assessment 9-17 INDUSTRY ASSESSMENT 9 MARKET SIZES FOR LUXURY ACCESSORIES 13 FRAMEWORK OF LUXURY PRODUCTS 14 LUXURY ACCESSORIES IN US 16 CHAPTER 3: Ralph Lauren Luxury Accessories Market 18-27 ‘THE WORLD OF RALPH LAUREN’ – LIFESTYLE LUXURY BRAND 19 RALPH LAUREN ACCESSORIES – CURRENT POSITION IN MARKET 20 TARGET MARKET 24 CONSUMER INSIGHTS 27 CHAPTER 4: Marketing Objectives 31 CHAPTER 5: Brand Inventory / Brand Measurement 32-37 3 Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 BRAND IMAGE 32 BRAND ELEMENTS 33 RODUCT – ACCESSORIES 35 BRAND PORTFOLIO ANALYSIS 37 ICONIC RALPH LAUREN PRODUCT: The Ricky Bag Story 41 STRATEGIES – TOUCH POINTS 45 CHAPTER 6: Competitive Analysis 46-50 TOP COMPETITORS - Gucci and Louis Vuitton 49 COMPETITIVE DIFFERENTIATION 50 CHAPTER 7: SWOT 51-53 CHAPTER 8: Marketing Measurement 54-56 VALUE EQUATIONS 54-55 CHAPTER 9: Recommendations 57 References 59-62 Appendix 63 APPENDIX I: MARKETING 10P’S 63 - 66 4 Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 1 - Ralph Lauren Corporation Overview RALPH LAUREN CORPORATION OVERVIEW Ralph Lauren Corporation is a global leader in the design, marketing, and distribution of premium lifestyle products in four categories: apparel, home, accessories and fragrances. For more than 46 years, Ralph Lauren’s reputation and distinctive image have been constantly developed across an expanding number of products, brands and international markets. The Company’s brand names, which include Ralph Lauren, Ralph Lauren Collection, Purple Label, Black Label, Polo, Polo Ralph Lauren, Blue Label, RRL, RLX Ralph Lauren, Lauren Ralph Lauren, Ralph Lauren Childrenswear, Denim & Supply Ralph Lauren, Chaps, and Club Monaco, constitute one of the world’s most widely recognized families of consumer brands. (RLC 10K, 2014). RALPH LAUREN CORPORATION STORY Ralph Lauren Corporation is a publicly traded, United States-based holding company headquartered in New York, NY. Ralph Lauren Corporation began with the 1967 founding of the Polo Ralph Lauren Company by American designer Ralph Lauren. Back in the late 1960s, Ralph Lauren began his business with nothing more than a tie collection. His chance to create a big name for himself came when Bloomingdale's agreed to carry his line of neckties. But there was one condition: that he make them slightly narrower and remove his name from the label. He refused. Even at that early point in his career, Lauren understood the importance of defining his brand and then protecting it. That mind-set has stood him in excellent stead ever since. Ralph Lauren went on to grow the company into a global lifestyle brand that embodies that image of American tradition. For over five decades Ralph Lauren maintains the legacy of American heritage and invites its customers to participate in that lifestyle. American Style. Ralph Lauren operates a multi-brand strategy while keeping the focus clearly on the overall Ralph Lauren name. With nine divisions and thirty five brand lines each targeting a different consumer group based on age and income, Ralph Lauren is among the most diverse players in lifestyle goods in terms of product category and price point. (RLC Luxury Goods, 2014) 5 Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 MR. RALPH LAUREN Ralph Lauren was not a trained fashion designer. He was born as Ralph Lifshitz, not Ralph Lauren. His first foray into fashion was working as a salesman at Brooks Brothers. Later, he designed ties for men. He sold those designs in a small store, under the label "Polo." Ralph Lauren started in women's fashion by designing clothes for his wife. He had never been on a safari, but he made beautiful clothes in khaki. “He grew up in the Bronx, not an English manor. He wasn't skilled at playing polo, but he had a fantasy of how clothes could transform the wearer via styles and illusion. The idea was to dress for the life you wanted, and who you wanted to be. "Ralph Lauren says he writes through his clothes, it's not about fabric. It's about dreams" (Girvin, 2008). RALPH LAUREN CORPORATION – Brief History Timeline 6 Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 MARKET POSITIONING EXPANSION IN ASIA TO SUSTAIN GROWTH Ralph Lauren Corp is a global leader in the design, Ralph Lauren has been focusing recently on expanding retail marketing and distribution of premium lifestyle products. operations in emerging markets like China and India (Ralph RLC is positioned well on a global platform with its presence Lauren Company Overview, 2014). RLC has been working on in US, Europe and Asian Market. RLC holds a giant share of understanding the complexities of logistics to sell in Asian 25.1% in the global market (Fig. 1) when compared to the market. There is a huge disconnecting with business global luxury brands attributed to its strong presence in practices but RL models have not figured out the exact digital marketing seamed with the premium lifestyle reason. It needs partnerships and business propositions to experience it provides its customers. succeed in this market. (M. Fisher, personal communication, MARKET PRESENCE RLC has its presence in US/North America, Asia and Europe. US serve to be the largest market for RLC which is followed by France at the second position. Its popularity in markets with major luxury buyers –can be understood as it is the 2nd most popular luxury fashion brand in Japan (Carr, 2012). The absolute value growth of RLC in US is $2,600million. (Ralph Lauren, 2014). U.S. remains the largest luxury goods market in the World however, by the end of 2014, China is predicted to surpass Japan to become the second largest luxury market in the world (Euromonitior, 2014). This poses a threat to RLC as it still needs to establish a strong foothold in the Asian Market. WEAK MACROECOMIC CONDITIONS IN EUROPE ARE A NEAR TERM THREAT Ralph Lauren's wholesale business is most vulnerable to the current situation of weak macroeconomic condition in Europe (Spain, Greece and Italy), as Europe contributes a Fig. 1.1 (Bogan, Bowles, significant percentage of the company's total wholesale Raut, Relyea. 2014) revenues. (Ralph Lauren Company Overview, 2014) Source: Experian Marketing Services, 2013 YTD 7 Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 October 24, 2014). In 2010, Ralph Lauren acquired its in the Chinese market is now one of the key priorities for the previously licensed Ralph Lauren-branded apparel business company. Ralph Lauren plans to open nearly 60 new stores in the Greater China and Southeast Asia region. The brand in Greater China, primarily in premium locations over the focus and perception had been diluted due to the licensee's next 3 years to achieve this. (Ralph Lauren Company focus on selling lower price point products. Re-positioning Overview, 2014). Ralph Lauren's brand perception into a more premium brand CORE COMPETENCIES Ralph Lauren competes primarily on the basis of fashion, quality, value, and service, which depends on their ability to: · Anticipate and respond to changing consumer demands in a timely manner; · Maintain favorable brand recognition, loyalty, and reputation for quality; · Develop and produce high quality products that appeal to consumers; · Appropriately source raw materials at cost-effective prices; · Appropriately price our products; · Provide strong and effective marketing support; · Ensure product availability; and · Obtain additional points of distribution and sufficient retail floor space, and effectively present our products at retail.