We are going to launch a new brand in the most famous emerging market in the world: China.
The concept is to launch a semi-luxury clothing company with the brand name Frenchy'.
Our objectives are very simple; we want to open a French clothing shop in China, because this market is growing and we think that it could be a real opportunity for us.
We are going to target the middle class market which represents the next generation of powerful-buyers'.
Through this business plan, we will explain the different steps that are required to commence our business in the fast growing Chinese market. We will begin by explaining the conception of our idea and its characteristics. Then, we will explain the market analysis that we made in order to understand the market expectations and to recognize our competitors. We will analyze the Chinese market to define how to penetrate it. This part is very important for us, because by learning about the market, we can change and adapt our strategy.
Then we will develop a part of the marketing mix; this part is about our price strategy, the offer that we are going to propose to consumers and the way we will develop our communication strategy in order to be quickly known in the big cities.
Finally, we will present a brief financial analysis.
[...] Skimming Strategy Higher price than the competitors High profit margin to quickly recover the first investment Quality involves High Price Target ‘Frenchy' will enter the Chinese market with a specific target: Active women living in Chinese cities 25 45 years old With high purchasing power Positioning ‘Luxury image in retail' Top of the line clothes This study aims to analyze how the ‘Frenchy' brand could enter the Chinese clothes market. In fact, in order to be efficient and to develop ‘Frenchy' in a good way in the Chinese market, it is necessary to study the Chinese needs, the Chinese environment and a lot of key factors which involve success or failure. [...]
[...] Key factors for the setting up of a shop Expected Turnover: €600,000 per year approximately €12,000 /week Entrance Fee: €7500 Minimum initial and personal capital: €80,000 Distribution area: 100,000 inhabitants minimum Medium area: 150 m2 Total investment without key money: €200,000 Workforce: Saleswomen: 5 for 1 store + Trainees 130 €150,000/ year At the Beginning: 4 stores in the four biggest cities in China. Then: If the 4 stores are successful, more stores will be established Conclusion To conclude, we could say that the Chinese market is a big opportunity for our brand ‘Frenchy'. [...]
[...] III) Current situation analysis Analysis of the 7 Ps In this section, details are presented for four key decision areas (the 4 Product, Promotion, Pricing, and Place/Distribution ( Current market position: 4 Ps Product - Main product : clothes - Other products : accessories such as scarves, bags, a range of watches and a collection of optical and solar glasses - High quality products - High positioning - Trendy image - Notion of luxury because it is a French brand Place - Retailers and franchises: main tools of distribution - Target area: cities with minimum 100,000 inhabitants - Preferential location : downtown areas, malls Price - Price range: between 40 and 200 euros in the current market Promotion - Online promotion through the website www.frenchy.com; possibility to see new products of the brand and to download the booklet. [...]
[...] Porter's Five Forces In order to realize a good entry in the Chinese market, ‘Frenchy' has to evaluate its chances of success. That is the reason why it is important to use the Porter's 5 forces model. Source : http://www.quickmba.com/strategy/porter.shtml Potential New Entrants: Since the last few years, there has been a decrease in the number of new entrants in China. Despite this apparent flexibility, we have a strong link with a Chinese firm to really tackle the market. Threat of Substitute Products: There is no substitute. [...]
[...] China is a target of all kinds of business because it is currently the largest market of the world with more than 1,300 million potential consumers of them live in the cities) and it has an increasing GDP. In terms of GDP, it is the seventh world power, having major economic powers like Spain, Canada and Brazil. According to the World Bank, China will be the leading world economic power in 2020, representing nearly 40% of the world production. The entry of China in WTO brings a series of advantages to the businesses: a reduction of the average tariff an elimination of the quotas and licenses of import, and finally, the foreign companies can enter the businesses of distribution. [...]
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