Solutions to make black label brand personality strong

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business -Student’s name: Chu Thi Thuy Thesis: Solutions to make Black Label brand personality strong ID: 22140050 MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Professor- Tran Ha Minh Quan Ho Chi Minh City – Year 2017 Table of contents Introduction………………………………………………………………… Company background……………………………………………………… Situation Analysis………………………………………………………… Symptoms…………………………………………………………… Problem identification………………………………………………… Problem definition…………………………………………………… Brand personality dimension of Black Label………………………… 11 Problem existences 11 Cause of the problem and the validation……………………………… 12 The effects of problem on brand/store performance………………… 19 Cause and effect map………………………………………………… 21 Some solutions to make brand personality strong………………………… 22 Solution map ………………………………………………………… 28 Action Plan…………………………………………………………… 29 Conclusion…………………………………………………………………… Reference …………………………………………………………………… 30 31 Appendix……………………………………………………………………… 35 Introduction Haley-Davidson selected Vietnam market to launch the world’s first Black Label store because Vietnam is an alluring market for international fashion brands with its young population, an expanding middle class, and an emerging market However, recent five years, Vietnam fashion retail competes fiercely to gain market shares and loyal customers Those brands which can survive and success in Vietnam market is brands understand customer’s needs and wants including styling, quality of products, price, and accessibility After one year opening, Black Label store failed because it could not approach its right target customers and less advantage competitive among other competitors in comparison with customer loyalty, product characteristics, price, positioning market Nowadays, consumers have multiple choices in many global fashion brands which meet their customers’ needs and wants Consequently, if Black Label brand don’t have strong its characteristics to attract customers, it will disappear from Vietnam market in one day This study is to analyse characteristics of Black Label store in term of brand personality, suggest some solutions to make this brand personality strong, and improve brand performance Company background William S Harley and William A Davidson1 founded Harley-Davidson in Milwaukee, Wisconsin in 1903 Harley-Davidson Motor Company is the largest manufacturer of heavyweight motorcycles in the world, and is one of the most identifiable brands in the United States Harley targets high-class customers, and represents success and high social status Harley-Davidson emphasizes that the company doesn't just produce American motorcycles; it produces an American legend Harley customers are extremely loyal to the brand, and believe that Harley-Davidson makes the best heavyweight motorcycles in the world The price of H-D positioned as premium because it stands for a legendary Harley-Davidson Motor Company offers a complete line of motorcycle parts, accessories, apparel, and general merchandise February 2011, the all-new Black Label Collection of Harley-Davidson Motor Clothes was launched, sporting street-inspired designs, a custom look and casual feel, and evoking an authentic, rebel attitude Black Label products include jacket, shirt, T-shirt, jeans, and accessory Black Label products are displaying and selling together with H-D clothing in Harley-Davidson stores or/and showrooms According to Karen Davidson2, Harley-Davidson General Merchandise Creative Director said that: “Black Label is born of the Dark Custom movement with an honest, authentic style, and is for those whose allegiance to Harley-Davidson does not scream to be heard Black Label is inspired by customers and to satisfy the latest generation of men and women riders” Black Label retail store is a concept for apparel and accessories that extends from H-D primary channels (Dealers, E-commerce, AROs) focused Black Label collections that target young adult outreach consumers where they shop at mall or high traffic street sites with stand-alone Black Label location October 2013, Al Naboodah international Vietnam became a distributor of HarleyDavidson (H-D) at Vietnam market The company sells H-D motors, H-D part & accessories, and H-D clothes for bikers The world’s first Black Label store opened on 19th April 2015 at Vivo City, district Hochiminh City This fashion retail store is considered as an experiment project of Harley-Davidson and AL Naboodah Vietnam Situation Analysis Symptoms Current performance of Black Label store: after a year store opening, sales revenue of Black Label has achieved 40% of target only; burdening losses every month From historical sale record: 50% of customers who bought Black Label are HarleyDavidson and the others are foreigners and Vivo SC’s visitor 90% of them purchased sale items with discount up to 50% despite its profit margin is lower than industry average (Profit margin of black Label is 45%, industry average is 60%) Sales revenue is generated from in-store promotions and customers pass by store; and the number of repurchase is so modesty Therefore, the customer patronage of store is unremarkable After reviewing sales performance, there are some symptoms as following: Harley-Davidson targeted customers for Black Label products is younger generation with age from 18 to 29 years old Black Label store recorded that young people with age under 30 years old visits to store just looking around and will get out when they see the tag price of merchandise A few of them tried on some items, but can’t afford to purchase although they are really interested in those products because of unique and differentiation According to historical sales record from the store, actual customers who purchased B/L are over 30 years old, and contribute 80% of total sales We can see that Black Label has targeted wrong customer’s age Due to setting Black Label’s target customer is youngster, Harley-Davidson opened the first Black Label store at VIVO SC which combines supermarket and shopping mall and its target customers are youngster and families too The company organized two big events to appeal visitors coming to the store including: + The first one is cooperating with Anh Khoa, Rock singer, in his live concert by giving away the concert’s ticket and gift voucher valued one million dong of purchasing any item at B/L store to attract young audiences to visit B/L store The target audiences are RMIT students, current loyalty customers of H-D, and followers of H-D Facebook’s fan page & Anh Khoa fans The result is there was a few customers of H-D and no RMIT student pass by the store to get gift vouchers, and this cooperation was under expectation while the company sponsored 10,000 US dollar for this concert + The second one is a night event organized at VIVO’s lobby, this event attracted huge VIVO’s visitors but fail in sales The result is marketing activations was unsuccessful due to not approach right target customers, and couldn’t take customers visiting the store Moreover, international fashion-shoppers has not been familiar with Black Label brand even thought this brand is origin from USA In US, almost Harley-Davidson clothing is purchased by customers who own Harley-Davidson motors and Vietnam market as well Consumer brand experiment is too modest because only one thousand people own H-D motors, so H-D is seen as a niche market or premium market in Vietnam fashion industry In conclusion, characteristics of Black Label brand including products, location, customers, marketing activities create a brand personality Consequently, a main cause of its failure is weak brand personality Problem identification Because of unexpected result, Harley-Davidson of Asian –Pacific helped AL Naboodah investigating why Black Label store performance is bad The investigation is conducted by TNS Vietnam (Please refer to Appendix for more detail of TNS’s survey) The survey with sampling of 300 visitors/customers is conducted by TNS Vietnam to understand two main issues are - What is consumer awareness level and perceptions towards Black Label store - How VIVO’s visitors look like? Does it match with Black Label target customers? According to the result of TNS’s survey, the survey also showed that among nonshoppers, only 10% of total surveyed are aware of Black Label; among shoppers, 31% of total surveyed are aware of Back Label and 96% of those claimed that they are aware of Black Label because they passed by store before and 18% of those said that they know Black Label through Harley-Davidson Marketing efforts For brand association, more than half of customers don’t know which brand Black Label is associated with, only 9% of those surveys were able to associate Black Label with H-D 27% associated Black Label as a beverage brand The main reason for not making purchase is not having any specific need for any items Other reasons are “not matching my style” and “pricing” This survey couldn’t describe how VIVO SC customers are From this secondary survey, a cause is arisen from B/L products (price and styling), and from low customers’ perception In order to consolidate TNS’s result, during a week, 100 interviews are conducted in Vivo SC (please see detail of Appendix 2) The questionnaires are designed to study customers’ perception toward B/L and its competitive advantage toward the others brands in VIVO SC, to find out a relation of Black Label and H-D The results are 10% are aware of Black Label brand; 84% are aware of Harley-Davidson Motor; only 2% know B/L without knowing H-D; 43% of those who know H-D know B/L is a fashion Brand of H-D; 84% of those who don’t know B/L belong to H-D acknowledge that prices are expensive; 78% of those who know B/L is a fashion brand of H-D acknowledge that its price is acceptable; Only 2% purchase Levi's and Diesel which are B/L's competitors The results of this survey are to find out who are targeted customers of VIVO SC and a relationship between awareness and price as following: Firstly, the question is the target customer of Black Label is younger than H-D’s customers, so would product categories of Black Label and its price meet right demand of majority of young customers? The survey revealed that 80% visitors or/and consumers visit Vivo SC are young adult and teenagers, so will their income afford to buy Black Label products? The answer is “no” because Black Label is positioned as premium price, those customers can’t afford to buy even though they would like to experience with this brand Almost Vietnam teenagers are flowing up the trend of POP music On the other hands, Black Label presents for young adult with rebellious and street styles “Not matching my style” and “pricing” are two reasons effect on purchase decision Secondly, Customer’s perception toward B/L is at low level This lead to customer’s brand awareness is low meanwhile brand awareness is one of important factor affecting on customer’s purchase intention and purchase decision Consumers won’t be willing to pay high price for what they evaluate not appropriate with their perceived From the primary survey, another cause is arisen from store location (VIVO SC), and low customer’s awareness Following the TNS’s report, there was a meeting between Harley-Davidson of Asian Pacific and H-D Vietnam to discuss and suggest some solutions to improve B/L performance Some issues are concerned as: + Traffic of Vivo City wasn’t high as expected, conversion rate of B/L is low (achieved: 3%, target: at least from 8%) The question is how much percentage of customers/visitors of Vivo SC is target customer of Black Label + Store’s concept does not attract customers visit the store: mystery store makes customer curious but not willing to get in Harley-Davidson of AP said that causes of B/L problems are visitors of Vivo SC and store concept & store name In-depth interviews conclude: Store manager and sale staffs: I often put questions to my staffs about customer as following: Question How many people enter the store? Answer The footfall is low on weekday and increasing on weekend ( times to 10 times) What did visitor experience in the store? Just looking (70%) Finding tag price (90%) Try on (20%) Purchase (3%) What is customer’s age (average) (customer who purchased) 30-40 How is visitor’s age (Who just enter but not purchase) Teenager : 80% Family : 70% Over 30 years old: not much The reason why customer did not purchase any item? Price The size doesn’t fit Does customer like our products a few like Do you think what make customer enter the store? Curious How did you serve customer? Friendly, good consultant, and professional Did you get customer's information? We can get 90% of them a Visitors get in store and customers purchased: Question Answer What you like our products? Unique but the size is too big, and the color is more suitable for young adult Many products are made in USA, so are you interested in? Yes, I like them, but its price is still so high Black Label belongs to Harley-Davidson; you know H-D? Yes, I know H-D However, it is the first time I see Black Label store (95%) I know, let's me look around first (90%) So its price wasn't high if you compare with H-D's products and brand We are selling T-shirts that you can select the graphics; waiting for minutes, you will have a T-shirt with your style Its price is only 900,000VND Sound great, I get ones (10%) The reason why you purchase our products It is unique (5%) Discount (almost) The main reason that customer not purchase is price and the size Action Plan Moving store location in Vincom center, and budget for this store as following Fixed cost (store fit-out) 1,000,000,000 Marketing expenses 1,272,000,000 Working capital (purchase merchandise) 2,640,000,000 Budget for store (in years) 4,912,000,000 Sales Plan in years: Items 1st year Unit : 1,000 VND year years 2nd year 3rd year 10,800,00 12,000,000 14,400,000 14,400,000 Sales plan Cost of goods sold 9,600,000 5,280,000 5,940,000 6,600,000 7,920,000 7,920,000 Gross profit 4,320,000 4,860,000 5,400,000 6,480,000 6,480,000 2,733,600 3,006,960 3,006,960 3,143,640 3,143,640 333,333, 333,333 20,000 10,000 10,000 10,000 Expenses Rental fee Deprecation Internal training sales staff Marketing expenses 333,333, 480,000 432,000 360,000 288,000 288,000 Employee cost 432,000 432,000 432,000 432,000 432,000 Total expenses 3,998,933 4,214,293 4,142,293 3,873,640 3,863,640 645,706 1,257,706 2,606,360 2,616,360 Net profit 321,066 Break event point at years and first week of 5th year: Net profit of project in years = Total net profit – initial investment = 7,447,200,000 – 4,912,000,000 = 2, 535,200,000 Conclusion In conclusion, in order to achieve a good performance in Vietnam, Harley-Davidson needs combine solutions and implement these solutions at the same time Solution will help the store approaching the right target customer; solution & effect on customer’s decision making Solution will support the store/brand building customer database and customer loyalty by leveraging customer’s awareness The premium fashion brands compete fiercely in Vietnam, so it is very hard for all retailers which distribute premium brand can achieve their goal Hence, investing in the massive brands might be wiser decision and easier to achieve successful 30 REFERENCES Mark G Harley-Davidson motorcycle history [document on the Internet] Motorcycle; no date [cited 2016 December 16] Available from http://www.motorcycle.com/manufacturer/history-harley-davidson-motorcycle.html Alina D New Black Label collection from Harley-Davidson [document on the Internet] Autoevolution;2011 from: [cited 2016 December 16] Available http://www.autoevolution.com/news/new-black-label-collection-from-harley- davidson-31146.html#ixzz4JIvECpES Aaker JL Dimensions of brand personality Journal of Marketing Research 1997;34(3);347-56 Aaker DA Building strong brands New York: Simon & Schuster; 2012 Freling TH, Forbes LP An empirical analysis of the brand personality effect Journal of Product & Brand Management 2013;14(7),404-413 Aaker J, Fournier S A brand as a character, a partner and a person: Three perspectives on the question of brand personality Journal of Consumer Research 1995;22;391-395 Azoulay A, Kapferer JN Do brand personality scales really measure brand personality? 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Do you know the motor brand Harley Davidson? 84% are aware of Harley-Davidson Motor From where? Only 2% know B/L without knowing H-D Will it make you surprise if you know Black 43% of those who know H-D know B/L is a fashion Brand of H-D Label is a fashion brand of Harley Davidson? 84% of those who don’t know B/L belong to H-D acknowledge that prices are expensive 78% of those who know B/L is a fashion brand of H-D acknowledge that its price is acceptable 70% prefer shopping in district to district Which location you prefer to go shopping? 30% like shopping in streets 35 60% of survey buys massive brands like mango, Top Shop, Charles & Keith, PT200, etc 38% of surveyed buys What brands did you purchase before? local brands on the streets 2% purchase Levi's and Diesel which are B/L's competitors 36 CUSTOMER SURVEY Date: ………………………………………………………………………………… Time: ……………………………………………………………………………… Survey officer: ……………………………………………………………………… Customer Information Full name: ………………………………………………………………………………………… Date of birth: /………… /……………………… Sex: Male Female Survey Content A Product What you know about Black Label? ……………………………………………………………………………………… Have you ever heard about this fashion brand?  Yes No Where did you heard about this brand from? ……………………………………………………………………………………… Do you know the motor brand Harley Davidson? From where? ……………………………………………………………………………………… Will it make you surprise if you know Black Label is a fashion brand of Harley Davidson?  Yes No 37 What makes you impressed the most of Black Label store? (Inside and outside of the store) ……………………………………………………………………………………… Do you like the style of Black Label clothes? Do you think it suit you? ……………………………………………………………………………………… What kind of product that you interest? ……………………………………………………………………………………… How you feel about the price of products?  Cheap Expensive Acceptable 10 Are you willing to introduce our brand/products to your family/friends? Why?  Yes No May be B Selling Staff Did the salesman serve you enthusiastically? Did they approach you from the beginning? …………………………………………………………………………… Are you happy with his/her consultant? How did him/her serve you? ……………………………………………………………………………………… Did you get enough information that you want from him/her? …………………………………………………………………………………… Do you have any suggest for him/her? ………………………………………………………………………………………… …………………………………………………………………………………… 38 Appendix 3: Observation Observation’s purpose: to see what is happening in Vivo SC during weekday and weekend Focus on seven stores that are close to Black Label store and they are all international brands Five of them are allocated in district as well Wed Store V* Thu B* Fri VB Sat VB V Sun B V Mon B V Tue B V Total B V CR* B Black Label 9 63 89 187 4% Miss selfridge 36 38 87 32 205 20 10% Charles & Keith 41 60 102 113 15 349 34 10% Pedro 11 19 37 84 75 16 250 15 6% Topshop-topman 23 73 11 80 150 43 112 34 17 43 498 110 22% Adidas 28 46 16 84 76 23 17 290 33 11% 55 21 95 13 84 10 22 296 43 15% Super sport  High traffic on the weekend 39  Observation’s results : 80% are young adult and teenager, V* : Visitors ; B* : Buy; CR* : conversion rate 40 Appendix 1: Secondary survey: Qualitative research methods The survey with sampling of 300 visitors/customers is conducted by TNS Vietnam to understand two main issues are - What is consumer awareness level and perceptions towards Black Label store - How VIVO’s visitors look like? Does it match with Black Label target customers? Sampling size: Sample Criteria Those who have just visited/ purchased any apparel at Black Shopper 70 Label store Those who just visit SC Vivo City but have not visited or Non-shoper 230 Total 300 purchased any apparels at Black Label Questionnaires and conclusions: Factors Question Conclusion Could you please tell us which age group you belong to? Demographic Could you please state your current employment Black Label shoppers tend to be employed full time, have higher income and status? are younger Which of the following best describes your total monthly personal income before taxes? Which of these stores are you familiar with? As expected, store visit is leveraged by awareness Levis is the most Have you visited any of those stores? recognized as well as the most visited store Relation of awareness & visit Common reasons for not wanting to visit Black Label include: “Don’t need it” Why did you visit ‘Black Label’ today? and “Not my style” Majority of shoppers visited Black Label just to browse Majority of those that intend to visit just want to check out the shop 31% are aware of B/L Brand awareness How did you learn about ‘Black Label’? 42 The main source of Black Label awareness is from passing by it before Black Label brand Which companies you associate ‘Black Label’ Yet when it comes to brand association, more than half of customers don’t with? know which brand Black Label is associated with Only 9% of those surveys were able to associate Black Label with H-D 27% association What you think this store sells? Purchase decision Why / Why not did you make a purchase? associated Black Label as a beverage brand The main reason for not making purchase is not having any specific need for any item Other reasons include “Not match my style” and “Pricing” ... one day This study is to analyse characteristics of Black Label store in term of brand personality, suggest some solutions to make this brand personality strong, and improve brand performance Company... percentage of customers/visitors of Vivo SC is target customer of Black Label + Store’s concept does not attract customers visit the store: mystery store makes customer curious but not willing to get in... solutions to make the brand personality strong Solution 1: The brand name should be ? ?Black Label of Harley Davidson” rather than “Harley-Davidson” In May 2016, the name of store ? ?Black Label? ?? was