MARKETING COMMUNICATION

EXECUTIVE SUMMARY

 

Tommy Hilfiger is one of the world's leading fashion and clothing line companies in terms of profit and sales volume. The company has also the widest presence among all international companies. This is made possible through a positioning strategy of global networking of distributors.

Tommy Hilfiger uses the name of both the company and its mainstream fashion labels, and this strategy has allowed the company to pursue an integrated marketing approach directly related to the company name. There are also a variety of Integrated Marketing Communication (IMC) tools available that Tommy Hilfiger could make use of in order to control all of their promotional activities. These tools include a combination of advertising, branding and personal selling. When used appropriately, these IMC tools will be able to help Tommy Hilfiger to consistently disseminate the valuable information that they want to convey to their valued consumers.

However, certain points have to be taken into consideration by Tommy Hilfiger regarding IMC tools. Since their income is relatively higher than most of their competitors, the time for implementation of their chosen IMC tools would take longer than usual, aside from being expensive. But since the goal of Tommy Hilfiger is towards a long-term dominance and stability in the fashion industry, then the pursuit of these promotional campaigns will be beneficial for the company in the long run.

INTRODUCTION

The fashion industry over the years has developed an efficient and effective process of implementing the policies and tasks necessary to satisfy its consumers and management of companies and organizations. There has been a recent focus on the careful management of the processes involved in the production and distribution of fashionable products and services within the industry (, 1998).

More often than not, small fashion companies don't really have the capabilities to implement international marketing strategies. Instead, these companies engage in activities that various schools of management typically associate with implementing integrated marketing strategies. These activities include the manufacturing of creative fashion products, product development, production and distribution.

However, international marketing strategies deal with all operations done within companies and organizations. Activities such as the management of purchases, the control of inventories, logistics and evaluations are often related with operations management. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, international marketing strategies include the analysis and management of internal processes.

Tommy Hilfiger will be the model business entity that will be used in this research based on their history in international marketing strategies.

SITUATIONAL ANALYSIS

A. Measuring Tommy Hilfiger’s Performance

a. Financial Analysis

In the fiscal year of 2003, Tommy Hilfiger was able to experience a significant progress in several key metrics. The inventory was reduced from $55 million to $23 million and inventory turns rose from 12 to 26. The cost of revenues, excluding the benefit from previous special charges and the applicable portion of the amortization of intangible assets, decreased from 72.3% of revenues to 67.8% of revenues. The combination of sales and marketing, research and development, and general and administrative expenses was reduced from $ 435 million to $339 million, while at the same time improving on the pace of innovation. Tommy Hilfiger’s total revenue has approximately grown from $1 million in fiscal year 1995 to $ 871. 9 million in fiscal year 2003.

b. Marketing

The retailers in Europe represent Tommy Hilfiger’s largest sales and marketing channel which encompass national and regional office supply stores and mass merchants. Distributors represent Tommy Hilfiger’s second largest European channel and generally sell to both traditional and Internet resellers and retailers. In Europe and the US, Tommy Hilfiger’s market share is still relatively high. Tommy Hilfiger has more than 100 international distributors located worldwide.

            The company also uses online stores as a venue to sell its products. This is accomplished through the use of e-marketing campaigns and product bundles. The company is able to build awareness of its products and brands through mass media advertising, public relations efforts and branded Internet properties. The company also makes it a point to receive feedback from its customers through market research. The company then uses these feedbacks to refine its product development efforts and marketing strategies (. 1999).

c. Operations

Tommy Hilfiger out-sources all of the fashion designs of its products to third party manufacturers. This outsourcing extends from prototyping to volume manufacturing and includes activities such as material procurement, quality control and delivery to distribution centres. The company is assured that there is an adequate supply of components to manufacture its products. The majority of the company’s products are assembled in Europe and the US. Distribution centres are operated on an outsourced basis in Europe and the US.

d. Human Resources

Tommy Hilfiger knows that its future depends on the company’s ability to attract new personnel and retain existing personnel in key areas including engineering and sales. None of the company’s employees is subject to a collective bargaining agreement. The company considers its relationship to its employees to be good.

B. Tommy Hilfiger SWOT Analysis

Strengths:

• Tommy Hilfiger has products that boast of a very powerful retail. This includes a reputation for value of money, convenience and a wide variety of products
• Tommy Hilfiger has grown significantly over the years, and has experienced global expansion.
• Tommy Hilfiger’s main competence lies on the use of information technology (IT) to fully support its international logistics system. Therefore, the company can see how their individual products perform within the United States, or even at stores at a glance. IT also supports Tommy Hilfiger’s efficient procurement.
• Tommy Hilfiger is able to deliver good customer care, as the limited amount of work would mean plenty of time to devote to customers.
• Tommy Hilfiger’s lead consultants have established a strong reputation within the market.
• Tommy Hilfiger can afford to change direction quickly if its management finds that the company’s marketing strategy is not effective.
• Tommy Hilfiger has little deficits and overheads. Therefore the company can offer good value to customers on a consistent basis.

 

 

Weaknesses:

• Tommy Hilfiger is one of the world's largest companies in luxury goods but has a weak control of its empire, despite its IT advantages. This could lead to a decrease in productivity in some areas where they have the least control of.
• Since Tommy Hilfiger sell products across many sectors, the company may lack the flexibility that some of its more focused competitors possess.
• Tommy Hilfiger operates globally, but its presence is located in only relatively few countries worldwide.
• Some of the company’s weaker branches lack market presence or reputation
• Some of the company’s personnel still lack the essential skills base in many areas.
• The company is still vulnerable to the temporary losses of its vital staff (e.g. being sick, leaving).
• The company’s cash flow is unreliable especially in the early stages of a new product development.

Opportunities:

• Taking over, merging, or forming strategic alliances with other fashion companies while focusing on strong markets like Europe or the Greater China Region.
• The branches of Tommy Hilfiger operate only on trade in a relatively small number of countries all over the world. Thus, this would open the opportunities for future businesses in expanding various consumer markets, such as those in China and India.
• The opening of new locations and branches offer Tommy Hilfiger the opportunities to exploit market development. This could lead to the diversification of the company’s branches from large super centers to local-based sites.
• Opportunities exist for Tommy Hilfiger to continue with its current strategy of establishing large branches worldwide.
• Tommy Hilfiger is continuously expanding, with plenty of future opportunities to exploit for success.
• The local councils of Tommy Hilfiger are in the process of encouraging local businesses with work whenever possible.
• The competitors of Tommy Hilfiger may be slow to adapt to new luxury goods especially the ones that the company releases.

Threats:

• Being number one means that Tommy Hilfiger is the target of competition, the company to beat, both locally and globally.
• Being a global retailer means that Tommy Hilfiger might be exposed to political problems in the countries where the company has operations.
• The production costs of most consumer products have the tendency to fall because of lower manufacturing costs. Manufacturing costs fall because of outsourcing to low-cost regions around the globe. This phenomenon could lead to competition in prices, which in turn would result in the deflation of prices in various ranges. Intense price competition must definitely be considered a threat.
• The latest developments in information technology which could possibly change the markets might challenge the company’s ability to adapt to these changes
• A slight shift in focus of a large competitor might wipe out any market position that Tommy Hilfiger has achieved over the years. This could force the company to specialize in rapid response but good value services to local businesses. This would put so much pressure on the company’s consultancy staff to keep informed with the latest changes in technology where possible.

C. Marketing Mix Analysis

A. Product

Tommy Hilfiger’s dedication to quality for almost three generations now has led to the satisfaction of millions and millions of its customers worldwide. Tommy Hilfiger was created by a group of people who pursued the best quality and craftsmanship in terms of luxury goods designing and production. The various Tommy Hilfiger products that its customers patronize today are still being manufactured using nothing but the original and unparalleled raw materials discovered three generations ago by the Hilfiger family. Tommy Hilfiger’s durability and bright colors are obtained by using only the purest raw materials.

The raw materials used in the production of Tommy Hilfiger products are able to meet the high quality standards and specifications. The packaging materials where Tommy Hilfiger products are sold are also being subjected to strict quality standards.

In line to Tommy Hilfiger 's policies in product safety, appropriate measures are taken in the production process of Tommy Hilfiger and all of its brands to prevent the possible contamination of the products. Tommy Hilfiger manufacturing plants implement the principles of the HACCP (Hazard Analysis and Critical Control Points) system as a testament to their dedication to quality.

B. Promotion

Tommy Hilfiger has been able to maintain its reputation as one of the world's leading fashion companies for more than 130 years now. It is able to face the challenges in many of its markets directly. This is made possible by the effective promotional and positional strategies aimed to deliver not only profit growth, but also on building down the foundation of Tommy Hilfiger’s brands and business.

The promotional campaigns and strategies of Tommy Hilfiger are focused mainly on driving the growth of its brands and improving the company’s financial performance. These campaigns have also helped secure significant acquisitions and partnerships. And more importantly, these campaigns have led to the release of the potentials of the company’s employees, thus building a quality performance- based culture.

The promotional strategies of Tommy Hilfiger’s local products are practically reinforced by the local employees themselves. These moves certainly allow the company to improve even more without the costs of introducing new technologies. These efforts have resulted in increased financial gains for the company and have allowed the establishment of distribution networks for both the local and international Tommy Hilfiger products.

C. Place

Tommy Hilfiger has grown and expanded virtually around the entire globe. This was made possible by their strong efforts to acquire smaller luxury goods companies and firms from other countries. Over the years and decades, Tommy Hilfiger has slowly but surely established an empire, with strong segment markets established in Asia and the Middle East, the Western Hemisphere, the Europe and most recently the Asia Pacific.

In Europe for instance, Tommy Hilfiger was able to achieve a broad market leadership through various acquisition deals over the years. The company also exerts efforts to communicate with their customers in every local culture about Tommy Hilfiger products and their impressions. And this is no easy thing because Europeans have different tastes in fashion and technologies. Therefore, Tommy Hilfiger products might not really have an appeal to them. This critical information gathered by Tommy Hilfiger paves the way for them to make the right decision regarding the appropriate strategies to pursue.

Management Team

The management team of Tommy Hilfiger determines the best ways to utilize its basic factors of production. These resources include the company’s people, materials, information, and energy needed in the production. Excellence is the bridge that links the goals of management and operational performance. They are concerned with the increase in productivity through the proper management of people and choosing the appropriate methods of business organization.

The management team of Tommy Hilfiger performs the careful analysis of the company’s products and their requirements. In this process, they make use of various mathematical methods in its operations research to meet the requirements. They also develop systems of management control in order to aid in the planning of finances and cost analysis. These systems are eventually subjected to improvements for the effective distribution of goods and services.

The management team of Tommy Hilfiger performs the tedious task of selecting which among the various Tommy Hilfiger store locations have the best combination of raw materials availability and costs. This time, the management team of Tommy Hilfiger makes use of computers for simulations and robots for controlling various activities and devices.

Internationalization Issues

It is a common knowledge that the fashion industry is still a relatively new industry in China and is still in its early stages of development. However, it has shown signs of rapid growth and it is being estimated that there will be more than a million fashion products that will be shipped within the year. And it is further being expected that within the next years the tremendous growth and technological advancements will continue in the fashion industry. Mobile commerce and multimedia terminals are just some of the technological advancements already being expected. Therefore, the continued growth and development will also make it imperative for localization to occur in the fashion industry in China in the years to come.

The development of style for the Tommy Hilfiger clothing line in China certainly will become the target for localization because of its dynamism. There are still plenty of styles and designs that Tommy Hilfiger can use. But since development cycles are much shorter in the fashion world, Tommy Hilfiger may need to rush the release of its localized versions of clothing. By doing this measure, they will be the first to launch Tommy Hilfiger signature fashion wears in various Chinese markets, thus putting more pressure on the localization process. Also, the redesigning and streamlining of both clothing development and the localization process will become imperative if this scenario happens.

A majority of the localization projects of Tommy Hilfiger for its Chinese clothing lines are part of various deals. Tommy Hilfiger often partners with smaller companies to ship its fashion products. Hence the huge customer influence on localization projects and fashion design is undeniable.  Changes are also frequently made to the documentations and the overall look of the signature clothes. Therefore, this will require the localization process to be a lot more flexible than in other situations localizers are used to dealing with.

 

There is also an issue of Tommy Hilfiger’s lack of experience in dealing with the Chinese consumers in both the fashion and localization industries. Thus, there is still no knowledge base from where to get the troubleshooting tips. Since most projects require both the fashion and localization industries to sign non- disclosure agreements, fashion designers who are working on a project and encounter problems won’t be able to go outside Tommy Hilfiger to ask for assistance. Thus, they would have to find answers and solutions to their problems by themselves. Their solutions also may never be shared with others. Clearly, there is an immediate need for a knowledge base that will guide all those in this field.

The points discussed so far bring out the necessity of having cooperation between Tommy Hilfiger and the Chinese localization vendors. Both should strive hard in order to establish streamlined processes for localization. Close collaboration will help guarantee successful localization for Tommy Hilfiger clothing lines.

 

BUSINESS MODEL for Tommy Hilfiger

The subscription business model has been widely used by most fashion companies, but the application of this model has started to spread up to this time. Instead of selling the clothes and accessories directly, most fashion companies nowadays are doing the process of selling their monthly or yearly access to a particular product or service. As a result, the company is able to convert a one-time sale of a product into a recurring sale of a service.

Effect on Tommy Hilfiger

Tommy Hilfiger will surely benefit because of the fact that they are guaranteed of a constant revenue stream. This will significantly reduce the uncertainty and the risk-taking of Tommy Hilfiger. Also, most of the time, the subscription pricing structure is carefully designed in order to make sure that the revenue stream from the recurring subscriptions could be significantly higher than the revenue coming from simple one-time purchases. In most subscription schemes, it also induces the increase of the company’s sales through disallowing the subscriber’s option to either accept or reject any specific product. This triggers the reduction of customer acquisition costs, and allows the implementation of a personalized marketing or database marketing.

However, subscription business models also have their disadvantages. Tommy Hilfiger needs to invest to a large infrastructure in order to help in the management and monitoring of subscriptions.

Effect on the Tommy Hilfiger Customers

Tommy Hilfiger consumers can also benefit greatly from this business model. If they will be able to buy Tommy Hilfiger products regularly, then they will significantly benefit from the convenience. However, since they will only have to make one particular Tommy Hilfiger purchase decision, then they will just simply have to wait for the product to arrive. This model will be of great help for those consumers who are in search for structure and constancy in their hectic lives.

Critical Success Factors

For Tommy Hilfiger to be a viable player in the fashion industry in China, the following success factors are critical:

·         Financial Stability

Financial stability is crucial especially in the pursuit of research and development activities. In the fashion industry, it is important to remain updated with the latest tdevelopments to be able to stay competitive in the market.

·         Product Performance and Price

The designing of the best clothing products comes as a result of well-funded research and development activities. The strong performance of Tommy Hilfiger products in the market could also be linked to their cost-effectiveness. However, the company has to be aware of the positioning in terms of process so as to maintain satisfactory profits margin and remain competitive in the market.

·         Marketing Strategy and Distribution

High brand awareness among the buyers has created the need for aggressive marketing, and access to strong distribution channels is critical for the introduction of new models.

TARGET MARKET (CHINA)

Segmentation is a key factor especially in markets where a broad leadership position has yet to be fully developed. In these markets Tommy Hilfiger strives for strong positions especially in the premium/import and specialty segments.

          Good examples here include Tommy Hilfiger’s leading position in the import segment in the United States as well as its plan to establish a market in China.  In both examples, Tommy Hilfiger shows its desire to establish autonomous growth through the selling of more and more brands and expansion through the distribution networks as well as growth through acquisitions.

The Chinese fashion industry has been showing steady signs of growth and progress for a couple of years now. This consistent progress can be attributed to the change in strategic directions that was implemented several years ago by its government and is still being further structured up to now. Basically, the critical element of the strategy was that the Chinese fashion industry started looking at things from the perspectives of the consumers and the customers.

China possesses a strong fashion market that enables it to be easily targeted by the world’s leading fashion companies. China’s market value has even increased over the recent years especially with the steady increase of their presence. Tommy Hilfiger will be the first to strike a deal with China in its bid to strengthen its foothold as the top fashion company in the world.

Why China?

Because primarily, China has nearly half a million outlets where clothing and other fashionable items are allowed to be sold. If one would consider the size of the country, it would seem like that the “getting closer to the market” strategy would not work. Add the fact that it is very difficult to get detailed information about the performances in terms of sales of every independent fashion store in China.

But Tommy Hilfiger must still take up the challenge. Large-scale operations must be initiated.  Business units must be started to be established to initiate the change process needed to bring Tommy Hilfiger closer to the Chinese market. In the part of marketing, the decisions taken in recent years already established positive impacts such as portfolio management and ethnic marketing.

This will be a crucial initial step that can be done by Tommy Hilfiger, and they remain positive about the prospects of striking more deals with several other countries in Asia to fortify its number one position in the fashion industry.

Political Trends

China has experienced electoral and political transitions and crises in the last 12 months.  There have been at least four political trends that have emanated from these political events. These are: (a) the cry for democracy and reforms; (b) increased popular and local-level assertiveness; (c) greater public accountability; (d) re-definition of the concepts of power and politics. Also, the forms of political economies have slowly shifted from a bipolar (big government-big business) to a tri-polar structure (authorities - private sector – civil society).

 

            The implementation of the Free Trade Area, or FTA, which laid out a comprehensive program of regional tariff reduction, will be continuously implemented in phases through the year 2008 (. 2008). Over the course of the next several years, the programs in tariff reductions were made broader. Efforts to eliminate non-tariff barriers and develop common product certification standards were initiated. In addition, the United States also was able to formulate framework agreements for the intra-regional liberalization of trade in services. Industrial complementation schemes meant to encourage intra-regional investment were also approved.

Economic Trends

Despite the adverse economic trends in the first half of the year, China as a whole experienced relatively robust economic growth. It is estimated that China posted a better-than-expected GDP growth of 4.5% last year, slightly higher than the 4.1% growth that they achieved in 2002 (. 2004).

Many Chinese provinces have also seen the risk-weighted capital adequacy ratios of their banking systems improve due to government-sponsored bank recapitalization programs, continued progress in financial restructuring, and improvements in financial risk management. The capital adequacy ratio of commercial banks in these countries is now far higher than the 8% Basle norm. It ranges from about 14% in Beijing to about 20% in Guangzhou, with commercial banks reporting an average capital adequacy ratio of about 18%.

Social/Cultural Trends

With the rise in the middle to upper-middle class households in certain provinces within China, there exists a strategy mismatch for not considering the potential for consumer market.

There have also been social and cultural trends that have been evident over the last 12 months. These include: (a) the irreversible rise of civil society among Chinese provinces; (b) the rise of civil society blends perfectly with a tri-polar structure of political economy; (c) the increase in the roles of intellectuals; and (d) the beginning of a period of introspection.

Technological Trends

It is a common knowledge that the fashion industry in China is still a relatively new industry and is still in its early stages of development. However, it has shown signs of rapid growth and it is being estimated that there will be more than a million fashion products and luxury goods that will be shipped within the year ( 2004). And it is further being expected that within the next years the tremendous growth and technological advancements will continue in the fashion industry. Mobile commerce and multimedia terminals are just some of the technological advancements already being expected. Therefore, the continued growth and development will also make it imperative for localization to occur in the fashion industry in the years to come.

Legal Trends

Intellectual property (IP) and IP Rights (IPR) creation, commercialization, and protection have been a significant source of comparative advantage of enterprises and economies and a major driver of their competitive strategies. Indeed, China is fully aware of the pressing need for a long-term policy commitment to collectively transform the region into one which is largely based on knowledge, driven by innovation and sustained by life-long learning (. 2003).

China has pledged to work together to help accelerate the pace and scope of IP asset creation, commercialization and protection; to improve the regional framework of policies and institutions relating to IP and IPRs, including the development and harmonization of enabling IPR registration systems; to promote IP cooperation and dialogues within the region as well with the region’s Dialogue Partners and organizations; to strengthen IP-related human and institutional capabilities in the region, including fostering greater public awareness of issues and implications, relating to IP and IPRs. The new action plan on IPRs for 2004-2010 would cover all these aspects.

CREATIVE STRATEGY

This creative strategy is based on the market needs, trends, & growth of Tommy Hilfiger. Tommy Hilfiger must base its pricing strategies on several key trends that continuously shape the global marketplace of luxury goods. One particular trend is labeled as “premium-tization” (, 1981). This phenomenon causes the polarization of different markets. This would then trigger the consumers to demand and pay much higher prices for perceived quality. However, discounting in prices is also simultaneously taking place, therefore squeezing out the middle range. More often than not, retailers undergo internationalization which leads to a tighter squeeze for shelf space. This will in turn leave Tommy Hilfiger as a winner. It is for this reason why Tommy Hilfiger must value the “premise sector” so much because this would allow consumers can to try their brands at low risk and price.

In terms of market segments, premium and specialty brands of Tommy Hilfiger have a disproportionate share of volume growth at an estimated 4-5% per year, as against the 2-3% overall growth rate. These rates come up as a result of both the rise in GDP among developing markets and consumer demands for higher value propositions, which is obviously dominated by international brands. Therefore, Tommy Hilfiger has to increase its portfolio and operate globally to overcome the home market. Tommy Hilfiger practically operates on a relatively fragmented market, with the top four luxury goods companies accounting for 22% of global luxury goods volume five years ago and only about 28% today (, 2004).

MEDIA STRATEGY

For Tommy Hilfiger to be able to reach their target markets in China effectively, a combination of media advertising and personal selling is the key strategy and communication tool that must be used. There are various kinds of media advertising that could choose from.

Television Commercial Campaigns

The TV commercial campaigns are generally considered the most effective mass-market advertising format, even amidst the high prices TV networks charge for commercial airtime. In the world of media and entertainment, a particular television commercial can be broadcasted continuously for months and even years. Normally, television commercial production studios often risk astronomical amounts of money for the production of a mere thirty-second television commercial. In Tommy Hilfiger’s case, the company is financially capable for this kind of huge expenditures. The resulting number of high-quality Tommy Hilfiger TV commercials, those with the best production values and the most popular personalities, will be able to offset the huge expenses later on.

Billboard Advertisements

Tommy Hilfiger Billboard advertisements must be able to catch the consumer’s attention and thus create an immediate impression. They also have to be readable especially because they are usually noticed in roads and highways while consumers are boarded at vehicles with high speeds. Therefore, the Tommy Hilfiger billboard must only contain a few words in large print, with a clear image in bright colors ( 2001).

Event Sponsorship Campaigns

 Sponsoring something means supporting an event or organization through the provision of money or other resources in exchange for advertising or publicity. Sponsorship may also refer to an arrangement to exchange advertising for the responsibility of financing a popular event or entity. For example, in China, Tommy Hilfiger could make an effort to gain sponsorships of exclusive Green Room Sessions and global world-music events. This particular music strategy that can be initiated by Tommy Hilfiger in the Chinese market could potentially gain success and perhaps be emulated also in other Asian markets, such as in Malaysia (1984). The Indy Music Series as well as Jazz Festivals are some of the most common world-music events in China. Green Nights are also starting to gain popularity in China because of its strong appeal to the younger target audience and influenced by cutting-edge music.

 

The World of Movies is also starting to get the appreciation of the general public in China. Tommy Hilfiger can also embark into securing major sponsorships in tennis and golf tournaments in China, or any other global sports events. For instance, Tommy Hilfiger can offer to sponsor the broadcasts of Wimbledon, the US Open and the Australian Open in Guangzhou and Shenzhen. Another option is to sponsor yearly golf tournaments. To show its support for China’s hosting of the 2008 Olympics, Tommy Hilfiger can undertake a wide range of promotions in China (, 1998).  

Personal Selling of Tommy Hilfiger Products

Personal selling is normally conducted at the place of purchase. This is especially important because consumers still have special needs or technical questions. Personal selling remains the major promotional ingredient for intermediary being used by Tommy Hilfiger.

Brand Positioning and Performance

 

As part of its positioning strategy to stay connected with their young consumers aged 30s and younger, Tommy Hilfiger can initiate a popular global music program. This program will be able to provide dance and music events to major cities around the world, especially in China. These programs will aim to further strengthen the positioning of the Tommy Hilfiger brands with the help of the continuous advertisement campaigns ( 1991).

BUDGET FORMULATION (1 day)

Advertising
TV ($500/30-second ad/station)
Radio ($50-$100/60-second ad/station)
Newspaper ads ($500/ad)
Billboard campaign ($1000)
Flyers ($100 @ $0.10 each)

Personal Selling
Hiring of additional sales representatives to visit unserviced locations - $20,000

TOTAL BUDGET: $22, 200 daily

EVALUATION and CONTROL

There are several steps needed in order to evaluate and control the recommended promotional campaigns. First, the recommended promotional campaigns have to be tested first in varying situations and environments, after which a Test-result database must be established for comparisons. The tests have to determine the relative impact of the promotional campaigns, which in turn will be the basis towards evaluating the execution options regarding the appropriate promotion tools (. 2004).

On the other hand, the established test-result database will be the basis towards the creation of more promotional campaign designs and decisions. The data will also provide support for the continued implementation of IMC activities.

FEEDBACK MEASURES and TOOLS

A. “Consumer Understanding”

The occurrence of consumer research within the economy reflects the growing difficulty in the management of organizations that require the effective use of valuable resources such as money, materials, equipments, and people. And Tommy Hilfiger is no exception to these. This is the reason why consumer research is being done by the company in order to determine the most effective ways to coordinate these resources through the application of analytical methods derived from fields of studies such as mathematics, science, and engineering.

Through this process, problems are solved in different ways and alternative solutions are then relayed to the winery’s management. The management then selects the appropriate course of action in line with Tommy Hilfiger’s goals. More often than not, consumer research analysis are concerned with complicated issues such as top-level strategy, resource allocation, designing of production facilities and systems, pricing and the analysis of large databases.

B. Balanced Scorecard

The balanced scorecard is a strategic management system that allows Tommy Hilfiger to clearly establish and follow their goals and business strategies and put them into action. This approach also enables the company to issue feedbacks around both the internal business processes and external outcomes, and this undoubtedly helped the organization on its drive to continuously improve in terms of its strategic performance and results. When appropriately implemented, the balanced scorecard will be able to develop strategic planning into the brain of an organization.

The balanced scorecard approach is based on integral concepts of past management ideas such as Total Quality Management (TQM) and measurement-based management and feedback. The balanced scorecard integrates feedback within internal business process outputs, just like in TQM. The only difference is the existence of an additional feedback loop around the results of business strategies.  This establishes the existence of a double-loop feedback process in the balanced scorecard. To establish such a process, the entire business processes must be part of a system with feedback loops. The feedback data needs to be thoroughly investigated by the company and organization managers in order to identify the causes of variation.

The balanced scorecard is strategic management process based on facts. It is a universal fact that business entities nowadays rely upon measurement and outputs of performance. Measurements must come from the business entity's marketing strategy and provide accurate and relevant data and information regarding critical processes and results. Critical data and information needed for performance analysis and improvement include service performance, operations, and financial. The careful investigation involves using this critical information to identify trends that might not be obvious without at first without undergoing thorough investigation. Relevant information and thorough investigation are able to support a variety of organizational purposes, such as planning, improvement of operations, as well as the comparison of company performance with those of major competitors.

C. Customer Satisfaction

A major factor involved in the improvement of Tommy Hilfiger’s involves the establishment and utilization of performance measures or indicators that in turn measure their customer’s satisfaction. These measures or indicators are measurable characteristics of products and services that the company typically utilizes in order to study and improve performance. The indicators that will be chosen should be able to represent the essential factors that are crucial to the improvement of operational and financial performance. Through the analysis of accurate information brought about by the tracking processes, the measures or indicators themselves can possibly be analyzed and improved to support such goals.

RECOMMENDATIONS

A tie-up or merger with various local fashion companies offers tremendous benefits in terms of access to the company’s marketing strategies, infrastructure and even its resources. However, Tommy Hilfiger must not lose sight of its core competencies while pursuing these tie-ups. Otherwise, the image of Tommy Hilfiger might be put in jeopardy.

Meanwhile, the collaboration of Tommy Hilfiger with its major competitors can be seen as a ridiculous move at first.  However, upon close examination, this move could pave the way for Tommy Hilfiger to improve even more its IMC strategies and capabilities. The bottom line is both sides would be able significantly gain in such an alliance. Tommy Hilfiger’s strengths in fashionable product development combined with the financial capabilities of their competitors can transform them suddenly into an unbeatable force to reckon with. One possible setback, however, is the differences in the cultures of the companies involved. Another possible setback could be whether any of Tommy Hilfiger’s competitors has the need to form alliances.

The third option also focuses on alliances, but this time with either one of the suppliers specializing in raw materials for fashionable products. The benefits of these alliances should outweigh the costs in the long run.

In terms of appropriateness, all three options are able to directly address the current issues mentioned. However, the question remains whether Tommy Hilfiger could be able to implement any of these options, and whether these options can be acceptable to the key stakeholders. Any merger or alliances may also involve the sharing of expertise. Tommy Hilfiger has traditionally relied on the inside-out approach. It is important to note that any merger transactions would have many implications on the company’s values and culture as well as the resources. The key stakeholders definitely would be concerned with such options and need to be convinced of the positive aspects. Somehow, Tommy Hilfiger will be able to overcome this barrier in managing strategic changes in the process of implementing any of the above mentioned strategic options.

CONCLUSION

As a person with knowledge of the fashion industry, the author has always brought up to his superiors the viability of strategy formation regarding the analysis of this industry and at times fails to understand the reasons or logic behind certain strategic implementations imposed on it.

By delving into this project paper, the author intended to have better insights into how the strategic analysis of the fashion industry is thought up, formulated and then imparted down. The author hoped to have an in-depth understanding as to how the strategic analysis of the fashion industry enabled companies and organizations in this business to compete effectively and profitably in this era of internationalization where competition is extremely intense.

In order to reinforce the learning objectives, two key focal issues were focused upon i.e. innovation and diversity. Innovation was discussed with regard to the strategic analysis of the fashion industry where it was renowned for its developmental capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to better understand the issues being discussed.

Tommy Hilfiger has been able to remain one of the world's leading fashion companies for more than a century now primarily because of the execution of the company’s international marketing strategies to perfection. Add to the mix the company’s dedication to high quality of service and the formula for success is at hand.

However, I am not totally convinced that the international marketing strategies Tommy Hilfiger implements currently would be as effective as before. For one, consolidation and globalization are taking place across most industries, and the luxury goods industry is not excluded. Tommy Hilfiger, as a leader in their industry, has implemented various strategies to fully adapt to the need to go global.

 I suggest that Tommy Hilfiger should implement a more sober approach to maintain consumer loyalty with their local brands. There is nothing wrong with building new loyalties with the other global consumers like China. But there are instances where the local market is often neglected. As a result, local consumers will tend to develop a bad impression about the company and its products. While it is good to acquire new firms, it is even better to keep and maintain the older and more established markets. This way, the empire of Tommy Hilfiger will remain unscathed amidst the advent of consolidation and globalization.

REFERENCES

http://researchkorner.blogspot.com/2013/12/marketing-communication.html