Business Proposal for Victoria’s Secret Stores LLC
12102 Cheroywoods Ct.
Ashland VA, 23005
Lori Greeley - Chief Executive Officer
Victoria’s Secret Stores, LLC
P.O. BOX 16586
Columbus OH, 43216 6586
Dear Ms. Greely,
Victoria’s Secret is one of the most alluring lingerie that exists. You also have an impressive set of people who would love to live their fantasy using your products. There is a slight point of concern on mind that I wish to bring to your attention that the size of the average American’s size has increased in the last few decades. Their dress sizes have increased by 3 sizes which must be a point of concern. This is exactly the opportunity that I would want you to check and consider if a 23% increase in revenue would be an interesting proposition. My research was conducted by conducting surveys and statistical analysis. The following report suggests that the market is ready for the next step.
I look forward to your thoughts on this and would be available to you and your team for a discussion and creating an action plan that must excite you and your Board. Look forward to being associated with you. I am available on 804-878-8997.
Sincerely,
Marketing Major
PS: Do you thing the title of the newer campaign offering larger sizes be called “Big Beautiful Angels.”
Memorandum
Victoria’s Secret is the world’s best known lingerie brand and is known for its chic and contemporary designs that are absolutely amazing. However over the last three decades a newer challenge has arisen in terms of increasing body sizes and even the government is seized of this issue. Increased body sizes beyond a point have been identified as obesity and are now acknowledged as a disease and even insurance companies are covering treatment for this, does this actually mean a newer segment of customers for Victoria’s Secret?
The purpose of this document is to create a reason for the world’s most famous lingerie brand to create a solution and seize an opportunity serving the larger populace. The increased sizes must allow the brand to increase its revenues as well their profitability. The study covers the reasons of why and how of handling this problem.
Executive summary
Victoria’s Secret
June 7, 201
It is but evident that over a period of the last three decades the typical size of an average American has consistently increased. This size increase has several contributing factors. Several brands of clothing has a sever challenge at hand. The typical shopper wants to buy smaller sized clothing to satisfy their vanity and ego needs since buying larger sized clothing would mean they are “big!” This has led to “size inflation.”
For the very popular range of lingerie makers this has been a severe challenge. Since it is an acknowledged fact that the average size has been increasing should the brand acknowledge it and stocks the same sizes with more and more large sized lingerie or go in for further size inflation? Will this increase their business or will it impact VS’s brand image? Should they miss on the “larger” opportunity? This is the purpose of the report.
Introduction
Problem Statement
The Centre for Disease Control and Prevention, as recently as March 2014, has reported that 35% of US adults are obese with an annual estimated medical cost of USD 147 billion. The same citizens try and imitate their favourite movie stars and trying to be slim and in an effort try to get into the super small size clothes and surprisingly, the United States seem to have been afflicted much more than other countries. The two graphs are representing the increase in size of the US citizens over the last decade.
The increasing obesity rates in the United States, despite the psychological craving to be slim and trim, have created numerous socio-economic and psychological issues over a period of time, and the resulting increase in medical expenses has been well captured by the Center for Disease Prevention.
The Economist, on the 7th of April, 2012, in the article titled ‘Dressing Up’, makes a sensational opening statement, which reads – “that a woman today wears smaller sized clothing than what she used to 20 years back when she weighs more or less the same, then and now.” The only logical explanation seems to be the concept of size inflation. It is reported that the same label sizes have increased by almost four inches than what they were about twenty years back, and it also says the typical fashion firms have increased their dress sizes to make women feel better.
What does all this translate to and mean to Victoria’s Secret?
Since it is an established and acknowledged fact that there is serious “Size Inflation” that has happened over a period of time and the target population group has grown bigger, the following questions need to be answered as part of this business report:
- What portion of the target group are we missing from being part of the customer base due to the larger size?
- Should Victoria’s Secret indulge in further Size Inflation? By how much?
- Should Victoria’s Secret simply have “plus” size to ensure they bring in the missing population segment into their customer base?
- What impact will this increase in the size have on the brand image that has always been known for its slick and super smart image?
Research Methodology
This research study will envisage a primary and secondary research mix. Secondary research would be done by gathering information through books, magazines, articles, and the internet to establish the need for the company to start thinking about offering larger dress sizes, impact on branding, the targeting, communication strategy and also its impact on the overall organization and brand perception. A wide range of relevant information would be gathered through secondary research from the plethora of sources that are readily available on the public domain.
The primary research will be used to put capture the perception of the “larger” people their need for using top-brands and how much business Potential does this have and what kind of revenues can be generated from this target segment. Primary data would be gathered by conducting a market research survey to gather information related the increased need for plus-size clothing, the requirements of such sizes as well as the specifications that people preferring such plus size clothing might have. The survey would be done by administering a questionnaire to a group of people who prefer plus size clothing.
This research should ideally end up drawing inferences on what is the opportunity size that is presented for max-sized clothing and what would be the revenue potential for Victoria’s Secret. Also, communication recommendations on advertising would also be given as part of the research. Certain indicative recommendations on the impact of offering max-sized clothing would also be made.
The Findings
Victoria’s Secret it one of the globally renowned lingerie brands. The organization is known for its retailing in the intimate apparel industry. Victoria’s Secret has an extremely strong foothold in the intimate apparel industry with an approximate market share of about 27.5%. The majority of the competitors of Victoria’s Secret are family owned individual proprietary firms. There are numerous factors that affect this particular industry like consumer sentiment, disposable income, as well as external competitors.
As far as the promotions of this famous brand are considered, it is recommended that the company maintains efficient channels of promoting a product and also the option of brand marketing. The Brand Image of Victoria’s Secret is clearly visible from the company’s official website as the imagery that is visible on the home page of the website reflects the brand’s refurbished glossy finish. Photographs of sun-glazed men and women draped in product, dressed across the desert, lure the viewer into opening their signature wallets.
Victoria’s Secret’s official website’s offers a great amount of value addition to the creative glimpse into its inner sanctum. The equal time that is being spent on both the brand’s image and the quality of the products is visible here. For example, the Victoria’s Secret online presence and market would be profitable if the organization retains the fashionable vibe which the brand had been cultivating for long while offering the online clientele with the very latest information about the various products of the company that are in real high demand and also offer a foretaste into the intricacies of highly publicized events. Extensive information about featured products is conspicuously displayed in the centre of the web page. This is accompanied by a virtual voyeuristic vault of celebrity stocked store openings in the store windows and this becomes the actual eye candy for viewers or passers-by .
The above promotions are the current promotional activities that the company follows for its existing products and the same can be tried even for a new product that has been developed. Social Media Marketing is one another option that the company can explore as today internet has become the means to connect to a huge number of people across the globe with fewer expenses. It is comparatively cheaper when compared to other options of advertising.
The main focus should be to align the retail segment offering closely to the catalogue and Web channels, and the same undoubtedly is a massive undertaking that would be done by the brand.
The company, like any other brand in this industry, has got high hopes with regards to its official website. Victoria’s Secret has a clear distinction over its competitors as a far superior brand. The company’s collection has also created a cult-like feeling among the different genders of the customers. This cult following by both celebrities and wealthy consumers has elevated the Victoria’s Secret brand to the foremost position in accessory design alongside various other competitors in the industry.
Brand Patronage or sponsoring is a type of promotional activity, which is done by associating the name of the organization with a specific event, generally, sporting events or any activity that encompasses an extensive public gathering. Celebrity endorsement is another form of brand promotion . The phenomenal success of Vitoria’s Secret has resulted in much revenue growth and a little bit of controversy. The Fashion Shows Catalogues and the models of Victoria's Secret have become more informative, increasingly voluptuous and more divisive.
It is necessary to first analyze the customer expectations of the service output and accordingly design the channel. It is to be first decided as to how many total numbers of units are acquired by a consumer during a particular transaction period. This would further help in providing distribution channels to meet the demand of these customers.
Analysis Findings
There is extensive literature that is available in the public domain that is relevant to this research proposal. Some of the useful sources are highlighted here for sampling purpose and more would be sourced and added as part of the thesis document.
Plus-size preference for apparel is growing on a daily basis world over. According to research reports, “although the US apparel market contracted during the recession, (falling from US$34.6bn in 2007 to $29.6bn in 2009), it is now climbing again. Market researcher Mintel predicts overall apparel sales in the USA will raise to USD30bn in 2011and by 3.4% in years after; according to its 2009 'plus size teens and women' report.”
It is very easy for women having an average body size to choose any trendy and classy petite clothes or lingerie from any department store or a boutique. However, women having larger body built often are underserved and a pleasant shopping experience has apparently become a luxury in the contemporary fashion market that is dominated by small size. It is an important point to note that plus-size women are faced with a plethora of challenges in discovering lingerie to suit their body sizes, and this is applicable more to the Asian market.
Any informal review of retailers across various parts of the globe, unfortunately, fails to indicate any perceived need for plus-size apparel, especially for women. According to recent market survey conducted by a company called Mintel, the US market for plus-size clothing is really its very high peak as approximately 40% of the women populace tend to use size 12 and above while the demand for clothing highly representative of the overall population is continuously growing. The most crucial age groups on which apparel manufacturers could focus are the age bracket of 15-24 and also the women of the ‘baby boomers’ generation, currently at the age of 55 or more. Many similar studies have also indicated that, there is a common feeling among many women that there is inadequacy in the number of stores that offered considerable choices that cater to various sizes while it is also felt by many women that plus-size clothes appear to be less fashionable when compared to the regular or small sizes.
According to recent market survey conducted by a company called Mintel, the US market for plus-size clothing is really its very high peak as approximately 40% of the women populace tend to use size 12 and above while the demand for clothing highly representative of the overall population is continuously growing. The most crucial age groups on which apparel manufacturers could focus are the age bracket of 15-24 and also the women of the ‘baby boomers’ generation, currently at the age of 55 or more. Many similar studies have also indicated that, there is a common feeling among many women that there is inadequacy in the number of stores that offered considerable choices that cater to various sizes while it is also felt by many women that plus-size clothes appear to be less fashionable when compared to the regular or small sizes.
Conclusion
As the average body size increased and this presents a newer business opportunity for Victoria’s Secret. This research should ideally end up drawing inferences on what is the opportunity size that is presented for plus-sized clothing and what would be the revenue potential for Victoria’s Secret. Also, communication recommendations on advertising would also be given as part of the research. Certain indicative recommendations on the impact of offering plus-sized clothing would also be made. Will ‘Big Beautiful Angels’ be a reality?
Bibliography
(ICMR), I. C. (2004). Marketing Management. Hyderabad: ICMR.
Alice, W. C. (2011). A Study on Bra Preferences for Plus Size Young Ladies. Hong Kong: The Hong Kong Polytechnic University.
Customer Relationship Management Conference - CRMF. (2006). Victoria's Secret - How to Manage Change in your DM Strategies. Customer Relationship Management Conference - CRMF (p. News Update # 24). Chicago: Customer Relationship Management Conference - CRMF.
Douglas, B. (2013, March 25). Super Scary Obesity Statistics. Retrieved May 24, 2014, from Health Habits: http://www.healthhabits.ca/2013/03/25/super-scary-obesity-statistics/
ICFAI Center for Management Research (ICMR). (2005). International Marketing and International Business. Hyderabad: ICFAI Center for Management Research.
Just-style.com briefings service. (2010). July 2010 management briefing: Growth in the US-Plus Size market. Just Style.
Marcheso, M. (2010). United Kingdom: Plus-Size Women's Wear. US Commercial Service.
The Economist. (2012, April 07). Dressing Up. Retrieved May 24, 2014, from The Economist: http://www.economist.com/node/21552262
