Table of Contents
Executive Summary 3
Introduction 3
Brand Overview 3
Company and Brand History 3
Key Developments of The Brand 4
Issues and Controversies 5
Market Analysis 6
Target Market 6
Market Positioning 7
Brand Identity 7
Product 7
Promotion 8
Price 8
Place 8
Process 9
Conclusions and Recommendations 9
Appendices 10
SWOT Analysis 10
PEST Analysis 11
Bibliography 13
Executive Summary
This written report on Victoria’s Secret’s will provide insights and discussion on brand and marketing analysis of the brand. To assist the analysis and present the key points, there are some tools such as PEST analysis, SWOT analysis and Marketing Mix applied, specifically on the part where the market of the brand is analysed. This report also feature the examination of issues and controversies the brand previously faced, as well as introducing the possible recommendations on how to further improve the brand image.
Introduction
The purpose of this assignment is to complete a brand and marketing report of an existing fashion brand, in this case, Victoria’s Secret. The application of marketing in fashion business is essential – it assists the businesses to manage their growth and change, to strengthen the chance of success and lessen the failure possibility (Easey, 2009, p. 13). He further stated that “marketing is a management process concerned with anticipating, identifying and satisfying customer needs in order to meet the long-term goals of the organisation” (Easey, 2009, p. 24).
In order to thoroughly analyse Victoria’s Secret brand identity and marketing effort, the writing of this assignment would be divided into a few major parts; brand overview, market analysis and brand identity analysis.
Brand Overview
Company and Brand History
Victoria’s Secret, or also known as VS, is a specialty retailer of women’s intimate and other apparel with fashion-inspired collections and beauty products. It is the largest retailer of women’s lingerie in America – generating a total of $6.2 billion of sales in 2012. The company considers itself as an iconic women’s intimate brand, featuring supermodels and renowned annual fashion shows. Victoria’s Secret, along with three other brands – Bath & Body Works, La Senza and Henri Bendel – is a subsidiary within L Brands, Inc. and is the largest segment of the company. L Brands is currently headquartered in Columbus, Ohio.
Victoria’s Secret was founded in 1977 by Roy Raymond and his wife Gaye in San Fransisco. Raymond’s idea to establish Victoria’s Secret came from his experience trying to shop lingerie for his wife at a department store – he felt embarrassed because he had the feeling the department store saleswomen thought he was an unwelcomed intruder. After studying the lingerie market for eight years, Raymond created Victoria’s Secret with the goal of creating a comfortable environment for both men and women in a lingerie store – instead of placing the products in racks, Raymond’s store had every style hung on the wall in frames.
In 1982, five years after the first store opened, Roy sold Victoria’s Secret to L Brands. At the time of the sale, Victoria’s Secret was operating six stores, with gross sales of $6 million per annum. L Brands then rapidly expanded Victoria’s Secret into US malls during the 1980s, and the brand started to offer a wider range of products, including shoes, evening wear and perfumes through catalogue sale issued eight times a year. By early 1990s, Victoria’s Secret had established themselves as the largest American lingerie retailer, reaching sales level of $1 billion. The brand gained even more recognition in the same period when they began putting supermodels in their advertisements and initiated the annual Victoria’s Secret fashion show in 1995 that is broadcasted in primetime televisions. The show displays custom lingerie, music performance and set designs. Famous entertainers, celebrities and personalities are regular attendants of the show.
Key Developments of The Brand
As of 2016, Victoria’s Secret operates more than 1,200 retail stores in the US, Canada, UK and Greater China, and online through their e-commerce website VictoriasSecret.com. Additionally, Victoria’s Secret has more than 410 stores in more than 70 countries, operating under varying strategies of franchise, licensing and wholesale arrangements (L Brands Inc., 2016).
After successfully establishing their presence in the home market of US for nearly three decades from late 1970s, in the year of 2000s, Victoria’s Secret initiated international expansion, starting with their virtual presence through their e-commerce website for a number of reasons, including the maturation of American lingerie retail market, the growth opportunities in another American countries, European countries and Asian countries. Victoria’s Secret initially employed three international entry strategies – opening a retail store, opening a store as a part of airport Duty Free and through franchising. They made their first international entry in the UK in 2005, opening a boutique in London Heathrow Airport Terminal 5, followed by several stores within airport Duty Free in Amsterdam, Dubai and various other locations. Victoria’s Secret opened first retail store outside the US in the UK, in New Bond Street in London. In 2010, they opened a franchise store in Venezuela followed by Colombia, Bahrain, Kuwait, Poland and so on.
In 2002, Victoria’s Secret launched a new product line of the brand called PINK, targeting a younger audience than the target market of Victoria’s Secret, to introduce them to the brand, earning a wider range of target customers. In 2011, PINK established a partnership with all 32 teams of the National Football League and began selling apparels sporting NFL team logos and names. PINK received enormous reception from the target market, especially after the brand opened the first standalone store in Canada in 2010, when they achieved $1 billion of sales.
Issues and Controversies
Even though Victoria’s Secret has a strong brand identity and is the number one lingerie retailer in the US, the brand seems to be surrounded by controversies and issues. The first issue is the issue that always hit Victoria’s Secret, especially after the annual fashion show is aired on television. A lot of people think that Victoria’s Secret promote gender problem and body image negativity. The headliners of Victoria’s Secret, or widely known as VS Angels, are nine famous models selected to be the brand ambassadors. When it comes to the Angels, many people focus on the physical homogeneity of the women, while in reality, the shape of women’s body vary – the body ideal that is typically presented in medias is expected not to be physically attainable by 95 percent of the population (Granja-Sierra, 2013). Furthermore, Victoria’s Secret was caught up in another controversy of excessive photo altering of one of their models posing for an advertisement. Women tend to compare their bodies to the figures of the VS Angels, resulting in them questioning their self-esteem. This can put a pressure on women, the pressure to achieve an unrealistic body ideal, leading to a more serious issue of health problems.
The second issue surrounds the brand PINK as part of Victoria’s Secret brand. In spring 2013, PINK launched a line called Bright Young Things, a collection that target the tween demographic. The line featured underwear with the word “Wild” or “Feeling Lucky?” on the bottom. The launch sparked an uproar among parents – the brand is accused to popularise the trend of sexualising young girls, comparing the young girls to objects, and tweens are at the age when they are vulnerable to the exposure of media’s messaging (Newsom and Newsom, 2013). As an effort to solve this issue, Victoria’s Secret removed the most offensive products and took down the advertisements.
The third and last issues are the issues surrounding community and environment – the issue of Victoria’s Secret alleged use of child labour in Burkina Faso and the attack from the organisation ForestEthics. ForestEthics “depicts Victoria’s Secret as disregarding the environment, suggesting that the corporation behind the brand is reckless; it accuses the brand of promoting a negligent lifestyle and anti-environmental behaviours by encouraging customers to read fashion catalogues” (Cervellon, 2012). Since then, L Brands as the parent company of Victoria’s Secret, has issued a corporate responsibility planning and management to be a more ethical, sustainable and responsible business, to give back to the community and to avoid similar issues in the future.
Market Analysis
Target Market
Victoria’s Secret target market is trends, fashion conscious people who care about their appearance, put value luxury goods, on buying underwear, lingerie and intimates that provides them with positive emotional effects. Since majority of Victoria’s Secret retail stores are located in malls, their customers are frequent mall visitors, who do not necessarily go to the mall to shop in Victoria’s Secret. The customers probably visit the mall with the intention of window shopping or during socialising events with friends and family, and see the opportunity to shop.
The main target market is female aged between 18 and 49 – 44 percent of Victoria’s Secret customers are between the ages of 18 and 34. Male is another Victoria’s Secret important target market. During holidays and another celebrated day like Valentine’s Day, men comes to the stores to shop for lingerie as a gift for their significant others. According to a report by Quantcast (2011), 39 percent of Victoria Secret’s customers are male customers.
Victoria’s Secret customers have an average annual income of $50,000, enabling them to have enough fund to purchase Victoria’s Secret product several times on a seasonal basis over a year period (Quantcast, 2011).
The launch of PINK further expanded their target market range – focusing on catering to the 13 – 22 years old demographic.
Market Positioning
Based on the price points that they offer for their products, GapBody and Triumph can be identified as Victoria’s Secret’s competitors. Compared to their competitors, Victoria’s Secret is positioned in a graph below:
Brand Identity
In order facilitate discussion and analysis of Victoria’s Secret brand identity, the tools of 4Ps Marketing Mix will be used.
Product
Victoria Secret’s produce, manufacture and market various product lines. Beside lingerie and intimates, the brand also manages beauty products, fragrances, sleepwear, loungewear, swimwear, clothing, shoes athletic attire and personal care accessories. The beauty segment includes make-up, skincare, body care, hair care and tanners. Victoria’s Secret follows trends – just like other fashion apparel companies, and manufactures their products relating to different seasons. Victoria’s Secret garments are offered in a range of size, from size 0 to size 16 (XS to XL), bras from 30A to 40D and shoes from size 5 to 12.
Promotion
Hume and Mills (2013) stated that “the market for lingerie and other women’s undergarments is highly brand competitive and volatile” – it might be the reason why Victoria’s Secret spend a lot on promoting their products, maximising the function of various promotion platforms of both traditional and modern platforms. Generally, L Brands spent $325 million to fulfil their marketing efforts in 2016 alone (L Brands Inc., 2016). They advertise on television, printed advertisements (magazines, brochures, catalogues), as well as online and digitally through their website and social networking platforms. The annual fashion show featuring their brand ambassadors is a part of the promotions, too, and it is aired in primetime television channels.
Victoria’s Secret is also renowned for their marketing and promotion effort through social networking platforms. As of 18 April 2017, they have 10.7 million followers on Twitter, 54.1 million followers on Instagram, 28 million likes on Facebook and 1.2 million subscribers on YouTube.
Price
Based on the pricing, Victoria’s Secret product can be placed between the category of middle and high-end brand. The lower-priced cotton and basic items are similar to the products found in common department stores or retail stores, while the higher-priced and fancy items are more similar to another high-end competitor brands or at luxurious department stores.
Victoria’s Secret implements the promotional pricing strategy. They set an initial price that is not too high and not too low – opening chance to allow price markdowns. Permanent markdowns occur during the semi-annual sale. The semi-annual sale features permanently marked down items from the previous season. Instead, Victoria’s Secret administers temporary and seasonal markdowns through promotions like holiday season sales or five items for the price of four. During these sales events, Victoria’s Secret stores still display new arrivals and full-priced items, to keep a product balance.
Place
Place is not only limited to the physical presence of the brand – it also includes the virtual, online presence of the brand, any platforms that can facilitate the contact between the company and every party involved in their business – customers, suppliers, employees, or communities. For their physical presence, as a result of their strong brands and established retail presence, Victoria’s Secret retail stores are primarily mall-based or in high-traffic locations in retail centers. They have manufacturing plants and suppliers in Sri Lanka and India, as well as in China, Thailand and Indonesia. The L Brands headquarter in Columbus, Ohio also house seven distribution centers.
The online presence of the brand is on the internet – mainly through their e-commerce website.
Process
In a 2015 marketing mix report, it is mentioned that “many customers no longer simply buy a product or service – they invest in an entire experience that starts from the moment they discover the company and lasts through to purchase and beyond” (The Chartered Institute of Marketing, 2015, p. 8), and in Victoria’s Secret’s case, the process is an important part that assist the process of building their brand image.
Victoria’s Secret views their customers’ in-store experience as an important vehicle for conveying their brand image to the customers. Victoria’s Secret still continues Roy Raymond’s – the founder of the brand – legacy in providing exceptional in-store experience. Every Victoria’s Secret retail store all over the world are uniformly designed to ensure consistent store experience, regardless of locations. They utilise visual presentation and innovative range of the products, visual appearance of the stores, in-store marketing, friendliness of staff members and the use of music to provide the customers with luxurious experience. All those aspects aid the brand to retain their customers, making the brand resilient to slowdowns in fashion industry or economic fluctuations.
Conclusions and Recommendations
Victoria’s Secret is known for its strong brand identity, brand loyalty of the customers, the extensive, successful marketing efforts and their commitment to customer service. As Easey (2009) emphasised in his book, it is really important for fashion businesses to understand the customer, their perspective, preferences and demands. The company constantly comes up with new product lines and innovations to satisfy the customers’ demands and cater to an even wider target market. The aspects and processes are managed and integrated well – even though the company seems to be doing well, they are constantly faced with issues surrounding body image or hyper-sexualising of women – this is the room for the company to improve. In order to break the current negativity, the company should focus more on promoting body positivity by catering to the plus-sized market, providing wider size range, promoting body diversity through their campaigns – they should also conduct quality check or cultural appropriateness research to avoid the PINK apparel issues. By implementing these kind of changes, it would advantage the company, since fixing these issues will reduce the amount of negative comments and backlashes that are targeted towards the brand, and even further improving the brand image.
Appendices
SWOT Analysis
Strengths
Weaknesses
o VS has a strong brand presence, supported by the existence of 1,177 physical stores located all over the world. They maintain the consistency of their brand image by applying consistent architectural style and interior design to increase the customers’ in-store experience
o VS has a strong marketing strategies across different platforms. For a more traditional marketing approach, the company signs with supermodels as their brand ambassadors and utilise television commercials, along with their online marketing. The company updates their e-commerce websites on a regular basis and provide product catalogues to make the customers aware of their new product lines and have an easy access, as well as their presence in social media platforms. In 2014, VS was ranked as the second most popular retail brand on Facebook
o The creation of PINK product range, the company’s decision to use organic and fair trade raw materials and the launch of beauty products enabled them to expand their target market
o The strong customer following enable VS to maintain sales and even see increase in gross profit year by year
o The annual runway shows that attract public’s attention, featuring star performers and star models
o Continuous work of product research and development to provide more quality products for the customers
o Extensive and growing product line and range
o Fast adaptation to emergent trends, markets and environments
o VS is missing out on gaining more sales by not catering to the plus-sized market. So far, the company has not put any effort to include larger sizes in their product range
o VS has faced controversies for alleged publicity of negative body image
o VS has previously been sued for fraud when they terminated their contract with a hosiery supplier. VS then continued to sell a lower quality version of the same product using the same packaging
o VS’s price points are exceptionally high, compared to other high-street lingerie brands. While this pricing strategy is proven to generate more profit, some customers might view the brand as a splurge rather than a brand that they reach out to buy essential items. This can be seen as a constraint
o Reliance on foreign sources for production and manufacturing
o Customers’ complaints on inconsistence of lingerie sizing
Opportunities
Threats
o Development of a more positive and healthy body image
o The annual runway show can be held in a country that VS wishes to penetrate – in order to create brand awareness in the particular market and familiarise the customers in the market with the products
o Bringing in a cheaper product range options could expand the size of their market
o Creation of plus size product range would satisfy the demand from potential customers with plus size
o Since the brand recognition has increased into a global level, it is easier for VS to expand their operations to new markets
o Wide range of target market
o Unstable prediction of future trends
o More and more fashion brands are starting to create their own lingerie lines, increasing VS’s competition
o Competition from established local brand when penetrating new markets
o Cultural differences in new markets that should be overcomed
o The availability of fake products might taint the brand image
o Negative publicities
o The economic instability might affect the company’s effort to expand globally
o Shift in customers’ preferences
PEST Analysis
Political Factors
Economic Analysis
With operations and manufacturing plants located in various part of the world, it is vital for Victoria’s Secret to be aware of political conditions and rules and regulations of each of the countries they have operations on. Before entering a new market, Victoria’s Secret should conduct a thorough research on every rules and regulations that affect the company, in order to avoid unwanted issues that can restrict establishment process in the new market.
The different rules and regulations regarding import tariffs and taxation in various countries might affect the pricing of Victoria’s Secret products in some markets. Another deep research might be needed to determine whether a market is a suitable market for a luxury products of Victoria’s Secret – the company needs to make sure that the customers in the market have the ability to afford the products.
Social Analysis
Technological Analysis
Victoria’s Secret possess a strong brand identity and is recognised in various part of the world. The company should emphasise more on their popularity by promoting a healthier body image and expanding their product portfolio, catering to plus-sized market.
The advancement of technology enables Victoria’s Secret to provide an even better customer service – first, it is now easier for the company to have integrated system in managing the manufacturing, production, supply chain and product distribution, to make sure that products reach the assigned stores in time and stock levels are kept in control. Second, the e-commerce website assists the company to manage its virtual presence online and enter a new market by selling products through the website. Third, the existence of social networking platforms (Facebook, Twitter, Instagram, YouTube) enables the company to conveniently connect and interact with their customers in order to solve customers’ issues and increase brand loyalty. The social networking platforms can also be utilised to track and record latest fashion trends and demands.
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