Contents
Two-Part Competitor Analysis 6
Strategic and Creative Solutions 9
Suppliers’ Bargaining Power 10
Effective Communication Lines 12
Public relations and sales promotions 14
Due to the rapid growth and massive potential of the Chinese market, most countries have given it favorable receptions all over the world. Foreign companies have increasingly shown interest while others have conquered the market with their progress highly enviable due to the mega trending effect. The fashion industry has maneuvered its way to becoming one of the highest performing industries in the Chinese market with both local and foreign companies doing exceptionally well thanks to the high taste of fashion adopted in the area recently.
Companies have explored all the opportunities for further growth in the country with the aim of exploiting every available market avenue. Supreme street-wear brand which was initially founded by James Jebbia in April 1994 in the City of New York is advancing well on the global map and has recently penetrated in some Chinese second-tier cities such as, Nanjing, Tianjin, Suzhou, Hangzhou, Xi’an, Wuhan, Shenyang, Chongqing, and Chengdu. Supreme began as a skateboarding shop with its first store opening on the Lafayette Street, New York and has since expanded to other six in Japan and one each in Los Angeles, Paris, and London.
Supreme’s unique branding strategy has played a considerable role to its success over the period with the skateboard being its trademark, and the featuring of New York stars like Nate Lowman and Jeff Koons promoting the brand further. However, in China, the brand is not well recognized, and a very different style of market entry must be adopted to ensure the company maintains its high profile reputation. The nature of the balance in the Chinese market poses enormous challenges due to the already available brands with certain loyalties and admiration from the Chinese consumers. Nevertheless, the key to successfully surviving in the market is having comprehensive market knowledge.
Over the period, China has gone beyond Japan’s economy to become the second largest world’s economy which turns out to be a significant emerging market for several foreign brands owed to the high Chinese development rate. Other luxury brands have previously entered the market in the search for production opportunities even though the economic growth of China declined in the recent years. The foreign brands also faced a massive financial blow as a result of the measures of anti-corruption which were implemented by the new administration together with the deep understanding of fashion by the consumers which led to rational consumption.
However, according to Anderson and He (2015, pp. 3-8) the Chinese consumer base is expected to grow continuously in power and sophistication increasing annual fashion expenditures thrice by 2021 to 200.7 billion US dollars. He and Anderson further stated that the fashion industry market value domestically approximates to 191 billion US dollars while the entire production size of the fashion industry ranges to 500 billion US dollars nationally. With the overall Supreme market value being around 1 billion US dollars and expected revenue approximated at 100 million US dollars, the Chinese market is likely to offer more growth opportunities. For a start, Supreme fashion brand claims around 10% of the market share in the Chinese economy with the second tier cities providing this avenue for growth.
Having launched different stores in the various cities, Supreme Company is still new and has an extreme desire to expand its operations and investments. Research by Stottingher, Schlegelmich and Zon (2015, pp. xi-xvi) state that the consumers are getting younger in regards to the observation from the previously opened stores in Tokyo, London and Paris as well as from comparisons with other global markets.
The Supreme fashion brand has developed a loyal customer base from passionate young stars all over the world which is the same case with the Chinese market in the second tier cities. The long-term survival of the Supreme brand will largely depend on the changing patterns of the age structure of its customers considering the sudden change in the tastes of the young generation who were previously detached from the luxury brands. For instance, the T-shirts luxury has earned a market demand of over 25 million dollars in the fast-growing market as well as higher demand for rubber sliders in the same market.
“The most demanded clothing brand worldwide is none other but Supreme” This is according to Atwal and Williams (2017, p. 48). They argue that the products are statistically very likely to increase in value and demand than any other merchandise consumer company globally. The young generation is catching up with the modern community lifestyle in China, and the efforts will encourage the company further to prepare unique, affordable products for its increasing customer base. With the Supreme Company providing various classes of products, the Chinese customer base reacts positively, and the demand is relatively higher compared to other areas around the world.
The affordability power together with their great purchasing behavior, the Chinese citizens guarantee the Supreme Company consistent profits in the future. However, still, the company faces some challenges to convincing a large number of the Chinese people to prefer their products. This is because there is a great number of the citizens who stick to the locally produced commodities and are not likely to embrace foreign products.
As stated by Balmer and Chen (2015, pp. 175-176) H&M and Zara companies opened new stores of which more than 70 percent were located in the second-tier cities in the year 2012. The customer is always at the mind of these two companies such that all the business operations are based on the customer’s demands which make it their priority to integrate an efficient and a strong customer relationship planning. H&M and Zara have always targeted to understand their customers better to improve relationship maintenance and building. As a result, the two companies implemented customer care models which ensured the personnel at the store enabled positive shopping in a lovely environment to all the customers. To achieve admirable consultancy and customer service, employees regularly attend courses offered by professionals and receive assessments from the store supervisors about the assistant services.
The customer care model implementation was designed to attract more walk-in-shoppers, build loyalty from the customers as well as to retain them. Additionally, dialogue tools were introduced to ensure the customers stayed close to the companies to air out their commodity demands, questions, complaints or recommendations. When customers realize that their queries directly shape changes in the firm it builds their loyalty making them feel appreciated and therefore increasing their satisfaction. Due to this positive feedback, the companies have launched local Chinese websites as a way to improve information sharing among their customers (Prange, 2016, p.50). Despite the site becoming a crucial communication tool, it became the second avenue to remain in touch with their customers besides in the physical shops.
Additionally, the two firms introduced the lookbook feature to their website which shows the recent in-store collections and styles, therefore, serving as an avenue for fashion inspiration to the prospective and current customers. With the progress, the two companies have introduced smartphone and iPhone applications enabling the customers to stay informed conveniently about popular products arriving daily in the shops. Through these developments, the customers are capable of approaching a company online to view the items without necessarily having to visit the actual stores.
Bettiol et al. (2016, pp. 1269) stated that a good performance in China also means a good performance globally. For example, during the year 2015 H&M registered a 25 percent yearly growth from 2013 where a Swedish bank attributed the success to the strong demand in China. The bank also reported that H&M, Zara, and Supreme are more profitable in the Chinese markets than any other globally.
However, due to the introduction of the social media world, these companies are earning popularity daily, and the competition among one another has become more intense both in the regional and global markets. All these companies have made their spaces in social media avenues such as Twitter, Facebook, Instagram, Pinterest, and Youtube. These corporate strategies have brought up new marketplaces for fashion proposals, customer relations, and promotion of high-level services. In these social media platforms, customers get into dialogues with the companies for product safety and quality assurances. Through web activities, these companies have maintained high competition standards with each company focusing on acquiring and retaining more customers than the others.
Both in the region and globally Zara, H&M, and Supreme have developed ways to improve their corporate ethical standards and social responsibilities. They have done so by contributing financial aids, donations and sponsorships to the disadvantaged groups worldwide for life developments, for example, their engagements in charitable causes and social investments such as providing contributions to Red Cross. However, Supreme has done it with style by using skateboarders to influence the society on supporting the needy and showing love to the less fortunate by providing T-shirts and other cool fashion clothing.
Currently, Supreme brand products are marketed through the local and regional specialty stores distributed along the Chinese second-tier cities from Tianjin to Hangzhou and Chongqing. So far in the Chinese market Supreme products have not been supplied through national apparel chains and sporting goods. The season, as well as the climate, mostly dictates the number of sales at the specialty stores, which retail more riders, caps, and T-shirts during the warm weather while during the cold season they sell more jackets and fleece vests. Supreme acquires its information concerning the overall trends in the industry in various geographic regions and at different types of retailing outlets through its business organization.
The Supreme Company has for a long time supplied their products through retail shops but currently due to intense competition and the need to build their brand in the Chinese market it has partnered with some well known local distributers. It has therefore introduced a wholesale shop at Beijing which is the source of clothing for other retail shops in the country. The retail shops are either owned by supreme or other partnering distributers.
Supreme has also developed online sales which offer customized products that are only available for the internet market. Its major customers subscribe to email updates where they can also make orders and specify the type and design as well as other details concerning the commodity they want to purchase. Internet shops have also been placed at the store outlets to enable customers to order customized products directly from the store which is even more profitable. However, regardless of the different supply methods, Supreme is able to maintain fully functional relationships with the members of other distribution channels.
According to Okwonko (2017, pp. 60-62), 60 percent of customers prefer replacing active and casual wear more often than any other clothing. Therefore, the quality, product pricing, customized products, maintaining the brand’s name outlook as well as meeting every customer’s needs matter a lot in the selection of the brand company a customer will visit time after time. Also, regular discounts will attract other customers who are mostly not yet decided where to purchase specific items.
The targeted consumers of Supreme products are active customers who are aged between 16 to 45 years. These people are mostly the youths who are interested in hiking, rock climbing, cycling, surfing, figure skating, in-line skating, horse riding, snowboarding or skydiving, skateboarding and all other related activities. As Choi, Chow and Liu (2013, p. 70) states, the target consumers must not be necessarily experts or professionals to buy the commodities. Despite the initial aim of Supreme Brand which was meant for the skateboarders only, the increase in demand for the products has led to broadening of the customer base as long as they can afford.
However, the active customers consist of a broad group of prosperous and well-educated individuals who are young, single, married or raising families. Their household incomes are estimated between 50, 000 and 120, 000 US dollars annually. Despite being comfortable with their salaries, the customers are consistently price conscious and always seek quality in the commodities they purchase (Bettiol et al., 2016, pp. 1270-1273). Also, regardless of how old they are (whether they belong to the lower or upper target range end), they live active lifestyles. They like being associated with precious products and are somehow status oriented though not ready to incur the extra price for branding.
Supreme clothing brand started its manufacturing in New York where there was a quick availability of cotton and other raw materials, therefore, enhancing fast production. The firm is well integrated which therefore means it controls and owns the chain of supply. By doing so, it can produce more effectively and efficiently and thus gains more control over the market. By the use of this strategy, Supreme continuously provides a variety of products in large scale and still acquires high turnover.
In China, there are available manufacturing resources which make it strategically convenient for local and more production of Supreme commodities at cheaper costs and therefore avoiding the extra burden to the consumer.
The company does not incur pressure to raise prices or lower quality or supply due to inadequate resources. This is a good factor in the competitive environment and the profit potential.
The Fashion retail industry sells goods worth around 5 billion US dollars annually, which range from equipment to clothing. In China, ANTA Sports Products, Lao Feng Xiang Jewelry, Zhejiang Semir Garment Company Ltd and Shanghai Metersbonwe Fashion & Accessories Company Ltd include the most prominent competitors that offer almost similar products to those of Supreme. Other smaller competitors provide same products and have their portion of the market mainly from the loyal citizens who prefer locally based companies.
Despite the listed competitor companies, very few offer the trendy and quality yet practical goods provided by Supreme. Also, they don’t carry the customized slogans and logos that Supreme plans to deliver soon. While most of the competitors sell high-tech performance apparel manufactured fabrics, Supreme clothing is strictly made of the best quality cotton apart from jackets and fleece vests. Finally, Supreme products are available at affordable prices in multiple numbers accompanied by their quality. For example, a Supreme T-shirt is available for 16 dollars compared with the same quality selling at 20 dollars in another firm.
The Fashion clothing Industry has a lot of entry opportunities. However, the general industry outlook and Supreme, in particular, is positive due to several reasons which include: First, the consumer’s interest in skateboarding around their homes. Second, consumers look for means of having fun and get dressed with their families and friends without excessive spending. Third, most Supreme customers are familiar with the brand name and are likely to remain loyal even when other new companies enter the market.
Supreme communicates with their retailers and consumers about its commodities in various ways. The information concerning the Supreme Company together with its products can be obtained through the internet, direct mails and private message delivery. Through this strategy, the firm is able achieve its promotional efforts which seek to create a difference between its products and those of the competitors.
The firm relies on the retailer’s contacts to establish other items in the stores. The individual contacts through face to face or via the phone, assists in conveying the Supreme message, build relationships and demonstrate the unique qualities of its products. Supreme sales representatives keep visiting the stores throughout the year offering in-store training to the new retailers about products features.
For the next five years, Supreme focuses on expanding supply to every potential city all over the entire country aiming to achieve popularity even in the interior inaccessible areas. With the expansion of distribution channels in China, Supreme will adjust accordingly to meet the high demand through increasing sales officials to promote more understanding of the market.
As much as hiring more task force to encourage effective communication may be phenomenal, it comes along with the need for a more significant managerial structure. Communication is an essential factor in the fashion industry, and if not taken into a more profound concern, consumers may quickly get misguided.
With the brand name that Supreme possesses, it is easier to communicate its message to their new audience through celebrity endorsements. Chinese fans trust and adore some specific celebrities and therefore they as well get attracted by their opinions and choices. As stated by Heine and Gutsaz (2016, p5833) the use of stars in establishing essential features through advertisements achieves more than just new audiences.
Every single store in China has a communication department which links up all the customers with the entire company structure. The stores implement their own communication ways while there are still the common expected rules to be followed by the entire staff. Such that one store may come up with a communication strategy which can be adopted by the other stores if it becomes a success thereafter.
Increased costs are likely to affect a business negatively. For instance, in regards to Supreme entering the China Market, increased costs are inevitable due to the desire of establishing itself. The use of certain strategies to enhance communication may be very capital intensive and if not well planned Supreme may likely experience reduced turnover. Therefore, the company controls all strategies which may involve usage of intense capital to ensure the company does not experience lower profits than expected
Public relations and sales promotions are among the leading promotional strategies that Supreme has always given their full energy. For example, while still marketing themselves, Supreme has recently engaged in organizing environmental programs around some of the most prominent cities in China. This, therefore, has created favorable public relations among the citizens building the brand name of the company before it even gets well established in the region. Also, due to the flexibility of Supreme, distributing incentives to customers such as free water to skaters and discount coupons during outdoor events has created good relationships in the new market.
In the process of entering the new market, Supreme Company has not been able to impress the Chinese citizens thoroughly. This is because many of them have their preferences defined and loyalty to local producers as well as to the already established brands such as the ANTA streetwear company is very tight and Supreme has to do more to ensure it captures a significant number of the customers.
The Supreme Company has previously collaborated with other big luxury brands such as Louis Vuitton to enlarge their customer base in other regions. Similarly, for the company to extend its brand’s audience as well as its product line, unexpected collaborations are on the way to the Chinese market. Other promotional objectives of Supreme Company shortly include distributing promotional items for example discount coupons and stickers to its potential customers, attending and organizing skateboarding competitions as well as planning hiking events towards the few well-selected customers.
Other promotional objectives include kicking off new seasons with showrooms and fashion shows where new fashions and other hot deals from Supreme are displayed to the customers. Also during the beginning of sales and tax seasons, the company will try to reach customers with invitations to special celebrations which offers added value apart from just the sale price. Celebrating special dates and anniversaries of the business life in China will also be among Supreme’s promotional objectives to use the occasions for inviting the loyal customers where the company will be capable put its brand in the spotlight.
It will be challenging to have full control of what the media will portray about the Supreme Company and the message which will be delivered to the public unlike the case of advertisements. Due to the competitors’ reactions to these strategies, public relations efforts may be misinterpreted, and a bad picture about the intentions of the company may be portrayed. Also despite the money and time used during sales promotions and public relations efforts, there are no guaranteed positive results and the return on investment may not be relatively proportional to the efforts employed.
For the previous 10 years, Supreme brand has gained popularity in the global market and is recently doing very well in China beating other brands which have been in the market before. This is due to the warm reception and most importantly the expertise demonstrated by the entire Supreme team. Every other international brand which intends to penetrate to the Chinese market could use the Supreme marketing strategies highlights as good examples for a successful outcome. However, due to new opportunities and continuous different challenges, Supreme is also required to improve its strategies with time in order to remain relevant for an unforeseeable future.
Anderson, P.M. and He, X., 2015. Consumer behavior in East/West cultures: Implications for marketing a consumer durable. In Proceedings of the 1996 Multicultural Marketing Conference (pp. 3-8). Springer, Cham.
Atwal, G. and Williams, A., 2017. Luxury Brand Marketing–The Experience Is Everything!. In Advances in Luxury Brand Management (pp. 43-57). Palgrave Macmillan, Cham.
Balmer, J.M. and Chen, W., 2015. China’s brands, China’s brand development strategies and corporate brand communications in China. Journal of Brand Management, 22(3), pp.175-193.
Bettiol, M., Chiarvesio, M., Di Maria, E. and Tabacco, R., 2016. Luxury firms in China: The role of design and marketing capabilities. Global Business Review, 17(6), pp.1269-1279.
Choi, T.M., Chow, P.S. and Liu, S.C., 2013. Implementation of fashion ERP systems in China: Case study of a fashion brand, review and future challenges. International Journal of Production Economics, 146(1), pp.70-81.
Godey, B., Manthiou, A., Pederzoli, D., Rokka, J., Aiello, G., Donvito, R. and Singh, R., 2016. Social media marketing efforts of luxury brands: Influence on brand equity and consumer behavior. Journal of business research, 69(12), pp.5833-5841.
Heine, K. and Gutsatz, M., 2015. Luxury brand building in China: Eight case studies and eight lessons learned. Journal of Brand Management, 22(3), pp.229-245.
Kim, Kyulim, Eunju Ko, Mi-ah Lee, Pekka Mattila, and Kyung Hoon Kim. “Fashion collaboration effects on consumer response and customer equity in global luxury and SPA brand marketing.” Journal of Global Scholars of Marketing Science24, no. 3 (2014): 350-364.
Lim, S., Chae, H. and Jeon, H., 2014. The Effect of Experience Marketing on Brand Attitude and Brand Loyalty of Beauty Salon Franchise Stores. Fashion business, 18(5), pp.42-55.
Liu, S., Perry, P., Moore, C. and Warnaby, G., 2016. The standardization-localization dilemma of brand communications for luxury fashion retailers’ internationalization into China. Journal of Business Research, 69(1), pp.357-364.
Oh, H.M., 2015. Enhancing Brand Equity in an Emerging Market: An Investigation of Korean Fashion Brands in China.
Okonkwo-Pézard, U., 2017. The Luxury Brand Strategy Challenge. In Advances in Luxury Brand Management (pp. 59-64). Palgrave Macmillan, Cham.
Prange, C., 2016. Market Entry in China. Springer Science and Business Media,.
Schroeder, J., Borgerson, J. and Wu, Z., 2015. A brand culture approach to Chinese cultural heritage brands. Journal of Brand Management, 22(3), pp.261-279.
Stöttinger, B., Schlegelmilch, B.B. and Zou, S. eds., 2015. International Marketing in the Fast Changing World–Introduction to Volume 26. In International Marketing in the Fast Changing World (pp. xi-xvi). Emerald Group Publishing Limited.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more