Gazdasági Ismeretek | Marketing » Dóra Belme - Market research about the fashion market of the Benelux States analysis and suggestion on how a foreign brand, like Makány Márta can appear on these markets

http://www.doksihu Budapest Business School FACULTY OF INTERNATIONAL MANAGEMENT AND BUSINESS INTERNATIONAL BUSINESS ECONOMICS COURSE International Marketing specialization AVANS HOGESCHOOL INTERNATIONAL BUSINESS SCHOOL BREDA BUSINESS ADMINISTRATION COURSE MARKET RESEARCH ABOUT THE FASHION MARKET OF THE BENELUX STATES. ANALYSIS AND SUGGESTION ON HOW A FOREIGN BRAND, LIKE MAKÁNY MÁRTA CAN APPEAR ON THESE MARKETS. Prepared by Dóra Belme Budapest, 2009 2 http://www.doksihu Table of content EXECUTIVE SUMMARY 5 1. INTRODUCTION 6 1.1 Current Situation, Problem Definition and Objective of the report 6 1.2 Methods of working 7 2. THE MAKÁNY MÁRTA BRAND 8 2.1 Company profile 8 2.2 Positioning

9 2.3 Target group 9 2.4 Main features 9 2.5 Strenght and Weaknesses 9 2.6 Organizational Structure 11 3. DEALING WITH THE CONCEPT OF FASHION DESIGN IN BUSINESS 12 3.1 What is fashion design? A brief history of the concept 12 3.2 Types of Fashion design 12 3.3 Industry structure 13 3.4 Areas of Fashion design 14 4. SECONDARY RESEARCH 15 4.1 Methods of working 16 4.2 Industry overview-Netherlands 16 4.21Market Analysis

16 4.22Market Value and Forecast 17 4.23 Market Segmentation 18 4.24 Five forces Analysis 18 4.24 Designer overview 23 4.3 Industry overview-Belgium 25 4.31Market Analysis 25 4.32Market Value and Forecast 25 4.33 Market Segmentation 26 4.34 Five forces Analysis 26 4.4 Most important fashion designers (competitor analysis) 29 4.5 Magazines, fashion blogs 31 4.6 Important events, Dutch and Belgian Fashion Week 32 4.7 Multibrand shops

33 3 http://www.doksihu 5. PRIMARY RESEARCH 35 5.1 Methods of working 37 5.2 In-depth analysis: personal interviews 38 5.3 Observation 42 5.4 Questionnaire design: targeted at customer needs 43 5.5 Results of Primary research 50 6. RECOMMENDATIONS, ACTION PLAN 51 7. EVALUATION AND CONCLUSION 58 8. BIBLIOGRAPHY 59 9. APPENDICES 60 4 http://www.doksihu Executive Summary My graduation placement took place at a Hungarian fashion designer, Makány Márta and her company. My assignment was a market research topic: the

investigation of the Belgian and Dutch fashion markets using primary and secondary data collection methods. This report was made to describe the process, the methods of working during the research and the final results and outcomes of the market research. Furthermore the report contains an overall introduction of the Makány Márta brand and the company itself. In order to carry out a precise and in-depth market research, which is useful in planning the company’s policy and helps to make recommendations, a secondary research was needed at first. This step included the building up, and the analysis of different data gained mainly with the help of the Internet. I collected this market information, evaluated the products of competitors and structured them into database. In the secondary research, I analyzed different areas, which were necessary for the company, such as magazines, fashion blogs, fashion weeks, opinion leaders and trendsetters, most important fashion designers, wedding

and fashion fairs, multi-brand shops and department stores. The next step in the research process was a primary research, which consisted of personal interviews with Belgian and Dutch persons competent in this field about their ideas and opinions, using their expertise and experience as a main element in my research. The other part of the primary research was a questionnaire targeted 50 buyers in both countries in order to gain information about their tastes, needs and desires. The intention of this analysis is to provide answers to the following questions: How to introduce this Hungarian brand on the fashion market of the Benelux States? , What kind of different ways exist to appear on these markets? , What is needed from the company’s perspective? After gathering and analyzing all this information, I was able to provide recommendations for the company. In the last part of the report, an action plan can be found with the practical steps that are necessary for the export activity. 5

http://www.doksihu 1. Introduction This report contains a market research topic: the investigation of the Belgian and Dutch fashion markets using primary and secondary data collection methods. This assignment was carried out for the AVANS Hogeschool Breda, University of Applied Sciences as well. The introduction part consists of the current situation, the problem definition and and the objective of the report. Furthermore, the methods of working is also described. 1.1 Current Situation, Problem Definition and Objective of the report The brand, Makány Márta named after the designer is well-known on the Hungarian market. The growth in Hungary is stabilizing due to the economic crisis and the limited possibilities of the market and the management is considering expanding abroad. The company already has contacts in some of the neighboring countries, such as in Slovakia, and the Makány Márta dresses can be bought in few countries like in Italy, Japan or South-Korea. The next

objective of the director is expanding in Western-Europe. The company chose the Benelux States because of several reasons. Firstly, the brand put a big emphasis on quality, French and Italian materials and hand-made work. Belgium is close enough to Paris to feel its effects, but the market is a smaller segment than the French, with less competition. On the other hand, according to data and experiences in the Netherlands, there are a lot of bridal stores for our target group which all can be potential customers of the Makány Márta brand. This is not typical in every country, and we should take this into consideration. As a geographical unit, it was obvious to investigate the Benelux States, in a group. Luxembourg is the third member of the states As this country is a really small market, it can be seen only after the secondary research, whether it is worth to continue the investigation. The main question, as it was referred as my research question is: How can the brand, Makány Márta

appear on the markets of Belgium and Netherlands? This problem has to be analyzed and my assignment tries to find a final answer, solution for the company. In the last part of the report, I try to suggest a strategy for the company how to enter the given markets. Further arising questions are: What kind of different ways exist to appear on these markets? What is needed from the company’s perspective? 6 http://www.doksihu The objective of my report is to solve these questions and suggest a possible strategy for the company. 1.2 Methods of working The purpose during my research was a detailed investigation using primary and secondary data collection methods. I decided to implement two theoretical methods of market research learnt at the college in order to use this knowledge in real business life situation: to conduct interviews, and to ask the target group about their opinions with the help of questionnaire. My intention was to prove how it works in practice and to support my

secondary research. Regarding the personal interviews with people from the given countries competent in this industry, I decided that 3 would be appropriate in each country. I wanted to gather qualitative information about the market from different viewpoints. On the other hand, the purpose of the questionnaires, the quantitative part of my research was to get opinions from the target group in order to better understand their special needs, desires and attitudes. These steps and choices turned out to be very useful for the company and the method can be implemented later in the case of new potentiel markets. Besides my primary research, I also had to use secondary data collection. In the secondary research, I analyzed different areas, which were necessary for the company, such as magazines, fashion blogs, fashion weeks, opinion leaders and trendsetters, most important fashion designers, wedding and fashion fairs, multi-brand shops and department stores. I could not use internal

documents for my secondary analysis as the company is totally new on the Benelux markets. There was no relevant document in this topic That is why in order to get all the necessary information needed I used mainly the Internet. I worked on a structured basis, I had all the important topics that had to be analyzed and gathered into a common database. 7 http://www.doksihu 2. The Makány Márta Brand The company was established in 1998 by the owner and the designer, Makány Márta. Márta did fashion design at the Hungarian University of Applied Art with master degree. The company is based in Budapest, Hungary. In 2008, the average amount of sold customs-made dresses was around 200 items. It meant a turnover above €. 200000 Accessories accounts for € 10-20000/ year This tendency continued in 2009 with a slight decrease due to the economic crisis. The market is quite competitive; however the Makány Márta brand is among the market leaders. 2.1 Company profile The Makány Márta

brand covers 3 labels: the bridal (Makány Márta Bridal Wear), the evening wear (Makány Márta Collection) and the prêt-a-porter collection (Makány Márta Boutique). The brand stands for elegance and sophisticated luxury1 The competitive advantage that is emphasized is excellence, which can be seen not only in the pictures, but in real life too: in the details of the dresses. For all of the collections the designer uses particular fabrics (from Italy, France, Spain and the UK) and Swarovski crystals. The dresses are meticulously crafted and very detailed. Another important feature is that the style absolutely follows the fashion trends, mixing with the particular own style and taste of Makány Márta, which defines her own label and line. Regarding the reputation of the company, we can state that Makány Márta, the designer is one of the most famous designers in Hungary. She already presented herself in several European countries, (i.e exhibitions in Milano Fashion week) Since

1998, when the company was established, she has gained an outstanding success. The strength of the brand also confirmed by the clients who wear Makány Márta, such as the prime minister and her wife, the Chair of the Parliament and the popular and internationally well-known tennis player, Agnes Szavay. Furthermore we can also mention many actors/actresses, and all of the NEWS presenters of the National TV Channels. Another differentiating feature against the competitors is that Márta creates the evening wear of the Budapest Opera Ball’s host and hostess. The Hungarian Olympic team’s uniform in Beijing was also designed by Makány Márta. 1 See Appendix I/1-3 8 http://www.doksihu 2.2 Positioning The brand is positioned as an artistic fashion brand with high fashion taste, which keeps an eye on the trends. This is the main differentiating feature 2.3 Target group The company’s target is selective and ambitious women who like to be women and who like to express it with

their dresses. They are women with fashion taste and need for being different from others. This group is open to the world with full of flow, taste, energy, happiness, and self-confidence. They are women with need for exclusivity, art and passion 2.4 Main features In 2007 the brand was presented at the Si Sposaitalia Collezioni exhibition in Milan as the one and only fashion designer from Eastern-Europe. Both the business professionals and the press received the collections with high expectations. This international appearance further improved the brand’s profile. The Nonsolosposi (Italy) magazine and the Wedding TV (UK) made exclusive interviews with the designer. Moreover, this year Makány Márta started her advertising campaign in Vogue Sposa, with a very particular print ad. Another main feature emphasized by the brand is product quality. Every piece of clothes is made of crystallized Swarovski elements. Fabrics are purchase from Italy, France, Spain, UK and every piece is a

hand-made work. 2.5 Strengths and Weaknesses2 SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a business venture. It involves specifying the objective of the company, identifying the internal and external factors that are favorable and unfavorable to achieving that objective. A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strengths are the attributes of the company that are helpful to achieving the objective. Weaknesses are the attributes that are harmful to achieving the objective. Opportunities are external conditions that are helpful to 2 Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey 9 http://www.doksihu reaching the goal. Threats are external conditions which could do damage to the goal Identification of SWOTs is essential because subsequent steps in the

planning process for the achievement of the objective may be derived from the SWOTs. It is particularly helpful in identifying areas for development. In our case, I analyzed the internal factors, the strengths and weaknesses of the company that have an effect on brand expansion. I applied the analysis for the Hungarian and the foreign market. Table 1- SWOT Analysis Strengths Weaknesses In Hungary 9 The an 9 Not everyone from the target group is outstanding success in Hungary since its aware of all the services given by the establishment company Makány Márta brand has 9 Well-known designer behind the brand 9 Makány Márta is rather known for her with outstanding customer base (the elite wedding dresses, than the other lines of layer of the society) the brand (e.g prêt-a-porter) 9 Commitment to quality: particular fabrics 9 Informal network (from Italy, France, Spain and the UK) 9 No complex strategy regarding the and Swarovski crystals. Meticulously

development of product lines offered by crafted dresses. the brand In the Benelux States 9 Quality features: the target group in these countries appreciates and rewards quality-conscious brands 9 Strong bridal wear line: the opportunities given by the bridal salons in the Netherlands 9 No real internal documents about the Benelux States (e.g database, contacts, etc.) 9 Lack of knowledge about expanding abroad 9 Continuous improvement is needed 9 Low entering limits 9 Good defined positioning 9 Differentiated marketing 10 http://www.doksihu Opportunities Threats 9 Opportunities given by the bridal salons 9 Effects of economic crisis on the buyer of Netherlands and multibrand stores of power 9 Appearance of new competitors Belgium 9 Further expansion in Western-Europe 9 Lack of demand 9 Introduction of all product lines in the 9 Price sensitiveness of consumers long-run 2.6 Source: own analysis Organizational structure Figure 1- Organizational structure Makány

Márta Leader designer Th Based on projects the followings: Art director e co mp Online Manager 2 Strategic advisor PR Agency any Lyricist has aro und 10 Timea Szivek Modelliser / Production manager Judit Lehoczki Designer assistant Emese Juhasz Brand Manager Krisztian Hackl Sales director Dressmakers em ployees, 2 strategic advisors and a PR Agency that helps the brand. The number of employees can increase at the time of different projects when an art director, online manager or a lyricist is hired under work orders. The owner of the company and the leader designer is Makány Márta. Under her supervision, we can find the different positions. As the company is really small, all the control is in the hand of the director and all the employees report to her. One advantage is that the company can respond very fast to the changes on the market and it also allows using the potentials given by the employees. The company works as a small team with experts in different fields,

which means that knowledge is added up to find the best solutions from the company’s perspective. The main positions are: the production manager, the brand manager, the sales director and the designer assistant. The dressmakers are under the control of the production manager, however, they closely work together with the designer herself, as well. 11 http://www.doksihu 3. Dealing with the concept of Fashion Design in Business -Determining the segment in which the company operatesFashion design is considered to be an applied art dedicated to the creation of clothing and accessories, influenced by the cultural and social impacts of a specific period. The term, obsolescence is usual in this industry: the products of fashion design can be out of fashion in one to two seasons, which means that companies have to respond very fast to changes in trends and styles. A season is defined as autumn-winter or spring-summer Nowadays, the French, Japanese, British and American fashion is regarded

as top in style, however, the Italian fashion has the biggest importance in design and it leads the fashion world since the 1970s and ‘80s. Furthermore, most major countries have their own fashion industry, such as Belgium, Spain, Canada, Portugal, Brazil, India, The Netherlands, Germany, Hungary and Australia.3 3.1 A brief history of the concept The term, fashion design started in the 19th century with an important name in this field, Charles Frederick Wort. Before him, maison couture, fashion houses were set up and the design and creation of clothes were handled by anonymus dressmakers. Worth was the first designer to have his label sewn into the garments. The wheel turned, he was able to tell the customers what they should wear instead of the earlier practices of following the customer needs. The term, couturier was crated to describe Worth’s newly- developed role Earlier, all articles of clothing were studied by academics as costume design, only after 1858 we can use the

term, fashion design. During this period, many fashion houses hired artists to sketch the design for garments. Only if the customer liked the item, the house ordered the chosen cloth. This process gradually gained ground, and began as an economy At this time, we cannot draw a sharp line between haute couture and ready-to-wear clothes. The two separate modes of production were often mixed and co-existed in the fashion houses. 3.2 Types of Fashion design There are three important lines of fashion design, although these categories can be further divided into specific ones. 3 http://en.wikipediaorg/wiki/Fashion design 12 http://www.doksihu Hautre couture is a French word, meaning for high fashion. The couture garment is made for an order by a given customer, and it is made from high-quality, expensive fabrics. The method often uses time-consuming, hand-executed techniques with extreme attention to details. The cost of materials and the time it takes to make plays second role

Ready-to wear or pret-a-porter clothes represent a cross between haute couture and mass market. They are not sewn for individual customers as in the case of haute couture, however great importance is taken in the quality and fabrics. As clothes are made in small quantities for exclusivity, they are rather expensive. Collections by fashion houses are presented in ech season during a period named as Fashion Week. The most important cities have their own events and occurs twice a year: autumn/winter and spring/summer. The third category is the mass market, which gains an outstanding popularity nowadays. The mass market produces ready-to-wear clothes in large quantities and standard sizes from cheap materials in order to produce affordable fashion. Mass market designers generally use the trends set by the famous names in the fashion world. They often wait a season to make sure a trend is going to gain ground and then they produce their own versions of the original look. If we examine these

three categories, we can say that the Makány Márta brand covers haute couture and pret-a-porter clothes.4 3.3 Industry structure Fashion designers can work in different ways. One option is when designers work full time for a fashion company called as in-house designers. Freelance designers work for themselves, and sell their garments for fashion houses, directly to shops or to manufacturers. Some designers set up their own labels which are marketed, and there are ones who design for just individual clients. Other high-fashion designers create original garments or those that followed established trends and provide the clothes to specialty stores or high-fashion department stores. Although, the big proportion of the designers work for manufacturers creating designs for men’s, women’s and children’s fashions on the mass market. Large designer brands, as Gucci, Chanel or Dior are designed by a team of designers directed by a designer director. 4 See examples in Appendix I. 13

http://www.doksihu Makány Márta is a freelance designer, working for herself and selling garments mainly for individual customers. The intention of the brand and the company is to appear on more and more markets on the world with the own label which is the same as the designer’s name: Makány Márta. The aim is to sell the three different lines for shops such as bridal stores, multi-brand shops or department stores. The strategy is close to the ones implemented by the large designers mentioned above. However, the brand is only in the first stage of brand expansion. 3.4 Areas of fashion design As many designers, Makány Márta also started by specializing in a particular area, bridal wear. At the beginning, it is easier to establish a name in the fashion industry if a company is known from a given type of product. Once a fashion company becomes established, get stronger, has regular clients and is well-known by both the public and the trend, it may decide to expand into new

areas. The Makány Márta brand is in this phase at the moment The following table shows the areas, in which the brand operates and the potential new fields. Table 2: Areas, in which the brand operates Area Differentiating feature Market Bridal wear purity and naturalness Haute couture, ready-to-wear Womens Evening wear Womens Day wear Sportswear Mens Evening wear Uniforms Elegant, sophisticated, apt for the occasion Comfortable, fashionable Adapted for competitions, team uniforms Elegant, formal, apt for the occasion Haute couture, ready-to-wear Ready-to-wear Special segment Tailoring, special orders Special orders as Olympic Possibilities mainly offered team’s uniform in Beijing by tenders Interior decoration, Elegance, sophisticated accessories luxury Possible new fields Source: personal analysis according to internal data 14 http://www.doksihu 4. Secondary Research Secondary data is data that already exists and has been collected by someone else for another

purpose. Secondary research involves the investigation of secondary sources of data The sources can come from within the firm itself – this is known as internal secondary data. External secondary data, on the other hand, is data that has been published by other organizations. Internal sources of data should always be considered as a first line of enquiry for any investigation because they are usually the quickest, cheapest and most convenient source of information available. Internal data will also be exclusive to the organization that generated it, so that rival firms will not have access to it. However, internal data may be incomplete or out of date, and, if a project is new, there may be no relevant data at all. In such cases, an organization may need to consider using external sources of secondary data. There are several sources of existing data available from outside of the organization that may be of value. These include commercial market research organizations including

MINTEL, Keynote and Euromonitor, the government and competitors making company reports and websites which are easily accessible and contain a limited amount of information. Moreover trade publications and the general media can also be a starting point for the research. Secondary data sources should always be considered by any firm conducting research. No firm can afford to waste time and money conducting expensive surveys to gather data that already exists. However, secondary data may have been collected some time ago and therefore, be out-of-date. Because it has been collected for another purpose, it may be in the wrong format or incomplete. The advantages and disadvantages of using secondary data will vary from source to source. Government data, for example, is usually cheap or even free to access. It is likely to be accurate and updated regularly However, it may be too general and because it is available to everyone, it is unlikely to give an organization any competitive edge. Some

information on competitors may be easily available via company reports or websites, but these are unlikely to contain sensitive information or data that gives the firm a negative image.5 5 McCarthy, E. Jerome; Perreault, William D: Essentials of MARKETING, 6th edition, Irwin 15 http://www.doksihu Secondary data collection is a starting point in every situation and researchers can examine whether the problem can be fully or partly solved without collecting expensive primary data. The results of the secondary analysis make it clear whether the company can rely only on the findings of the secondary research or primary data collection is also needed.6 In my case, secondary data provided a starting point to get a general overview about the fashion market of the Benelux States. I took an advantage of low cost and ready availability and I got a preliminary sense how these markets operate and which kind of threats and opportunities are given by these countries. 4.1 Methods of working

First of all, I could not use internal documents for my secondary analysis as the company is totally new on the Benelux markets. There was no relevant document in this topic Moreover, the company needed a database, which they can use in the long-run, as well. That is why I had to structure and build up a summary and a database about different areas, such as: magazines, fashion blogs; Dutch and Belgian fashion weeks; opinion leaders, trendsetters; most important fashion designers; wedding and fashion fairs; multi-brand shops and department stores. In order to get all the necessary information, to build up a database and to compile a detailed analysis about the markets, I used the help of the Internet. 4.2 Industry overview- Netherlands The womenswear market comprises womens activewear, casual wear, essentials, formalwear, formalwear-occasion and outerwear. In the following tables and diagrams the market’s value is calculated at retail selling price (RSP). 4.21 Market Analysis7

According to Datamonitor, the Dutch womenswear market decelerated significantly since 2006 and is expected to continue to 2011. Furthermore, the market is expected to exhibit a stable level of growth through to 2013. 6 7 Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey Datamonitor Europe: Womenswear in the Netherlands- Industry Profile, United Kingdom, August 2009 16 http://www.doksihu The report states that the Dutch womenswear market generated total revenues of $8.7 billion in 2008, representing a compound annual growth rate (CAGR) of 3% for the period 20042008. In comparison, the German market declined with a compound annual rate of change (CARC) of -0.2%, and the Belgian market increased with a CAGR of 38%, over the same period. These markets reached values of $436 billion and $57 billion in 2008, respectively The performance of the market is forecasted to decelerate, with an anticipated CAGR of 1.6% for the five-year period 2008-2013,

which is expected to drive the market to a value of $9.5 billion by the end of 2013. Comparatively, the German market will decline with a CARC of 03%, and the Belgian market will increase with a CAGR of 15%, over the same period, to reach values of $42.9 billion and $61 billion in 2013,respectively 4.22 Market Value Forecast8 Table 3: Netherlands Womanswear Market Value: $billion, 2004-2008 (Source: Datamonitor report) As mentioned before, the Dutch womenswear market grew by 2% in 2008 to reach a value of $8.7 billion The compound annual growth rate of the market in the period 2004-2008 was 3%. Figure 2: Netherlands Womanswear Market Value: $billion, 2004-2008 Figure 3: Netherlands Womenswear Market value Forecast: $ billion, 2008-2013 In 2013, the Dutch womenswear market is forecasted to have a value of $9.5 billion, an increase of 8.3% since 2008 The compound annual growth rate of the market in the period 2008-2013 is predicted to be 1.6% 8 Datamonitor: Womenswear in the

Netherlands 17 http://www.doksihu 4.23 Market Segmentation The clothing, footwear, sportswear and accessories retailers segment was the markets most lucrative in 2008, generating total revenues of $7.5 billion, equivalent to 859% of the markets overall value. On the other hand, the department stores segment contributed revenues of $0.4 billion in 2008, equating to only 4.1% of the markets overall revenues. Figure 4: Netherlands Womenswear Market Segmentation I: % Share, by Value, 2008 (Source: Datamonitor report) Figure 5: Netherlands Womenswear Market Segmentation II: % Share, by Value, 2008 The Netherlands accounts for 3.8% of the European womenswear markets value. In comparison, Germany accounts for a further 19% of the regional markets value. 4.24 Five forces Analysis9 "Porters five forces" is a framework for the industry analysis and business strategy development developed by Michael E. Porter It uses five forces that determine the competitive intensity and

therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition". The framework consists of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace. 9 Porter, Michael E. (1980): Competitive Strategy: Techniques for Analyzing Industries and Competitors 18 http://www.doksihu Porters five force include three forces from horizontal competition: threat of substitute products, the threat of established rivals, and the threat of new entrants; and two forces from vertical competition: the bargaining power of suppliers and the bargaining power of customers. According to Porter, the five forces model should be used

at the industry level; it is not designed to be used at the industry group or industry sector level. An industry is defined at a lower, more basic level: a market in which similar or closely related products and/or services are sold to buyers. A firm that competes in a single industry should develop, at a minimum, one five forces analysis for its industry. This five forces analysis is just one part of the complete Porter strategic models. The other elements are the value chain and the generic strategies. Due to lack of information about the designer segment, I analysed with the help of the Datamonitor report the Dutch and Belgian womenswear market taking clothing retailers as players. The key buyers are taken as individual consumers, and clothing manufacturing or wholesalers as the key suppliers. Figure 6: Forces Driving Competition in the Womenswear Market in the Netherlands, 2008 (Source: Datamonitor report) As clothing is an essential item and consumer choice is influenced by

factors such as fashion and a desire to signal social status, demand patterns are sensitive to branding, advertising, etc. These factors tend to weaken buyer power despite the lack of significant switching costs. Supplier power in the market is also moderate Due to the steady market growth observed in recent years, and low barriers to entry, there is a high likelihood of new entrants in this market. Substitutes pose a minimal threat to the market players Rivalry in the market is assessed as fairly strong due to the combination of growing market size. 19 http://www.doksihu 1. Buyer power Figure 7: Drivers of Buyer Power in the Womenswear Market in the Netherlands, 2008 Virtually all buyers are individual consumers, which weakens buyer power. Generally, all retailers have large numbers of individual customers. Retailers can differentiate themselves quite strongly through the styles of clothing offered, which also weakens buyer power. Buyers have negligible switching costs and brand

choice is dependant only on the personal taste of customers. Although brand awareness in the market is high, loyalty of consumers to specific brands is moderate and a high level of choice enhances buyer power. Brand loyalty within the womenswear market is connected more with the particular designer than the retailer, although some labels also have their own retail operations. There is a large market for non-designer womenswear especially among customers with lower disposable incomes. On the other hand, for many people clothes represent lifestyle and social status, which gives retailers a chance to influence what is bought through brand advertising and this may weaken buyer power.Retailers are obliged to offer buyers what they require, in a market often subject to unpredictable and rapid changes in fashion. These factors strengthen buyer power, which is assessed overall as moderate. 2. Supplier Power Figure 8: Drivers of Supplier Power in the Womenswear Market in the Netherlands, 2008

(Source: Datamonitor report) 20 http://www.doksihu Key suppliers in this market are clothing manufacturers and wholesalers, which are typically small to medium sized enterprises, giving the retailers possibility to source from both. As international trade liberalizes, supplier power in the global market is decreased through competition from manufacturers in low-wage regions, most notably China. (Apparel manufacturing is almost always labor intensive, due to the difficulty of automating processes such as the sewing of garments.) Retailers’ switching costs are not very high and include the risk of choosing a supplier with more extended supply chain for whom it may not be possible to cope with sudden changes in demand on the market. Suppliers are further weakened by their lack of diversity, which makes the womenswear retail market highly important to their business. Retail is also labor-intensive, and the existence of a minimum wage in the many countries slightly increases the power

of suppliers of labor. Overall, there is weak to moderate supplier power in this market. 3. New Entrants Figure 9: Factors Influencing the Likelihood of New Entrants in the Womenswear Market in the Netherlands, 2008 The Dutch womenswear market like most retail markets has fairly low barriers to entry meaning capital requirements are low enough for individuals to enter. However, a few much larger corporations account for a major share of total market revenues. Their scale economies include the ability to build brands in multiple retail outlets, and greater buying power when negotiating with suppliers. The latter allows them to compete more intensely on price. There is little regulation as such for retailers in the market, but there are some self-imposed conventions like avoiding clothes manufactured with child labor. New entrants who are known to have items manufactured in this way may lose customers. Overall, there is a strong likelihood of significant new entrants to this market. 21

http://www.doksihu 4. Substitutes Figure 10: Factors Influencing the Threat of Substitues in the Womenswear Netherlands, Market 2008 in the (Source: Datamonitor) While there are no substitutes for womenswear as such, there are alternatives to retail. This includes buying directly from manufacturers the conventional distribution chain, which is facilitated by the growth of online sales. However, the threat of substitutes to womenswear retail is assessed as moderate 5. Rivalry Figure 11: Drivers of Degree of Rivalry in the Womanswear Market in the Netherlands, 2008 The Dutch womenswear market is fairly fragmented with generally large numbers of similar retailers, and many of these are independents. However there is still a room for large numbers of smaller players in this market. While some retailers selling womenswear are highly diverse (e.g department store chain HEMA), many retain a strong emphasis on clothing, or womenswear specifically, which intensifies rivalry. A

fast pace of change in womenswear’s market combined with moderate market performance over the past five years only partly decresed rivalry, which is assessed as fairly strong overall. 22 http://www.doksihu 4.25 Designer overview10 There are around 46,000 designers working in the Netherlands. Around 72 percent of them work in the commercial services sector, while one fifth in the manufacturing industry and only 7 percent in the non-profit sector. The number of fashion designers doubled in the past 10 years, which proves the growing importance of this industry. The design sector includes the following activities: fashion design, communication design, industrial and product design and interior design. Dutch fashion design is concentrated in Amsterdam and Arnhem. The Amsterdam Fashion Week, The World Fashion Centre and the Amsterdam Fashion Institute are all important elements in the fashion life of Amsterdam. Other important institutions in the Netherlands are the Artez Fashion

Institute in Arnhem, Artemis, and the Rietveld Academie. Further sectoral organizations include the Dutch Platform for Design and Fashion and the Dutch Fashion Foundation, responsible for the Dutch Fashion Awards. The Dutch Fashion Award was first organized in 2007 and was won by a designer duo Klavers and van Engelen. Design is a free profession in the Netherlands which means that designers are not bound by a government body. That is why professional organizations attempt to provide a form of representation The Professional Association for Dutch Designers has circa 2500 individual members. Economic indicators11 Table 4: Structure of the Dutch design sector Fashion design Number of designers Advertising and Interior design Product design communication design 1,300 1,600 13,900 14,000 Number of companies 3,290 1,540 13,175 Percentage SME companies 100% 99% 99.8% Value added of the sector (€ 209 n/a 1915 109 n/a 526 mln) Value added produced by designers in the

sector (€ mln) (52,2% of total) (27.5% of total) Source: Number of designers and value added based on TNO (2004) companies and percentage SME on Central Bureau of Statistics (2008) 10 11 http://www.hollandtradecom/sector-information/design-and-fashion/?bstnum=3208 http://www.hollandtradecom/sector-information/design-and-fashion/?bstnum=3209 23 http://www.doksihu Table 4 presents the number of companies and employees in the different design sectors, as well as the value added of the segments. The last row represents the value added produced by the designers in the different subsectors. In the brackets, the share of the total added value of the subsectors can be seen. The statistics shows that advertising is the most important activity, employing 14,000 people. The fashion and interior design sectors account for a total of 2,900 employees. Altogether, 16,900 people work in the design industries. These are companies offering design services, such as advertising, fashion or

interior design. Product design is mainly carried out by design companies and in-house design departments within companies. The important fact for us from this statistics is the number of independent fashion designers present in the Dutch industry. Their total number is around 1,300 according to the Central Bureau of Statistics. Perspectives to take into consideration12 In the view of hollandtrade.com, an important aspect against fierce competition in this sector is the designer’s private network, and peer review, which means the appraisal and judgement by colleagues. These points have a significant impact on the success and reputation of the individual designers. It is also worth mentioning that due to the importance of having a regional network, most designers operate on a regional basis. Design firms are generally smallsized companies, as in the case of Makány Márta. That is why we have to take these aspects into account when we define the company’s strategy regarding the

expansion in the Netherlands. Customers in the Benelux States are very quality conscious. Therefore, Dutch design firms pay huge attention on quality, reliability, use of materials. In the Netherlands, most of the big high-fashion companies outsourced their production. Designers are hired on a project basis In the middle segment, department stores gradually contract independent designers. A good example is the cooperation of C&A and the designer and stylist, Dyanne Beekman. We cannot leave this out of consideration, as it can be a possible way for a foreign designer to enter the market. 12 http://www.hollandtradecom/sector-information/design-and-fashion/?bstnum=3210 24 http://www.doksihu Industry overview- Belgium13 4.3 We can see in the report made by Datamonitor that the Belgian womenswear market has been decelerating over the last five years, a trend which is anticipated to continue through to 2012. 4.31 Market Analysis14 The Belgian womenswear market generated total

revenues of $5.7 billion in 2008, representing a compound annual growth rate (CAGR) of 3.8% for the period 2004-2008 In comparison, the French market increased with a CAGR of 1.9% over the same period, to reach value of $27.9 billion in 2008 The performance of the market is forecasted to decelerate, with an anticipated CAGR of 1.5% for the five-year period 2008-2013, which is expected to drive the market to a value of $6.1 billion by the end of 2013. Comparatively, the French market will increase with a CAGR of 2.8% over the same period, to reach value of $321 billion in 2013 4.32 Table 5: Market Value and Forecast Belgium Womenswear Market Value: $ billion, 2004-2008 The Belgian womenswear market grew by 2.1% in 2008 to reach a value of $57 billion. The compound annual growth rate of the market in the period 2004-2008 was 3.8% Figure 12: Belgium Womanswear Market Value Forecast: $ billion, 2008-2013 In 2013, the Belgian womenswear market is forecast to have a value of $6.1

billion, an increase of 77% since 2008. The compound annual growth rate of the market in the period 2008-2013 is predicted to be 1.5% 13 14 Datamonitor Europe: Womenswear in Belgium- Industry Profile, United Kingdom, August 2009 Datamonitor 25 http://www.doksihu 4.33 Market Segmentation Figure 13: Belgium Womenswear Market Segmentation I: % Share, by Value, 2008 (Source: Datamonitor- Belgium) As noticed in the Netherlands, the clothing, footwear, sportswear and accessories retailers segment was the markets most lucrative in 2008, generating total revenues of $5.2 billion, and equivalent to 914% of the markets overall value. The hypermarket, supermarket, and discounters segment contributed revenues of $02 billion in 2008, equating to 4% of the markets overall revenues. Figure 14: Belgium Womenswear Market Segmentation II: % Share, by Value, 2008 Belgium accounts for 2.5% of the European womenswear markets value. comparison, Germany In accounts for 19% of the regional

markets value. 4.34 Five Forces Analysis15 The same method was implemented in the case of Belgium that I used analyzing the data about the Netherlands. I took clothing retailers as players; the key buyers are taken as individual consumers, and clothing manufacturing or wholesalers as the key suppliers. Examining the Datamonitor report about the Belgian womanswear market, I found the same charts as in the Dutch one. I came to the conclusion, that the forces driving competition is very similar in the two countries. Hence the following figures correspond with the previous ones, that is why I did not explain the charts step by step again. 15 Datamonitor report: Belgium 26 http://www.doksihu Figure 15: Forces Driving Competition in the Womenswear Market in Belgium, 2008 Figure 15 proves the fact that the functioning of the Belgian market is almost the same as in the case of Netherlands. Regarding the five factors as buyer and supplier power, substitutes, new entrants and rivalry,

the same features can be presented. 1. Buyer Power Figure 17: Drivers of Buyer Power in the Womenswear Market in Belgium, 2008 As we have seen before, the chart about the Belgian buyer power is totally the Dutch one. The characteristic features are similar and overall we can state that Belgian buyer power is assessed as moderate. 2. Supplier Power Figure 18: Drivers of Supplier Power in the Womenswear Market in Belgium, 2008 27 http://www.doksihu 3. New entrants Figure 19: Factors Influencing the Likelihood of New Entrants in the Womenswear Market in Belgium, 2008 4. Substitutes Figure 20: Factors Influencing the Threat of Substitutes in the Womenswear Market in Belgium, 2008 5. Rivalry Figure 21: Drivers of Degree of Rivalry in the Womenswear Market in Belgium, 2008 (Source: Datamonitor- Belgium) 28 http://www.doksihu 4.4 Most important fashion designers- Netherlands Table 6: Competitor analysis Key players on the market Viktor and Rolf Francisco van

Benthum Mada van Gaans Joline Jolink Marlies Dekkers Strength, Characteristic features MM’s position, opportunities given by competitors Biggest reputation among Dutch Different target group; the MM brand designers. Operating in the high wants to sell in designer shops, not in fashion industry high fashions stores Luxury brand for men MM’s main labels are for women Ultra feminine style, sold in the best The distribution channel of Mada can be designer shops useful for MMÆ has to be analyzed Amsterdam FW participant Lingerie, 100 points of sales worldwide Warmenhoven & High quality, ready-to-wear Venderbos collections for high end retail stores Opportunity given by the distribution channel, online fashion store of JJ MM operates in another segment Ideas close to the MM brand. Same target groupÆ opportunities in W&V distribution Source: personal analysis according to secondary data In the high fashion industry, Viktor and Rolf made a reputation around

the whole world. Their success is flourishing outside the borders of the Netherlands, as well. They have fashion boutiques all over the world. In 2006, Viktor & Rolf designed a line for the Swedish-based retailer H&M following others. It is clear that this designer duo achieved the biggest success from the fashion industry. 2008 was a turning point in the life of the company They announced that Renzo Rosso owner of Diesel Jeans, chairman of Only the Brave (OTB) has taken a controlling stake in their company. Rosso already controlled Dsquared, Maison Martin Margiela and Sophia Kokosalaki, and manufactures Vivienne Westwoods leading lines. The impact on the brand can not be seen yet, however Viktor & Rolf stated that the main intention of the deal was to put out a wider range of products and to open more stores.16 Other notable fashion designers are Alexander van Slobbe with his own brand Orson-Bodil and Francisco van Benthum with the brand Wolf. Since 2003 Francisco van

Benthum is the 16 http://www.viktor-rolfcom/dispatchhtm 29 http://www.doksihu leading force behind luxury men’s fashion with his own label. Mada van Gaans has an ultra feminine style and is sold in some of the best Dutch designer boutiques such as Coming Soon in Arnhem and Wendela van Dijk in Rotterdam. Although, Joline Jolink started her women’s wear label only in 2005, she managed to make quite a name for herself. As she aims specifically for the American market she shows her collections during both Amsterdam Fashion Week and New York Fashion Week. Apart from her online shop, Joline Jolink is currently available from Sky in Amsterdam, Wendela van Dijk in Rotterdam, Wandjina in Amersfoort, and Pixie Market in Los Angeles and New York.17 Another key player on the market is Marlies Dekkers with her prominent brand in lingerie and undergarments. The marlies|dekkers brand has established 100 points of sale worldwide and her stores are located in cities such as Amsterdam,

Rotterdam, Antwerp, Paris, Bangkok, Berlin and Cologne.18 The label, W&V was founded in 1996 by Sascha Warmenhoven and Babette Venderbos. Their first collections were mainly haute couture pieces. In 2001 they decided to create a preta-porter collection targeted on the Asian market In 2008 they launched a ready to wear collection for the European market. Warmenhoven & Venderbos are also art- and creative directors for collections of various major brands. For some of their clients they also design and develop complete special collections. 19 Most important fashion designers- Belgium Regarding the most important Belgian fashion designers, our competitors, we can name the Antwerp 6 who gained the biggest reputation not only in their own country but around the world. The name refers to a group of influential avant-garde fashion designers graduating from Antwerps Royal Academy of Fine Arts between 1980 and 1981. The members are Walter Van Beirendonck, Ann Demeulemeester, Dries van

Noten, Dirk Van Saene, Dirk 17 18 19 http://www.dutchfashionfoundationcom http://www.marliesdekkersnl/ http://www.warmenhoven-venderboscom 30 http://www.doksihu Bikkembergs and Marina Yee. They run their business in Antwerp which is the centre of Belgian fashion world. Other important players in the industry are Martin Margiela, Elvis Pompilio, Raf Simons and Veronique Branquinho. However, if we examine these designers and their products offered on the market, we can draw the conclusion that they are not our direct competitors as they target another group and not the potential customers of the Makány Márta brand. They represent an avant-garde direction, while our concept is elegance, sophistication and purity.20 4.5 Magazines and fashion blogs - Designing integrated marketing communication - An important way to appear on the market is to be mentioned in magazines or on fashion blogs. Selecting the appropriate communication channel is an important step of brand expansion. The

company must select efficient communication to spread the message, the mission of the brand. We have to identify influential individuals, who shape and form customers’ tastes and needs and are followed by people. We need to find opinion leaders who have influence on the market, and determine what can be successful and which products are fashionable to buy. The company can also work together with community influentials such as bloggers which is one of the easiest ways to introduce the brand to the audience. It is a possible path to develop word-of-mouth referral channels in order to build local reputation. Bloggers can recommend our products to others as they have influence on fashion fans, and it can become a successful marketing communication tool. The above mentioned ways are part of personal communication.21 Regarding nonpersonal channels, at the beginning of brand introduction it is quite expensive for the company. As the company is small and has few employees, without an

investor, it has to find the cheapest ways for marketing activities. Print media, such as newspapers, magazines or broadcast media, as radio and television can be permanent channels in the longrun. However, the company can use these channels only if the marketing budget can cover the costs of advertising in one of the following magazines. 20 21 http://www.kuleuvenbe/iccp/2003/iccp11/starthtm Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey 31 http://www.doksihu Table 7: Dutch and Belgian magazines and fashion blogs Elle Group • • • • • • ELLE Wohnen ELLE girl ELLE eten Santé Red Fashionfinds Fashion Magazines Netherlands www.ellenl Cosmopolitan www.ellenl/wonen www.ellegirlnl www.ellenl/eten www.santeonlinenl/ www.rednl www.fashionfindsnl • • • • • • Styletoday BeauMonde Grazia Pink Ribbon Nouveau Marie Claire www.glamournl/ Bruid www.jackieonlinenl Wit wedding Trouwen Belgium Glamour Jackie ELLE Group Marie

Claire Purple Fashion Magazine http://www.ellebe/ Belgian edition www.purplefr Elle Netherlands Madame Mode s Dutch Fashion Blogger Fashion Mission Shoppen.blogo Everything Stylish Bozar Mariee www.styletodaynl www.beaumondenl www.grazianl www.pinkribbonmagazinenl www.nouveaunl/ www.marieclairenl het.huwelijksnet/ www.witweddingnl www.trouwennl/ http://www.bozarbe www.marieefr Dutch and Belgian Fashion Blogs My Fashion Blog-Emma Andrea Campbell Source: own analysis according to secondary data The Table summarizes the most important magazines and fashion blogs in the two countries. Our goal is to contact them and to either advertise in the magazine or publish an article about Makány Márta as the outstanding fashion designer from Eastern-Europe. It is really important to achieve the most favorable position for our brand and to find the most cost-effective way at t he beginning of brand introduction. 4.6 Important events, Dutch and Belgian Fashion Week Netherlands Examining

the fashion market of the Netherlands, we have to mention the most important event in the Dutch fashion world: the Amsterdam Fashion Week. Two times a year, a series of fashion shows, mainly by Dutch and Belgian designers takes place in Amsterdam. The shows on the catwalk are accompanied by series of events called Laundry Days, which consists of openings of museum and gallery exhibitions, meetings and parties. The Amsterdam Fashion Week exists since 2004. During the last years it obtained a growing reputation, as it is trying to position itself as a platform for the fashion of the new generation and so called New Luxury segment of the market. Designers taking part value exclusivity and originality, and often reject established commercial brands. During the Fashion Week an 32 http://www.doksihu important, two days fashion fair takes place called Modefabriek. Besides other important events, it is the largest fair in the Netherlands. The date is at the end of July and the end January

each year.22 Modefabriek as mentioned before is a significant event for both the national and international fashion world. Innovation and creativity are the main characters in the trade show; it gathers the most important brands. The participants of Modefabriek are from a wide range: recognized brands, newcomers and trend-setting designers. Over 600 labels can be found in 6 different segments: refined, appearance, authentic, limited, industry and department. The next fair will be held on Sunday 24th and Monday 25th of January 2010.23 Regarding Makány Márta, the Amsterdam Fashion Week is not yet realistic to be a participant, however the Modefabriek can be interesting as it is a place which gathers designers from all over the world. It can be a possible place to find contacts in the Netherlands and build up co-operations with other designers, which is favorable for both partners. Once, a foreign brand is present in a shop, it is much easier to expand further in the country. However,

it depends on the conditions of the fair, such as fee of being a participant and the financial resources of the company. Belgium As most of the Belgian designers go to Paris to show their clothes, there is no Belgian fashion week. There is no point in organizing a FW in Antwerp or Brussels, because Paris and Amsterdam are such big events, that the Belgian would count nothing in the fashion world. The only show is the graduation show for the Antwerp Academy of Fashion & La Cambre. Although, several fairs are organized in Belgium, from which the “A Fair” in Antwerp is the most famous. It gives the opportunity for the designers to show their talents and collections. The organizers of A Fair have created a unique event within the fair: A Store The participating high-quality level brands are contemporary and neither of them are present at any other fair in Europe. The next A Fair edition (February 2010), A Store will logically expand this project to the Antwerp retailers who buy the

participating brands. Their selection of the season will be revealed “in store” to consumers on the one hand and visitors of A Store 22 23 http://www.amsterdamfashionweekcom http://www.modefabrieknl 33 http://www.doksihu on the other hand. These fairs can be considered as the most important events in the Belgian fashion life. The most relevant events in the Benelux States are summarized in a table.24 4.7 Multibrand shops Once a company decides to enter a foreign market, it has to determine the way of entry. There are broad choices, however the most common strategies are direct exporting, licensing, joint ventures, direct investment and direct exporting. In our case, export is considered as the most appropriate one. Occasional exporting is the way when the company exports from time to time, either on its own initiative or in response to orders from abroad. As a main feature of the company’s profile is quality, and the most of the garments require special methods, the

clothes have to be made by our dressmakers. Exporting allows the company to produce all its clothes in the home country. The company can decide either to employ an export sales representative or hire a foreignbased distributor. One option is to send a home-based sales representative to the Benelux States to find business. On the other hand, we can hire a foreign-based distributor, an agent to represent the brand in the country. However, this way could require more investment The company has to decide, which distribution is more efficient and cost-effective.25 Although, our main targets as retailers are the multibrand shops in these countries. These are boutiques, which sells garments from different designers. These stores are the best intermediaries between a designer and the customer if the designer lacks the financial resource to open an own store in the given country. These multibrand shops help foreign designers to enter markets abroad. My task was to structure our competitors from

all over the world and try to find the designers whose profile is similar to the MM brand. After this step, I had to find the locations where they sell their collections. From this data, I could build up a database containing the potential multibrand stores where Makány Márta has the possibility to sell her garments. When the company decides about the entering strategy, it will be a useful tool to contact these retailers.26 24 See Appendix II/4- Fashion fairs in the Benelux States Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey 26 See Appendix II/5- Competitor and Retailer Overview in Brussels 25 34 http://www.doksihu 5. Primary Research27 Primary research involves getting original data directly about the product and market. Primary research data is data that did not exist before. It is designed to answer specific questions of the interest to the business. To collect primary data a business must carry out field research Qualitative and

Quantitative Research There are two basic methods for obtaining information: qualitative and quantitative research. Qualitative research is called the ‘WHY’ research. Its basic purpose is to provide additional insights and understanding of the problem at hand. This type of research is typically based on a loosely structured non representative sample, unstructured interviews, or observations and a non statistical approach to data analysis. The most widely used forms of qualitative questioning are focus group, in-depth interview, projective techniques and observation. • Focus group is the most popular qualitative research technique because it is relatively inexpensive which can be used in almost any situation requiring preliminary understanding and insights. This technique has several advantages including: stimulation, spontaneity, serendipity (making new discoveries), specialization, structure and speed. Generally between 5 & 8 people are able to participate constructively

and a period of no more than 1.5 hours allows topics to be adequately explored. The analysis and interpretation require expert and objective attention The discussions are usually tape recorded and objective and systematic analysis applied to the content. • In-depth interview is an unstructured and direct way of obtaining information and is conducted on a one-to-one basis. The respondent is probed in depth by a highly skilled interviewer to uncover underlying motivations, beliefs, attitudes, and feelings on a topic. The interviewer attempts to encourage the subject to talk freely and the direction of interview is influenced heavily by the subjects answers. • Projective techniques are indirect methods of investigation, borrowed from clinical psychology, in order to obtain data that cannot be secured through more overt methods, e.g direct questioning The techniques enable and encourage participants to involve themselves in relatively unstructured task related to aspects of

consumption 27 McCarthy, E. Jerome; Perreault, William D: Essentials of MARKETING, 6th edition, Irwin 35 http://www.doksihu behavior. It may be used in group or in individual sessions There are 4 technical procedures: association, completion, transformation and construction. • Observation is used when it is believed that the best way to find out what people do is to watch them in natural settings. It can be done with or without the knowledge of the observed. It may be done in a structured (record only certain things) or unstructured (record everything that happens) way. The advantage of qualitative research is that it is much cheaper than quantitative research. It produces a good mechanism for coming to an understanding of customer attitudes and motivations. It can also improve the efficiency of quantitative research On the other hand, the limitation of qualitative research is that it does not pick out small differences quite as well as large-scale quantitative research.

Moreover, qualitative studies do not provide samples that are representative of the target population of the research. That is why, many researchers use qualitative research in order to prepare for quantitative research. Structured questioning gives more objective results Samples can be larger and more representative and various statistics allow drawing conclusions. For these reasons, quantitative research is widely implemented by researchers which seeks structured responses and can be summarized in numbers, percentages, averages, etc. Typical example of quantitative research is survey, such as mail surveys, telephone surveys. Advantages and disadvantages of Primary research In most cases it is not possible to ask all existing or potential customers the questions that the business wants answering. That is why primary research makes use of surveys and sampling to obtain valid results. The main advantages of primary research and data are that it is up to date. The research is specific to

the purpose, we can ask the questions that the business wants to know. The results are confidential, no other business have the access to the collected data In the case of online surveys and telephone interviews, the data can be obtained quite quickly. On the other hand, the main disadvantages are that it can be difficult to collect the necessary information and takes a long time. The collection is expensive and may provide misleading results if the sample is not large enough or chosen with care; or if the questionnaire questions are not worded properly. 36 http://www.doksihu Despite of the disadvantages of primary research, after gathering all the secondary information, I still lacked sufficient data about the different needs of customers. That is why I turned to primary sources and planned the process of conducting formal investigation. 5.1 Methods of working I used different methods to gather primary data: in-depth interviews, questionnaire and observation. The aim of the

personal interviews was to gain expertise and knowledgeable opinion concerning the fashion markets from competent persons in these fields. I selected as objectives of the interview those persons who have different roles in the markets and act like, bloggers, retailers, etc. I wanted to make sure as well that I get the answers specific to the purpose of my assignment. An additional reason why I chose this type of field research is that this way I obtain the needed data quick and the collected information remains confidential for the company. All together I conducted four interviews in Belgium with one blogger, Andrea Campbell who is an active participant of the Belgian fashion world and have a huge knowledge about this market and with 3 retailers operating on the bridal and prêt-a-porter markets. In the Netherlands, I conducted 3 interviews with retailers selling prêt-a-porter and bridal wear, moreover I interviewed dutchcatwalk.com that deals with the Dutch fashion industry and

supplied useful information for my primary research. The observation method helped me to better understand the behaviour of our target group in natural settings and to discover independent designer boutiques and the structure of the Belgian and Dutch fashion market. Information was gathered by personal observation The technique was useful to gain information about the group of people buying in multibrand or designer shops, the attitudes of shop assistants and qualities of products offered in these shops. The questionnaire focused on our target group in order to discover their special needs, desires and attitudes towards fashion. I applied online questionnaire because it saves time, effort and money compared to mail, telephone or personal interviewing. The questionnaires targeted 50 buyers in both countries. I compiled the questions together with the management of the company and paid attention to the different requirements for the appropriate questions. 37 http://www.doksihu 5.2

In-depth analysis: personal interviews The intention of the personal interviews was to explore the most relevant information about the two markets. I wanted to confirm the results of my secondary research and gain opinions about the market in general; who our competitors are; the potential retailers we can contact; the events organized in the countries; and possible strategies entering the markets. The other part of my questions was related to the interviewee’s competence whether it is blogging or a special market. I asked the persons about their experiences and suggestions what I could include in my report which is useful for the company. Belgium- Interview with Andrea Campbell28 According to Andrea Campbell, “the Belgian fashion market is characterized by many independent designers co-existing with the usual high street stores and designer boutiques. It is quite competitive, but Belgian women are willing to pay for a quality product and originality, if the price is right. There

is a strong place in the Belgian market for mid-range brands that sit between the high-end and mass market retailers.” The centre of Belgian fashion world is Antwerp, where we can find the Antwerp 6, the bestknown designers and a really famous Art Academy. From this viewpoint, Brussels is lagging behind. “It is quite strange that despite of the fact that Belgian people can afford buying from the independent designers, and the market offers several options, she has the impression that Belgian people have lack of taste and style. However, in the suitable setting, there is a group of people who is open to new foreign brands and trends appearing on the market.” Regarding the trendsetters and the main opinion leaders, the interview proved the fact of my secondary research. The Antwerp Academy of fashion and the Antwerp 6 (Dries Van Noten, Maison Martin Margiela, Ann Demeulemeester, etc) are good examples of designers that lead the fashion ideas in Belgium. Besides their role as

opinion leaders, they are the most important Belgian designers, as well. The best-known designers according to Andrea are the representatives of the big brands such as Chanel Gucci, Dior Luis Vuitton, etc. However, my interviewee is rather interested in Alexander Wang, Stella McCartney and Hussein Chalayan. 28 See Appendix III/6: Interview questions 38 http://www.doksihu My fifth question referred to the topic of Fashion Weeks. “There is no Belgian Fashion Week and the most Belgian fashion designers show in Paris. The only shows are the graduate fashion shows for the Antwerp Academy of Fashion & La Cambre.” As Andrea explained it, there is no point in organizing a FW in Antwerp or Brussels, because Paris is so close and such a big event, that the Belgian one would count nothing in the fashion world. However, several fairs are organized in Belgium, from which the “A Fair” in Antwerp is the most famous. It gives the opportunity for the designers to show their talents

and collections These fairs can be considered as the most important events in the Belgian fashion life. Considering strategies how to enter the market, Andrea said, that “the easiest way to enter the market for a foreign brand is through getting stocked in influential boutiques in Brussels, but more importantly in Antwerp: boutiques such as Princess Blue or Sien in Antwerp and Mapp or Icon in Brussels.” Moreover, fairs like ‘A Fair’ give another opportunity for a foreign designer. One of the easiest ways to find contacts in Belgium is through other designers and fairs are the best places to build up co-operations with others, which is favorable for both partners. Once, a foreign brand is present in a Belgian shop, it is easier to expand further in the country. “In order to get known to the Belgian audience, it is about getting presence and being profiled in the local fashion magazines.” The blog culture that Andrea is involved in is rather targeting international

inhabitants in Brussels, and not Belgians. She gains her information from different sources such as Knack Weekend for Belgian news and normal sites like Vogue.com, stylecom, Voguecouk, fashionistacom, the Moment blog, style bubble, elle.couk and twitter posts from the Telegraph/NY times Fashion blogs which Andrea aspires to is fashionista.com and Antwerpisthenewpariscom “The best Belgian shops are Y-dress, Conni Kaminski, and some mix brand shops such as Icon, Mapp or Stijl in Brussels. In Antwerp, we can mention Princess Blue, Ann Demeulemeester, Dries Van Noten and Maureen De Clercq. The most significant department store in Belgium is Immo.” I also wanted to get an overview about the Belgian wedding habits. Andrea told me that in Belgium it is often happen that couples live together and delay getting married like in many European countries nowadays. The bride usually buys the dress and sometimes she goes to the 39 http://www.doksihu independent designers and gets custom

dresses made. Mostly, the family organizes the event and they do not hire a wedding planner. Interview with retailers Brussels Ceremony is a salon for wedding and evening clothes in Brussels. I conducted an interview with the manager of the salon. I was interested in the bridal market and I wanted to gain specific information about this segment. “Belgians do not spend so much money on eg the bridal wear. They do not put such a big emphasis on this issue That is why wedding planners are not common, as well. The family rather wears the burdens of the wedding and they organize the ceremony on their own.” These facts were proved by the manager of another bridal salon, Pronuptia. The brand covers two designers, who design the clothes in the boutique. The manager confirmed the facts heard in Brussels Ceremony. They do not work together with wedding planners Almost in all the cases, the bride comes to choose the suitable wear for her wedding. New generation is a boutique in Brussels

specialized in prêt-a-porter collections. The manager gave me an overview about this market segment. They sell not only designer’s clothes but also jewelry, shoes and interior decoration. The store is advertised as an international one with foreign designers. The manager works together with Danish, English designers, upcoming talents. In her view, Belgian designers are more famous abroad than in their home country, which is typical in many other countries, too. As the manager is Irish, she wanted a place where international talents get scene, and she is always looking for something special. She choose her designer either by travelling directly to the designer or just discovering something special in a catalogue or magazine. It changes in every situation She confirmed that Andrea told me that “the Belgians are open to new brands and styles if it is packed in the suitable form.” Our interview was successful as all the information given by her confirmed the data heard before and

helped me to gain an overall picture about the Belgian fashion market. 40 http://www.doksihu Netherlands: Interview with bridal stores In the view of the employee of Honeymoon Shop in Rotterdam, “the Dutch bridal market is quite conservative like its customers. However, in the last years change and a small development can be experienced in the tastes and desires. Customers are getting more openminded than before to new trends and styles In general, although, we can tell that the socalled ”princess-style” is successful in design” It means that retailers have to sell these “fairytale” dresses as these are saleable on the market. It is also a limitation, as commercial brands have less opportunity on the market. As wedding is important in the life of couples and Dutch people like making it memorable, the expenditures can be really high. The price of the bridal dress can range from € 500 to € 4500. However, the economic crisis had an effect on the bridal stores as well

It means that salons which sold before high-priced dresses had to turn to middle-range wear, etc. “In most of the cases the family arranges the wedding and they do not hire a wedding planner. Wedding planners can be found on fairs but they do not play such an important role on the market.” Most of the bridal stores choose the designers, with who they work together, on various fairs in Italy, France or in the Netherlands. On the other hand, they receive e-mails from designers all over the world. The key factor to success is to be innovative, creative and interesting According to the opinion of Amica’s manager, “sending an e-mail introducing your brand can be successful if it raises the attention of the store. They will definitely answer and contact you if the salon is interested and realize the opportunity in your garments.” Another successful way entering the market is being present on various fairs. You can build up contacts with other designers and possible clients in the

foreign market. Interview with Dutchcatwalk.com about the Dutch fashion market Dutchcatwalk.com deals with the Dutch fashion market and with all the players involved in fashion. I could not conduct a personal interview, that is why I have sent my questions via email According to Dutchcatwalk.com, “in contemporary culture, dressing has become a vital element in performing ones identity. Netherlands has a creative industry of fashion, which combines a mix of individualism, innovation and (post)modern design.” 41 http://www.doksihu Dutch fashion design is concentrated mainly in Amsterdam and Arnhem. “The Amsterdam Fashion Week, The World Fashion Centre and the Amsterdam Fashion Institute are all important elements in the fashion life, not to mention the Artez Fashion Institute in Arnhem. The main opinion leaders and the trendsetters are celebrities and TV personalities.” According to dutchcatwalk.com, the most successful Dutch fashion designers are Viktor& Rolf, Frans

Molenaar and Mart Visser. The best-known foreign designers are the representatives of the big brands such as Versace, Lacroix, Louis Vuitton, etc. The wellknown fashion events are organized by organizations dealing with fashion, such as Professional Association for Dutch Designers and the Dutch Fashion Foundation, responsible for the Dutch Fashion Awards. The Amsterdam Fashion Week is organized twice a year and is gaining growing reputation in the last years. However, it is rather a significant event in Europe and not world wide Other important fairs are the Modefabriek and events organized by fashion associations. “The most outstanding department stores in the Netherlands are de Bijenkorf and V&W.” According to Dutchcatwalk.com, “entering the Dutch market for a foreign designer is not easy, however different ways exist to appear on the fashion market, such as finding a TV celeb who wears your dress. Another option can be taking part in a fair, which suits the profile of the

given designer“. These events give the opportunity for building up relationships in the foreign country. The Dutch fashion industry is innovative with a lot of upcoming talents and designers, that is why it is really important for a new brand to find the suitable segment and the appropriate strategy. 5.3 Observation Belgium There are few designer districts in Brussels, where you can find the local designers, the multi brand shops and the luxury brands as well. Department stores do not play an important role in the life of these independent designers and multi brand stores. They sell their collections in flagship stores, boutiques, etc. I visited few stores to observe the motives, attitudes and opinions of the buyers. I conducted my observation method in the two important designer districts of Brussels: Rue Antoine Dansaert and Avenue Louise- Bailli Baljuw. In the case of designer shops, I experienced a high level of service offered by the shop assistant. I spent 42

http://www.doksihu around 15 minutes in each shop and I met 1-5 customers in each boutique. I felt that the buyers have a close connection to these shops and the possible level of customer retention is very high. Most of the cases, the clients had personal talks with the shop assistants and they really relied on the opinion of the “expert”. The boutiques pay attention to their customers and appreciate that the customer chose them among plenty of other options. The price range of the products is between € 150 and € 600 in general. Table 8: Multi-brand shops in Brussels Multi-brand shops that can be the potential clients of the Makány Márta brand 1st district 2nd district Rue Blanche Francis Ferents Cotélac Louis 54 Olivier Strelli Sekel Lula New generation FLM Fashion Source: Table made according to personal observation Netherlands Visiting the designer districts of Rotterdam and Amsterdam, I tried to find out which product line of Makány Márta has the biggest

chance to successfully enter the Dutch market. As the wedding dresses have the highest prices among the products, they earn the highest profit, and the Dutch bridal market is significant enough, I would suggest starting with the introduction of the Makány Márta bridal wear. The number of bridal stores in the Netherlands, hence the number of our potential clients is remarkable and they offer a high quality for their clients. The salons meet the requirements of the company regarding garments offered in the stores and service quality. 5.4 Questionnaire design: targeted at customer needs Questionnaires are a choice of market research instruments in the hand of market researchers to collect primary data. A questionnaire consists of a set of questions presented to respondents. Because of it flexibility, it is the most common tool used to collect primary data Questionnaires need to be carefully developed, tested before they are used on a large scale. The first step in the process is to

carefully choose the questions, their form, wording and sequence. The questionnaire should use simple, direct, unbiased wording In addition, the form of questions asked can also influence the response. 43 http://www.doksihu The lead question should create interest. The personal, more difficult questions should be included toward the end of the questionnaire so that the respondents do not become defensive. The questions should flow in a logical order. We can distinguish between open-end and closed-end questions. In my questionnaire, I used both types Open-end questions allow respondents to answer in their own words and reveal more because they do not constrain the answer. On the other hand, closed-end questions specify all the possible answers and respondents make a choice among them. These questions provide answers that are easier to interpret and tabulate when we analyze data.29 After constructing the questionnaire, the market researcher must design a sampling plan. Three

questions arise: Who is to be surveyed?, How many people should be surveyed?, How should the respondents be chosen?. In my case, the target population was Belgian and Dutch people interested in fashion. The age group was between 19-39 and mainly women I decided to survey 50 people from my target audience. I used a simple random sample to choose the respondents for my survey. After the sampling plan, the contact method has to be determined. I uploaded my questionnaire on a website, in this way making it available for my target group. It took only two minutes to answer my questions which made the process for the respondents easier. Using the Internet is a big advantage for the market researchers in the collection process, because it saves time, effort and money compared to mail, telephone or personal interviewing. Thanks to modern computers and telecommunications, data collection methods are rapidly improving nowadays. After collecting the respondent’s answers, the –next-last-step is

to extract the findings from the collected data. The researcher tabulates the data and apply different statistical techniques and decision models to discover additional findings and correspondence. The final step is presenting the findings for the management. We should not overwhelm the decision-makers with statistical techniques and lots of numbers, but rather we should focus on information which is relevant for the decision-making. 29 Kothler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey 44 http://www.doksihu Findings of the Questionnaire30 I analyzed and evaluated the results of the questionnaire question by question. In both countries, the sample consisted of 80% females, and 20% males. There was no missing data for this variable. The age group was between 19 and 39, which corresponds with the target group of the Makány Márta brand. How much do you care about fashion? The respondents could give their answers on a scale from 0 to 10, where 10

means top interest. The average was 71 and 77 in Belgium and in the Netherlands, respectively It means that the respondents are interested in fashion, care about their outfit and the type of clothes they buy. Informing about fashion How often do you w atch fashion new s? Netherlands 16 18 34 24 8 1 times a w eek 2 times a w eek Never Daily Belgium 0% 46 20% 40% 24 16 6 8 60% 80% 100% Monthly From this diagram we can see that the majority of the respondents (46%) watch fashion news 1 times a week in Belgium. The next group is 2 times a week with 24% However, 16% of the respondents do not watch fashion news at all. The Dutch diagram shows different results The majority of the respondents (34%) never watch news about fashion. On the other hand, a significant proportion (24%) is interested in fashion on a daily basis. 30 See Appendix III/7- Questionnaire 45 http://www.doksihu Where do you inform about fashion? Belgium 42% of the Belgian respondents inform about

fashion mainly from magazines. Magazines 22% 42% Magazines Online w ebpages 26% Fashion bloges 10% Friends are followed by Fashion blogs, friends and online web pages with 26%, 22% and 10%, respectively. In the Netherlands, magazines stand on the first place with 64%, which is Where do you inform about fashion? Netherlands significant compared to the 28% of online 8% web pages. 0% 28% 0 Magazines 64% Online w ebpages Fashion bloges Friends Personal style As an open-ended question, the respondents could give different answers regarding their own style. What is your presonal style considered to be like? Belgium What is your personal style? Netherlands 8% 12% 20% 42% Casual 24% Leisure Leisure Artistic 14% 10% Artistic 28% 26% 16% Modern Casual Modern Trendy Sporty In Belgium, the most of the respondents (42%) gave the category of leisure clothes. It is followed by artistic, modern and casual with 24%, 20% and 14%, respectively. In the Netherlands, the

respondents gave more categories, and the most popular one was trendy and casual with 28% and 26%. Favorite designer The respondents gave a long list of fashion designers, such as Conni Kaminski, Olivier Theyskens, Vandenvos, Balenciaga, Gucci, Dior, Victor& Rolf or Christian Louboutin. Approximately 25% of the respondents do not have a favorite designer. 46 http://www.doksihu Influences on personal style What influences you the m ost w hen you buy clothes? We can realize that the different Trend and Fashion 66 20 14 on the Belgian and Dutch buyers. Belgium Wearability and Comfortability 28 42 12 In Belgium, the 42% of the The brand 18 respondents are mainly influenced Other: Speciality 0% 50% categories have different impact 100% by wearability and comfortability when they buy clothes. Trend and fashion is also important with 28%. On the other hand, 66% of the Dutch respondents stated that trend and fashion have the biggest impact on them. Wearability and

comfortability account for only 20%. The greatest proportion of the Who or What influe nce s your s tyle ? Belgian respondents stated that Netherlands 44 18 trends have the biggest impact on 38 their style. On the other hand, the Magazines Belgium 12 18 52 18 Friends Trends Myself 0% 20% 40% 60% 80% 100% Dutch respondents confirmed it, but in their case magazines also play an important role when they create their own style. Expenditure How much are you w illing to spend on one item of clothing? Belgium How much are you w illing to spend on one item of clothing? Netherlands 12% 18% -50 euro 82% -50 euro 50-500 euro 50-500 euro 88% We can conclude from the diagram that in both countries, the 80% of the respondents are willing to spend between 50 and 500 euro on one item of clothing. The respondents probably thought for prêt-a-porter collections. 47 http://www.doksihu How much do you usually spend on clothes in one month? Belgium How much do you usually

spend on clothes in one month? Netherlands 14% 20% 50-100 euro 44% 50-100 euro 36% 100-200 euro -50 euro 56% 30% -50 euro 100-200 euro 0% 200-500 euro The diagrams show that there is a small difference in the spending of the Belgian and Dutch respondents. The majority (44%) of the Belgian respondents spend € 50-€ 100 on clothes every month. They are followed by the group (36% of the total) who spends under € 50 20% stated that their monthly spending on clothes is between € 100 and € 200. In the Netherlands, it looks quite differently. More than half of the respondents (56%) are willing to spend € 50- € 100 in a month on clothes. Moreover, 14% of the respondents have expenditure between € 200 and € 500 in every month. In general, we can state that the Dutch respondents are willing to spend more on clothes. Where do you usually go shopping? Where do you usually go shopping? Department store Netherlands 42 48 Belgium 42 16 18 0% 20% 40% 60% 10

24 80% 100% Second-hand shop I am brand loyal, only in the shop of a given brand Multibrand shops The place where the respondents usually go shopping is different in totally the two countries. The 42% of the Belgian respondents prefer department stores. It is followed by multi brand shops, the shop of a given brand, and second-hand shops. 48% of the Dutch respondents stated that it depends on the clothes and not on the shop. Furthermore, 42% prefer multi brand shops and 10% said that they usually buy online. Openness to buy new brands The respondents could give their answers on a scale from 1 to 5, where 5 means top interest. The average was 4 and 4.2 in Belgium and in the Netherlands, respectively It means that the respondents consider themselves open to buy new, foreign brands. 48 http://www.doksihu If you see a new brand, do you look for it on the Internet? Belgium Netherlands Yes -51% No 20% 19% Seldom 80% 30% How often do check the website of different

brands? Belgium 32% 8% 10% -- Rarely I dont care Not really Often Netherlands 31% -8% 11% The influence of advertisements on decision-making The respondents could give their answers on a scale from 1 to 5, where 5 means totally. The average was 2.8 and 33 in Belgium and in the Netherlands, respectively It represents that the respondents are not really influenced by the advertisements of fashion brands when they choose their clothes. If yes, please specify which has the biggest impact: Print 42 Netherlands 10 20 22 City light Virus- e.g youtube, f acebook 42 Belgium 38 20 TV Online- e.g banner 0 50 100 49 http://www.doksihu 5.5 Results of the Primary Research On the basis of the primary research, I can draw the conclusion that from the 3 main lines of Makány Márta (wedding dresses, evening dresses, prêt-a-porter collection), the prêt-a- porter has the biggest chance to enter the Belgian market first. The style, the collections that can be found in the Belgian

designer shops and the opinions of my interviewee supported the same strategy. On the other hand, in the Netherlands I would suggest to start the introduction of the Makány Márta Bridal Wear. These garments have the highest prices which mean that we have to sell less to reach the same profit than in the case of the prêt-a-porter collections. The number of bridal stores in the Netherlands, hence the number of our potential clients is remarkable and they offer a high quality for their clients. The salons meet the requirements of the Makány Márta brand regarding garments sold and service quality offered in the stores. The same distribution channel can be used for the Makány Márta Collection in the long-run. 50 http://www.doksihu 6. Recommendations, Action plan -Preparing for the export activityThis section is dedicated to introduce and list the main elements and characteristics of my idea how the current situation could be improved and the problem could be solved within the

organization. Action plan A business plan serves mainly three functions. Firstly, it is a plan that can be used to develop ideas about how the business should be conducted. It is a chance to refine strategies and "make mistakes on paper" rather than in the real world, by examining the company from all perspectives, such as marketing, finance, and operations. Secondly, it is a retrospective tool, against which a businessperson can assess a companys actual performance over time. The plan can be used as the basis for a new plan. Thirdly, most lenders or investors will not put money into a business without seeing a business plan. When the plan is prepared for internal use, it is more detailed. For external use, it focuses on the subject which is important mostly In our case, I have compiled an action plan for the export activity and I used the various parts of a business plan as a basis for my planning: Marketing plan, Price policy, Financial Analysis and NPV calculation. I set

up a goal, which should be achieved, determined the deadlines and the employees responsible for the activity. Moreover, I formulated the different tasks that have to be done in the process. I. Marketing plan a) Advertisements • Apply of introductory ads, such as in Vogue Sposa • Fairs • Magazines b) PR • Objective: formulation of favorable picture about the company 51 http://www.doksihu • Communication: journalist, editor, bloggers, trendsetters ( to make contact, continuous communication, newsletters in every 2 weeks) • Celeb dress-up and red carpet events • Virus marketing: mood movies on the Internet, events, • Generating content and news continuously in the website and on the blog c) Sales Promotion • Discount for the retailers after a certain amount of order d) Indirect communication • Influence on forums • Generation of news on advertising WebPages (adsoftheworld.com, adforum.com, lurzersarchivecom, shotsnet, contagiousmagazinecouk) • The same process

on sites dealing with trends ( trendhunter.com, trendcentral.com) e) Online communication • Community sites: facebook, twitter, tumblr, blog, myspace • Presence on a daily basis • Strategy on a weekly basis about the content and the news The marketing activities have to be started from 1 January 2010. The marketing manager, Emese Juhász is responsible for the coordination of the project. The tasks are carried out by the intern of the company. II. Price Policy Pricing The prices of the products are given by the company. The company decided that the same prices should be applied as in the case of other foreign customers from Italy, Japan, etc. That is why I do not have to deal with pricing strategy. Discounts for retailers- 5% Belgium: prêt-a-porter collection- Makány Márta Boutique Discount after 20 pieces of dresses 52 http://www.doksihu Netherlands: bridal collection- Makány Márta Bridal Wear Discount after 10 dresses III. Financing plan This plan will be the base

of financial function of the export activity. The previous market study helped me to make this financing plan. It refers to the period of January 2010December 2010 We do not establish an office in the Benelux States, the company will keep in contact with the retailers from the Hungarian office. Financial Analysis The balance sheet and the income statement are the keystone of the company or a project activity. I have taken notice of account and tax law and the local regulations in the course of making the financial plan. The data were determined according to previous study and operative laws. I assume that the laws and regulations will be constant Our income comes from the garments sold for the retailers. The target is 5 bridal stores in the Netherlands in the 1st year and 5 multi brand stores in Belgium. The average amount of sold items for 1 retailer is 10 dresses for the bridal salon/ year and 20 dresses for the multibrand store. The number of sold items for 1 retailer was calculated

according to the market research and market demand. Assumptions: 1. Revenue: Netherlands: 5 stores*10 garments € 1300= € 65 000 Belgium: 5 stores*20 garments € 350 = € 35 000 € 100.000 53 http://www.doksihu 2. Costs • Marketing cost: 10% of the revenueÆ € 10 000 • Shipment expense: Two different types for the different product lines: o 1 big package for the ready-to-wear collection/ retailer- approximately € 100 for the shipment of 1 package o The bridal wear shall be shipped 1 by 1, with value-assurance included, €85/ each item o € 100* 5 retailers = €500 and €85 50 bridal dress= €4250 Æ €4750 • Variable cost: according to previous experiences, the cost is 40% of the price of a given dress Æ € 40 000 ƒ Direct labour ƒ Direct material • Payroll: € 2100 o The sales and marketing managers are responsible for the export activity. Their salary: € 750/ each employee Æ € 1500 o Their tasks are helped by two interns. Their salary is €

300/ internÆ € 600 • Tax: 25% of the profit according to the Hungarian law • Payroll Taxes: € 840 (40% of the payroll) • Total Costs: € 10 000 +€ 4750+ € 40 000+ € 2100+ € 840= € 57.690 3. Profit Revenue- Costs= Profit € 100 000- € 57 690= € 42 310 Income statement for exporting Profit and Loss (thousand €) Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses: 2010 100 40 0 40 60 60% 54 http://www.doksihu Payroll Sales and Marketing and Other Expenses Depreciation Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred (25%) Net Profit Net Profit/Sales 2,1 10 0 0 0 0,84 4,75 17,69 42,31 0 10,58 31,73 31,73% Break –even analysis Total Costs= Total revenues Marketing expense: if we decide to spend € 4000 to generate income before the export activity (1st fair and ads), the gross margin has to be € 4000 to break-even and achieve 0 profit.

It means that we have to generate at least € 6668 in order to break-even Gross margin =€ 4000 € 40000/ € 60000= x/ € 4000 Total Cost= € 2667 Sales= € 6668 The sales manager, Krisztián Hackl is responsible for the sales activities. His work is helped by another intern. From the 1st January, two interns should be hired for 6 months period in order to help the tasks of the marketing and sales manager. Their salary is included among the costs. Deadlines: • January- March 2010: making contact with the bridal salons and the multibrand shops from the database which I have built up. • April- June 2010: cooperation with the retailers (the target was set above), setting agreements, writing contracts. 55 http://www.doksihu • June-August 2010: shipment, building- up strong relationship with our existing clients (discounts, strong marketing activity) • September- December 2010: searching for new customers in the target countries, expanding on the market according to

the previous practices. Strong marketing activity during the whole year. 2 other interns can be hired, or on the basis of the profit, the company can decide to hire new employees competent in these fields. NPV Analysis This project has certain delivery dates. Let’s take 3 different options 1. All the incomes and costs appear in the same time, at the beginning of the project 2. All our costs appear in the beginning of the project and all our income in 1 year time (pessimistic version). In this case all of our costs accrue in the very first moment (1st January) and all of our incomes come in the last minute, 31/12/2010. 3. All our incomes appear at the beginning and we only have to pay costs in one year time (optimistic version). NPV is counted as the PV of all our cash flows, or as a difference between the PV of all our income and the PV of all our expenditures. (NPV = PV (ΣI - Σc = PVi - PVc) 1. Pessimistic version: PV = c* (1/ (1+r)n For all our costs n = 0, therefore PV (costs)

= c*1 = c Where: c: is our cash flow (cost or income) r: is our inflation rate n: is the number of years So PV (costs) = C meaning: costs PV (income) PV = c*(1/ (1+r)1 56 http://www.doksihu NPV = PVi – PVc Inflation rate: 4, 9% PV (income) = PVi= 100 000/1,049= € 95.329 PV (costs) = PV c = € 10 000 +€ 4750+ € 40 000+ € 2100+ € 840= € 57.690 NPV = €95.329- €57690 =€ 37639 2. Centrist version In the next case all of our costs and incomes accrue in the very first moment (1st January). PVi = € 100.000 PVc = € 57.690 NPV= € 100.000- € 57690= € 42310 3. Optimistic version PVi = €100.000 PVc = €57690*0,95328885= €54.995 NPV= € 100.000 – € 54995 = € 45005 Difference: € 45.005- € 37639= 7366€ There is more than a slight difference between the different solutions. When looking at the pessimist and the optimist version, it is visible, that the Net Profit differs as much as 7366€ more, than 16%. In reality, incomes and payments are in

different times during the year The calculations proved that it is extremely important to pay attention on incomes-timetable. Fortunately, designer clothes are usually paid up-front, and some suppliers are ready to set longer payment dues. Not being a financial institution, it is a pretty financial result to earn 16% on financial transitions. 57 http://www.doksihu 7. Evaluation and Conclusion The aim of my dissertation was to prepare a market research about the fashion market of the Benelux States and to explore the potentials given by these countries. To the research’s objective that consisted of analyzing the markets and investigating the possibilities, we have clearly seen that several possibilities exist in order to enter these foreign markets. After gathering, analyzing and putting together all the collected information, I was able to provide recommendations for the company, a solution, a possible strategy that serves the company’s interest. The action plan proves the

success of my research as it serves as a formulated strategy for the export activities. My market research, both the secondary and primary data collection helped me to explore the market potentials and gave an in-depth overview about these markets. It was important to use several market research instruments in order to better understand the market from different perspectives. Moreover, the databases that I have built up during my research will be the key factors when the company contacts possible new clients and starts its marketing activity in the given countries. To conclude I do feel that the product of my mission at Makány Márta serves its aim and it provides the management with the right solution. I consider the action plan as a useful tool for future export activities that is pertinent and can serve its purpose in the long run. 58 http://www.doksihu BIBLIOGRAPHY Literature • Dibb, Sally; Simkin, Lyndon; Pride, William M.; Ferrel, OC (1997): MarketingConcepts and

Strategies, 3rd European edition, Houghton Mifflin, Boston • Malhotra, Mares K. (2003): Marketing Research, Prentice Hall, New Jersey • McCarthy, E. Jerome; Perreault, William D: Essentials of MARKETING, 6th edition, Irwin • Porter, Michael E. (1980): Competitive Strategy: Techniques for Analyzing Industries and Competitors • Kotler, Philip (2003): Marketing management, 11th edition, Prentice Hall, New Jersey • Stanton, William J.; Etzel, Michael J; Walker, Bruce J: Fundamentals of Marketing, 9th edition, McGraw- Hill Inc. Articles/ Magazines/ Reports: • Datamonitor Europe: Womenswear in the Netherlands- Industry Profile, United Kingdom, August 2009 • Datamonitor Europe: Womenswear in Belgium- Industry Profile, United Kingdom, August 2009 Internet Sites: • Holland trade- pioneers in international business http://www.hollandtradecom/sector-information/design-and-fashion/?bstnum=3208

http://www.hollandtradecom/sector-information/design-and-fashion/?bstnum=3209 http://www.hollandtradecom/sector-information/design-and-fashion/?bstnum=3210 • Dutch Fashion Foundation: http://www.dutchfashionfoundationcom • Marlies Dekkers: http://www.marliesdekkersnl/ • Warmenhoven- Venderbos: http://www.warmenhoven-venderboscom • Antwerp Six: http://www.kuleuvenbe/iccp/2003/iccp11/starthtm • Viktor&Rolf: http://www.viktor-rolfcom/dispatchhtm • Amsterdam Fashion Week: http://www.amsterdamfashionweekcom • Modefabriek: http://www.modefabrieknl 59 http://www.doksihu APPENDICES I- 3 labels of the Makány Márta brand: 1. Makány Márta Bridal Wear Page 61 2. Makány Márta Collection Page 61 3. Makány Márta Boutique Page 61 II– Additional context information to the secondary research 4. Fashion Fairs in the Benelux States Page 62 5. Competitor and retailer overview in Brussels Page 62 III– Additional context information to the primary

research 6. Interview questions Page 64 7. Questionnaire Page 65 60 http://www.doksihu I- 3 labels of the Makány Márta brand: 1. Makány Márta Bridal Wear 2. Makány Márta Collection 3. Makány Márta Boutique 61 http://www.doksihu II/4.: Fashion Fairs in the Benelux States Fashion Fairs- Benelux States Name City Time Notes Belgium EXPOFIL Brussels 08.09 - 1109 2009 European Spinners Fair – Yarns and fibres at the origin of creation INDIGO BRUXELLES Brussels 08.09 - 1109 2009 International Exhibition of Creative Textile Design MARIAGE Charleroi 22.01 - 2401 2010 Wedding fair A FAIR Antwerp February 2010 New Luxury Brands, Fashionable wear and Denim and Sportswear Amsterdam International Fashion Week Netherlands Amsterdam 22.07 - 2607 2009 MILLIONAIRE FAIR – AMSTERDAM Amsterdam 10.12 - 1412 2009 International Luxury Goods Industry Fair PLEIN 13- FASHION FAIR Amsterdam 15 Jul, 2010 organized by World Fashion Centre (WFC) SPOSATEX

FASHION FAIR Houten 15 Jun, 2011 Apparel, Clothing, Fashion, Wedding Rotterdam 16-17 Jan, 2010 organized by J.ES Organisatie & Advies AIFW LOVE&MARRIAGE Luxembourg BRIDAL SHOW Luxembourg 14-15 Nov, 2009 Wedding Fair II/5: Competitor and Retailer overview in Brussels: Multibrand and designer shops in Brussels Name Brands offered Accessability Competitor overview Annemie Verbeke Only own label www.annemieverbekebe Martin Margiela Only own label www.maisonmartinmargielacom Johanne Riss Only own label www.johannerisscom Filippa K Only own label www.filippa-kcom Maje Only own label www.maje-parisfr Norden Only from Scandinavian designers www.ilovenordencom Louise Assomo Only own label www.louiseassomocom Ogotai Only own label www.ogotaycom Pierre Gauthier Only own label Hartford Only own label Armelle G Only own label Dominique Lila Only own label Alix&Jo Only own label Mais il est oú le Only own label www.pierre-gauthierbe

www.hartfordfr Tel: 02.5137565 www.domlilacom www.alixandjobe www.ousoleilcom Soleil? 62 http://www.doksihu Potential Customers Charlotte aux Pommes Own Shop Houben Jean-Paul Gaultier, Jil Sander, Miu Miu, Prada or Issey Miyake A.PC, N-Hollywood, Atelier 11 www.charlotteauxpommescom www.ownbe Nina Ricci, Undercover, Yamamoto, Comme Tel: 02.5023205 des Garcons Soho Plein Sud, Irié Wash, Irié, Ebéne by Patrick Tel: 02 374 63 99 Assuline, Milly, Stuart Weitzman, Mackage, Balthazar Ventcouver, or Belstaff Paul Smith, Filippa K, John Smedley or www.balthazar22com I’Erotokritos Icon Essentiel No Concept Isabel Marant, Vanessa Bruno, Les Prairies de Paris, Acne Jeans, Sandrina Fasoli, Humanoid, Chloé, Indress, See by Paul&Joe, Citizens of Humanity. Multibrand store Chloé, Vanessa Bruno, Bérénice, American www.icon-shopbe www.essentielbe Tel: 02.5118420 Vintage, Les petites, Bash, Paul&Jo Privejoke Multibrand store www.privejokebe Kusje

American Vintage, Nümph, Yumi, Repetto, Tel: 02.5147156 Fred Perry Cachemire Coton et Missoni, Moncler, Church, Sartore, Loyd Soie Maish, Blanc Kelly, Mathilde, Heschung Dansart@Uccle Hugo Boss, Max Mara, Gérard Darel, Jeff, Vert Chasseur Missoni, Joseph, Barbara Bui, Isabel www.cachemirecotonetsoiecom www.dansartatucclebe Elisa Blue, Sandwich Tel: 02.3757943 Marant, Vanessa Bruno Seventy Nine Schumacher, Coast, Aspesi Tel: 02.5131979 Eighty Nine Coast-Weber-Ahaus, Aspesi Tel: 02.3755161 Elles Patrizia Pepe, Joseph, Majestic, Citizens, Tel: 02.3464619 Jucca, Berenice et Juicy Couture Parachute Jump Jeff, Essentiel, Coast www.parachutejumpbe Harmony Veronique de Nijs, Nicole Farhi, Corléone, Tel: 02.6478242 Overland One step, Sandwich, La Fée Maraboutée, I.Code Tel: 02.6406744 Expresso Ayna Herry, Twist, Dept, Ipekyol, Chilli Pepper Tel: 0476.517107 Tabou Exelle, Lidira, Tabou, Ulla www.boutiquetaboucom 63 http://www.doksihu III/6:

Interview questions 1) What can you say in general about the Belgian/ Dutch fashion market? What are its characteristics? 2) Who are the trendsetters, and the main opinion leaders? Could you name some? 3) Who are the most important Belgian/ Dutch fashion designers? 4) Who are the best-known foreign designers according to you? 5) Where is the Belgian/ Dutch Fashion week organized? Is it famous worldwide? 6) What are the most important events regarding fashion? 7) What is the easiest way to enter the market for a foreign brand? What do you think? 8) Could you name some famous department stores in Belgium/ Netherlands? Special information about wedding habits: 9) Could you tell me some facts about the Belgian/ Dutch wedding habits? a) How important is the wedding in Belgium/ Netherlands? b) Does the bride buy or just lend the wedding dress? How much do they spend? c) Do they hire a wedding planner or the family arranges everything? d) Role of wedding planners? e) Special

habits? Extra questions for bloggers: 10) How can the bloggers, such as you influence the market? 11) How do you get your information about fashion? 12) Favorite Belgian/ Dutch fashion journalists? 13) Do you have competitors in blogging? 14) Who is your ideal (icon)? 15) Which are the best Belgian/ Dutch shops? 64 http://www.doksihu III/7: Questionnaire 1. Sex:  Female  Male 2. Age status -18  19-39  40-59  603. How much do you care about fashion? (0 is you don’t care, 10 is the top interest) 4. How often do you watch fashion news?  Daily  2 times a week  1 time a week  Monthly  Never 5. What is your personal style considered to be like? ( Eg romantic, artistic, leisure, etc) 6. Who is your favorite designer? 7. What influences you the most when you buy clothes?  Trend and Fashion  The brand  Prices  Wearability and Comfortability

 Other (Please State): 8. Who or what influences your style?  Magazines (if yes, please specify which ):  Trends 65 http://www.doksihu  Friends  Celebrities  Other (please specify):  No (please specify why): 9. Where do you inform about fashion?  Magazines  Online web pages  Fashion blogs  Friends  Celebrities 10. How much are you willing to spend on one item of clothing with an appropriate brand image?  - 50 euro  50- 500 euro  500 – 1000 euro  1000 - 2000 euro  2000 euro11. How much do you usually spend on clothes in one month?  - 50 euro  50- 100 euro  100 – 200 euro  200 - 500 euro  500 euro12. Where do you usually go shopping? (Please underline the two most frequent ones)  Multi brand shops  Department store  Second-hand shop  Online stores, such as Ebay or Net-a-porter  I am brand loyal and only in the shop of a given

brand  It depends on the cloth not on the shop 66 http://www.doksihu 13. Do you consider yourself open to buy new brands? (1 no, 5 totally) 14. If you see a new brand, do you look for it on the Internet?  Yes  No  Seldom 15. How often do check the website of different brands?  Often  Rarely  Not really  I do not care 16. Do the advertisements of fashion brands influence you in choosing clothes? (1 not at all, 5 totally) If yes, please specify which has the biggest impact:  Print  TV  Online (e.g banner)  Billboard  City light  Virus (e.g youtube, facebook) Thank you for your answers! 67