Strategic Brand Management of international fashion

retailers
Mohammad reza moshkani
Dr. Economic Development
Pendar.3516@yahoo.com
Abstract:

In today’s high street fashion competition fashion retailers are adopting strategies to
compete and survive in order to capture and maintain market share. Being a seasonal
and highly volatile market the fashion market is always vulnerable to the concept of
‘fading-out’. Everyday a new design, style, fad or fashion develops and becomes hype
hence fading out the previous fashion. The retailers that keep up the pace of this fast
development and creativity manage to survive, while those left behind, become
extinct. This paper examines the brand management strategies that fashion retailers
would adopt to compete in the international market. From the process of
internationalisation, to devising brand strategies, to taking the right decisions of brand
management, all of the issues are equally important and carry immense importance.
Although there are many dimensions of brand management, but only three major
themes are highlighted in this paper, which prove vital for the success of fashion retail
brand.

Keywords: Brand Management, Retail Internationalisation, Fashion Retailing,

Retail mix
Introduction:

With the advent of the 21st century, and the new phenomenon of globalisation, the
world markets have become closer and are shrinking in size and getting highly
saturated yet volatile. This gives rise to competition and survival of the fittest makes
the competition even more intense. This is the exact scenario at the current retail
sector of the world. With the high street wars amongst the retail giants, the ever
increasing competition not only gives rise to more options but much better
presentation for a customer to choose from. Hence, the bigger retail giants make low
budget retailers difficult for them to survive. Furthermore, in order to survive in this
high paced and intensely competitive market place there is a need to design a
marketing strategy with a clear differentiating stance.

Global retail sector has seen a tremendous growth in the last few decades. The global
retailing industry group grew by 4.9 percent in 2003 to reach a value of $4.68 trillion.
(Data Monitor – 2004). Historically retail operation has been limited to a national
level, as every country had a distinct national retail system. However, due to
expansion of markets and rise in accessibility, the scope of retailing operation is
becoming more international. Cross country retail operations has been going on since
long and as a result of international exposure, the Internationalisation of Retailing has
become a known phenomenon. Although retail internationalisation has been in
practice since a long time, the academic contribution towards this subject is somewhat
limited.

There has been some quality research on retail internationalisation relating to its
diversified fields such as the motivations to go international, the whole process of
internationalisation, individual company experiences and the direction of a company
towards internationalisation (Alexander 1990). There has been some literature on
grocery retailing and brand images of retailers across borders (Myers et al, 1997), but
one aspect of retail internationalisation that has remained relatively under researched
has been the issue of brand management of international retailers.

While the internationalisation of retailing continues to be the source of much

academic and practitioner attention (McGoldrick and Davies, 1995; Akehurst and

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Alexander, 1996; Sternquist, 1997; Vida and Airburst, 1998), the brand management
of internationalised retailers remains an under developed subject.

The following research paper undertakes the subject of brand management of

international retailers and explores different aspects of brand management and
identifies the level of brand consistency towards the international markets. There has
been little empirical research on ‘exporting’ the retail image to the international
market whereby the issue of competitive positioning and strategic branding should be
taken into consideration. The focus of this paper is international fashion retailers and
its brand management strategies.

Fashion retailing is emerging as one of the most challenging areas of business activity
in the western world. Uncertainties in demand, shrinking selling seasons, lengthening
delivery lead times, increasing competition and thinning margins together make the
job of the retailer truly daunting.

This paper starts by examining the different motives and reasons for a fashion retailer
to go international and how this process takes place. The literature review would
analyse and support the motivation for a fashion retailer going international and
expanding its operations in the global market. The focus then dwells onto the
marketing strategies of these fashion retailers and in identifying different aspects of
branding strategies that position an international fashion retailer in the new global
competitive market.

The development of a strong brand in the domestic market, in terms of store image,
product, and customer service, would seem to form the basis for long-term viability
and success in international markets.

The research questions highlighted in this paper are, how does a fashion brand
position itself in the international market, and how does it want the international
customer to perceive its brand image. In this regard, key issues concerning strategic
brand management would be identified in relation to international fashion retailer in
the global market. A conceptual framework would then be developed.

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Literature Review:

The literature review would cover two major interlinked topics. First the
internationalisation of fashion retailers and second linking it to the brand management
strategies to be adopted in the international market. There would be several sub-topics
reviews under both the major strands of literary contributions towards the subject. The
purpose of this paper is to identify the major international brand management
strategies that would contribute towards the success of an international fashion retail
brand.

Retail Internationalisation:

Whilst retail internationalization practice has a long history, academic research into
retail internationalization is a more recent phenomenon. Hollander’s (1970) early
work emphasised the effect of political and economic climate on the development of
international operations, highlighting the importance of declining domestic
opportunities as a factor in retail internationalisation. Hollander (1970) has been
termed as the first important researcher on the subject of Retail internationalization.
The largest stream of literature focuses on bilateral flows of investment and
concentrates on documenting firms’ moves, stressing the relative advantages which
can explain why they enter into a given market thus leading to internationalisation.
Waldman (1978), Treadgold (1988, 1990), Salmon and Tordjman (1989), Burt (1991),
and more explicitly Robinson and Clarke-Hill (1990), Pellegrini (1991), Alexander, N
(1990, 1993, 1994, 1998), and Whithead (1992) attempted to explain the motivation
behind going international and explained the process of internationalisation.

Motives to go international:

The drivers inducing the motive of internationalisation, include saturation within

home markets compounded by economic downturns, legislation blocking expansion,
shareholder pressures for growth, high operating costs, market driven pressures for
growth, opportunities as overseas markets open up and even an element of the ‘me-
too syndrome’ (Doherty, 1999). In contrast to manufacturers, however, retailers must
be physically present wherever they are doing business, and structural and cultural

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characteristics make it harder to operate across distinctive national markets. Retailers’
performance in local markets is highly sensitive to variations in consumer behaviour
and segmentation: consumer tastes and buying and spending patterns differ
considerably across the international market place therefore hampering global
sourcing.

Halls worth, Alan (2001), identified further topics and issues to be explored such as
different modes of entry, international competition and international retail growth.
Further research by Tread gold, (1988, 1990, 1992), Alexander, (1989, 1990) and
Wrigley (1989, 1992) suggest that by identifying a gap in the existing research on
retail management, one can measure the factors influencing success and failure of
international retailing.

The increased visibility of retail internationalisation over the past three decades has
stimulated a significant volume of academic research. A number of common themes
have emerged, as authors have explored the volume and direction of investment
(Hollander, 1970; Hamill and Crosbie, 1990; Burt, 1991, 1993; Myers and Alexander,
1997; Muniz-Martinez, 1998), the motivations for internationalisation (Alexander,
1990, 1995; Williams, 1991; Quinn, 1999), and the role and choice of market entry
mechanisms (Quinn, 1998; Doherty, 2000; Gielens and Dekimpe, 2001). Studies of
specific retail sectors and geographically determined flows have been accompanied by
case studies of ‘‘exemplars’’ of retail expansion (e.g. Treadgold, 1991; Laulajainen,
1991; Wrigley, 1997).

Others have developed frameworks categorizing international retailers on the basis of

behavioural criteria—most notably business culture and market responsiveness
(Treadgold, 1988, 1990; Salmon and Tordjman, 1989; Simpson and Thorpe, 1995;
Helferich et al., 1997; Alexander and Myers, 2000).

Many retailers struggle internationally yet most research explores success (for
example the texts and special issues of Akehurst and Alexander 1996; Alexander
1997; Alexander and Doherty 2000; Brown and Burt 1992; Kacker 1985; McGoldrick
and Davies 1995; Sternquist 1998; Sternquist and Kacker 1994).

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Alexander, A (1999, 2001) and Shaw, G (1999), has significantly contributed on the
history of retail internationalisation. It is evident from these studies that past
performance can be a very good source of learning, identifying factors of success, and
attributes of failure. Thus preventing further failure and identify success factors for
the retail industry in the international market.

The considerable expansion of international activity by retailers since the early 1980s
has generated an upsurge of academic study of the process. What has become evident
from these studies is that retailer internationalization is a very different process from
that undertaken by manufacturers. It has also become evident that the established
theoretical frameworks in international business require major modification if they are
to be applied in a meaningful way to retailing.

Despite the widespread incidence of failure in retail internationalization, the cynosure

of academic study has been success. There has been considerable research on retailers
like Marks and Spencer, Boots, Wal-mart, and likes of Next and Laura Ashley, but
very few contributions have been made towards the brand management of these retail
outlets. Hence there is a visible gap in the academic contributions on this subject.

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Fashion Retailing:

Fashion retailing is quite different from normal retailing. Typically, the demand for
fashion goods develops during the course of a limited fashion season in the shape of a
bell-shaped curve representing the beginning, growth, peaking and decline phases of
the fashion life cycle. The bell may be skewed to the right or the left depending on the
specific characteristics of an item. The demand at each price in each period of the
season is uncertain and the sensitivity of demand to price varies during the season.
Goods left over at the end of the fashion season fall drastically in value because
demand practically disappears when the fashion season is over.

Figure 1: Fashion Life Cycle:

Source: CIM 2005.

In any particular fashion market place, the consumer is faced with choice amongst a
varied group of retail outlets, each developing and maintaining its own brand profile.
The ability of each of these competitive retailers, and particularly those large chains
competing for mass market, is dependent upon the distinct advantage one brand has
on the market place. This advantage can be the basic customer perception, brand
image, brand positioning, or any other branding attribute.

With the intensifying competition in the international fashion market, there is a dire
need of better marketing strategies to capture the interest and loyalty of customers.
The challenge here is the diversification of customer base in the international market.
The marketing strategy should target the needs of the customers that come from
distinct backgrounds with different taste in fashion. Hence, a fashion retailer has to

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keep in consideration all aspects of marketing and accessibility of its brand in the
international market. The key marketing concepts that a retailer determines, is that of
clear definition of target market, accessibility, communication and retail mix. Retail
mix is a relatively new phenomenon, which refers to the combination of merchandise,
price, advertising and promotion, customer service and selling, store layout and
design. These combinations are used to attract and meet the needs of the target market
of a fashion retailer (Dunne et al, 2002). Each and every aspect of this retail mix is
very important and vital for a retailer. Different retail firms use different combination
of retail mix to capture the market share. Some might use pricing and advertising as
the dominant theme of retail marketing, while others would use marketing niche and
customer services as a key to attract.

Brand Management:

A brand is termed as the key organizational asset. A successful fashion brand would
seek to create a distinct brand image and personality (Doyle, 1991). De Chernatony
and McDonald (1992) define a brand as “an identifiable product, service, person or
place, augmented in such a way that the buyer or user perceives relevant, unique
added values which match their needs most closely”. Dominant conceptualizations of
brands and brand management evolved from unidimensional approaches, focused on
role of brands as legal instruments and visual identification and differentiation
devices, toward multidimensional views emphasizing holistic conceptions of brands
comprising functional, emotional, relational and strategic dimensions (Low and
Fullerton 1994; Ambler 1996; de Chernatony and Dall’Olmo Riley 1998a). Several
authors have identified a marked shift in branding literature from the importance of
image (Boulding, 1956), focusing on consumer’s perception of brand differentiation,
to identity (Kapferer, 1997) which is more concerned with how a firm makes a brand
unique. Hence a new concept of brand identity has evolved. (Marwick and Fill 1997,
Hatch and Schultz 1997, Balmer and Stotvig 1997, Morison 1997, Wilson 1997,
Balmer 1995, Melewar 2001, 2002, 2003). So the focus has gone beyond the graphic
design and logo of the brand label, to corporate identity which signifies certain values
and attributes contributed by the organization towards its brand management.

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Brand Premium/Added value:

A retail customer perceives a fashion brand as premium brand that carries added
value. This added value can be in terms of design, brand repute, quality, or even hype.
There have been two basic values identified by de Chernatony (1999) that contribute
towards the brand premium. One is the functional value such as the price, technology,
design and store layout. This functional value is a distinct attribute that a customer
adds to the brand and distinguishes the brand from the rest. The second form of added
value comes from emotional value. This value is derived from notions like
advertising, internal branding, translating the retail brand into consumer taste, and
even the shopping experience itself at the retail outlet. A customer values all these
attributes and attaches these values to a fashion brand. These added values determine
the success of a brand and only successful brands can have control over adding brand
premiums onto the pricing of the products. If a brand is successful, it can command a
premium price, allowing the retailer greater opportunities to maximise profitability
with less need to discount prices (Doyle, 1991). Hence, a brand has to be able to
differentiate itself positively and have the quality and added value to define a
premium price.

Brand Positioning:

The basic strategic advantage a retailer can have in the competitive market is the
positioning of their brand. All the marketing programmes should be targeted towards
the better positioning of the brand and create a market position amongst its
competitors (Ring et al 1980). Urban and Hauser (1993) state, "Positioning is critical
for a new product. Not only must a new product deliver the benefits the customer
needs, but it must do so better than competition” (p. 202).

The fashion retailers target a particular segment of a market and position its brand
accordingly to be perceived by its customers in a distinct manner. A retail brands
position is derived from the perception of its product/service mix and its aggregate
image among various customer target markets (Sayman et al 2002). This positioning
is never permanent as it changes its direction and is time-related. It may change its
direction because of several reasons. The major reasons of change in brand position is

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change/improvement/development of product, change in store design and layout,
change of brand image, change of competitor’s brand positioning and even change in
fashion theme.

In summary, a brand position is how a retail firm wants its customers to perceive the
brand. Brand positioning depends upon how a company wishes itself to be projected
in the minds of its target market. This can be in terms of pricing, design, specialty,
quality, or the shopping experience. Different customers would perceive the brand
position differently. Therefore, an aggregate consumer perception defines the market
position of a particular brand.

The concept of value to the customer is central to an effective positioning. Further, the
brand must be able to communicate this value effectively to at least one segment of
customers to get customers to switch to the brand. Aaker (1998) states, "A
differentiation strategy must add value for the customer, and the added value must be
perceived by the customer (pp. 164-165)."

There are certain determinants that would define a particular market position of a
brand. These include price level, accessibility, customer services, store layout and
design, speciality fashion stores, and the shopping experience it offers to its target
customers. For example, customers of Debenhams would not mind spending more
time and money in the store because of two major reasons. Firstly, Debenhams is
reputed for its designer labels with low price tags, and secondly, the store layout is
very much attractive for any customer, and they would spend a long time enjoying the
very experience of shopping at Debenhams. Hence, Debenhams has positioned itself
in the minds of its customers as economic designer brands with high quality shopping
experience.

The most important strategic issue in international market positioning is to maintain

the same standards throughout all retail outlets throughout the international market. A

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fashion retail brand has to maintain its position in the international market all the time
to convey its brand image in the consistent manner to its customers (Ailawadi 2004).
But there can be certain instances where a particular brand would assert different
positions in different international markets. This strategy is adopted when a fashion
retail firm intends to have different perception for its customers due the different
natures of different international markets.

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Corporate Identity:

Corporate identity has been defined as ‘a strategic manifestation of corporate-level

vision and mission, underpinned by the strategies which a corporation employs in its
operations or production; the marketing strategy and mix which determines the
product/service brand; and the human resource strategy which affects the manner in
which the product/services are delivered.’ (Melewar et al 2001)

Corporate identity conveys the image of the company, its values and its brand image.
Another definition of corporate identity is ‘the set of meanings by which a company
allows itself to be known and through which it allows people to describe, remember
and relate to it.’ (Topalian, 1984, p.56, Olins, 1989; Markwick and Fill, 1997).

A fashion retail brand’s corporate identity would reflect the image it wants to convey
and this can be act as a competitive advantage for the international fashion retailer
over other firms. Melewar (2003) defined the taxanomy of corporate identity by
identifying seven dimensions of corporate branding. These are corporate
communication, corporate design, corporate culture, behaviour, corporate structure,
industry identity, and corporate strategy. Each of these dimensions encapsulates
different aspects of corporate branding and how would a firm communicate its image
to its target customers. Hence, an international fashion retailer would carry its
corporate identity to the foreign market and maintain a distinct market position
accordingly.
To summarize, the above three dimensions of brand management i.e. brand values,
brand positioning and corporate identity would have the right combination to capture
the market share in an international market for a fashion retail brand.

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Conceptual Framework and research question:

The above literature review has identified the three basic aspects of brand
management that would determine and contribute towards the success of international
fashion retail brand.

This literature review has highlighted some brand management strategies that can be
implemented by the international fashion retailer to capture the market. Although
there is much to analyse and determine while discussing these three themes of brand
management, yet a general concept can be developed to assess the impact of a fashion
retail brand in the international market. The broad research question would be:

RQ1: What strategic brand management measures would a fashion retailer take,
while entering and competing in an international world?

In other words, what measures of retail mix, market positioning, and corporate
identity would a fashion retailer take, while entering or operating in an international
market. A fashion retail brand has to face severe competition and market compatibility
issues while going international. These constraints can be very threatening and has to
be addressed in a very careful manner to capture and maintain a better position in the
international market. Hence, continuing with the works of Treadgold (1990), it would
be further investigated that whilst in a process of retail internationalization, going
through different stages, how does a retail company position its brand and how does
that affect its brand equity in the international market. Hence the research would
narrow its focus on the effects of retail internationalisation on global fashion retail
brands. William (2001) has contributed a very informative research regarding the
factors contributing towards the internationalization of a retail brand and the motives
for a retail brand to go international. He also has identified certain obstacles and
constraints for these global retail brands whilst going international. This gives rise to
another research question:

RQ2: What affects does internationalisation have on the brand management of a

fashion retailer?

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In its explanation, how the brand management of a fashion retailer would be affected
when entering an international market. This concept can be seen as the opposite
direction of research question one. Different international markets have different
attributes and different perception. Now if a fashion retailer has a distinct market
position in one market, and the other market carries different attributes, then the
fashion retailer would adopt a new market position and branding strategies in this
second market. Hence a fashion retailer would adopt different branding strategies
according to the demand and perception of the international market.

Referring back to the literature review, continuing with Treadgold (1990), Doherty
(2000) and Burt (1992), the attributes of success can be measured. It is quite evident
from these contributions that a retailer success is based upon the strategic branding
and positioning in the right market and the right time. From the very instance of
internationalisation, a fashion retailer has to have a strong motive to expand and grow
in the international market. A thorough market study and international market trend
analysis is required to be conducted prior to making any decision to go international.
This would make the subject firm be in a better position to make branding and
positioning decisions. Furthermore, a firm should carefully choose its mode of entry
in the new international market (Doherty, 1999). Here again, it depends upon how
strong the brand position is of the fashion brand in the new market. The stronger the
brand position is, the higher risk the firm can take by choosing from choices such as
exporting, wholesaling, organic growth, merger and acquisition, franchising, joint
venture, licensing, in-store concessions, and to a much lesser extent, management
contracts. Stores like Debenhams, BHS, Marks and Spencer and Mothercare have
entered throughout the Middle East starting slow and now taking a better strategic
branding position. Looking at the conservative society of the Middle East, these
fashion brands changed its normal market position and adapted to the culture of the
new market. Hence, the market image of these retail brands was competitive at the
domestic level in the Middle East. The mode of entry for these brands was slow yet
very careful as well, looking at the market trends, and once a better brand position
was acquired, the firms took a proper entry mode.

Referring to the concepts of brand premium and corporate identity, taking into
consideration the example of Debenhams (Jones, 2003), it replicated its corporate

14
brand image in the Middle East but with slight changes adapting to the local demands
and culture. This amendment came in the form of not highlighting feminine liberty
and keeping the decency of the society intact. This new market position coupled with
UK branding and quality was highly accepted and created the added value in the niche
market. Customers, who had visited Debenhams in UK, had the same brand feeling
when shopping at Debenhams Middle East. Hence, Debenhams gives the same
shopping experience to its customers across the international market. This contributes
towards the success of the brand.

The conceptualisation model for brand management of fashion retail firm in an

international market explains the different dimensions that carry equal importance
while going international. This careful brand management would determine the
success of a fashion retail brand in the international market.

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Conclusion and further scope for research:

This paper has identified the strategic importance of brand management while going
international for a fashion retailing firm. It identified three major themes of brand
management that define its success in the international market. While going to a
complete new international market, each of these three themes can be broken into
separate dimensions and strategically implemented to compete with rival brands. The
interlinked themes of brand management need the best combination to evaluate a
success of a brand.

This paper leads to future research activities as well. There is a scope for research on
subjects like evaluating and measuring the success of a fashion retail brand after
implementing the brand management strategies. It can be evaluated as to how
successful the branding strategies were and which attribute contributed most towards
this success.

Another aspect for further research can be the study of consumer perception in the
international market towards these international fashion retail brands. How would a
customer perceive a particular fashion brand entering an international market
equipped with its branding strategies, and how would this customer position this
brand while competing with local and already present fashion brand in the market.

Brand management trends in international market can be compared to that of domestic

market and observed how much a brand needs to adapt towards the internationalised
market and not losing its corporate identity. Sometimes replicating the corporate
identity is a necessity to convey the brand image, but sometimes due to international
market trends, the brand image needs to be slightly changed. To what extent this
change can occur and how flexible a fashion retail corporate identity is, can be a
measure of further research study.

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 Motive Brand
Premium

Fashion Brand Brand

Retail Internationalisation Management Positioning
Retail Mix
Brand

Corporate
Identity
Mode of
Entry

Brand Perception

International Market

Conceptual model for brand management of a fashion retailer in an

international market

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