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Tommy Hl

In: Business and Management

Submitted By harryizme
Words 3683
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THE MARKETING MIX: 4 P’S

Rob Sloan
MKT1040-8
November 21, 2012

MAI PHUNG
NAVI PRASHAD
SARAH KON
MATT GAMMON

5317904
6018196
5834577
6441950

I

NTRODUCTION: Company Overview & Ryder Jeans

Tommy Hilfiger has earned worldwide recognition as one of the top leaders in premium lifestyle brands. Its high quality “Classic American Cool” preppy fashion with a refreshing twist is currently distributed in 90+ countries 1. In 1985, with the support of a businessman, Tommy Hilfiger released his first signature collection, offering high quality clothes for men, women, and children. The brand became a major hit after
George Lois, a famous advertising communicator released a Tommy Hilfiger ad in New
York’s Time Square 2. The 1985 “Hangman Billboard Ad” instantly ignited Tommy Hilfiger’s career, making it the starting point of his worldwide success and popularity.

In the 90’s, Hilfiger Denim created a very bold marketing campaign in which they featured emerging musical talents such as Britney Spears and Lenny Kravitz 3. The strategy was to develop lasting relationships with cultural influencers and trendsetters in order to entice younger consumers to purchase the brand 4. Pop culture was becoming a worldwide phenomenon, attracting young consumers all over the world. In 2004, Beyonce signed a deal with Tommy Hilfiger agreeing to be the spokesperson for Hilfiger’s True Star fragrance. Her relationship with the brand proved to be major success, as sales skyrocketed through the roof.

Currently, Hilfiger Denim is only one of many collections, which targets a younger crowd, those between the ages of 18 to 28 5. One of the men’s bestsellers are Ryder Jeans, which comes in various washes, fits, and styles. Some come in a stretch denim providing comfort with its soft feel. Washes range from dark to light, making it easy to coordinate with separate pieces to achieve many different looks. These top sellers are sold in Tommy
Hilfiger Specialty stores, primarily located in high profile areas, in the midst of other big brand names, entertainment, and fine dining.

In 2010, the Tommy Hilfiger brand was sold to Phillip Van Heusen Corporation, also owners of Calvin Klein, IZOD, Arrow, and Heritage Brands 6. Although the brand was sold to
PVH Corporation, all design processes were still under the leadership of Founder Tommy
Hilfiger. As principal designer, he’s been awarded year after year for his major contribution to the fashion industry, community organizations, and charities.

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T

ARGET MARKET: Generation-Y Males

Tommy Hilfiger's Specialty Denim Collection speaks to young adults, more specifically those between the ages of 18 to 28 7. This age group falls into the
Generation Y category, most of which are children of baby boomers.

Hilfiger's Ryder line attracts fashion forward and brand conscious male consumers. They are classy, sophisticated, well groomed, and stylish young men with entrepreneurial spirit.
They are knowledgeable and technology savvy. They appreciate quality and fashion and will spend the money to get what they want. They are well educated with high purchasing power. They value individuality, independence, family, and friends. Social class is a major factor in their purchasing decisions, as they prefer to stand out by wearing prestige high quality brands. They enjoy social media such as Facebook, YouTube, and Twitter. They care about the latest trends and designs in fashion. Being outdoors, playing golf, and travelling with friends are common interests found in this youthful target market.

Hilfiger Denim ad campaigns are straightforward in their approach to reach its target market. Commercials, magazine ads, and runway fashion shows display attractive models wearing the best of Tommy Hilfiger. The brands colors red, blue, and white dominate ad campaigns, painting a rich and bold image of the company. High quality “Classic American
Cool” merchandise, knowledgeable staff, friendly customer service, and thousands of stores in premium locations worldwide are reasons why customers remain loyal to the brand.

Those who want cutting edge fashion, denim with a twist, or a mixture of preppy and urban styles will choose Hilfiger Denim for their choice of jeans 8. Consumers willing to pay more money for high quality products will enjoy Hilfiger’s Denim Collection. Its versatility will achieve many great looks from preppy, urban, to retro. Coordinating pieces is very easy to achieve, as other collections offer a large variety as well.

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RODUCT STRATEGY

For this assignment, we chose the Ryder Denim Line to focus our attention on. The high quality Ryder jean has been popularized for its versatility, durability, and long lasting comfort. As a top seller in many markets including North
America, The Netherlands, and United Kingdom, these well designed jeans remain a top seller under Hilfiger’s Denim Collection earning long lasting relationships with its trendy style-conscious male consumers.

Many fits and styles are available in-store and online, catering to individual body shapes and sizes. Denim washes available include indigo blue, dark bases with a heavy contrast, and a medium light wash with fading at the front and rear 9. For the most part, its five-pocket styling remains consistent in the entire denim collection 10. Refer to Appendix 1 to view the Ryder jeans on a male model.

Exterior jean tags distinguish the different styles and fits available, making the consumer purchasing process much easier. The purpose of these tags is to highlight and promote specific product features. For instance, a style-conscious male consumer weighing
200 pounds and standing over 6 feet tall would prefer a medium-rise, regular to wide fit jean, compared to a low-rise, slim fit jean. Highlighting product features is an excellent way to steer customers in the right direction. It also eliminates the process of trying on multiple unflattering jeans that would only mourn a customer’s shopping experience at Tommy
Hilfiger. Well trained staff with extensive product knowledge regarding fit, materials, instructions for care, and so on is key to retaining customers and maintaining quality customer service.
Tommy Hilfiger does not offer a warranty for their denim products but do have a 30 day return and exchange policy in their specialty and outlet stores. Unwashed and unworn merchandise can be returned in-store with proof of purchase 11. For online orders, merchandise can be returned and shipped free of charge.
Tommy Hilfiger’s major competitor is Ralph Lauren, which happens to focus on vintage styles, such as plaid shirts, and ripped jeans. Ralph Lauren’s Denim and Supply
Collection is inspired by American country rock music 12. Their rugged and distressed look is quite opposite of Tommy Hilfiger’s rich, sleek, and bold denim styles.

Hilfiger’s Ryder jeans are quite easy to maintain. Customers who follow simple care instructions regarding washing and drying procedures will reap the benefits of long lasting jeans. Ralph Lauren’s heavily frayed, distressed, and faded jeans require special care in regards to maintenance. In many cases, Ralph Lauren specialty customers may consider professional dry cleaning and laundry services to maintain longevity in their jeans. This means extra costs and time, which may be a disadvantage for its customers.
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LACE STRATEGY

In September 2008, Tommy Hilfiger and Macy’s developed an alliance agreeing to sell the brand’s best clothing lines exclusively at its stores 13. Signing this deal also meant limiting Tommy Hilfiger merchandise in other department stores. Big name department stores such as Macy’s are turning to exclusive offerings making them more competitive and appealing in the marketplace 14. Consumers with high purchasing power will not hesitate to pay higher prices for specialty products.
Hilfiger Denim specialty stores are strategically located in high profile areas in many major cities. These premium locations help firms gain local exposure and make products available to desired target markets. An optimal location also plays a significant role in a company's profit and overall success 15.

In major cities where heavy traffic is problematic, many people turn to public transportation. Subways, being one of the most efficient and reliable source of public transportation is usually linked to major shopping centres. These shopping centres usually serve as terminals and transfer hubs for riders, commuters, and tourists. This provides ease of access, also a factor for boosting revenue and profitability.
Another in-store retailer is The Bay. Tommy Hilfiger Collections are primarily sold in high-volume Bay stores, such as Toronto’s Eaton Centre. Visual Merchandising Teams designate specific floor areas in the men’s department to maintain and display each individual brand. Fully dressed mannequins, company logos, and oversized posters will distinguish each brand from the rest in its entirety. Top selling brands including Tommy
Hilfiger, Calvin Klein, and Ralph Lauren sit at the front of mens departments, making their brand predominant in the store. The following is a list of major shopping hot spots around the world selling Tommy Hilfiger products.
1.
2.
3.
4.
5.

New York City, NY
Paris, France
Rome, Italy
Shibuya, Tokyo, Japan
Toronto, Ontario

Tommy Hilfiger Company Stores, referred to as outlet stores are primarily located in retail power centers containing at least two or three big box stores. Within these power centers are plaza strips of smaller retailers, all sharing common parking areas 16. These outlets carry specially designed merchandise at lower price points than merchandise sold in specialty stores, including leftover or last season’s merchandise from its specialty
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stores 17. Also, outlet stores are much larger in square footage with an oversized backroom to hold plenty of stock for easy replenishment.
In 2009, the company launched their Hilfiger Denim website, making it easy for consumers to browse or purchase products online. Other reputable websites selling its merchandise include Macy’s and Zappo’s.

Tommy Hilfiger is distributed to 90+ countries 18. Products are sold by the company at wholesale and retail in North America, Europe, and Japan. Wholesale operations serving
North America were taken over by Macy’s after exclusive selling rights were given to the firm 19.
In comparison, Ralph Lauren specialty products are available at The Bay, Holt
Renfrew, and Sears. The brand is also sold in Macy’s stores, therefore competing directly with Tommy Hilfiger. In terms of the Canadian market, independent Ralph Lauren specialty stores are non-existent. Both firms have very similar placement strategies by putting emphasis on high profile areas and major cities. Ralph Lauren wholesalers sell products to all parts of the world. They distribute products to department stores, specialty stores, and golf pro shops. In North America, department stores are the only customers the wholesalers have. In Europe, they serve department stores and specialty shops. Ralph
Laurens primary showroom is located in New York City, with regional showrooms located in Dallas, Chicago, London, Paris, and Tokyo 20. This gives business owners an opportunity to view collections prior to making purchases with wholesalers.

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RICE STRATEGY

Tommy Hilfiger is an affordable premium brand. Surprisingly during the recession, sales went up as consumers still wanted quality products at reasonable prices. Ryder jeans have an average price point of $129, while Ralph
Lauren’s expensive denim collection varies from $299-$499.
PRICE

CASH DISCOUNTS

 Specialty Stores $129
 Outlet Stores $59

 Specialty Stores $299 to
$499

 Receive an additional 15% off next purchase.

Comparison

 Ralph Lauren shows a symbol of distinction and status. Customers enjoy that and constantly return.

Hilfiger Denim

Ralph Lauren Denim

 Online printable coupons and
 10% discount coupons that promo codes, discounts ranging only apply to out of season from 10-50% off sale merchandise
 Fall Preview Sale 30-50% off
 Encourage online shopping
 Summer Preview Sale 30-50% off by offering complementary
 Free shipping for online orders shipping over $195
 Complimentary holiday gift wrapping included with free shipping

LOYAL CUSTOMERS  Customer e-mails added to database after making purchases, email mailing system tracks consumer purchasing habits, sends promotions to via email

Tommy Hilfiger’s geographic pricing is promoted through their speciality stores which are located in high-profile areas in major cities. Heavy populated cities, with large shopping centres generate high profitability. Companies must operate and market strategically to bring in the most revenue.
Outlet stores carry specially designed merchandise sold at lower price points. Europe and Japan outlets clear excess inventory from previous seasons at discounted prices.

The Ralph Lauren brand has extremely elevated prices and steer away from giving out discounts. Ralph Lauren Corporation believes discounts can hurt the brands image and values. Offering discounts does not establish long-term relationships with customers, just short-term potentials.
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P

ROMOTION STRATEGY

The brands witty Fall advertising campaign, “Meet the Hilfigers” was released in 2010 with a 60% increase in funds. The campaign was meant to coincide with the brands 25th Anniversary, also giving the designer an opportunity to regain his throne in the fashion industry after losing some credibility in his earlier years.

The company took a five year break from television ads in 2005, in order to focus on fine tuning the message of the brand to consumers. In 2010, the company featured a fun television commercial showing a very chaotic Hilfiger Family picnic in celebration of the holidays. The commercial titled “Feast Interruptus,” featured all 16 members of the Hilfiger
Family, including two well-beloved Basset Hounds. Each member was dressed to impress, with matching Tommy Hilfiger attire from head to toe. A major highlight of the commercial was the assortment of accessories. Scarves, hats, sunglasses, and gloves were very hard to miss, an excellent strategy for featuring the brands various offerings.
According to Avery Baker, Chief Marketing Officer of Tommy Hilfiger, “it has become a really fun part of the campaign. We’ve found that wherever The Hilfigers go, people are just so drawn to them. On Facebook, on Twitter, on our own site, The Hilfigers have been engaging with fans on a frequent basis. We actually saw in one month our fan base grow by
25% on Facebook. We think the more we can push this campaign out in traditional media, the more we can pull consumers in to engage with the family and with the brand in social media and the digital world.” Tommy Hilfigers Facebook page has approximately 5.5 million likes. Members get the latest updates regarding news, events, and sales. They can also receive special promotional offers including discounts and promo codes for online purchases. Other forms of social media used by the company include Tumbler, YouTube, and Twitter.
The brands 2010 Ad Campaign proved to be a success, but another fantastic form of advertising is Hilfiger Denim Live. This has been an ongoing promotional strategy sponsored by the company which showcases the latest in local and emerging musical talent. The large music concert combines music and fashion with the purpose of attracting youthful consumers to the brand. Britney Spears, in the early stages of her pop singing career is seen in Appendix 2 promoting her tour with the brand attached to her name.
Another famous female artist is Beyonce, who signed a deal in 2004 agreeing to put her face on the brands True Star fragrance. Consumers were then able to identify and relate to the brand with the help of celebrity faces. This boosted sales significantly, also giving the company tons of momentum.
The famous Hangman billboard ad ignited Hilfigers career back in 1985. Appendix 3 shows the fill-in-the-blank game which got people talking. This promotion strategy was a
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success as Tommy Hilfigers name immediately spread across the globe causing a major shopping frenzy among consumers.

Another major factor the marketing team must be sensitive to is culture. Different countries require different forms of advertising communication. For example, several years ago the company released a very popular magazine ad showing a male model riding a motorcycle in the scorching heat on a long quiet dessert road. Western culture would identify this as being cool, stylish, hip, and free. In Chinese culture, a motorcycle is seen as being a low-class or dirty object.

Tommy Hilfiger launched Tommy Hilfiger Corporation in 1995. Their mission is to provide youth with higher levels of education providing greater career opportunities. They also focus on cultural programs to positively impact the well-being of adolescents 21. Also, the organization also donated 1 million dollars to the Hurricane Sandy Relief Fund.

The Council of Fashion Designers of America/Vogue Fashion Fund is a nonprofit major fashion event that is sponsored by the Tommy Hilfiger company, along with many others.
Aspiring fashion designers are given the chance to showcase their talents and receive monetary rewards. Tommy Hilfiger is among one of 400 designers who are members of the
CFDA. Designers offer mentoring to contestants regarding business planning, marketing, sourcing, production, and exporting.
The company has established a positive reputation by helping out in the community, sponsoring events, and donating to charities. Social responsibility is major part of their values and beliefs, and giving back to those in need also projects a professional and respectful image of the company.

In terms of personal selling, the main focus is to maximize profit through brand loyalty and building strong personal relationships with customers. Being a worldwide premium brand, the company uses an assortment of direct and indirect marketing channels to increase brand loyalty and build lifetime value with customers.

Loyal and regular customers are most profitable for the company. The brand pyramid is what Hilfiger uses to determine the stages a customer goes through.

Stage 1:
Stage 2:
Stage 3:
Stage 4:
Stage 5:

Acknowledging the brand.
Feeling a personal connection with the brand and what it stands for.
Purposely visiting a store to purchase the Hilfiger brand.
Buying the brand for the first time.
Continuously buying the brand

In comparison, Ralph Lauren has supported dozens of non-profit organizations including Habitat for Humanity, Ronald McDonald House, and the American Cancer Society.
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Sales promotions are similar to those of Tommy Hilfiger such as free shipping on online orders over $195. Discounts are only offered on sale items and out of season merchandise.
The Ralph Lauren brand is extremely prestige and high-end. The brands attitude is very corporate and professional, emphasizing rich lifestyles.
The Ralph Lauren brand is targeting the filthy rich, who have immense purchasing power. They focus on maximizing profits with repeat customers and try to build personal relationships with each and every one of them.
Television ads, catalogues, and magazines are still used by the brand. Social media is also integrated into Ralph Laurens promotions with their Facebook and Twitter pages revealing the latest collections, news, and events.

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C

ONCLUSION

The Tommy Hilfiger brand has taken many great strides to improve their marketing strategies. Taking a step back from television ads and finding new strategic ways to position the brand has put the company in a stronger and much more competitive position. Putting more money towards advertising was a positive way of gaining exposure and momentum. Introducing The Hilfigers was a major hit, fans fell in love and now they just can’t get enough. The brand is all about having fun, and looking good while doing it. This is very opposite compared to Ralph Lauren’s serious highclass image.

The Tommy Hilfiger brand is proud to identify itself as an affordable premium brand, with a price point significantly lower than its key competitor. The brands merchandise can be found in outlet stores, specialty stores, and department stores. Ryder Jeans are still a major hit in the Hilfiger Denim Collection. High quality products, in various sizes, washes, and fits make it easy for stylish male consumers to shop and keep coming back. Organized stores, a fully stocked sales floor, and friendly sales associates have made in-store shopping experiences for consumers a positive one. These contributing factors are major reasons why many consumers choose Tommy Hilfiger as their #1 fashion destination.

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Appendix 1
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Appendix 2

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Appendix 3

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Endnotes
1

PVH Corporation. “Tommy Hilfiger.” http://www.pvh.com/media.aspx (November 6, 2012)
Tommy Hilfiger Licensing, LLC. “Overview.” http://global.tommy.com/int/en/About/overview/14. (November 10,
2012)
3
Tommy Hilfiger Licensing, LLC. “Overview.” http://global.tommy.com/int/en/About/overview/14. (November 10,
2012)
4
Van Der Beek, Jerry. “Tommy Hilfiger.” http://apportal.ey1.dedicated.nines.nl/wp-content/uploads/2010/11/C3Tommy-Hilfiger.pdf. (November 10, 2012)
5
Van Der Beek, Jerry. “Tommy Hilfiger.” http://apportal.ey1.dedicated.nines.nl/wp-content/uploads/2010/11/C3Tommy-Hilfiger.pdf. (November 10, 2012)
6
Tommy Hilfiger Licensing, LLC. “Denim Men.” http://uk.tommy.com/Jeans/503000,en_GB,sc.html#/guide.
(November 5, 2012)
7
PVH Corporation. “Tommy Hilfiger.” http://apportal.ey1.dedicated.nines.nl/wp-content/uploads/2010/11/C3Tommy-Hilfiger.pdf. (November 10, 2012)
8
Tommy Hilfiger Licensing, LLC. “Denim Men.” http://uk.tommy.com/Jeans/503000,en_GB,sc.html#/guide.
(November 5, 2012)
9
Tommy Hilfiger Licensing, LLC. “Denim Men.” http://uk.tommy.com/Jeans/503000,en_GB,sc.html#/guide.
(November 5, 2012)
10
Tommy Hilfiger Licensing, LLC. “Denim Men.” http://uk.tommy.com/Jeans/503000,en_GB,sc.html#/guide.
(November 5, 2012)
11
PVH Corporation. “Tommy Hilfiger.” http://www.pvh.com/media.aspx (November 6, 2012)
12
Clash. “Tommy Hilfiger on Musical Inspirations.” http://www.clashmusic.com/feature/tommy-hilfiger-onmusical-inspirations (November 13, 2012)
13
Shop Search. “Tommy Hilfiger.” http://www.shopsearch.com/brandname.asp?b=Tommy+Hilfiger (November 15,
2012)
14
Appleby, Richard, Joseph F. Hair, Jr, Harish Kapoor, Charles W. Lamb, Carl McDaniel, and Janice Shearer. MKTG
Second Canadian Edition. Toronto, Ontario: Nelson, 2010
15
Tommy Hilfiger Licensing, LLC. “Ryder.“ http://uk.tommy.com/HilfigeDenim/Ryder/1950829678,en_GB,pd.html
(November 12, 2012)
16
Shop Search. “Tommy Hilfiger.” http://www.shopsearch.com/brandname.asp?b=Tommy+Hilfiger (November 15,
2012)
17
Tommy Hilfiger Licensing, LLC. “Overview.” http://global.tommy.com/int/en/About/overview/14.
(November 10, 2012)
18
Gellsumino, Angelo. “Tommy Hilfiger.” http://apportal.ey1.dedicated.nines.nl/wp-content/uploads/2010/11/C3Tommy-Hilfiger.pdf. (November 10, 2012)
19
Shop Search. “Tommy Hilfiger.” http://www.shopsearch.com/brandname.asp?b=Tommy+Hilfiger (November 15,
2012)
20
Tommy Hilfiger Licensing, LLC. “Brand.” http://global.tommy.com/int/en/About/overview/14. (November 10,
2012)
21
Tommy Hilfiger Licensing, LLC. “Tommy Hilfiger Corporate Foundation.” http://global.tommy.com/int/en/About/overview/14. (November 10, 2012)
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