Barneys Marketing Plan
BARNEYS MARKETING PLAN
Executive summary
Barneys is planning to extend the target market by embracing budget fashionistas as well as current target customers who are fashion connoisseurs with a high disposable income and cutting-edge taste. It is because, according to Spending Pulse, Sales of luxury goods fell 27.6% in December 2009 compared with December 2008 including credit cards and cash. The pullback in luxury spending due to the deteriorating economy brought about a sharp slowdown and a torrent of extraordinary markdowns last year. The competitors including Bergdorf Goodman, Saks Fifth Avenue, and Neiman Marcus have been saddled with excess inventories and double-digit sales decrease. In order to do extend target market, Barneys will increase the amount of contemporary, accessory and Co-op merchandise up to 60% of whole inventory in two years, which can draw fashion-oriented customers with limited budget. The primary marketing objective is to accomplish sales increase by 3% compared with sales of $780 million for 2008 keeping profit margins of 50% or more, and a 8% increase in sales compared with sales of 2009, maintaining profit margins of 60% or more in the second year. The economic downturn has been bankrupting some firms, toppling longstanding agreements on pricing and distribution. Also, deep markdowns have been destroying the exclusivity that designers are trying to do.
Customers are continuing to turn to the internet for clothing shopping because the online stores offers fashion trends and styling tips as well, and shoppers can quickly search the items by various categories, which makes shopping experience more efficient and not physically demanding. The leading online retailers of designer brands including Net-A-Porter.com and Bluefly.com have performed well showing revenue increase except for the fourth quarter 2008.
Macroenvironment:
The shrinking economy, stock market declines, investment erosion, housing crisis, higher food and gas prices
Executive summary
Barneys is planning to extend the target market by embracing budget fashionistas as well as current target customers who are fashion connoisseurs with a high disposable income and cutting-edge taste. It is because, according to Spending Pulse, Sales of luxury goods fell 27.6% in December 2009 compared with December 2008 including credit cards and cash. The pullback in luxury spending due to the deteriorating economy brought about a sharp slowdown and a torrent of extraordinary markdowns last year. The competitors including Bergdorf Goodman, Saks Fifth Avenue, and Neiman Marcus have been saddled with excess inventories and double-digit sales decrease. In order to do extend target market, Barneys will increase the amount of contemporary, accessory and Co-op merchandise up to 60% of whole inventory in two years, which can draw fashion-oriented customers with limited budget. The primary marketing objective is to accomplish sales increase by 3% compared with sales of $780 million for 2008 keeping profit margins of 50% or more, and a 8% increase in sales compared with sales of 2009, maintaining profit margins of 60% or more in the second year. The economic downturn has been bankrupting some firms, toppling longstanding agreements on pricing and distribution. Also, deep markdowns have been destroying the exclusivity that designers are trying to do.
Customers are continuing to turn to the internet for clothing shopping because the online stores offers fashion trends and styling tips as well, and shoppers can quickly search the items by various categories, which makes shopping experience more efficient and not physically demanding. The leading online retailers of designer brands including Net-A-Porter.com and Bluefly.com have performed well showing revenue increase except for the fourth quarter 2008.
Macroenvironment:
The shrinking economy, stock market declines, investment erosion, housing crisis, higher food and gas prices