Superdry label entry to Mexico

 Introduction

Superdry label is a clothing line from the SuperGroup public limited company that offers stylish clothes which combine the vintage American styling and Japanese inspired graphic. With the robust growth in the local market in Britain, Superdry label needs to expand to other oversea markets so as to get a chance for more growth (Wilson, et.al, 2016). With such status, Mexico stands as one of the countries the Superdry clothing label is focused into, and intend to invest into. However, as Schiavon & Westley (2012) argues, before an investor makes an investment in an oversea nation, there is a need for prior comprehensive research on the feasibility of making such investment. Through such prior research, investors are able to identify the benefits of making a move to invest in such a market, as well as also the challenges they may face while operating in such a new market. A critical analysis of these two sides of a market helps a company to make a viable decision on whether to make an investment or not (Marcotte, 2015). So, in this paper, there will be a critical look at the Mexico clothing and fashion industry, and how attractive it is for foreign investors such as Superdry label. With such look, a rational decision will be made on whether to advise the Superdry label to enter into Mexico fashion and clothing market or not.

Critical analysis

Current situation

Mexico economy has experienced immense changes in the last decade or so. A lot of positive developments have taken place in the country, a shift that has made Mexico a worth country to consider as an expansion site for Superdry label brands. One of the major positive changes that have been experienced in Mexico is the growth of middle-class population. Until a decade ago, Mexico used to be a nation of two extremes when it came to the issue of economic tiers; the very wealthy and the very poor (Schiavon & Westley, 2012).  The country had only 15% of its population as extremely wealthy while 85% of the remaining population was extremely poor. With such a situation, Mexico then offered little promise for Superdry –style retail; which is a label that offers trendy and fashionable clothes for the elites in the society. The poor majority in the country could not be able to afford to shop for the Superdry label clothes and other brands, while the remaining 15% of the super-rich could not offer a sustainable market for such a global brand in the country (The Guardian, 2015). However, after the 2007 global economic crisis, things have been positively changing.            Mexico has experienced a rapid expansion of middle class, whereby a young population of Mexicans has gone through education and secured formal jobs in the manufacturing and service sectors across the country (Marcotte, 2015). This shift in destiny amongst the local Mexicans has created a growing and educated middle class comprising almost 50% of the country’s population; who are fashion conscious; want to shop, and have good experience for their money. This means with a population of around 130 million people, over 65 million people are eagerly looking for trendy and fashionable labels that they can shop from to meet their growing fashion and style demand (Tovar Landa, 2013). This offers a viable and reliable market for Superdry label, which is globally known for its stylish and graphically inspired clothes. So, from the above argument, it is evident that the shift in the economic situation in Mexico has created a conducive environment for international investors such as Superdry label, given the fact that the new class has given a whole new look in the Mexico fashion industry.

Market analysis

Mexico clothing industry is rapidly growing, as well as diversifying. With $1.26 trillion economy, the clothing industry boast of a huge share with over 4% of the country’s GDP coming from it. This clearly indicate how significant the clothing industry has grown and become attractive in Mexico (Drew & Sinclair, 2015). Additionally, Mexico clothing industry is rapidly becoming diverse, with different labels becoming more recognized and demanded for by consumers.  Initially, the rich were controlling the demand of the country’s fashion market as they demanded for highly luxurious brands, thus denying opportunities for middle-label brands such as Superdry.

However, the rapid rise of around 65 million young, middle class group of fashion-conscious consumers’ has changed the dynamics in the country’s clothing market (Herrod, 2016). This pool of young-economically stable shoppers has created a scenario where customers taste is shifting from luxury brands to brands influenced by pop culture. Most of the people in this 65 million segment are demanding for more graphically inspired and stylish clothes as they argue that they make them look young, stylish and more relatable as opposed to the official look brought about by the luxury brands.  This upsurge of a group of Mexican shoppers, whose customer taste is shifting to a more pop-linked style, has created an ample opportunity for Superdry brand (Mooradian, Matzler & Ring, 2014).  With its perfect combination of vintage Americana styling and Japanese inspired graphics, Superdry label stand a better opportunity to tap into this newly emerging fashion taste to penetrate into Mexico. Given its right product, pricing model and infrastructure, Superdry is perfectly positioned to be successful in the Mexican clothing market.

Competitor analysis

Mexico clothing industry is increasingly becoming competitive. With the expansion of aspirational middle-class, the market has experienced the penetration of international players such as H&M, Forever 21 as well as Lefties (Vedder, 2016). The presence of these players has made the market extremely competitive, thus making it difficult for a new player to easily enter the market. Other key players which have significant influence in the market include Gap, Old Navy, and Desigual.

Key issues

One major issue facing clothing industry in Mexico is lack of proper infrastructure. The country lack proper roads, railway lines as well as intermodal containers (Grayson, 2010). Such lack of proper infrastructures makes it difficult for oversea companies to reach the country’s strategic markets.

Additionally, the country’s ecommerce is in a relative infancy, implying that big label companies such as Superdry, which has invested heavily on online selling cannot exploit its potentials fully in Mexico (Grayson, 2010). This restrict it reach for the Mexican fashion consumers.

However, Mexico government is largely starting to invest in infrastructural development, and it is projected that by 2020, the country will have expansive infrastructural connection (Tovar Landa, 2013).This means that despite the issues facing the country right now, Mexico stands as a viable destination for Superdry brands.

Penetration strategy

Superdry label should opt for partnering strategy in its efforts to enter Mexico market. The company should establish a simple co-marketing arrangement with different malls across the country, so as to enhance its ability to serve the expansive Mexican market (Li & Yang, 2011). Simple co-marketing is whereby a company collaborate with already established businesses in a given market to aid it product distribution and sale. So, the co-marketing strategy will allow Superdry to collaborate with the established malls in Mexico to enhance its ability to reach customers across the country. Through this strategy, the label will be able to sell its brands in these malls shelves at a negotiated fee. In Mexico, over 50 new malls are being developed annually, as the emerging middle calls are largely embracing the culture of under one roof shopping. This present a strategic opportunity for Superdry to tap the target market (Li & Yang, 2011). By partnering with different malls, the label will not only overcome the physical barriers to the market, but also be able to reach its rightly targeted segment.

Marketing mix recommendation

Product: Superdry should offer a wide-variety of graphically inspired brands of clothes, given that the youthful consumers, who are the majority, are shifting into it (Marcotte, 2015). Youthful population in Mexico is becoming increasingly unique when it comes to fashion and sense of style. Some of them are largely embracing the American culture and lifestyle, as they view it superior than their local traditions. This means that Superdry label should be able to offer a vintage Americana styled brands to satisfy this segment. Additionally, some other youths especially the artistic youths prefer graphically inspired clothes, and as a retail company, Superdry should satisfy this segment either through its globally known Japanese inspired graphics brands or other-newly developed graphically inspired brands.

Place: the company should avail its brands in all cities, towns and also suburb residential areas, given that these are the key strategic locations that the youthful middle class, who are the target market are largely concentrated (Vedder, 2016).

Price: the Superdry label should introduce their brands at mid-level prices, given that the middle class are not yet able to afford premium pricing, and also dislike low-level pricing as they associate it with poor quality (Mooradian, Matzler & Ring, 2014).

Promotion: Superdry should largely focus on online campaigns through use of social media platforms such as Facebook, Instagram and YouTube (Schiavon & Westley, 2012). Such methods will not only help them to minimize of promotion cost, but also capture a large pool of middle-class consumers who are tech-savvy.

Marcomms strategy 

Apart from internet marketing which has been emphasized on the Marketing mix recommendation, Superdry label should consider employing other mainstream channels of promotion including mainly the use of TV ads, and radio campaigns. It is reported that household with TV in Mexico is 94% (Herrod, 2016). This means that over 122 people in the country have access to Television. Also, over 90% of the households own a radio gadget, an indicator that these two channels serve as a good source of information (Marcotte, 2015). So, tapping into these two mainstream media can also give Superdry label a huge chance to penetrate the market.

 

 

 

 

 

 

 

 

Bibliography

Drew, L., & Sinclair, R, 2015, Fashion and the Fashion Industry. Textiles and Fashion, 635-647. doi:10.1016/b978-1-84569-931-4.00025-8

Grayson, G. W, 2010, Mexico: Narco-violence and a failed state? New Brunswick, NJ: Transaction Publishers.

Li, A., & Yang, D. (2011). Business Advertising Strategy in Co-Marketing. 2011 International Conference on Management and Service Science. doi:10.1109/icmss.2011.5998583

The Guardian, 2015, SuperGroup embarks on China expansion | Business | The Guardian. Retrieved from https://www.theguardian.com/business/2015/jul/09/supergroup-embarks-on-china-expansion

Tovar Landa, R. (2013). Policy Reform in Networks Infrastructure: The Case of Mexico. SSRN Electronic Journal . doi:10.2139/ssrn.36020

Herrod, E, 2016, INTERVIEW Superdry: collaboration, expansion and fulfilment – InternetRetailing. Retrieved from http://internetretailing.net/2016/01/interview-superdry-collaboration-expansion-and-fulfilment/

Marcotte, D, 2015, Expanding Globally? Then Consider Mexico – The Robin Report. Retrieved from http://www.therobinreport.com/expanding-globally-then-consider-mexico/

Mooradian, T. A., Matzler, K., & Ring, L, 2014, Strategic marketing. Williamsburg, VA: GOOD DOG Publishing.

Schiavon, R., & Westley, E, 2012, Mexico: Expanding Access Through Partnerships and Persistence. Emergency Contraception, 91-106. doi:10.1057/9781137016485_6

Vedder, F, 2016, Tencent: A Case Study on Expanding Through Micro-Innovation and Strategic Partnerships. Multinational Management, 111-130. doi:10.1007/978-3-319-23012-2_7

Wilson, Richard M.S, Gilligan, & Colin, 2016, Strategic Marketing Management. Routledge.

 

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