distribution and service analysis of promod

Toulouse business
school, Bachelor
Program CS2, IB/B
Cecile Fontaine,
Emilie Cambus,
Pan Ying,
Sophie
[DISTRIBUTION
AND
SERVICE ANALYSIS OF
PROMOD]
Table of content
PART 1 : DISTRIBUTION ANALYSIS
a)
b)
c)
d)
Promod’s positioning and its mission statement
Main competitors compared to Promod
Analyze of the retailing mix
Suggestion of strategic recommendations
PART 2 : SERVICES ANALYSIS
A. Service description
a) The Flower of Service of Promod
b) service experience blueprinting
c) The SWOT
B. Positioning Map
a) High/low price VS high/low service
b) High/low quality product VS High/low variety of product
C. Identification of strategic issues and service gaps
D. Recommendations
E. Annexes
a) Annexe n°1 : Questionnaire of the Promod store manager of
Portet/Garonne (31)
b) Annexe n°2 : Photos of the Promod Store located in the shopping
centre of St Orens (31)
PART 1
DISTRIBUTION ANALYSIS
a) Promod’s positioning and its mission statement
Promod was created in 1975 as a French family boutique dedicated to the sharp
design, the production and the retailing of women's ready-to-wear and original
accessories.
Promod positionning:
Promod dresses up and down all modern women that are looking for affordable,
feminine and easy-to-wear fashion.
The inspiring collection offers a wide range of frequently updated items from more
timeless seasonal must-haves to more cutting-edge designer-inspired fashion pieces.
Promod collections aimed primarily at women 20 to 30 years, modern and active,
seeking a fashion accessible and quality, not too classical or too sharp, and they will
by its variety and its renewal to combine clothes to its own inspiration.
Additionally, Promod has its own clothes designers that create some 3,000 models a
year for all your fashion moments: work, evenings out, casual wear... What’s more,
Promod has 3 000 members of staff, of whom more than 90% are women. So it is
really a women-oriented company which supplies the women with fashionable clothes
over the world.
In all, Promod's brand success depends on the team's strong personal values:
customer insight and a shared love of fashion with lots of entrepreneurial team spirit!
Promod has been established in many Main countries such as France Spain, Greek,
Italy, Germany, China, Poland, Czech Republic, Hungary, Switzerland, Belgium, UAE,
India, Portugal, Austria, Russia, Malta, Lebanon, Luxembourg, Morocco and etc.
In the coming years, Promod aims to accelerate its international development, in new
geographic areas and in those where it is already present.
b) Main competitors compared to Promod
Zara
Zara is the flagship chain store of Inditex Group. It is claimed that Zara needs just
two weeks to develop a new product and get it to stores, compared with a six-month
industry average, and launches around 10,000 new designs each year. Nowadays
Zara is present in 71 countries, with a network of 1.474 stores in privileged
locations of major cities all over the world. Compared with Promod, Zara is a company
more international not only about the distribution but also the brand. Zara Stores has 4
basic product lines: men, women, the young and kids. Promod only focuses on
women’s clothing so it may loss a majority of market even it has the similar price and
quality as Zara.
The most unusual strategy of Zara is its policy of zero advertising; the company
preferred to invest a percentage of revenues in opening new stores instead. In this
case Promod was invested in some women’s magazine and newspaper in order to
advertize its brand name.
Bershka
Bershka is a new clothing and fashion brand which was created in April 1998.It
now has 558 stores in 39 countries. Bershka has a larger distribution than Promod
even though Promod has a longer history than Bershka.
Just like Promod, Bershka regard the young people as the target market. On the other
hand, Promod is oriented on women’s needs, and it seeks fashion accessibly with
high quality, not too classical or too sharp. But Bershka is looking for the most modern
and sharp style, especially for party girls. Additionally, the price of Bershka is lower
than that of Promod, and the quality still needs to be improved.
Bershka stores are large and spacious, with an avant-garde appearance. They
are intended to be meeting points for street fashion, music and art. In the store,
customers can watch videos, listed to CDs or read magazines. Therefore, the
additional service is much wider than that of Promod.
Mango
The Spanish firm has designed a key ring especially for this project, which will be
on sale in the more than 900 MANGO stores throughout the world.
MANGO continues to grow and consolidate its position in the international market.
The Spanish firm experienced growth of 8% with respect to the previous year,
closed2005 with a turnover of 1.144 billion Euros, of which 75% corresponds to sales
outside Spain. The firm opened over 118 stores in 2005 and expects to obtain even
better results in 2006.And most of them are located in the city centre like Promod
does.
Creating today’s woman’s wardrobe is the aim of all of Mango’s collections.
Inspired by art, design and pop culture, the brand transforms the latest trends into a
personal and unique urban fashion concept. Accessories, which have become a
major feature of MANGO designs, are an area of firm commitment for the brand. And
the style of MANGO wouldn’t be so sharp or very classic, so it suits professional office
lady quite well. And in this aspect, it is the same like Promod.
The campaign aims to prove that the more mature woman can adapt trends, and
that fashion is not limited to women of a certain age and size.
Here is the table that shows the simple differences among Promod and its
competitors, Zara Mango and Bershka.
Location
Promod
Women
All styles
Moderate
Magazine&
Internet
City Center
International
Intermediate
Orientation
Style
Price
Promotion
Zara
All people
All styles
Moderate
Window show&
Internet
City
Center&
Duty-Free
Shops
Advanced
Mango
Women
Professional
Moderate
Celebrities&
Internet
City
Center&
Duty-Free
Shops
Advanced
Bershka
Women
Party style
Low
Magazine&
Internet
City Center
Intermediate
Naf Naf
French Groupe Naf Naf offers young urban women's and children's apparel in
about 140 company-owned domestic stores as well as 25 international locations.
Seemingly all set to be sold to ready-to-wear retailer, Beaumanoir, French clothing
label Naf Naf is now in exclusive negotiations with Vivarte, which groups around 15
clothing and shoe brands.
And compared to Promod, Naf Naf has a little higher price with the great service.
And the international expansion is much better than Promod as one of the rare French
brands to have a truly international presence. Like Promod, it’s also member of
ready-to-wear fashion group. And under the new strategy, the company intends to
expand its overseas business to 50% from the existing 35% over the next few years.
The company plans to achieve this dream by capitalizing on its ability to offer bright,
youthful clothing, while keeping up with changes in style.
Etam
As the French local brand, Etam offers women with fashionable clothing with
acceptable price like Promod. The promotion part of Etam is really great with all the
top models sizzling at Etam lingerie show. And the fashion retailer never stopped
expanding the international area as long as it can touch.
As an international retailer of lingerie and women’s clothing, Etam reinforces its
position in Europe and pursue its international expansion, taking advantage of the
reputation and strength of its brand, Etam decided to unify and streamline its
processes. And compared to Promod, the competitor is much stronger in push the
products abroad. While the price of Etam is a little higher than that of Promod, the
service still needs to be improved in the retailing shops. Till now Etam has had3,361
stores.
Camaïeu
The Group's principal activity is the distribution of its own brand of ready to wear
fashion clothing and accessories through a chain of stores and via a network of
franchised boutiques in France and abroad. Camaïeu has created, manufactured and
sold its own collections at the best value for money on the market which is mainly for
women between the ages 20 to 40 years like Promod. And compared to Promod,
Camaïeu offers a similar price that is very acceptable for the consumers like Promod,
but the service still needs to be improved.
Internationally, Camaïeu continues to follow a programme of development and
expansion of its concept with its subsidiaries in Spain, Poland, Czech Republic, Italy
and Belgium, which is 92 out of 485 shops. .
Cache Cache
Cache-Cache sells stylish, practical and affordable maternity fashion, combining
quality and value for money. Styles for any occasion are sold, including weddings and
work. The company offers ready-made wear for women of 18 to 30 years as its
concept.
Concerning the international expansion, the local French brand owns 232units in
France and 128 abroad, amounting to 360 in all. And the space of Cache Cache is
around 150 - 200 m², which has a great advantage over Promod. But Promod has a
higher price with better service for the customers. And the promotion of Promod is
also more fashionable that that of Cache-Cache which might attract more OL.
c) Analyze of the retailing mix
Distribution network
Promod designs its products and distributes them in a network of 531 stores
spread over 34 countries mainly in Europe, the Middle East. And it has a turnover
audience of over 700 million Euros, almost 60% abroad and nearly 20% in partnership.
It employs over 3600 people. 100 stores were opened in 2006 (net openings) and
teaches provides 150 new stores in 2007. 100 stores were opened in 2006 (net
openings) and teaches provides 150 new stores in 2007.
Promod is one of the Specialty chains in most European clothing retailers.
Specialty chains usually have a wider geographical reach, with some very large
players, such as H&M, C&A and Zara. Some are directly owned and operated (e.g.
C&A) while others have a franchise structure (e.g. Benetton).
The economics of sourcing and marketing differ from those faced by independent
retailers. Specialty chains as Promod are also called verticals as their main
characteristic is the control of these companies over the products they sell.
Additionally, Promod sells its own branded production, produced by favored
suppliers. Promod uses advanced information and management systems through its
website, but also through its intranet (electronic data interchange and just-in-time).
To be specific, Promod as a single-industry specialist like Mango, Pimkie, Benetton,
Terranova, Gap, Kiabi, Top Shop, always focusing on the professional production and
the all-round service system.
When it comes to the locations and design of the store, Promod is usually
established in the city centre or mall and the good location provides the clients the
most convenient way, as well as convenient schedules. Thanks to this geo marketing
strategy, Promod is very close to its customers, in terms of physical presence, but
also in the customer’s mind.
Services
Moreover, Promod stresses on the quality of advice customer can get from a
friendly, commited and available well trained staff, to answer customer’s needs.
Promod aims at differentiate itself from main competitors by adopting this customer
oriented attitude.
Price
Concerning the price, the orientation of Promod is to offer affordable clothes, and
Promod's collections are made with their own designers, producing a range of
ready-to-wear items for quick seasonal trends, timeless classics or cutting-edge
designer-inspired pieces.
Nevertheless, Promod obviously sets its price according to the competition.
Merchandising
The Average size of a Promod store is 160 to 250 square meters with the
Catchment area of more than 50 000 people. And the Linear showcase is around 8
meters with clear classification of products.
Clothes are arranged by style: this permits customer to identify the Promod’s
universe, and get inspired.
The store is set in two main area:
“City” area: proposes clothes for working women with suits but also elegant
clothes for party or special occasion.
“Leisure” area: proposes a large range of trendy clothes and accessories
through different styles.
In these two areas we can find permanent products considered as “basic products”
and non permanent products which create event in the shop every week.
To create the event and attract the customers, Promod has adopted a cross
marketing strategy, which consists of setting up basic products and new products in a
natural and appealing way, on dummy or “event wall” every week. The facing theme is
determined by the Promod’s marketing department and set by the store managers
and employees of Promod network. It is the same process for the shop window
realization, changed every week.
Promod aims at keeping an homogeneity in all its stores. This is why Promod
employs visual merchandisers in order to check the merchandising rules are
respected in all stores by store managers.
Then all clothes and accessories are implemented on different supports: shelves,
areas, facing, coat hanger, still according to the marketing department’ strategy.
Store manager makes sure that the offer is clear for customers.
communication
As French owned women wear brand, Promod is stepping up its profile amongst
the UK fashion media by signing up Juice PR to introduce its range to fashion
journalists. The company is offering consumers high street women wear through its
online boutique. The online boutique has proved successful in other European
countries and is updated daily including weekly newsletters on the latest trends,
bestseller charts and style guide services. Every item sold in store will be available
for purchase online, including sale stock. Other extras include footage of the Promod
team putting together the model photo shoots.
However, Promod wants to stay discreet and aims at simplicity. Promod doesn’t
use aggressive marketing campaigns, even when there are some promotional offers
in store, Promod doesn’t stick flashy “- 50%” flyers on its shop windows, but just sets a
central area in the store with a simple flyer to inform customers. Promod trusts in its
customer’s loyalty, tries to set a mutual trust.
We can find on 2 walls of the store, large photos which are here just to immerse
the customer in the Promod atmosphere.
The communication strategy preferred by Promod is through its staff, who is
supposed to vehicle the Promod simplicity and enthusiasm, team spirit,
professionalism and creativity.
d) Suggestion of strategic recommendations
in terms of distribution
Promod plans this year to open 100 new stores. The company opened its first
store in India on April 15 in 2006 and is currently looking for distributor in Britain,
Northern Europe and Asia.
Promod, which has a turnover of public almost 650 million euros, of which over
55% in international and nearly 20% in partnership opened about 54 stores in 2005
(net openings). Compared to the giant clothing store such as ZARA, Promod needs to
aim to accelerate its international development, in new geographic areas and in those
where it is already present. Therefore, the vacancy in duty-free shops should also be
taken into consideration by Promod.
In terms of merchandising
In addition, Promod may need to add more ‘retailtainment’ in the store such as
the resting area with some comfortable sofas and magazines, even with a big screen
hung on the wall with the newly fashion shows about Promod while customers are
waiting to the cash desk. Bershka has done a lot in this area which can be very
effective for the long queue outside the fitting rooms. Nevertheless, we have to be
careful not being to aggressive or intrusive to respect Promod’ statements of simplicity
and peacefulness.
The net service should also be improved concerning the discount books of expertise.
In terms of communication
In the current context of economical crisis, customers may tend to look for
discount more frequently.
We can suggest to Promod to take this new trend into account in its
communication strategy, as it seems very risky to stay so discreet about the special
offers in store while main competitors are communicating a lot through their shop
windows. Indeed, we can think that even the most faithful Promod’s customers could
finally be attracted by the competitors’ discounting campaigns.
In order to respect Promod’s values of simplicity and trust, we can suggest to
communicate about the offers on the shop windows through designed stickers, which
could differentiate Promod from others competitors with flashy stickers.
PART 2
SERVICES ANALYSIS
a) The Flower of Service of Promod
Safe payment
Delivery of Product
E-ordered Gift
Book Product
Gift &Promod Card
Alternation
Designing and selling
up to date and various
clothes and accessories
Website
Credit Note
Pleasant store
Order Product
Advice & Feedback
Exchange of Product
a) High/low price VS high/low service
High price
Mango
Zara
Etam
Camaieu
Cache Cache
HetM
Naf Naf
Promod
Bershka
High service
Pimkie
Low service
Jennifer
Low price
b) High/low quality product VS High/low variety of product
High variety
of product
HetM
Zara
Promod
Mango
Bershka
Naf Naf
Camaieu
low product
quality
Pimkie
Good
product
quality
Cache Cache
Etam
Jennifer
low variety
of product
a) Annexe n°1 : Questionnaire of the Promod store manager
This questionnaire talks about the analysis of the offered services by the brand
Promod. This questionnaire is realized in a case of a report in retail and service
marketing at Toulouse Business School, third year of the Bachelor Program.
for any contact : [email protected]
thank you for your contribution
Q1: Are the services proposed by Promod around the physical products,
contributing more to gain the loyalty of the current customers or to attract new
customers?
Both actually. The aim is to build a trustful relationship between us and our existing
customers by bringing individualized services, according to their needs, as well as
seducing new customers by the quality of our services, the added value it brings to
our physical product.
Q2: What is done when Promod tries to set customer’s loyalty by increasing the
customer’s value?
1.loyalty card
2.reception:to be born salesman (smiling, helpful…)
3.services
Q3:what are the services offered to the client in order to facilitate the purchase
in shop?
1.easy access to the place and handy opening hours.
2.sale of Promod Card: credit accumulation, free alterations ( with a minimum of 6
Euros purchase per year to keep the validity of the Card)
3.simples alterations/hems (5euros, free with the card, extension of 2 or 3 days
business hours.)
4.reservation of a product, 2 articles maximum (3 days without the card, 10 with
the card)
5.product exchange, settlement or credit note (1month extension, 7 days on sales
period).
6. Gift Card
7.research of availability of a good in other Promod if the article is missing in the
shop (Promod Blagnac, Labège, St George and St Orens) and also in www.promod.fr
8.customer advice, orientation in his choices with the sales assistants.
Q4: Do theses services represent a competitive advantage comparing to other
main competitors, bringing an added value to the brand?
yes
Q5:what are the reception, accompaniment and sale policies of Promod with its
customer in the shop?
1.availability through handy opening hours, facility of access and geographic
proximity (shopping center)
2.warmly reception, smiling and pleasant saleswomen "good Morning" "goodbye"
3.saleswoman on the selling surface always turned to the entering clients, total
availability to inform, assist, listen and advice them.
4.use of Intranet to see the availability of an article if not found in the shop
5.always a saleswoman in the cabins.
6.decrease the waiting queue at the cash
Q6: to which needs does answer the Promod Intranet system in the daily life of
the store?
1.missing management (goods in warehouse, parcel of the day, in other shops of
the network, breakdown).
2. price questioning
3.product reservation
4.alteration voucher
5.turnover checking in real time
6.daily information coming from the head office (promotional operations, new
theme on facing, new store window...), merchandising.
7.HRD site (Promod employees are treated as customers: they can find on
Intranet all the information concerning luncheon voucher, benefits...).
Q7: what is the management style of Promod? In what is it translated in terms
of recruiting process and team training?
1.Promod values: simplicity and enthusiasm, others respect and team spirit
creativity and professionalism, to have initiative.
2.main mission of the shop manager: team animation (planning, objectives fixing,
special operation announcement...).
3.Sales assistant recruitment : SMILING above all
4.high amount of turnover, flexibility.
5.complete formation for crossing permanent contract, specific formation on 4
weeks for a shop manager, 3 weeks for a secondary store manager followed by yearly
evaluations.
6.formation in shop for a saleswoman with yearly evaluation.
Q8: How does Promod communicate on the company’ spirit and the products in
the shop?
1. point of sale promotion (picture on the wall that shows the atmosphere and the
Promod Spirit) adding merchandising.
2.saleswomen behavior in front of customers : pleasant, quiet and smiling.
3. no special display advertising, same for promotions: Promod wants to stay
discreet and doesn't want to assault customers with huge "promotion" or "-50%".
Promod can rely on the trust and loyalty of its customers.
Q9.If yes, what is the message that Promod wishes to give to the customers in
the shop?
"to be born salesman":the customer must have a nice time at Promod shop
"natural and simplicity at the service of the customer"
Q10:Promod is committed to have an homogenize merchandising to
communicate on its positioning: what are the specificities in the Promod shop?
1.display window: the regional Visual Merchandising coordinator comes to the
shop and check the goods in display window in accordance to the marketing service
of Promod via Intranet.
2.this display window is renewed every week.
3.clothes are tidied by style, to identify the universe of the brand:
a. 1.city scale
b. 2.leisure scale
4.daily restocking and daily delivering. Promod carries out 20% of the orders at
the beginning of the season and 80% at the last minute. That's why Promod must
have a high reactivity, possible thanks to an astute Intranet and a very efficient
computer system.
5.shop space divided into two areas:
a. 1.setting up on dummy/chests/shelves/supports/facing/areas.
b. 2.Event wall :decided by the marketing service of Promod and checked
regularly by the responsible of the visual merchandising.
6.special fitting rooms layout : floor, seats, internal space, external mirrors
Lightning :to offer a pleasant and clear place.
Q11: Through your experience, can you tell us the elements that make run away
customers?
1.dirty cabins and selling areas
2. clothes badly ordered, on the floor
3.lack of visibility
4.too long queue on cash desk or for the fitting rooms
5.unvailability of the saleswomen
6.lack of correct behavior
7.lack of reception
Q12:how do you manage the faulty goods? (discount? go back to the main
office?)
Faulty goods go back to the faulty goods warehouse and afterwards they are picked
out depending on the fault, then sent to the "Promod Stock", sold in factory shop in the
North of France.
Q13:do you carry out adaptations in terms of shop organization and on
management methods during peak periods (like Christmas and Sales
periods)?If yes can you quote the most representatives?
we recruit saleswomen (via Interim) upstream theses periods. we do a retro planning
and we establish the book of the saleswomen positioning with respected precisions.
C. Diagnostic : identification of the strategic issues and service gaps
•
Boundary defining of Promod of the other competitors, especially the French
ones like Etam, Cache-Cache and
•
Camaieu
Services personalisation : each brand offers nowadays a pleiad of services but
they finally start to look like each other. The customer wants more and more a
service adapted to his personal needs, uniquely designed for him (and not
somebody else).
•
Use of new technology : the use of network is more and more common on the
clothe selling domain and Promod should incorporate more and more this
system for the customer relationship. saving costs and time.
•
Waiting line : this time loss should be transfigured on a pleasant time for the
customer and the brand must benefit of this purchase period to promote
additional services.
•
Adaptation (International) : Promod is continuously opening new shops abroad,
promoting French culture, but foreign customers wait also their cultural
recognition (not only on the clothes and accessories but especially on the
services offered). The time and space notions differ from a country to another.
D. Recommandations
•
e-newsletter for the card holder including prerogative discounts. Furthermore
Promod can offer private sales (one per season) on its website www.promod.fr
•
some discounts can be customer personalised : when the card holder buy
mostly a category of clothes (more casual, or only pants for instance), the
computer register it and later the customer will receive mostly discounts
oriented on his favourite category.
•
We have observed during our analysis that many customers are searching for
the availability of certain goods. They are also loosing time searching shop by
shop because they don’t dare to ask to the staff.
•
Promod can develop in each shop an access point (a computer with a touch
screen) for the customer searching the availability of a good. The customer
has just to choose the desired product and see if it is available in this shop
(with the sizes and number of
goods available) or in which nearest Promod
shop he can find his happiness. This access point will reduce waiting queue
and enable the salespersons to focuse more on the customer advices.
•
In the waiting line, Promod can dipose free magazine of the brand (some kind
of newsletter with fashion advices and discounts promotion). This magazine
(few pages are enough) can attract the curiosity of the customers and
encourages occasional purchasers to be regular purchasers (developing the
novelty need).
•
At the time of the payment, Promod can provide free of charge used coat
hangers for the customers. They are always the welcome in customer’s
closets and allow an easiness putting away. Furthermore they are often
engraved with the brand name (good for the advertising).