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International Marketing Report: Harvey Nichols

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Question:

Case information: Harvey Nichols

Harvey Nichols to open in Qatar

Source: Mintel 09-12-2014

The premium department store will open an 80,000 sq ft store in Doha in 2017.

The Harvey Nichols store will be opened in partnership with Qatari business group, Saleh Al Hamad Al Mana, in the Doha Festival City shopping area. This will be Harvey Nichols’ eighth international store.

Stacey Cartwright, group chief executive of Harvey Nichols, said: ‘Doha is an exciting market for Harvey Nichols due to the significant growth we are seeing in the country. Research tells us that our brand translates well in Qatar as well as with the Qatari customers when they shop in our home market.’

Since Harvey Nichols first opened in Knightsbridge in 1831, it has led the way in sourcing the most desirable and cutting-edge designer brands. Recognised as the UK's premier luxury fashion retailer, Harvey Nichols is internationally renowned for its expertly edited fashion and beauty merchandise, premium food and wine offer and award-winning restaurants.

Harvey Nichols has seven stores within the UK and Ireland, consisting of four large-format stores in London, Edinburgh, Leeds and Manchester, and three small-format stores in Birmingham, Bristol and Dublin. The new beauty concept store, Beauty Bazaar, Harvey Nichols, opened in Liverpool in November 2012.

All UK stores have luxury Foodmarkets and Restaurants, Cafés or Brasseries. Harvey Nichols also owns and operates OXO Tower Restaurant, Bar and Brasserie on the South Bank in London.

In addition to this, there are seven large-format stores overseas: two in Turkey (Istanbul and Ankara), one in Riyadh, one in Dubai, two in Hong Kong and one in Kuwait. Harvey Nichols Baku, Azerbaijan, will open in summer 2014.  Its eighth international store will open in Doha, Qatar in 2017.

Harvey Nichols stores offer the ultimate fashion experience. Seen as ‘the place to be’, Harvey Nichols is the club that doesn’t require a membership. Exclusive, niche and established labels sit alongside accessible everyday collections, offering customers the must-have edit for all their wardrobe needs – from everyday to extraordinary.

Required:

• Summary situation analysis reviewing key aspects of the marketing environment audit

• Critically discuss Harvey Nichols strategic options for international growth and make strategic recommendations for its future international growth

• Evaluate market potential and recommend its next international market and proposed entry strategy for its 9th store

• Outline the recommended marketing mix for the proposed market, ensuring its relevance to the target audience.

 

Answer:

Introduction

This report aims at observing the company- Harvey Nichols, a standout amongst the most in luxury and fashionable retail chains universally. Customers can discover the vast majority of the world renowned brands of fashion designers in the store. The reason for this report is to analyse and assess the marketing plan and strategies of Harvey Nichols. This has been accomplished through secondary information. The secondary analysis included exploration utilizing the course books and articles about and of significant advertising method ideas and speculations, and in addition exploring the target audience of the organization and strategy. This report proposes international marketing development strategies for Harvey Nichols.

Brief Overview of the Case Study

Harvey Nichols stores offer a different fashion experience. Observed as 'the place to be', Harvey Nichols is the club that doesn't oblige a membership. Niche, Elite, and well-established brand that sit nearby  accessible regular collections regular, offering clients the must-have alter for all their closet needs – from ordinary to extraordinary. According to the news of Mintel, Harvey Nichols has decided to open a new store in Qatar. It will be a premium departmental store of 80,000 sq ft in Doha in 2017. This is 8th international store of Harvey Nichol’s along with the partnership with Qatari business group and Saleh Al Hamad Al Mana in the Doha Festival City shopping area. The reason behind the opening of the store in Doha is due the demand of the brand in Qatar and also the Qatari customers in its domestic market, UK.

Situational Analysis

Macro Environment Analysis

The macro analysis can be done using the PEST tool analysis for Harvey Nichols.

Political: Qatar follows the emirate-government type. Qatar is an established country with no democracy. The country claims that it is forming into an established government yet it doesn’t permit political gatherings nor hold decisions on a national level yet. This makes sure of the certainty of the business certainty in such a way that the company can function productively without any intrusion of the political parties. In case of regulation, that generally decreases the attractiveness of the Harvey Nichole’s market. It raises the size of the market. The larger the size of the market, results into better economies of scale.

Economical: The economy of Qatar is developing. The freedom score of the economy of Qatar is 70.8. It is 32nd freest economic country according to the index of 2015. There is an improvement in the labour freedom and trade freedom. The country enjoys the highlight standard of living. Recently, the government of Qatar has decided to develop the open-market policies, to position the country as a financial and logistic hub. This makes the business of Harvey Nichole’s to explore in the Qatari market (Heritage.org, 2015).

Social: Most of the Qatari people are reluctant to luxury brands. They love the luxury brands very much. The consumers of the Qatar region are very sophisticated about their needs. They like to show their wealth through their interest towards the luxury brands. The regions like Kuwait, Riyadh, Abu Dhabi, Dubai and Doha are well known for their exposition towards the world luxury. The luxury sector in the locale is evaluated between USD 6 and USD 10 billion, with CAGR of 11% from the year 2009, and it is required to keep up growth of 8% by 2017. Such a brilliant future for the luxury items in Qatar gives Harvey Nichols the opportunity to grow effectively in the Qatar market (Pivac, 2014).

Technological: The improved technological factor helps to better the economies of scale in the production for the Harvey Nichols. Technological trends are changing, the way people are using the smartphones and tables and loving to shop online will help to reduce the infrastructure cost and lead to overhead savings.

 

Micro Environment Analysis

Company: Harvey Nichols is the leading retailer of premier luxury fashion in UK. The vision of the organization is to provide the ultimate fashion experience along with beauty, home and food (Harveynichols.com, 2015). The core values of the organization are commitment, teamwork, professionalism, recognition and integrity (Careers.harveynichols.com, 2015).

Customers: The target customers are people who are brand lovers. They target youngsters both men and women. This brand is mainly for customers who have high social status and also have high level of disposable income.

Competitors: There are two main competitors in the Qatar market. The UFC (United Fashion Company), which is one of the prominent retail in Doha. It also brings in the world-class fashion luxury brands for the Qatari customers (Udcqatar.com, 2015). Secondly, the Qatar Luxury group has developed its brands in the area of fashion, lifestyle and hospitality sector. It contributes to maximum of the economy of Qatar (Qatarluxurygroup.com, 2015).

Suppliers: The suppliers of the Harvey Nichols are expected to ethical perform towards the growth of the organization. They have multiple suppliers that help them to succeed in the business (Computacenter.com, 2015).

Swot Analysis

Strength

Weakness

·         Harvey Nichols has luxury products that boast a very strong retail. This includes value for money, reputation and also various different brands

·         Harvey Nichols have experience worldwide expansion

·         It mostly emphasizes on the customer care, devote maximum of their time towards delivering the needs of the customers.

·         The organization does not have its store in the emerging countries.

·         The brand is premium and is dependent on the designer’s personality

·         The Harvey Nichols functions globally, but its presence is located only in few nations. 

Opportunities

Threat

·         Merger, Acquisition, strategic alliances with the luxury good companies in Dubai, Doha, Abu Dhabi can increase the presence more effectively.

·         The opening of new stores in the new locations gives Harvey opportunities to develop market. This leads to diversification of the organization.

·         The change in the technological market would possible change the market on Qatar, which might challenge the ability of the organization.

·         A bit change in the focus of the competitor of the Harvey may wipe out the position of the market of Harvey that the organization has achieved in these years. This could put the pressure on the organization.

 

 

Specific Challeneges To Company

With levels of high-wage, Qatar is from various perspectives a conspicuous business for luxury products. On the other hand, unexpectedly, world-beating every capita salaries can be both a. Advantage and disadvantage for the domestic retail sector. People with very high-net-worth may not shop by regional standards, the same number of Qataris in this level of pay go to other worldwide capitals to purchase top brands products. Indeed, those serving the high end sector of retail are mindful that there is a status to purchasing things in Europe and taking them back to Qatar. In any case, almost every luxury brand has vicinity in Qatar, with The Pearl a center for some, for example, Yves Saint Laurent, Emporio Armani and Hermes (Oxford Business Group, 2014).

In result, the extended base of affluent customers the world over are experiencing a parallel advancement in perception towards the brand, interests, attitudes and also the overall mentality and psychology. They are driving the shift in the 'top-down' relationship that has existed for quite a long time with luxury brands to a bottom-up association where the customer has ended up as essential as the item. An extra move in force is occurring through the development of new luxury markets, for example, Qatar, China, India. These market dynamics are changing the landscape of luxury brands, and hence luxury administration practices oblige refining and revisiting to suit these conundrums (Okonkwo, 2009).

Market Potential And Entry Strategy

Setting foot print in Qatar has various potential like (HSBC Global Connections, 2014):

  • Intense economic prospect: In spite of this, the retail area stays among the brightest prospects of economic factors in the region. In the GCC nations like Qatar, around $16.5bn-worth of retail plans are being arranged, authorized or are under way. The plans reflect the transformation far from souks and nearby retailers, towards urban shopping centers and mass retailers. Quite a bit of this is being driven by the twin triggers of financial aspects and demographics: the locale has an inconceivable, youthful populace and a developing middle class.

  • Next area to grow: Among the top 20 spots, the Middle East countries ranks 5th in the appeal towards the western brands. Comparatively, the economy of UK is expected to decrease by 0.4%. GDP per capita over the Gulf ranges from $22,635 in Saudi Arabia to a huge $106,394 in Qatar.

  • Consumers are highly spending: Customers from Arab parted with a £812 average (about $1,301) in UK sale. This represented 32% of sales in international retail, as indicated by Swiss research firm Global Blue, and represented a yearly spike of 104% in consumption from Arab customers. Qataris drove the field with spending average of £1,288 (about $2,064) in the 9 months from January to September, trailed by Emiratis, with a spending average of £1,072 (about $1,718).

  • Foreign Brands: For global retailers like Harvey Nicholes, the attractive markets are Kuwait, UAE and Saudi Arabia. It is found that 53.1% of leading brands have footprint in UAE, 40.2% in Kuwait and 41.1% in Saudi Arabia.

The above potentials show that the Harvey Nichols has good potential to expand in the Qatar Market and also other GCC regions. In order to enter in the Qatar market, Harvey Nicholes can use either the Franchising Mode of entry.

Franchising: Franchising empowers expansion in the international market rapidly by utilizing the intellectual property of the franchisor, owner operators’ network and also the capital. It is a plan whereby the franchisor gives the franchisee the privilege to utilize the franchisor's trademarks, trade names, business models, plans of action, and expertise in a given region for a particular time period. With this framework, the Harvey Nichols can issue its master franchise to a nearby business entrepreneur in Doha, who will, thusly, offer nearby franchises inside his region. Through this Harvey Nichols can capitalize towards the wining business by extending abroad with less investment. The key drawback of franchising is the trouble of adjusting the franchised resource or brand to nearby market tastes.

 

Marketing Mix

Product: The measure of world's acclaimed fashion brands Harvey Nichols has got will be the essential premise for separating it from other retail chain. The purchasers of Harvey Nichols have looked the universal catwalks and accumulations to source the best of the new season's style and adornments. The brand is mainly for the people for whom, luxury is a life's way. Since its opening in 2006 in Dubai (Harveynichols.com, 2015), its signature concept is "Beyond Beauty" (Malloftheemirates.com, 2015). Luxury retail establishment Harvey Nichols is to extend its own private label with another department. The organization is looking to discover people who can fill the parts of planning, creation control and sourcing. The new label will see footwear, accessories and clothing dress oversaw under the brand name of Harvey Nichols brand (Fashionunited.co.uk, 2013).

Price: The price limits of Harvey Nichols fashion brands for men and women is targeted towards the people who have high income and also have high sense of fashion. For Instance, the price of women dresses is like £3,600.00 (Harveynichols.com, 2015/ women), the cost of vest for men is £1,055.00, printed T-shirts like £665.00 (Harveynichols.com, 2015/ men). They have broadened their price architecture for encompassing the different product ranges (Fashionunited.co.uk, 2012).

Place: Harvey Nichols already have 7 stores in Ireland and UK, large stores in Manchester, Leeds, Edinburg and London and small stores in Dublin, Bristol and Birmingham. It also operates and own the Bar and Brasserie and also OXO Tower Restaurant in London. Apart from this, it already has store in Kuwait, Dubai, Riyadh, Hong Kong and Turkey (The Retail Appointment, n.d.). The 8th store opening in the Doha Festival City is a largest commercial development and is said to be a retail and entertainment hub (Dpa.com.sg, 2015). This makes the people more accessible towards the brand.

Promotion: Harvey Nichols puts a great deal into promotion and advertising. It did it effectively, and made numerous memorable advertisements. It decides to publicize on newspapers and fashion magazines to pull in the customers who dependably focus on the most recent design pattern. The recent campaign “Sorry I spent it on Myself” has encourages the customers to be unreasonably selfish and spend more on themselves rather than their loved ones. This campaign was featured across in-store displays, shop windows, with the downloaded cards of Christmas and also website of the company (West, 2013). Additionally, the brand also provides some discount coupons to make the purchase experience more effective (RetailMeNot.com, n.d.). In 2015, Harvey Nichols has also launched the Valentine's Day campaign that allowed customers to tap on an item connection to send a not-so-subtle clue to their partner. The happiness hint generator' was implanted into all items on the site so shoppers can snap "send a hint" on their chosen gift. Customer enters their own name and the name of their partner, and then the online generator made a Valentine's Day card including the wishes and a hint for the partner (Aron, 2015).

 

Target Market

A target market is a segment selected by the organization among the broad market. Harvey Nichols can target the customers who are big spenders. People, who spend large portion of their income at Harvey Nichols, shop very frequently from the Harvey Nichols shops. People with high social status, high disposable incomes are the best suitable target market.

Demographic Segment: Variable like income, occupation and age can segment the market effectively. Using age, the best target market would be 25-34 years, who have high disposable income. These are the sorts of customers who will help grow new patterns through an eagerness to attempt new things. Older age group are prone to stick on one style of garments and once in a while change style. Subsequently the group having age between 25-34 has the high salary given them a chance to ready to manage the cost of the luxury stocks, and are willing to attempt new things let them effectively acknowledge the new style of design. Such a characteristic makes them turn into the biggest target business sector of Harvey Nichols.

Psychological Segment: To promote such a most fashion-forward department store of UK in Qatar, it is very much important to target the attitudes, lifestyles, hobbies and interests of the customers. They need to target the people who observe shopping as the pass-time leisure and enjoy with friends, people who are very brand conscious and mostly shop at designer stores.

Conclusion

In conclusion, this report has demonstrated that Harvey Nichols has developed a strong brand image in the international luxury lifestyles departmental store. They can attract the customers between the age group of 24-35years who have disposable income and love spending on shopping. This best entry strategy that can be followed is the Franchising entry mode which helps to increase its capital. The report also has analyzed the micro and macro environment of the organization and has used the SWOT analysis to understand the brand’s capabilities. The report has discussed the marketing mix strategies being used by the organization.

 

References

Aron, I. (2015). Harvey Nichols creates Valentine's Day digital hint generator. [online] Prweek.com. Available at: https://www.prweek.com/article/1332508/harvey-nichols-creates-valentines-day-digital-hint-generator [Accessed 26 Apr. 2015].

Careers.harveynichols.com, (2015). Careers Site. [online] Available at: https://careers.harveynichols.com/ [Accessed 26 Apr. 2015].

Computacenter.com, (2015). Case study - Harvey Nichols | Computacenter UK LTD. [online] Available at: https://www.computacenter.com/our_customers/case_studies/100126_harvey_nichols.asp [Accessed 26 Apr. 2015].

Dpa.com.sg, (2015). Doha Festival City - DP Architects. [online] Available at: https://www.dpa.com.sg/projects/doha-festival-city-2/ [Accessed 26 Apr. 2015].

Fashionunited.co.uk, (2012). Harvey Nichols to launch own collection brand - Fashion - Fashion-news. [online] Available at: https://www.fashionunited.co.uk/fashion-news/fashion/harvey-nichols-to-launch-own-collection-brand-2012112316313 [Accessed 26 Apr. 2015].

Fashionunited.co.uk, (2013). Harvey Nichols expands own label - Fashion - Fashion-news. [online] Available at: https://www.fashionunited.co.uk/fashion-news/fashion/harvey-nichols-expands-own-label-2013052017661 [Accessed 26 Apr. 2015].

Harveynichols.com, (2015). Harvey Nichols - Designer Fashion, Beauty, Food & Wine - Dubai - Store Details. [online] Available at: https://www.harveynichols.com/store/international/dubai/ [Accessed 26 Apr. 2015].

Harveynichols.com, (2015). Printed T-shirts - T-shirts & Vests - All Clothing - Men. [online] Available at: https://www.harveynichols.com/mens-all-clothing-t-shirts-and-vests-printed/#/sortby/pricehl [Accessed 26 Apr. 2015].

Harveynichols.com, (2015). The Company. [online] Available at: https://www.harveynichols.com/about/the-company/ [Accessed 26 Apr. 2015].

Harveynichols.com, (2015). Women's Designer Clothing, Dresses and Luxury Fashion. [online] Available at: https://www.harveynichols.com/womens-all-clothing/#/sortby/pricehl/mode/grid [Accessed 26 Apr. 2015].

Heritage.org, (2015). Qatar Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. [online] Available at: https://www.heritage.org/index/country/qatar [Accessed 26 Apr. 2015].

HSBC Global Connections, (2014). Retail offers risks and rewards in the Middle East. [online] Available at: https://globalconnections.hsbc.com/uae/en/articles/retail-offers-risks-and-rewards-middle-east-meed [Accessed 26 Apr. 2015].

Malloftheemirates.com, (2015). Harvey Nichols Dubai |  Mall of the Emirates. [online] Available at: https://www.malloftheemirates.com/anchor-stores/harvey-nichols-dubai.aspx [Accessed 26 Apr. 2015].

Okonkwo, U. (2009). The luxury brand strategy challenge. J Brand Manag, 16(5-6), pp.287-289.

Oxford Business Group, (2014). Market surge: Locals can expect more choices than ever before. [online] Available at: https://www.oxfordbusinessgroup.com/overview/market-surge-locals-can-expect-more-choices-ever [Accessed 26 Apr. 2015].

Pivac, D. (2014). GCC's luxury goods market continues to grow fast. [online] bq Magazine. Available at: https://www.bqdoha.com/2014/09/gccs-luxury-goods-market-continues-grow-fast [Accessed 26 Apr. 2015].

Qatarluxurygroup.com, (2015). Qatar Luxury Group | Creating Brands and Experiences Epitomizing Refined Luxury. [online] Available at: https://www.qatarluxurygroup.com/about-group.html/lang/en [Accessed 26 Apr. 2015].

RetailMeNot.com, (n.d.). Harvey Nichols Coupons - RetailMeNot. [online] Available at: https://www.retailmenot.com/view/harveynichols.com [Accessed 26 Apr. 2015].

The Retail Appointment, (n.d.). Harvey Nichols. [online] Available at: https://www.retailappointment.co.uk/career-advice/company-a-z/companies-f-j/harvey-nichols [Accessed 26 Apr. 2015].

Udcqatar.com, (2015). UDC - United Fashion Company (UFC). [online] Available at: https://www.udcqatar.com/English/OurVentures/UnitedFashionCompany/Pages/default.aspx [Accessed 26 Apr. 2015].

West, G. (2013). Harvey Nichols encourages shoppers to be more selfish this Christmas with 'Sorry I Spent It On Myself' low-cost gift collection. [online] The Drum. Available at: https://www.thedrum.com/news/2013/11/27/harvey-nichols-encourages-shoppers-be-more-selfish-christmas-sorry-i-spent-it-myself [Accessed 26 Apr. 2015].

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