Introduction Company Background Giordano Essay Example
Introduction Company Background Giordano Essay Example

Introduction Company Background Giordano Essay Example

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  • Pages: 10 (2601 words)
  • Published: October 15, 2017
  • Type: Case Study
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It was founded in 1981 by Jimmy Lai.As of 1996, Jimmy Lai no longer owns the company. Its current Chairman and CEO since 1996 is Peter Lau Kwok Kwen, a Chinese-Canadian. The company has its own apparel manufacturing division where many of its own clothing styles are produced. Giordano is also prominence for its basic and practical men's, women's, and children's T-shirts and trousers, especially denims. Corporate Vision: To be the best and biggest World Brand in apparel retailing.

Corporate Mission: To make people “feel good” and “look great”. Corporate Slogan: “World Without Strangers” Corporate Values: ‱Quality: Doing things right Knowledge: Updating expertise and sharing knowledge continuously

  • Innovation: Thinking "outside the box"
  • Simplicity: Less is More
  • Service: Exceeding customer’s expectations Source: www. giordano. com. hk

By focusing persistently on its five corporate business values (Quality, Knowle

...

dge, Innovation, Service, and Simplicity), Giordano has become a pioneer of customer service in the Asia-Pacific region and, as of January 2008, currently employs more than 11,000 people and operates 1800 retail stores worldwide in 40 countries which include Greater China, Japan, Korea, Southeast Asia, Australia, India and the Middle East.

Giordano was listed on the Hong Kong Stock Exchange in June 1991. The company’s steady commitment to deliver excellent customer service and super value and quality apparel has served it well for over 20 years, and it will maintain these principles as its continues to grow. Different Brands of Giordano Group Giordano International Limited is a leading international retailer of men’s, women’s and children’s apparel under the brand names “Giordano”, “Giordano Ladies”, “Giordano Concepts”, “Giordano Junior” and “Bluestar Exchange”.

The brand's goal is to be appealing to the everyday shopper, anywhere at anytime.

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The brand boasts seasonal exclusive and innovative casual styles in many colours. Along with seasonal launches, the brand also gives customers access to basic and simple unisex tees and polos as well as a large range of bottoms in a variety of fabrics, including cotton, linen and denim.The brand was the company's first and consequently possesses a more extensive worldwide network of stores than any other Giordano brand.

In 1990, Giordano launched Bluestar Exchange, which caters those looking for bargains. Strengths and Weaknesses of Giordano Group Strengths Excellent Service Giordano believes sale and services are equally important to its success. Giordano’s commitment to excellent service was reflected in the list of service-related awards it had received. It was ranked number one by the Far Eastern Economic Review, for being innovative in responding to customers' needs, for three consecutive years on 1994, 1995 and 1996.

To ensure that every store and individual employee provided excellent customer service, performance evaluations were conducted frequently at the store level, as well as for individual employees. Every month, Giordano awarded the ‘Service Star’ to individual employees, based on nominations provided by shoppers.

Its strategy involved not having a back storeroom in each store. Instead, a central distribution centre replaced the function of a back storeroom. With information technology supports, Giordano was able to skilfully manage its inventory and forecast demand.The use of technology also afforded more efficient inventory holding. Giordano’s inventory turnover on sales was reduced from 58 days in 1996 to 28 days in 1999, allowing it to thrive on lower gross margins.

Strong on Advertising and Promotion From 1995 to 1999, Giordano in Singapore had been spending about S$1. 5 million to

S$2 million annually on its advertising and promotional activities. (J. Wirtz, 2005)In addition to its big budget, Giordano’s advertising ads promotion campaigns were creative and appealing. Giordano has also upgraded its store design to provide a more attractive and comfortable shopping environment.The revamp has been well received and as a result turnover increased by 5. 7 percent to HK$3,707 million in 2007.

According to Giordano Annual report 2007, for creating better brand awareness, and the expansion of our premium Giordano Ladies and Giordano Concepts brands, Giordano management has substantially increased capital expenditure from the HK$142 million in 2007 to an estimated HK$250 million to HK$300 million in 2008 to fund store procurement and furnishing, including a number of new and exciting landmark locations in Mainland China and Hong Kong. Weaknesses Brand perceptionGiordano’s relatively low-end positioning worked well when inexpensive but contemporary looking outfits appealed to Asia’s penny-pinching customers, especially during the Asian economic crisis. However, over time its image did not help in building Giordano’s brand equity.

Geographical issue on Giordano’s market Giordano has chain store network in Hong Kong, Singapore, China, Tai Wan, South Korea, Malaysia, Indonesia, Thailand, Australia, India and Middle East (2007 Annual Report). However, market still considered narrow, because most market is developing countries, except Singapore & Australia.This may make Giordano over-rely on Asia countries, following by higher business risk.

In 2007, Giordano Group re-energized the core Giordano business by expanding and updating its range, while keeping true to the brand promise of offering basic, functional and value-oriented casual wear for the all-important middle market. One of its most important moves was to more than double our collection to over 3,000 styles a year

so as to offer a wide enough selection to cater to the increasingly sophisticated and demanding consumers in our disparate markets today. Giordano Annual Report 2007)

Sales Orentation Giordano is a “corporate retailing” organizations achieve economic of scale, greater purchasing power, wider brand recognition, and better trained employees. Giordano is type of “corporate chain store” which is two or more outlet owned and controlled, employing central buying and merchandising, and selling lines of merchandise. Marketing Concept Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption. (Kotler, P. & Kelvin, K. , 2006)

One of the most important roles of marketing channels is to convert the potential buyers into profitable orders. Marketing channels must not just serve markets, but they also make markets. Giordano skillfully employ both push and pull strategies. Push strategy involves using its sales force and trade promotion money to induce intermediaries to carry, promote, and sell the product to end users.

Pull strategy is using advertising and promotion to induce customers to ask intermediaries for the product. Giordano is a retailer of casual apparel.It retail and distribute casual apparel and accessories under Giordano, Giordano Concepts, Giordano Ladies, Giordano Junior and Giordano Bluestar Exchange brands, straightly to the end consumers. Besides, Giordano also carries on manufacturing operation, sopporting its retail business and supplying products to third parties. (Sally Dibb, 1996) In the view of channel level, Giordano engage in zero-level channel, selling the product manufactured from its own Manufacturing Division directly to the final customer.

Giordano operates 1800 of its directly managed retail outlets worldwide in 40 countries.Apart from that, Giordano also engage in

internet selling, which allow customers to order the product directly through internet. Giordano also engage in one-level channel. Their external sale to third parties (other retailers) was accounted for 56. 6% of its Manufacturing Division’s 2007 turnover. Besides, the Retail and Distribution Division of Giordano not just sale the product manufactured by Giordano itself, but others manufacturers who produce casual apparel and accessories.

Lastly, Giordano has granted some franchises to distribute its product. 5. Competitor Studies Market Structure & CompetitionThe market structure for apparel retail industry can be defined as Monopolistic Competition. According to Kotler, P. , & Kelvin, K. (2006), the characteristics of monopolistic competition including:

  • Many players;
  • Low power on price control;
  • Product range is wide;
  • Low barriers to entry;

Giordano will be keep on fighting with existing brands such as Gap, Bossini, Hang Ten, Baleno, Esprit, but new competitors may come into this market any time since barriers to entry is low. Giordano has to carry on its aggressive advertising strategy and building brand loyalty. 6.Segmentation, Targeting & Positioning Segmentation Approach Consumers vary on many dimensions.

Different consumers have different needs and preferences. However, we can group them according to one or more characteristics, and this is call “market segmentation”. A market segment consists of a group of customers who share a similar set of needs and wants. (Kotler, P., & Kelvin, K. , 2006)

In the casual apparel category, consumers can be divided into buyers who are seeking for low price basic apparel; reasonably priced with good quality; and, upscale and stylish apparel, which can show their social status.Geographic Segmentation In the view of geographic segmentation, Giordano main markets were in Asia Pacific, and there

are some products, which just launch at some countries or some region.

For example, we can found scarf, sweater and others winter products in Giordano retailer store located at Genting Highland, which are hard for us to find in others Giordano retailer store in Malaysia. Demographic SegmentationIn demographic segmentation, the market for casual apparel can divide into male or female; low-income, middle-income or high-income; and different social class for example lower class, working class, middle class and upper class.

Giordano deliver their products to both male and female, age between 0-12 and 13-35, working and middle class of consumers. (Roberts, CJ, 1996) In behavioural segmentation, buyers can be classified according the benefits they seek. Some buyers are looking for branded products and quality services; however some are looking for low price products.Giordano provide the quality products with reasonable price, reliable services, and convenient for customers to buy. Positioning of the Brands Giordano brands positioning proved to be successful at its current stage by emphasizing on two concepts: excellent customer service and value-for-money.

In that campaign, every Giordano employees wore yellow badges bearing the words “GiordanoMeans Service”. This philosophy consists of three principles: a)We welcome unlimited try-ons; b)We exchanged- no questions asked; c)We serve with a smile. Giordano was the first mass retailer to offer unconditional returns and refunds. It was the first to individually greet customers when they enter the store and say goodbye when they leave. And it was the first to offer value-added services to customers; free hemming and get it done on the same day. To ensure that every retail store and individual employee provided excellent customer service, performance evaluations were conducted frequently at every

level of employees.

The service standard of each retail outlets was evaluated twice every month. Giordano excellent service was reflected in the list of service awards its received. Value-for-money Original Giordano brand and Bluestar Exchange able to sell value-for-money merchandise through careful selection of suppliers, strict cost control and avoid increasing the retail price unreasonably. It always strives to sell the apparels in reasonable price with good quality and make it more convenient to buy anywhere at anytime. The target market for these two brands are more focused on the general apparel such as T-Shirts, Long Sleeve Shirts and denim jeans. Sally Dibb, 1996.

Up-market position Giordano repositioned its brands towards up-market consumers by developed the below brands:

  • Giordano Ladies, which target female office professional market.
  • Giordano Concepts, which provide exclusively monochromes, colour range with variety styles.
  • Giordano Juniors, which target to modern parents with spending power that desire shopping easiness.

According to Taha, O. (2000), Giordano intends to pursue up-market segments due to competition by upmarket firms such as Esprit and Theme. Giordano found out that consumers nowadays have changed due to growing sophistication of taste and preference.

This indicate that Giordano continue to re-examine its image and positioning in line with its globalisation strategy and changing consumers need. Targeting According to Mdshossain (2008), Giordano International Limited is a Hong Kong retailer of men’s, women’s and children’s quality apparel. It is Asia-Pacific’s most successful retailer and distributed its casual wear line through 1800 stores worldwide in 40 countries, under the brands of “Giordano”, “Giordano Concepts”, “Giordano Junior”, “Giordano Ladies” and “Giordano Bluestar Exchange”. These different brands under Giordano International Limited are targeting different segments:The mainstream, Giordano brand, focusing

on quality apparel for men and women. It emphasizes value-for-money casual clothes and accessories in basic but colorful styles and excellent customer service.

Giordano target market is teens (age 13 – 19) and young adults (age 20 – 30), who seeking for value-for-money and quality products. 7. Brief on Marketing Mix Strategies Product Packaging: According to Roberts, CJ (1996), Giordano has their design paper bag for their product. The paper bag has printed a word of “Giordano” with the colour black and grey with a high emphasis on its own "less is more" retail approach.The brand focuses on the idea that less is more than just more, but that is cool as well. The brands said "less is cool" approach involves innovative and modern black, white and grey monochromes in a large variety of styles.

The approach gives the brand a very up market causal clothes attitude, very much on par with other international brands. Retailing Strategies: Initially, Giordano focused on wholesale trade of high-margin merchandise under the Giordano brand in Hong Kong. In 1983, it scaled back on its wholesale operation and started to set up its own retail shop in Hong Kong.It also began to expand its market by distributing Giordano merchandise in Taiwan through a joint venture. In 1985, it opened its first retail outlet in Singapore.

However, in 1987, sales were low and the business become unprofitable. They realized that the pricey retail chain concept was not the way to go. Under a new management team, Giordano changed its strategies. Until 1987, Giordano sold exclusively casual apparel for men.

When it realized that female customers were increasingly attracted to its store, Giordano changed its positioning

and started selling unisex casual apparel.It repositioned itself as discounters of casual unisex apparel with the goal maximize unit sales instead of margins, and sold value-for-money merchandise. It shift in strategy was successful. Since 1991, is a publicly traded firm’s number of nations and regions are part of its network of retail markets including mainland China, Taiwan, Korea, Singapore, the Philippines, Malaysia, Thailand, Burma, Vietnam, Australia, New Zealand, the Middle East and Europe. (Please see the Appendix 2 for Giordano’s geographical expansion)After over two decades of development, Giordano is a well known name for clothing in the Asia Pacific region, especially widely known in the region of mainland China and Hong Kong.

In Guangzhou in August of 1992, Giordano opened its first retail apparel outlet in mainland China dedicated only to its line of clothing. (S. Dibb, 1996) Thereafter, Giordano continued to open retail outlets all over the province of Gaungdong. In 1993, Giordano enlarged the scope of its mainland market, opening Giordano dedicated retail outlets throughout the provinces of the nation, stabilizing and expanding the success of their sales.

As of January 2008, Giordano operates 1,800 retail outlets worldwide in over 40 nations and regions of the Asia Pacific. Pricing According to Roberts, CJ (1996), Giordano has focused on simple and basic high quality styles, in many colors and sold at reasonable price roughly for the POLO -T is RM30~RM50. The rationale for Giordano’s is “value for money” policy. Giordano always ask to sell it cheaper, make it more convenient for the consumer to buy, and deliver faster today than yesterday.

Conclusion

By knowing the marketing orientation and segmenting strategies of Giordano, we can know that by targeting

people from all areas of life, irrespective of age, background and culture, the company was aiming for volume sales using the chain store concept. Although the precise details of the company’s segmentation strategy are not clear, the Giordano brand seems to appeal particularly to the 20 to 35 years age group.

Giordano is able to sustain its value pricing by manufacturing most of its products in China, where labour and factory costs are low. In addition, the company’s fairly limited range of designs allows its considerable economies of scale. Indeed, in the 2006 Annual Report, Peter reported that the Group’s 2007 priority was to strengthen branding and growth, supported by human and financial resource investments in design, merchandising and marketing.

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