Ch. 7 Business Marketing

Michael Kors has worked it's tail off to become as successful as they are. There success didn't come easy or fast. MK took years become the global powerhouse it is. One of the main strategies that helped moved MK along was it's strategic alliance. MK built partnerships with big name stores like Macy's, Nordstrom and the like. These partnerships opened many doors for Michael Kors, because it allowed more consumers to see the available products without having to go to an actual MK store. There were many shoppers where Michael Kors was an unsought product. Michael Kors was definitely an unsought product to me. All of the moves they have made thus far has given great results. Hopefully, this trend will continue.

Ch. 11 Developing and Managing Products

A large part of Michael Kors' current success is due to innovation. By definition (in the marketing world), is a product perceived as new by a potential adopter. As I mentioned in prior posts Michael Kors originally had a target market consisting of the wealthy (social lites, actresses, singers etc). However, he eventually saw there was a need/want and/or demand for his product (handbags) in a different market. So he took his product, added a twist to the brand name, slightly altered some of the the stitching and released it to the new target market. It was a work in progress in regards to winning over the consumers who were loyal to the number one brand (at the time) Coach in that market.  Everyone knew he was a designer for the wealthy and now he designed for the working class-chic-sophisticated-everyday-modern fashionista. This line was called the "Lifestyle Brand". You could carry these handbags, clutches etc etc not just to exclusive parties but to work and school as well. Success for this line of handbags wasn't an instant hit but they kept at it and have surpassed the giant Coach in this market. Im not sure how long it will be before some other company enters the market but I'm going to continue to be a loyal MK customer.

Ch. 8 Segmenting and Targeting Markets

The market that Michael Kors operates in is a lucrative market. If you can build a likable and valuable brand, you can be very successful. I feel this to be true because in the fashion accessories industry there are millions of people who want and/or need handbags, purses, bookbags, clutches or wallets. Those who want these items are also willing to spend the necessary money on the things they deem are valuable and worthy of their hard earned money. Michael Kors identified his market and capitalized on the wants/needs of consumers and the demands they expressed for these products.

When you want to focus on a specific part of a market to pursue market segmentation comes not play. MK took the fashion market and broke it up so he could concentrate on a particular a field. He figured out that there was an opportunity to increase his market share by creating a more affordable line. he approached this opportunity with demographic segmentation.

His repositioning of the now "lifestyle" brand is what catapulted the MK brand into the dominate
position it currently holds. Innovation was also a part of the process as he took his line and changed some things (style, fabric, price, target market,marketing etc) and named it a "lifestyle" brand for the everyday working, chic sophisticated adult. This change worked well as we can see and the brand has been able to attract more shares of the market and shed light on their available other products.

Ch.15 Marketing Communications

The promotional mix is such an important tool to utilize when trying to build and maintain a company. This mix includes things like advertising, public relations, sales promotion, personal selling and social media. As I stated in a previous post MK did lots and lots of promotion for his brand to get it to its' current status. He used advertising via newspapers, magazines and more importantly by having famous actors, actresses, singers etc wear his products and just mention the brand when doing interviews. He also was a judge on a popular television show called "Project Runway". These avenues were explored to bring awareness to his brand.

To maintain his current status MK (along with most companies) turned to social media to stay relevant. They created a Twitter page when Twitter exploded on the scene. They have 2.81 million followers. They also have a Facebook page which currently has 16.25 million followers and a Instagram page with 4.1 million followers. With social media companies can now reach out and almost "touch" consumers. It has opened an almost direct line of communication where companies can now see and hear responses and feedback from consumers about their products. With the amount of followers MK has, they receive enough information to know when a handbag isn't doing well in the market or which handbags are doing extremely well. As long as social media has a strong hold on everyone, this channel will be one that Michael Kors consistently uses to stay ahead of the game.

Ch.10 Product Concepts

The MK brand has been on the rise for several years. It has worked its way up beating out its top competitor Coach recently. This win over Coach showed that the Michael Kors brand and its brand name now held significant value with it's consumers. With their steady climb, Michael Kors is working overtime to now become a global brand. By opening stores worldwide and establishing partnerships I'm confident they will claim that victory as well.

Michael Kors products serve a personal want and to some it might be a personal need. Their product mix includes accessories(glasses, sunglasses, watches), handbags, footwear and even clothing. There are 3 product lines: Michael Kors which is the runway collection, Michael which is the "lifestyle brand" and Kors with is the high-end collection. The handbag line has about 7 different types of available handbags: cross body, clutches, shoulder bags, totes, satchels and even backpacks. In addition each type of bag has it's own variety to choose from. An example is the Tote bag, within this line you could buy the Jet Set, Marina, Dillian, Izzy, Hamilton, Bedford, Fulton, Eliza etc etc. MK offers many different styles to choose from and they are all great in my opinion! :-)

Ch. 17 Personal Selling and Sales Mgmt

Due to Michael Kors being in the fashion industry and the business of selling to consumers, it is extremely important to know what it takes to sell and how to navigate/manage the selling process to best suit their company's need/purpose. MK uses elements from the traditional personal selling strategy to succeed: selling products(in regards to this blog we will focus on handbags), their sales staff spends large amounts of time with customers giving details and advice about the product(handbags). In addition, their proposals and presentations are based on pricing and product features.

Michael Kors has also applied some of the most common Customer Relationship Management(CRM) applications to not only sell their products but to expand their customer base. They took the time to actually get to "know" their customers and what the market wanted. This allowed MK to create a great campaign management application to showcase their "lifestyle brand" line. By doing so, they were able to retain loyal customers. Being able to keep customers meant they could then introduce them to other MK products. Since this was successful, they also needed to increase their distribution changing their status to a dual distribution (direct and retail marketing channels) company. Creating and continuously maintaining great customer relationships and sales management will ensure that MK stays around for years to come.

Ch.16 Advertising, Public Relations and Sales Promotion

Advertising is such a huge part of building and maintaining a successful company if the industry you are in deals with selling and customers. There are various routes that can be taken to advertise available products. Michael Kors uses things like print advertising, celebrity endorsements and more recently social media. You don't really see too many Michael Kors commercials on tv but anywhere you go you are liable to pass a billboard or ad on the side of a bus/bus stop, inside the train and especially in various magazines. The owner Michael Kors even gained national exposure for his brand by being a judge on the reality TV show Project runway. 

Advertising has changed in many ways from the old days. Yes companies still use commercials and magazines, but now with the addition of social media enabling immediate direct contact with people it is so much easier for companies to reach out to the consumers. With these new technological advances Michael Kors took total advantage of social media. They created Facebook and Instagram accounts which has over 20 million followers combined.  During February 2014 Michael Kors ran a contest on instagram and gave away products to a select numbers of followers. These advertising avenues and sales promotions allowed Michael Kors to surpass their biggest competitors Coach.

Ch. 14 Marketing Channels & Retailing

In my opinion Michael Kors operates via dual distribution. MK has both a direct and retail marketing channel for their handbags. With the direct channel MK handbags go from their specialty stores directly to the consumers. The retail channel is utilized by partnering with department stores like Macy's, Dillards, Neiman Marcus and Nordstrom to sell their products.  These channels enabled Michael Kors expand their market share and increase revenue. Most recently, MK opened a megastore in Soho. This new location is their largest chain store in the world. It has 3 floors and one of those floors is strictly for handbags. The news about this megastore made headlines in newspapers and online publications. Due to the loyalty and increasing value place upon their products from consumers, this store is definitely considered a destination store.

Ch. 6 Consumer Decision Making

Evolving consumer behavior requires luxury brands and retailers alike to continuously adapt. Michael Kors has done this and is very good at it. MK started out targeting the upper middle class and wealthy and it worked for him. After many years MK realized they could expand their market share if they appealed to a broader audience. This was a brilliant idea, because they had created a product that many would purchase whether the customer was from the working-poor all the way up to the upper middle class and beyond. So they created different collections for different target markets and called themselves a "lifestyle brand".

MK also realized that when a customer is contemplating making a purchase there are individual, social and even cultural aspects to consider. Once you have a clear understanding of this you can market it to your advantage and pretty much convert anyone into a consumer of your product. I was one of those people. If I saved money or was given a gift, Coach was what I said I wanted. Then along came Michael Kors; their prices were competitive, it was new(at least to me anyway) and I liked it. Now whenever I buy a handbag whether it is for myself or someone else it's Michael Kors. Job well done MK!

Ch. 5 Developing a Global Vision

Michael Kors started out as a designer for someone else. He then realized that he could take his gift and make it on his own and with that move he has truly done well for himself. Michael Kors has over 350 stores and counting.  Their first international stores were opened in London and Tokyo in 2002. Since MK has opened stores across the world in France, England, Germany, Italy, Japan, Korea, Bahrain, the United Arab Emirates and China. Initially this expansion was slow moving. They were more focused on building a strong name brand here in North America. However, with the increased exposure via the different marketing campaigns MK has been able to flourish globally. MK is doing better than even they anticipated, as their latest revenue number's showed they have finally topped their fiercest competitor Coach. Being able to do that is quite the victory since Coach is also internationally known and has been around for such a long period of time. Being aware of such a huge feat MK is riding their wave of success into expansion. MK is expected to increase the amount of stores owned and/or licensed to over 700 locations globally. Due to their manufacturing plants being located in China, MK wants to expand their presence there.  In addition to opening more stores in China, they also have their sights set on the Middle East and Australia.  Through hard work and perseverance Michael Kors has become a major player in the handbag/accessories market. The demand for MK is steady and I don't see that declining any time soon.

Ch.4 The Marketing Environment

Michael Kors handbags have been selling like hotcakes. The recently released 2014 3rd Quarter sales numbers show substantial growth. Michael Kors decided to separate his brand into 3 divisions: Michael Kors, Kors and Michael. Michael Kors is the runway collection. Kors is the luxury brand. Their handbags, clutches, wristlets and wallets range from $500 - $6,000. The mainstream collection (Michael) ranges from $200 - $800. They are able to price their products this way because their target markets which are generation x (born between 1965-1978) and y(born between 1979-1994) women whose taste vary from high maintenance and sophisticated to casual yet classy. His handbags appeal to almost all women. I mean who doesn't love a good looking purse?? As I stated in one of my earlier blogs Michael Kors has been expanding, opening stores in Europe and Asia as well as opening more locations within the United States. In addition to opening more stores, MK has stopped manufacturing their bags in Italy. They are now made in China and Korea. Unlike the reports of hazardous conditions in the Apple manufacturing warehouses, I was unable to find anything similar regarding MK (thank GOD). Despite where they are made I still love my MK bags.  If I'm feeling casual to run errands, sexy to go out on the town or classy when going to work there are plenty of options to choose from.
   

Ch. 3 Ethics & CSR (Corporate Social Responsibility)

Michael Kors(handbags) has committed to a culture of honesty, integrity and accountability which outlines the basic principles and policies that every employee is expected to follow.

Michael Kors has shown support to various causes and charities including: The American Foundation of AIDS Research, the Golden Hat Foundation and the New York Restoration Project just to name a few. In 2014, Michael Kors partners with Watch Hunger Stop in serving 5 million meals to children through it's United Nations' World Food Programme. He also serves on the Board of the Council of Fashion Designers of America.

However, the organization that he does the most work with is GOD's Love We Deliver. He has been supporting this company and their objective addressing the global hunger crisis for more than 20 years. In 2012 Michael Kors allowed their employees to volunteer for the New York based non-profit organization during business hours. To show their appreciation GOD's Love We Deliver named July the "Michael Kors month" Michael Kors also donated $5 million dollars to help build and expand their facilities. In connection with the company Michael Kors also has an award ("The Michael Kors Award for Outstanding Community Service") that is given to a nominated individual each year at the GOD's Love We Deliver annual ceremony. He was quoted to have said "I am continually dismayed by the scope and magnitude of the global hunger crisis, but it is not an issue just facing third-world countries. We see it right here in this country and in New York City on a daily basis". I like the fact that the cause they are affiliated with is such a tangible problem. You can literally help by delivering meals or serving in a soup kitchen. You see where your time and energy goes versus just donating money and not really knowing if it's going to where it's supposed to go or not. In addition, his long-term partnership with GLWD(GOD's Love We Deliver) shows he is passionate and committed to helping. What company you know would allow their employees to volunteer during business hours?? That says a lot in my book.

Ch. 2 Strategic Planning & Competitive Advantage

Michael Kors has a unique product (handbags) that is distinguishable from other's in their market. MK has a really strong brand name, loyal customers and their affordable prices accommodates their wide customer base. All of these things also enable MK to charge higher prices they wanted to because they know their consumers place value into their brand. This value is show by the increase in the 52% increase in total net revenue. However, a weakness that MK possesses is a lack of diversification.  MK is doing really well right now, they have surpassed Coach in sales which is a giant in the retail accessories market. How long will this rise last before a new younger company enters the market? To stay relevant Michael joined the reality contest show Project Runway as a judge. This created more exposure for his line and expanded his business to a wider audience. These opportunities allowed MK to open up hundreds of stores on several continents (74 to be exact). He not only opened Michael Kors stores, he partnered with retail chains like Macy's, Nordstrom and Sak's.  With all of the strengths and opportunities also comes it's threats. The accessories or handbag market is very difficult to be in. There are many international competitors that have an advantage over MK that are hard to fight. One major task is the price wars. Customer's tastes change frequently, so if you charge too much they will look for a substitute product. If you charge too little your brad is looked upon as not a luxury item. You want t appeal to both everyday consumers and the luxury consumers. Finding that balance while still trying to be competitive can be very hard to do, but MK seems to have found their niche...and taken it all the way to the bank.

        Another thing that has helped Michael Kors is that he is an awarded designer, he personally lead his design team when creating the products. Having this knowledge gave him competitive advantage over his competitors. Another thing that offered him an advantage was he used celebrities to expand his consumer base. Everyone watches what stars are wearing so what better way to gain exposure than to offer products to celebrities. This strategy worked well because they targeted generation x and y which are men and women born in the early 1960's thru the early 1980's and the 1980's thru the early 2000's respectively. That audience paid attention to actresses and singers and what they wore/carried. In today's market you have to be innovative and be able to adapt to change. Michael Kors is doing that and he is doing it quite well.

Ch.1:Mission Statement & History

Mission Statement: Michael Kors is the leading American fashion designer for luxury accessories and sportswear. The company’s heritage is rooted in producing polished, sleek, sophisticated American sportswear with a jet-set attitude. Whether Aspen, Palm Beach or Capri, our mission is to bring our vision of a jet-set, luxury lifestyle to women and men around the globe. Our products, emblematic of the highest standard of quality, include apparel, accessories and beauty. Our lifestyle-driven company embraces the highest standards of creativity, quality, technology and human resources.

 History:
 1981: The Michael Kors label was born. 1983: Michael Kors is awarded the First American Original Award from Dupont.
 1995: Michael Kors receives Elle/Cadillac Fashion Award for Excellence.
 1996: Michael Kors was named part of the ‘New Establishment’ by Vogue magazine. They even called the creative designer and namesake ‘one of the most influential designers of the decade.
 1997: Michael Kors releases a capsule menswear line, adding a new triumph to the label.
 1999: Michael Kors was given the CFDA Womenswear designer of the Year award.
 2000: The first women’s fragrance Michael Kors, called ‘Michael Kors’ is launched.
 2001: Accessories were added to the Michael Kors empire. And why stop there? This same year, the label also launches their first men’s fragrance. Michael Kors is nominated for the Accessories Designer of the year from the CFDA. 
2002: Michael Kors launches a full-blown men’s collection.
2003: Michael Kors is named the CFDA’s Menswear Designer of the Year.
2004: The Michael Kors comes out with a new line, MICHAEL Michael Kors, and KORS Michael Kors. These lines are launched in 350 stores in the United States and are made up of ready-to-wear, handbags, swimwear, jeans, footwear and other accessories. The company partners with the label Fossil to create and launch the Michael Kors watch line.
2005: The fragrance ‘Island Michael Kors’ is released.
2006: An expansion in the Michael Kors Company begins and they start by opening accessories specialty stores Internationally.
2009: Another Michael Kors fragrance, ‘Very Hollywood Michael Kors’, is launched adds to the roster of highly successful fragrances.
2010: An expansion into Japan began with the launch of K.K. Mr. Kors was given The Geoffrey Beene Lifetime Achievement Award from the CFDA was given to Michael Kors. The Michael Kors fragrance company is also recognized this year with the Fragrance Foundation’s Fifi Hall of Fame Award for Lifetime Achievement.
2011: Michael Kors continues to work with Fossil and will be creating a Michael Kors Jewelry line. The Michael Kors label recently celebrated 3 decades of his namesake line with a lavish party during Paris Fashion Week.