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Bienvenido a México, el

Secreto de Victoria
The Expansion of Victoria’s Secret
into Mexico

Aparna Donthi
Man Tsun Lee
Bouphavanh Mathouravong
Marisol Rivera
Nicole Winkle
Research Overview
• Primary Research •
– In-depth survey
• Industry Analysis
– Demographics
– Perfume Industry
• United States
• Mexico
• Company Analysis
– Situation Analysis
– STP
– Marketing Mix
• Implementation
Executive Summary
• Due to the declining market in the U.S. and
growth in Mexico, Victoria’s Secret has the
potential for a sizeable fragrance market in
Mexico.
• Mexican consumers’ product values are
congruent with that of the Victoria’s Secret brand
image.
• Significant similarities and differences in
marketing Victoria’s Secret brand in Mexico.
Primary Research
• Bilingual In-Depth Interview
– Parallel Translation
– Administered in Cuernavaca, Mexico
• Goals of the Interview
– Awareness of Victoria’s Secret in Mexico
– Product Perceptions/Knowledge
– 4 P’s
– Competitor Awareness
Situation Analysis
– Mexican Consumers
• Highly rank service and price
• Have short term view of products – initial
price means everything
• Receptive to high quality products that are
sold in smaller packages
– Implications
• Victoria Secret offers great service/personal
attention to customers
• Offers smaller, affordable product selection
Situation Analysis (Cont.)
• Company
– High International Awareness
– Sales Growth 8.1% (2003)
• Competitors
– Estee Lauder, Avon, JC Penney, Lancôme
• Collaborators
– CBS, Musicians
– Supermodels – Heidi Klum, Tyra Banks,
• Environmental Factors
Perfume Industry Analysis
• Perfume Industry in The United States
– Perfume industry to grow at declining rate
over next five years
– Dominated by female fragrances (2/3 of
sales)
– Male fragrances accounts for 23.5% of
market)
• Implications
– Declining U.S. market
– Seek International Growth
• Mexican Perfume Market
Mexican Demographics
• Male customers account for 70% of
perfume sales despite the fact that men’s
fragrances represent 1/3 of the market
• Women between 40-50 years can afford to
pay $40-$150 for a bottle of perfume
• Mexico City represents 52% of sales
• Guadalajara and Monterrey have large
potential for sales
Mexican Market
• Perfume Industry in Mexico
– “Female Fragrances Experience Dramatic Growth”
• 2001 - $253 million
• 2006 – Predicted $348 million (37.5% increase)
– Many competitors (“Satisfactory
sales…suggests…there is still space for new
launches…”)
– Black market
• Relevant to price and distribution
Mexican Economy
– Increased Purchases of Luxury Commodities
• Economic recovery in 1996
• Increase in private consumption
– International Companies are increasing their
presence
Victoria’s Secret (STP)
• Positioning
– “For the woman who wants to feel sexy, sophisticated,
and ultra feminine”
• Segmentation
– Does not segment based on age
– Segment based on products
• “various Victoria’s Secret brand fragrances appeal to different
aspects of the Victoria’s Secret woman”
• Targeting
– “Target how a woman feels, rather than her age,
ethnicity, or other specific demographic”
VS Marketing Implementation
• They cross promote between their online
and offline operations.
• “360-degree brand” – connects all 3 selling
channels (catalogs, the stores, and
website)
• Sex appeal is portrayed through
advertisements and promotions.
Expansion into Mexico
• Segmentation and Targeting
– Highly populated/developed cities
• Mexico City, Monterrey, Guadalajara
– Product selections to appeal to different tastes and
preferences
– Low price-sensitivity
• Positioning
– Provide high quality product that delivers a flawless
experience
– Creates an image of sensuality and femininity
Who and How Old?
AGE MALE FEMALE •More
>18 years (0) 0% (1) 6% women
between the
19-25 years (3) 60% (6) 52% ages of 19-
25
26-35 years (1) 20% (2) 18% responded
to the
36-45 years (1) 20% (2) 18%
survey.
46+ years (0) 0% (1) 6%

Total (5) 100% (12) 100%


Interest
Are you interested in receiving a Are you interested in shopping at a
catalog? Victoria’s Secret store?

Yes No Yes No

Male 40% 60% Male 20% 80%

Female 100% 0% Female 100% 0%


• Women are more apt to put their name on a mailing list to
receive Victoria’s Secret catalogs than are men , thus it is
important to target women with catalog advertising mediums.
• Women are interested in shopping at Victoria’s Secret more so
than men. Tactics emphasizing femininity and sensuality would
be appropriate.
Where and How?
Preferred Female specialty Media Channels Influencing Product
Shopping Location store Awareness
TV Ads
0%
25% department
17% 8%
store Fashion
17% Mags
discount Friends
store and
Family
8% supermarket Gift
67% 58%

• Brick and Mortar •Focus on print ads


– Provide service
•De-emphasize
– Provide quality
online ads
• Discount store
– Black market
Characteristics of Target Market
Typical Amount Paid for a Importance of Price Among
Perfume by Women Females slightly
important
17%
8%
33% neither
important nor
unimportant
extremely
$26-$40 59% important
83%
>$40

• Mexican consumers are willing to pay Victoria’s


Secret price-range.
• Customers are not price-sensitive.
Marketing Mix
• Product
– Victoria’s Secret perfume lines
• Price
– Equivalent to USD: range between $15-$60
• Place
– Open retail stores in major cities
– Primary distribution channels: specialty/beauty stores and
discount stores
• Promotion
– Fashion magazines, catalogs
• People, Cosmopolitan, Elle
• Mailing of 364 million catalogs worldwide
– Less emphasis of online sales
Goals
– Short-term (one year)
• Establish test markets in urbanized cities
• Monitor sales and product awareness
• Evaluate effectiveness of distribution options
– Long-term
• Evaluate potential production possibilities in
Mexico
• Gain competitive market share
• Evaluate opportunity to expand to lingerie and
clothing line
Summary
• Emphasis on fashion magazines, catalogs,
and television ads, not internet
• Specialty stores and discount stores
• Acknowledge differences in sex roles
when promoting
– Women are seductive, not assertive and
aggressive
QUESTIONS?