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To conduct a market audit and competitive analysis in the Argentina market for UNIQLO – Japanese clothing company

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Your analysis will provide an estimate of the market potential and an evaluation of the strengths and weaknesses of competitive marketing efforts. Your analysis also will be used to determine the extent of adaptation of the company’s marketing mix necessary for successful market entry.

In conducting the ‘market audit and competitive market analysis’ for the company use the following guidelines as a check-list to help you identify the correct questions to ask in undertaking the task

UNIQLO Case Study
(For Assessment 1 and 2)
Global Marketing MAR004-3
Updated and adapted from http://www.contagiousmagazine.com/resources/Uniqlo.pdf;
www.fastretailing.com; www.uniqlo.com
It could be a pair of pants. Perhaps it’s a cashmere sweater, or maybe even a T-shirt
sporting a mean n’ moody Manga-inspired design. Whatever it is, chances are that you own
at least one item of UNIQLO clothing. If not, it’s only a matter of time until you do.
Uniqlo is a distinct brand with a wide competitive set including Gap and Primark at the basics
end and Zara at a more premium level. It operates in a space which is not only crowded in
terms of competing retailers, but also in the context of marketing messages trying to target
similar demographics. As a result, Uniqlo has to work very hard to get its message across.
Marketing innovations like the Uniqlock and the Loop are useful in helping to build
communities and raise the presence of the Uniqlo brand. It’s a fair aspiration for Uniqlo to
want to be the world’s biggest retail brand, but it has a long way to go before meeting this
goal. Companies like Inditex, the parent company of Zara, are far more advanced in terms of
creating a sustainable and profitable global reach
Officially Japan’s leading clothing retail chain, UNIQLO currently has 845 stores in Japan
and 292 stores in other markets overseas (USA, UK, China, Thailand, France, Hong Kong,
Japan, Korea, Malaysia, Philippines, Russia, Singapore, Taiwan).
Consolidated sales increased 13.2% year on year (to August 2012) to ¥ 928.6bln, while
operating income expanded 8.7% to ¥ 126.4bln and net income expanded an impressive
31.8% to ¥ 71.6bln.
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However, like all the best success stories, the UNIQLO saga is not without its share of
adversity. Initial attempts to replicate UNIQLO’s quintessentially Japanese business model in
the western retail environment did not go exactly to plan and after failed expansion in 2001,
the brand was forced to retreat and regroup. It would seem that a different methodology
would need to be adopted if what started out as a single unisex clothing store in Hiroshima
was to be successfully rolled out on a global scale.
From tiny warehouses
The UNIQLO brand philosophy has always been about creating a distinctly utilitarian retail
experience for consumers. Normal concerns held by the average shopper about style,
quality and brand are dissolved by a simple assurance that whatever they buy, it will be
great quality, low in cost and will look good with anything and everything they decide to wear
it. What UNIQLO does therefore, is to provide the basic but premium ingredients of your
wardrobe. The ‘Unique Clothing Warehouse’ was opened in 1984 by the Yamaguchi-based
Ogori Shoji, which, since 1949, had operated a chain of clothing stores called ‘Men’s Shop
OS’. However, the simple difference of stocking unisex clothing was enough to ensure that
the success of the new store far eclipsed that of the existing outlets.
Ogori Shoji was changed to the somewhat catchier ‘Fast Retailing’ and in turn, its rapidly
expanding new chain became UNIQLO. By April 1994, over 100 stores had been opened
across Japan and to meet this new demand, in 1997 UNIQLO adapted the SPA (Specialty
Store of Private Label Apparel) model which had proved so successful for US retail giant
Gap; instead of selling proprietary clothing, UNIQLO would now exclusively produce and
carry its own garments. The out-sourcing of the manufacturing process to more affordable
factories in China enabled the brand to capitalise on this business model, providing great
value clothing that was snapped up by the Japanese public in the clutches of a recession.
In 2001, the first overseas UNIQLO outlets were opened in Shanghai and shortly after, four
more in London. However, poor execution of this expansion meant that the brand was met
with indifference by the UK public.
Simon Coble, UNIQLO UK, CEO, elaborates: ‘We opened without a flagship store and
expanded our network with a scattergun approach very quickly, before we stabilised
operations. Opening stores in Romford and Knightsbridge wasn’t, in hindsight, the best
approach as the brand wasn’t solidified and we failed to support our outer London stores
with the marketing that they required.’ Marino Donati, news editor for fashion publication
Drapers, adds: ‘In the UK, you’ve really got to shout about your identity in order to be heard.
On the one hand, retailers such as Zara and Topshop were practising fast fashion with a
quick turnover of lines, whilst on the other, retailers like Primark and Tesco had the budget
end of the market cornered. Occupying a space somewhere in the middle, UNIQLO was
something of a lost sheep.’ However, what doesn’t kill a brand only makes it stronger, and
over the following three years concerted efforts were made to revive and repair the
struggling business. In Japan, the solution was born out of a realisation that the standalone
SPA business model referred only to production and sales. Accordingly, UNIQLO embarked
upon a far more collaborative approach to its branding and advertising; rather than enlisting
any one agency, key figures from different creative disciplines were recruited to collaborate
on, and rejuvenate every aspect of the brand. Kashiwa Sato – executive creative director,
Samurai, Tokyo, oversaw the process as well as taking care of graphic work such as the
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redesigned logo which would be used on store facades, marketing materials and the
products themselves. Markus Kiersztan – creative director, MP Creative, NY handled instore visuals and communication strategies, whilst digital supremo Yugo Nakamura of tha*
ltd. Tokyo used his quirky Flash genius to revamp UNIQLO’s online presence and enhance
the digital element of the ensuing campaigns. In keeping with this new approach, changes
were being subtlety implemented and experimented within the remaining UK stores – Simon
Coble expands: ‘We realised that we had a loyal following in the UK and there was a definite
bubbling interest in the right demographics – so we had to be careful to keep the niche
element and attraction to the brand that appealed to this audience, whilst at the same time
retaining our “bread and butter” customers in the suburban stores.’ UNIQLO, it would seem,
was once again ready for a stab at globalisation – combining what it had learnt from the UK
with the fresh and most importantly, considered new brand identity.
From Tokyo to NYC
Photo: New York 5th Avenue flagship store.
In November 2006, UNIQLO opened its global flagship store in the SoHo fashion district of
Manhattan. Prior to the opening, several shipping containers were hoisted – via crane and
flat bed truck – into selected locations around New York. Powered by an external generator,
these temporary outlets contained neatly folded stacks of clothing and gave a glimpse of the
kind of utilitarian perfection preached by the brand. However, once the store itself opened, it
would become apparent that this sense of utility had been perfectly blended with a fresh,
cosmopolitan feel – every bit in keeping with its highprofile location. Designed by renowned
architect Masamichi Katayama of Wonderwall, Tokyo, the 36,000 square foot space
epitomises a carefully constructed juxtaposition between the brand’s Japanese heritage and
a contemporary, culturally inclusive retail experience.
Scott Kraenzlein, account executive with MP Creative, emphasises the challenge
encountered when striking a balance with the new store: ‘UNIQLO has always been more
about a service than a fashion brand; however, your average Manhattan shopper is not only
extremely style conscious, but also has higher expectations of what a retail experience
should encompass. Above all, simplicity is key and the clothes are given the space to speak
for themselves, allowing customers to become acquainted with the brand at their own pace.’
One device used to introduce the UNIQLO philosophy to New Yorkers, was the UNIQLO
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Paper, conceived by MP Creative. Distributed in-store and available online via a Flashenabled application, the free magazine features interviews with designers, local celebrities
and artists, illustrating the cultural relevance of the brand. ‘We wanted to create a magazine
that was more than the standard look-books you get at other stores,’ explains Marcus
Kiersztan, ‘We wanted to align the brand with the art and design industry.’ A large in-store
gallery was used to exhibit a range of over 100 limited-edition, exclusive T-shirt designs from
over 40 artists including Yayoi Kusama, Tezuka and Godzilla. This space was then used
from Spring 2007 to house products featuring in the first installment of the UT Campaign. Yet
another example of a distinctly Japanese retail device being tailored for a global market, the
project rode on the back of the phenomenal success of the exclusive UT Store in Harajuku,
Tokyo. This shop, devised by Kashiwa Sato, sells limited-edition T-shirts packaged in plastic
tubes on open shelves, providing a super-efficient self-service system that is more Japanese
convenience store than fussy fashion retailer. The campaign was supported by print, poster
and in-store advertising, featuring portraits by renowned fashion snapper Terry Richardson.
In spring 2008, the project launched again on a global scale, this time with Brit Matt Irwin
shooting 300 street-cast models in Tokyo, New York and London. The success of the new
formula in NYC proved that UNIQLO was finally striking the right balance for the western
retail environment. Kensuke Suwa, UNIQLO global marketing director, comments on the
expansion: ‘Each new territory spells new challenges as we move towards becoming a truly
global brand – be they internal or external factors. However, after the lessons we learnt back
in 2001, we now approach each new market tentatively and look to gain a solid
understanding prior to large scale-commitment.’
London calling
Clearly, whatever had originally been lost in translation was finally being found. One year on
from the opening of the global flagship store in New York, the brand was once again ready to
tackle its territorial Achilles heel and take on the UK fashion market right where it is distilled
to its most competitive and fickle – the high street. And what better high street to take on,
than Oxford Street in central London? With over 200m visitors and 300 retailers taking
approximately £5.5bn (€7bn) every year, this is one of the busiest retail environments in the
world. The same collaborative process that gave birth to the NY store was employed in the
design and execution of not one, but two new stores which opened simultaneously at either
end of Oxford Street in November 2007. The larger of the two premises (nearer the more upmarket Mayfair area) is the official European UNIQLO flagship store, echoing in terms of
interior design and architecture, many of the features found in the New York location. Four
huge revolving mannequin boxes reach up to the first floor, displaying the current seasonal
offerings and for the first time outside Japan, a dedicated UT ‘future convenience store’
section has been created with the shelf-stacked ‘T’s in tubes’ layout of the Harajuku shop.
The re-birth of the brand in the UK was promoted not only by the 2008 incarnation of the UT
T-shirt project, but also by a more cohesive version of the People campaign – first devised
for the New York launch by Marcus Kiersztan of MP Creative, and Nicola Formichetti,
creative director of Dazed & Confused. Focussing on local heroes and celebrities as brand
advocates, the success of this egalitarian campaign relied heavily on it being adapted for
each specific location. Therefore for London, home-grown British talent was featured such
as eclectic rapper Dizzee Rascal, who also performed atthe opening of the stores. Kensuke
Suwa concludes: ‘When launching the London flagship store, the strap line “From Tokyo to
London” reinforced the idea that the brand was Japanese, but by working with British talent
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such as Bobby Gillespie of Primal Scream, actress Samantha Morton and Georgia Jagger,
we created a campaign specifically for London that would resonate with Londoners.’
Building global communities online
Considering the size and location of UNIQLO’s flagship stores, one could be forgiven for
presuming that globalising the brand has thus far been a strictly territorial, real-world affair.
However, looking at the most successfully integrated of the brand’s advertising and
marketing campaigns, it soon becomes clear that encouraging consumers to interact with
the brand in a digital environment has played just as big a part – if not bigger – in helping the
UNIQLO community to expand and transcend cultural boundaries. Yugo Nakamura, as well
as forming part of UNIQLO’s Creative Committee, is creative director at tha* ltd. – the
agency responsible for some of the brand’s most innovative digital campaigns such as
UNIQLO GRID and UT LOOP. ‘With all of the UNIQLO online campaigns, the basic question
is how to deepen and broaden the users’ brand experience. The challenge is then to achieve
thisthrough encouraging user participation, by creating and visualising a space where users
can actively interact with the campaign. This isn’t to say that everything is dependent on the
activity of the users; what is important, is to keep the balance between places where users
can be passive and places where they can be active.’ Designed to reflect how the brand is
constantly evolving in the hands of the consumer, UNIQLO GRID allows users on a
dedicated microsite to manipulate the UNIQLO logo by using the mouse pointer to click,
drag, spin and multiply to their hearts’ content. However, the digital canvas on which they
play with the logo is shared by thousands of users across the world – making this a
genuinely collaborative exercise. At the top of the page, it tells you exactly who (by
nickname) is making which moves. At the time of writing, Mako in Japan was furiously
multiplying in diagonals across the bottom of the screen… For a slightly trickier but ultimately
more rewarding creative process, check out the UNIQLO UT LOOP – part of the UT T-shirts
campaign. Originally running alongside a series of TV spots, this Flash-enabled site provides
you with nine different UNIQLO representatives, each with their own sample noise, be it a
shout, grunt or even a big ol’ fashioned raspberry. You can then drag and drop the different
characters, complete with noises, into sixteen different spaces, thereby creating your very
own mini dub loop. Once you are happy with how it sounds, you can submit your loop to the
website, where it will be shuffled and played at random as part of the ‘People’s Loop’. There
is even an easy ‘Blog this’ button which allows visitors to download and share either this
collaborative loop or just their own, as a widget for embedding on blogs or external websites.
Yugo Nakamura concludes: ‘Rather than being at the centre of fashion trends, UNIQLO has
a philosophy of providing the high quality components of fashion. Respectively, UNIQLO
GRID and UT LOOP both encapsulate this idea of combining simple elements into a
complex and freeform variety.’
Clicks and clocks
There is of course, a campaign masterminded by Projector, Tokyo which took the interactive
and monstrously addictive flash site model to a whole new level in 2008. It has scooped thus
far, the Innova Lotus Gold Award at ADFEST, 2 Gold Awards and the Grand Prix at the One
Show Interactive, a Grand Clio for Interactive, a D&AD Black Pencil for Online Advertising as
well as a Cyber Lions Grand Prix and the prestigious Contagious sponsored Titanium Lion
award at Cannes 2008. Ladies and gentlemen, we give you the UNIQLOCK. Mark Tutssel,
chief creative officer, Leo Burnett Worldwide, was the Cannes 2008 Titanium and Integrated
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jury president. He describes the impact which the UNIQLOCK had on the judges: ‘A
Titanium Lion is an idea that’s so unique, pure and new it cannot be labelled in a
conventional way. It breaks through traditional award-category boundaries and creates
something altogether better. Titanium is about finding tomorrow’s ideas that reset the
creative bar and move the industry forward. The UNIQLOCK was an idea that stopped the
jury dead in its tracks. An idea that fused together everything that is new in our business:
entertainment, utility and interactivity. After all, only with innovative and ground-breaking
thinking can we adapt to the speed at which the world is changing. This is virtual, branded
utility – pure Titanium.’ The 2008 campaign is a development of a 2007 initiative – an online
clock which marks passing moments with 5-second clips of female dancers performing
micro-routines clad in the new UNIQLO line of cashmere. Somewhere between branded
entertainment and utility, this delightfully distracting microsite struck a chord with bored office
workers everywhere; it racked up over 30m views in 195 countries – highly significant
considering that the brand has stores in only a handful of these territories. Recognising the
brand-building potential of the application, Projector set about making it bigger and better for
2008. As a result, it now operates 24/7 for 365 days a year, with the dancers’ clothes
changing according to each season – polo shirts in spring and cashmere sweaters in the
winter. It will also go to sleep at night, with sequences on the hour and an alarm clock
function in case you’re in the habit of keeping your laptop next to your bed. Perhaps most
significantly however, a downloadable version of the UNIQLOCK is now available as a
widget for embedding on blogs, iGoogle or Facebook profiles. By viewing WORLD.
UNIQLOCK, users can link to all the embedded sites via a global map which lets you see at
any given time, exactly how many people are watching the UNIQLOCK and in what country.
This is perhaps the most literal realisation of the UNIQLO global community to date – proven
by the fact that so far, over 27,000 widgets have been downloaded and the site itself has
been viewed 68m times in over 209 countries. ‘I had the intuition that an expression which
perfectly synchronised bodily movements with sound, would be the most simple and pure
way of representing UNIQLO’s products. The concept of MUSIC X DANCE X CLOCK came
from the “rhythm of a second” – dance to the rhythm of a second and music to the rhythm of
a second – in the same way that a clock keeps time to the rhythm of a second. After
Googling the name “UNIQLOCK” and finding zero results, I knew straight away that this tag
would be perfect for spreading the experience across the web and uniting global bloggers,’
says Koichiro Tanaka, creative director, Projector, Tokyo. Since the UNIQLOCK, Projector
has continued to study the behavioural patterns of internet users – concentrating on that
initial moment of uptake and how content is absorbed. As a result, its latest campaign for
UNIQLO’s line of Dry Wear focuses on the way in which neurons fire in the human brain
when we observe the actions of another human on screen. More abstract than the
UNIQLOCK, DRY IN MOTION displays a grid of graceful gymnasts, which replicates or
changes in size every five seconds. Each figure is contained within their own sphere which
displays around its rim, the passing seconds in different increments. There is also a counter
in the top corner of the screen showing ‘your view time’ – a reminder of just how distracting
this kind of website can be. Koichiro Tanaka describes the thinking behind its conception: ‘I
am interested in the mirror neuron which copies the behaviour of another human as if the
observer itself were acting. When we see completely controlled body movement, our feelings
move and as a result, we want to see it more. In other words, emotion is made by body
motion. I feel that it is important to visualise “Time in Motion” – another method of
representing the user’s behaviour in a different way from the UNIQLOCK which visualises
the expansion of the users.’
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Turning Japanese
UNIQLO aims to open a new flagship store in Mexico City. The success of the US and UK
flagship stores, as well as stores in other regions, has proved that the brand is now capable
of adapting to cater for each new location – operating with a duality which allows it to sell
simultaneously in the Japanese suburbs and the centre of Manhattan. However, South
America presents whole new cultural and economic challenges, so until stores are
prospering in these locations, discussions of UNIQLO becoming the world’s biggest retail
brand will have to be considered and studied very carefully. One thing is for sure though –
thanks to the collaborative efforts of the Creative Committee and campaigns such as the
UNIQLOCK, the brand has set in place a marketing strategy which is capable of using every
second of every day to build brand awareness within a truly global community. The rest, as
they say, is just bricks and mortar.
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GLOBAL MARKETING OUTLINE 1 (2000 words +/- 10%)
UNIQLO

Your tasks are:
to conduct a market audit and competitive analysis in the Argentina market for UNIQLO – Japanese clothing company

Your analysis will provide an estimate of the market potential and an evaluation of the strengths and weaknesses of competitive marketing efforts. Your analysis also will be used to determine the extent of adaptation of the company’s marketing mix necessary for successful market entry.

In conducting the ‘market audit and competitive market analysis’ for the company use the following guidelines as a check-list to help you identify the correct questions to ask in undertaking the task

1. Introduction

2. The company (Internal analysis based on available information; its competitive advantage -> international competitiveness)

3. The Product

•    Evaluate the product(s) as it is or could be perceived by the intended market (Relative advantage, Compatibility, Complexity)

•    Major problems and resistances to product acceptance.

4. The Market
•    Describe the market(s) in which the product is to be sold (Geographical region(s), Population (growth rate, age, sex}, GNP {rate of growth, income per capita}, Forms of transportation and communication available in that/those region(s), Consumer buying habits {Product-use patterns, Product feature preferences, Shopping habits} etc.)

•    Distribution of the product (available distribution channels, intended distribution strategy)

•    Advertising and promotion (Media usually used to reach your target market(s), Sales promotions customarily used {sampling, coupons, etc.})

•    Compare and contrast your product and the competition’s product (s) (Competitors’ product(s) {Brand Name, Features, Package}, Competitors’ prices, Competitors’ promotion and advertising methods, Competitors’ distribution channels)

•    Market Size. (Estimate industry sales for the planning year; Estimate sales for your company for the planning year)

•    Government participation in the marketplace (Agencies that can help you, Regulations you must follow)

5. Conclusion

Based on your analysis briefly summarise the strengths, weaknesses, opportunities and threats requiring attention in the development of the marketing strategy and marketing mix.

6. Sources of information/References (Harvard referencing)

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