servicesmktdossier

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Toulouse business

school, Bachelor

Program CS2, IB/B

Cecile Fontaine,

Emilie Cambus,

Pan Ying,

Sophie

[DISTRIBUTION AND

SERVICE ANALYSIS OF

PROMOD]


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PART 1

DISTRIBUTION ANALYSIS

a)Promods positioning and its mission statement

Promod was created in 1975 as a French family boutique dedicated to the sharp

design, the production and the retailing of women's ready-to-wear and original

accessories.

Promod positionning:

Promod dresses up and down all modern women that are looking for affordable,

feminine and easy-to-wear fashion.

The inspiring collection offers a wide range of frequently updated items from more


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timeless seasonal must-haves to more cutting-edge designer-inspired fashion pieces.

Promod collections aimed primarily at women 20 to 30 years, modern and active,

seeking a fashion accessible and quality, not too classical or too sharp, and they will

by its variety and its renewal to combine clothes to its own inspiration.

Additionally, Promod has its own clothes designers that create some 3,000 models a

year for all your fashion moments: work, evenings out, casual wear... Whats more,

Promod has 3 000 members of staff, of whom more than 90% are women. So it is

really a women-oriented company which supplies the women with fashionable clothes

over the world.

In all, Promod's brand success depends on the team's strong personal values:

customer insight and a shared love of fashion with lots of entrepreneurial team spirit!

Promod has been established in many Main countries such as France Spain, Greek,

Italy, Germany, China, Poland, Czech Republic, Hungary, Switzerland, Belgium, UAE,

India, Portugal, Austria, Russia, Malta, Lebanon, Luxembourg, Morocco and etc.

In the coming years, Promod aims to accelerate its international development, in newgeographic areas and in those where it is already present.

b) Main competitors compared to Promod

Zara

Zara is the flagship chain store of Inditex Group. It is claimed that Zara needs just

two weeks to develop a new product and get it to stores, compared with a six-month

industry average, and launches around 10,000 new designs each year. Nowadays

Zara is present in 71 countries, with a network of 1.474 stores in privileged

locations of major cities all over the world. Compared with Promod, Zara is a company


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Here is the table that shows the simple differences among Promod and its

competitors, Zara Mango and Bershka.

Promod Zara Mango Bershka

Orientation Women All people Women Women

Style All styles All styles Professional Party style

Price Moderate Moderate Moderate Low

Promotion Magazine&

Internet

Window show&

Internet

Celebrities&

Internet

Magazine&

Internet

Location City Center City Center&

Duty-Free

Shops

City Center&

Duty-Free

Shops

City Center

International Intermediate Advanced Advanced Intermediate

Naf Naf

French Groupe Naf Naf offers young urban women's and children's apparel in

about 140 company-owned domestic stores as well as 25 international locations.

Seemingly all set to be sold to ready-to-wear retailer, Beaumanoir, French clothing

label Naf Naf is now in exclusive negotiations with Vivarte, which groups around 15

clothing and shoe brands.

And compared to Promod, Naf Naf has a little higher price with the great service.

And the international expansion is much better than Promod as one of the rare French

brands to have a truly international presence. Like Promod, its also member of

ready-to-wear fashion group. And under the new strategy, the company intends to

expand its overseas business to 50% from the existing 35% over the next few years.

The company plans to achieve this dream by capitalizing on its ability to offer bright,

youthful clothing, while keeping up with changes in style.

Etam

As the French local brand, Etam offers women with fashionable clothing with

acceptable price like Promod. The promotion part of Etam is really great with all the

top models sizzling at Etam lingerie show. And the fashion retailer never stopped

expanding the international area as long as it can touch.

As an international retailer of lingerie and womens clothing, Etam reinforces its

position in Europe and pursue its international expansion, taking advantage of the

reputation and strength of its brand, Etam decided to unify and streamline its

processes. And compared to Promod, the competitor is much stronger in push the


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products abroad. While the price of Etam is a little higher than that of Promod, the

service still needs to be improved in the retailing shops. Till now Etam has had3,361

stores.

Camaeu

The Group's principal activity is the distribution of its own brand of ready to wear

fashion clothing and accessories through a chain of stores and via a network of

franchised boutiques in France and abroad. Camaeu has created, manufactured and

sold its own collections at the best value for money on the market which is mainly for

women between the ages 20 to 40 years like Promod. And compared to Promod,

Camaeu offers a similar price that is very acceptable for the consumers like Promod,

but the service still needs to be improved.

Internationally, Camaeu continues to follow a programme of development andexpansion of its concept with its subsidiaries in Spain, Poland, Czech Republic, Italy

and Belgium, which is 92 out of 485 shops. .

Cache Cache

Cache-Cache sells stylish, practical and affordable maternity fashion, combining

quality and value for money. Styles for any occasion are sold, including weddings and

work. The company offers ready-made wear for women of 18 to 30 years as its

concept.

Concerning the international expansion, the local French brand owns 232units in

France and 128 abroad, amounting to 360 in all. And the space of Cache Cache is

around 150 - 200 m, which has a great advantage over Promod. But Promod has a

higher price with better service for the customers. And the promotion of Promod is

also more fashionable that that of Cache-Cache which might attract more OL.

c) Analyze of the retailing mix

Distribution network

Promod designs its products and distributes them in a network of 531 stores

spread over 34 countries mainly in Europe, the Middle East. And it has a turnoveraudience of over 700 million Euros, almost 60% abroad and nearly 20% in partnership.


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It employs over 3600 people. 100 stores were opened in 2006 (net openings) and

teaches provides 150 new stores in 2007. 100 stores were opened in 2006 (net

openings) and teaches provides 150 new stores in 2007.

Promod is one of the Specialty chains in most European clothing retailers.

Specialty chains usually have a wider geographical reach, with some very large

players, such as H&M, C&A and Zara. Some are directly owned and operated (e.g.

C&A) while others have a franchise structure (e.g. Benetton).

The economics of sourcing and marketing differ from those faced by independent

retailers. Specialty chains as Promod are also called verticals as their main

characteristic is the control of these companies over the products they sell.

Additionally, Promod sells its own branded production, produced by favored

suppliers. Promod uses advanced information and management systems through itswebsite, but also through its intranet (electronic data interchange and just-in-time).

To be specific, Promod as a single-industry specialist like Mango, Pimkie, Benetton,

Terranova, Gap, Kiabi, Top Shop, always focusing on the professional production and

the all-round service system.

When it comes to the locations and design of the store, Promod is usually

established in the city centre or mall and the good location provides the clients the

most convenient way, as well as convenient schedules. Thanks to this geo marketing

strategy, Promod is very close to its customers, in terms of physical presence, but

also in the customers mind.

Services

Moreover, Promod stresses on the quality of advice customer can get from a

friendly, commited and available well trained staff, to answer customers needs.

Promod aims at differentiate itself from main competitors by adopting this customer

oriented attitude.

Price

Concerning the price, the orientation of Promod is to offer affordable clothes, and

Promod's collections are made with their own designers, producing a range of

ready-to-wear items for quick seasonal trends, timeless classics or cutting-edge

designer-inspired pieces.

Nevertheless, Promod obviously sets its price according to the competition.


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Merchandising

The Average size of a Promod store is 160 to 250 square meters with the

Catchment area of more than 50 000 people. And the Linear showcase is around 8

meters with clear classification of products.

Clothes are arranged by style: this permits customer to identify the Promods

universe, and get inspired.

The store is set in two main area:

City area: proposes clothes for working women with suits but also elegant

clothes for party or special occasion.

Leisure area: proposes a large range of trendy clothes and accessoriesthrough different styles.

In these two areas we can find permanent products considered as basic products

and non permanent products which create event in the shop every week.

To create the event and attract the customers, Promod has adopted a cross

marketing strategy, which consists of setting up basic products and new products in a

natural and appealing way, on dummy or event wall every week. The facing theme is

determined by the Promods marketing department and set by the store managers

and employees of Promod network. It is the same process for the shop window

realization, changed every week.

Promod aims at keeping an homogeneity in all its stores. This is why Promod

employs visual merchandisers in order to check the merchandising rules are

respected in all stores by store managers.

Then all clothes and accessories are implemented on different supports: shelves,

areas, facing, coat hanger, still according to the marketing department strategy.

Store manager makes sure that the offer is clear for customers.

communication

As French owned women wear brand, Promod is stepping up its profile amongst

the UK fashion media by signing up Juice PR to introduce its range to fashion

journalists. The company is offering consumers high street women wear through its

online boutique. The online boutique has proved successful in other European

countries and is updated daily including weekly newsletters on the latest trends,

bestseller charts and style guide services. Every item sold in store will be available

for purchase online, including sale stock. Other extras include footage of the Promod

team putting together the model photo shoots.


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However, Promod wants to stay discreet and aims at simplicity. Promod doesnt

use aggressive marketing campaigns, even when there are some promotional offers

in store, Promod doesnt stick flashy - 50% flyers on its shop windows, but just sets a

central area in the store with a simple flyer to inform customers. Promod trusts in its

customers loyalty, tries to set a mutual trust.

We can find on 2 walls of the store, large photos which are here just to immerse

the customer in the Promod atmosphere.

The communication strategy preferred by Promod is through its staff, who is

supposed to vehicle the Promod simplicity and enthusiasm, team spirit,

professionalism and creativity.

d) Suggestion of strategic recommendations

in terms of distribution

Promod plans this year to open 100 new stores. The company opened its first

store in India on April 15 in 2006 and is currently looking for distributor in Britain,

Northern Europe and Asia.

Promod, which has a turnover of public almost 650 million euros, of which over55% in international and nearly 20% in partnership opened about 54 stores in 2005

(net openings). Compared to the giant clothing store such as ZARA, Promod needs to

aim to accelerate its international development, in new geographic areas and in those

where it is already present. Therefore, the vacancy in duty-free shops should also be

taken into consideration by Promod.

In terms of merchandising

In addition, Promod may need to add more retailtainment in the store such as

the resting area with some comfortable sofas and magazines, even with a big screen

hung on the wall with the newly fashion shows about Promod while customers are


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waiting to the cash desk. Bershka has done a lot in this area which can be very

effective for the long queue outside the fitting rooms. Nevertheless, we have to be

careful not being to aggressive or intrusive to respect Promod statements of simplicity

and peacefulness.

The net service should also be improved concerning the discount books of expertise.

In terms of communication

In the current context of economical crisis, customers may tend to look for

discount more frequently.

We can suggest to Promod to take this new trend into account in its

communication strategy, as it seems very risky to stay so discreet about the special

offers in store while main competitors are communicating a lot through their shop

windows. Indeed, we can think that even the most faithful Promods customers could

finally be attracted by the competitors discounting campaigns.

In order to respect Promods values of simplicity and trust, we can suggest tocommunicate about the offers on the shop windows through designed stickers, which

could differentiate Promod from others competitors with flashy stickers.

PART 2

SERVICES ANALYSIS


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a) The Flower of Service of Promod

Delivery of ProductSafe payment


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Promod

Naf Naf

HetM

Mango

Camaieu

Etam

Cache Cache

Bershka

Zara

Pimkie

Jennifer

a) High/low price VS high/low service

High service

Low price

High price

Low service


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Promod

Naf Naf

HetM

Mango

Camaieu

Etam

Cache Cache

Bershka

Zara

Pimkie

Jennifer

b) High/low quality product VS High/low variety of product

High variety

of product

low variety

of product

Good

product

quality

low product

quality


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a) Annexe n1 : Questionnaire of the Promod store manager

This questionnaire talks about the analysis of the offered services by the brand

Promod. This questionnaire is realized in a case of a report in retail and service

marketing at Toulouse Business School, third year of the Bachelor Program.

for any contact : [email protected]

thank you for your contribution

Q1: Are the services proposed by Promod around the physical products,

contributing more to gain the loyalty of the current customers or to attract new

customers?

Both actually. The aim is to build a trustful relationship between us and our existing

customers by bringing individualized services, according to their needs, as well asseducing new customers by the quality of our services, the added value it brings to

our physical product.

Q2: What is done when Promod tries to set customers loyalty by increasing the

customers value?

1.loyalty card

2.reception:to be born salesman (smiling, helpful)

3.services

Q3:what are the services offered to the client in order to facilitate the purchase

in shop?

1.easy access to the place and handy opening hours.

2.sale of Promod Card: credit accumulation, free alterations ( with a minimum of 6

Euros purchase per year to keep the validity of the Card)

3.simples alterations/hems (5euros, free with the card, extension of 2 or 3 days

business hours.)

4.reservation of a product, 2 articles maximum (3 days without the card, 10 withthe card)

5.product exchange, settlement or credit note (1month extension, 7 days on sales

period).

6. Gift Card

7.research of availability of a good in other Promod if the article is missing in the

shop (Promod Blagnac, Labge, St George and St Orens) and also in www.promod.fr

8.customer advice, orientation in his choices with the sales assistants.


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Q4: Do theses services represent a competitive advantage comparing to other

main competitors, bringing an added value to the brand?

yes

Q5:what are the reception, accompaniment and sale policies of Promod with itscustomer in the shop?

1.availability through handy opening hours, facility of access and geographic

proximity (shopping center)

2.warmly reception, smiling and pleasant saleswomen "good Morning" "goodbye"

3.saleswoman on the selling surface always turned to the entering clients, total

availability to inform, assist, listen and advice them.

4.use of Intranet to see the availability of an article if not found in the shop

5.always a saleswoman in the cabins.

6.decrease the waiting queue at the cash

Q6: to which needs does answer the Promod Intranet system in the daily life of

the store?

1.missing management (goods in warehouse, parcel of the day, in other shops of

the network, breakdown).

2. price questioning

3.product reservation

4.alteration voucher

5.turnover checking in real time

6.daily information coming from the head office (promotional operations, new

theme on facing, new store window...), merchandising.

7.HRD site (Promod employees are treated as customers: they can find on

Intranet all the information concerning luncheon voucher, benefits...).

Q7: what is the management style of Promod? In what is it translated in terms

of recruiting process and team training?

1.Promod values: simplicity and enthusiasm, others respect and team spirit

creativity and professionalism, to have initiative.

2.main mission of the shop manager: team animation (planning, objectives fixing,special operation announcement...).

3.Sales assistant recruitment : SMILING above all

4.high amount of turnover, flexibility.

5.complete formation for crossing permanent contract, specific formation on 4

weeks for a shop manager, 3 weeks for a secondary store manager followed by yearly

evaluations.

6.formation in shop for a saleswoman with yearly evaluation.


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Q8: How does Promod communicate on the company spirit and the products in

the shop?

1. point of sale promotion (picture on the wall that shows the atmosphere and the

Promod Spirit) adding merchandising.

2.saleswomen behavior in front of customers : pleasant, quiet and smiling.

3. no special display advertising, same for promotions: Promod wants to stay

discreet and doesn't want to assault customers with huge "promotion" or "-50%".

Promod can rely on the trust and loyalty of its customers.

Q9.If yes, what is the message that Promod wishes to give to the customers in

the shop?

"to be born salesman":the customer must have a nice time at Promod shop

"natural and simplicity at the service of the customer"

Q10:Promod is committed to have an homogenize merchandising tocommunicate on its positioning: what are the specificities in the Promod shop?

1.display window: the regional Visual Merchandising coordinator comes to the

shop and check the goods in display window in accordance to the marketing service

of Promod via Intranet.

2.this display window is renewed every week.

3.clothes are tidied by style, to identify the universe of the brand:

a. 1.city scale

b. 2.leisure scale

4.daily restocking and daily delivering. Promod carries out 20% of the orders at

the beginning of the season and 80% at the last minute. That's why Promod must

have a high reactivity, possible thanks to an astute Intranet and a very efficient

computer system.

5.shop space divided into two areas:

a. 1.setting up on dummy/chests/shelves/supports/facing/areas.

b. 2.Event wall :decided by the marketing service of Promod and checked

regularly by the responsible of the visual merchandising.

6.special fitting rooms layout : floor, seats, internal space, external mirrors

Lightning :to offer a pleasant and clear place.

Q11: Through your experience, can you tell us the elements that make run away

customers?

1.dirty cabins and selling areas

2. clothes badly ordered, on the floor

3.lack of visibility

4.too long queue on cash desk or for the fitting rooms

5.unvailability of the saleswomen

6.lack of correct behavior

7.lack of reception


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Q12:how do you manage the faulty goods? (discount? go back to the main

office?)

Faulty goods go back to the faulty goods warehouse and afterwards they are picked

out depending on the fault, then sent to the "Promod Stock", sold in factory shop in the

North of France.

Q13:do you carry out adaptations in terms of shop organization and on

management methods during peak periods (like Christmas and Sales

periods)?If yes can you quote the most representatives?

we recruit saleswomen (via Interim) upstream theses periods. we do a retro planning

and we establish the book of the saleswomen positioning with respected precisions.


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C. Diagnostic : identification of the strategic issues and service gaps

Boundary defining of Promod of the other competitors, especially the French

ones like Etam, Cache-Cache and Camaieu

Services personalisation : each brand offers nowadays a pleiad of services but

they finally start to look like each other. The customer wants more and more a

service adapted to his personal needs, uniquely designed for him (and not

somebody else).

Use of new technology : the use of network is more and more common on the

clothe selling domain and Promod should incorporate more and more this

system for the customer relationship. saving costs and time.

Waiting line : this time loss should be transfigured on a pleasant time for the

customer and the brand must benefit of this purchase period to promote

additional services.

Adaptation (International) : Promod is continuously opening new shops abroad,

promoting French culture, but foreign customers wait also their cultural

recognition (not only on the clothes and accessories but especially on the

services offered). The time and space notions differ from a country to another.


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D. Recommandations

e-newsletter for the card holder including prerogative discounts. Furthermore

Promod can offer private sales (one per season) on its website www.promod.fr

some discounts can be customer personalised : when the card holder buy

mostly a category of clothes (more casual, or only pants for instance), the

computer register it and later the customer will receive mostly discounts

oriented on his favourite category.

We have observed during our analysis that many customers are searching for

the availability of certain goods. They are also loosing time searching shop by

shop because they dont dare to ask to the staff.

Promod can develop in each shop an access point (a computer with a touch

screen) for the customer searching the availability of a good. The customer

has just to choose the desired product and see if it is available in this shop

(with the sizes and number of goods available) or in which nearest Promod

shop he can find his happiness. This access point will reduce waiting queue

and enable the salespersons to focuse more on the customer advices.

In the waiting line, Promod can dipose free magazine of the brand (some kind

of newsletter with fashion advices and discounts promotion). This magazine

(few pages are enough) can attract the curiosity of the customers and

encourages occasional purchasers to be regular purchasers (developing the

novelty need).

At the time of the payment, Promod can provide free of charge used coat

hangers for the customers. They are always the welcome in customers

closets and allow an easiness putting away. Furthermore they are often

engraved with the brand name (good for the advertising).

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