international retailing report

International Retailing BA(Hons) Fashion Business and PromotionModule Code: FAS5034Sophie Szeto.

International Retailing

Contents. Executive SummaryProfile of BrandStrategic AnalysisScope of MarketTrading EnvironmentsReasons for InternationalisationJustification of CountryMethods of InternationalisationMarketing StrategyConclusion/Future VisionsReference

Executive Summary. 2

Sophie Szeto FAS5034


Soko Glam is a Korean based cosmetic line taking in a variety of different products produced in Korea. Charlotte Cho, founder of the brand curates only the best products offering a sincere, real opinion of the products ensuring consumers to have the same genuine experience of the product as she does. The vision of opening a Soko Glam boutique in London has been researched throughout the project, taking into account the fact that London is a global mega city and a main tourist destination, suggesting high consumer spending habits. Bringing Soko Glam into the UK will create a new market of Asian cosmetics offering products that are not available in the market currently, creating a 'buzz' in the retail high street. This buzz will eventually lead onto customer loyalty which is one of Soko Glam's main objectives in the long term.

3Sophie Szeto FAS5034


Profile of the Brand- Soko Glam. Charlotte Cho founded Soko Glam in 2012 transforming her obsession with cosmetics into a passion project. Soko Glam is a self-owned brand created with help from co-founder and husband Dave. In order to help western customers discover Korean cosmetics, beauty trends and skin care regimens.Charlotte scours the market looking for only the best and most popular products to bring into her collection of what is virtually an online cosmetic department store. ‘Statistics Korea’ identifies Korean cosmetics to have increased by up to 9.6% since a year ago, a growth obtainable largely due to Koreans’ international visitors. It is difficult to purchase Korean products let alone get the latest news about the products due to international differences. However the new online store ‘Soko Glam’ (Soko short for South Korea) is on a mission to change all that by offering high quality and affordable Korean cosmetics.



Strategic AnalysisSoko Glam is an online cosmetics store that offers products which are rare in countries outside Asia, they are catered to people with fairer skin who cannot always find their match in makeup in western countries. Soko Glam offers a range of products from foundation and concealers to moisturisers. Their consumers will be people with a fair to pale skin complexion, e.g. Caucasians and Asian/Oriental, who are unable to or have struggle in finding their right make up match in todays’ retail market. Soko Glams main competitors will be Selfridges and drugstore companies like Boots and Superdrug which offer a range of different beauty products, ranging from drugstore affordable prices to a more premium high end price. In order for Soko Glam to adapt their brand values in the UK market and have a clear view on pricing of products and shipment costs focus groups and research will be taken place to get opinions and a better understanding of the target audiences’ needs. Focus groups can also be used to identify gaps in the market as at the end of the day the consumers are the customers buying the product. However issues can arise while bringing the product into the country, issues like shipment costs, currency exchange rates can make it harder to get the products across or health and safety issues like legalisation for different chemicals used to make the product itself.Thus this report will include strategies to bring Soko Glam’s product line to the UK, methods of entry into a new market and promotional plans will be devised in order to efficiently promote the brand and gain a high interest in my specified demographic.



Various business tools will be used to ensure that a carefully set out plan for Soko Glam to penetrate the UK cosmetics industry is put in place.

Scope of the market- Trends. Minimalistic detail is key, this justifies reasons for selecting an Asian based oriental cosmetic company. Various opportunities in the UK was assessed however through heavy secondary research and influences through celebrities such as Cara Delevingne and Kendall Jenner, It's concluded that the 'laid back' look is something that could be associated with. In a country where the younger demographic is heavily influenced from celebrities on platforms such as Instagram and YouTube it's established that this opportunity will be in demand. Moreover through speaking to a young Asian demographic, their thoughts are that there are not many stores that focus on Asian/fairer skin types .This is why internationalising Soko Glam will be successful as there is a gap in the market for Asian cosmetics due to the fact that more international students are moving to the UK to study, naturally they have a fairer/pale complexion and Western countries like UK and USA cannot cater to them as well as Asian countries, hence having a store internationalised into the UK will be ideal as it is different and this process will be carried out in sales terms through using the AIDA model. Awareness. Promotional aspects will include.



Print Advertisements in various UK fashion and gossip magazines- this is directly influenced through the chosen target market.

Digital Advertisements - Using big data which is data collected through online statistics to advertise on websites such as Facebook and other social media platforms, as the product is Asian oriented and will first be situated in medium to large shopping malls. Attempts to obtain billboards in the cities Chinatown/Asian villages will also be taken place.

Interest- All promotional aspects will include content that explains a promise to the consumer of vouchers, giveaways, subscriptions and one to one make therapy sessions with a lively atmosphere.Desire- Much of the desire aspect is already included in the interest gaining concept ideas, however to promote a healthy brand image that will effectively penetrate the young Asian market, aesthetics will be used within the shop, careful selection of staff as well as models modelling the makeup within the store, altogether this will promote a strong brand image.Action- Included within the other points, Soko Glam will offer one to one services which will entice customers to purchase goods that they have been recommended this will be through both cash and card payments which will also



include prize drawing questionnaires which consumers can fill out online through receipts that are given. This will also influence customer purchase decision which will enable the brand to determine customer purchase patterns.Trend is also a big influence on cosmetics, Korean culture has become popular not only in music and fashion but also makeup. Through it is identified that westerners are more fascinated with Korean skincare due to the fact that they have a lighter more dewy complexion, it gives off a 'natural glow' enhances 'natural beauty' with minimal makeup used.



SWOT analysis conducted to evaluate advantages and disadvantages into internationalising Soko Glam.

Trading Environments.

London is considered a mega city globally alongside New York, Honk Kong, Tokyo, etc. Spending by overseas visitors top £21bn. There has also been a surge in the number of Chinese tourists and the amount they are spending. They spent £492m in 2013, up from £184m in 2010. Over that period, the number of visits from Chinese people rose by 79.1% to 196,000. Overall, the number of visits by people from overseas is expected to



increase next year, with 35.1 million trips expected - up 2.5% on this year and compared with 29.8 million in 2010.

This will benefit Soko Glam when entering the UK market, however there may be implications with trading, tax and currency policies. Soko Glam is a Korean brand exporting to a foreign country outside of their trading environments, this can cause problems due to having to pay higher tax rates and currency exchange rates are significantly different with £1- 1700 won. Although through a retail perspective, London is considered to have a stable economy with all trading passing through before shipping to final destination. As well as big tourist attractions bringing in tourists from all over the world suggesting a large potential market,

this leads to a favourable operating environment and bigger consumer spending habits which benefits Soko Glam venturing out to London UK. Smart technology means consumers can complete purchases within seconds on the go. This will cause complications and competition for Soko Glam, a solution for this will be to create an app specified to selling Soko Glam products, with this the brand can also keep records to show where potential customer base is situated.



Reasons for Internationalisation. 'Companies that do international business grow faster and fail less' - business.govIn order for businesses to grow many opt for internationalisation through careful and strategic market research. Reasons why brands expand internationally is because controlling expenses are more in their favour, every business wants to have low expenses some companies enter the global arena to minimize their costs. Companies will examine the resources they need and where they can get them at the lowest



price by searching outside of their borders. Taking advantage of lower labour costs and profit from another countries tax structures. Internationalisation may also be in order to diversify a company's product line by choosing to enter a specific international market to gain more knowledge about their culture and ways of living. Many companies expand and internationalise due to defensive reasons, in order to protect themselves from competitors and potential competitors or even to gain advantage over them. 'If you are pondering whether to go global, recognize the fact that you are global, in that you very likely have global competitors.' - Richard P Biggs, Founder & CEO Atlantric.

For Soko Glam's business concept to internationalise, the brand will be looking to improve sales by entering with a unique idea offering products that are not currently in the market taking into consideration market saturation and location. The brand will also be looking to improve profit sales with a plan of action and long term security. Expanding into new cultures and social/economical locations will maximize sales as many Asian young demographics are migrating to countries outside of Asia for study and political reasons. The unique selling point for this business concept will be the fact



that Asian/Oriental young demographics are located internationally other than Asian countries, also more people even Caucasians with fair complexions are in need of an affordable high street product for fast on the go usage. Influences like YouTube makeup gurus, fashion bloggers and celebrities through social media platforms like Instagram and Twitter is also taken into consideration. In order to understand the local culture and its implications for the business concept to internationalise, the brand will consider the exact reason to internationalise as this can be fatal if a company does not determine/ define a strategy before expanding, defining a realistic budget including cost, resource and time needed and research the target market carefully.

Country justification and profile.



For Soko Glam's business concept to be successful, careful consideration will be need to take into account the market I will be entering. In the following a conducted table of research evaluating why the chosen market will be ideal to internationalise into.

For a product to be able to sell internationally there must be a unique selling point, in order for the brands concept to work an evaluation of the market in which I hope to enter has been conducted. Research shows that expanding into the UK can be ideal as the population size is big with an outstanding figure of 6 billion people situated in the UK. The UK is also relevantly stable economical wise with most of the population being of working class demographics, meaning more people are at the stage 4/5 of the family life cycle having means of disposable income. Lifestyle and living conditions are also good with



the government offering free NHS and population growth is slowly increasing meaning more cash flow into the economy.

Research shows that the USA can also be ideal to expand my business concept into as population size is big, with a federal government and disposable income at expenditure. Purchasing power is also high in USA this means that many people have free cash flow and are able to spend on luxuries. The geographical proximity is also medium/low, this can suggest a more 'laid back open-minded' government policy and regulations when taking trading into consideration. However there are signs showing a decrease in population, this can mean that people are migrating or there are natural/manmade hazards resulting in slower population growth, this may mean an



unstable economy to venture Soko Glam's business proposition into as it could result in loss of profit and sales. As a result bringing Soko Glam into the UK will be the best option for the brand to internationalise as the economy is stable therefore more disposable income for consumers and their spending habits. Lifestyle and living conditions are good, there are one or more technology available in each British household meaning they have knowledge and understanding through social media platforms like Twitter, Facebook and YouTube to access information about Soko Glam's products. Also the UK has a multicultural society which means the culture is very diversified along with the fact that more Asian students are migrating to the UK for a better education system. Soko Glam's business concept will be able to offer them a unique way of purchase, a

solution to finding their perfect match due to sparse saturation within this market area.



Identifying Internationalisation methods

for brand to enter market. In order for the brand to internationalise into a market successfully, Soko Glam will need to evaluate the mode of entry and analyse the best method for company to expand into.



WholesalingFor Soko Glam to enter the UK market through wholesaling is a good initial method to reach out to consumers in a new market. This allows Soko Glam to avoid costs of having to establish a new store meaning large amounts of goods can be sold in one go. However this forbids a direct interaction between Soko Glam and its new customers, this may cause a barrier when understanding the new markets culture and needs hence subsequently losing out on sales and profits.ExportingThrough exporting Soko Glam will have direct contact with the consumer meaning a personal relationship is built, this can lead to a better understanding of what the customer needs which can generate a long term customer base relationship and increase sales and profits. It also allows Soko Glam to test the market before fully committing which is a good method to avoid costs and damages if the brand was to enter the market unsuccessfully. Soko Glam will have greater levels of control through exporting as they will be selling the product directly from home market. Although other points to take into consideration are the fact that legal implications may apply



due to shipment outside of the home country, this may change the pricing of the product through different exchange rates and shipment time may be implicated.ConcessionsWith this entry method Soko Glam will have low financial and operating commitments meaning large amounts of goods can be sold. It is a good way to reach out to new markets further from the brands home market and costs relatively low to set up. However implications may apply due to the fact that it can be expensive to lease a section of a store. An example of this is Selfridges where they only lease out to

established brands due to their high end high street brand image. Subsequently withdrawal may be complex if Soko Glam was to be unsuccessful as companies have contracted policies for one to abide to.After carefully analysing the methods of market entry, wholesaling will be the best option for Soko Glam to venture into a new market. This will be a safe way to test out the new market with low risks. Soko Glam will obtain an agreement with stores like Selfridges and Boots which offer other affordable to premium makeup. It will be a good way in testing the new market before officially establishing Soko Glam's own store to avoid disappointment and costs of failure.



Marketing Strategy. In order for Soko Glam to achieve a successful internationalisation, the brands marketing strategy will need to be analysed thoroughly. Putting the right product in the right place at the right price and at the right time is essential, this creates a 'marketing mix' for a successful marketing strategy.

The product will need to satisfy a young Asian demographic as well as consumers with a fair complexion, customers will use it when minimal to no makeup is needed, products will also have SPF pigments which will be ideal for summer use.



It is a product more specifically catered to Asian/Oriental light complexions. Customers will experience the light weight product covering blemishes and insecure places without having to pile on makeup. The product will be produced in a standard 50-70ml sized bottle, minimal changes will be applied to the product to ensure Soko Glam maintains its originality whilst making new customers aware of the brands products e.g. product description can be translated to English so customers will have a better knowledge of what the product has to offer.

Customers can look for products in local high street stores (Selfridges, Boots) under makeup sections and skin care products. In order to differentiate from other competitors within the store, Soko Glam will have tester periods at front of store to both educate new customers and gain the attention of customers that are already aware of the product, subsequently building a good relationship through promotions and subscriptions. ( more information in Promotion )

Pricing of the product will range between £10-£25 with exceptional products higher. In general this mirrors most of the higher end drugstore makeup like Benefits, L'Oreal, Maybelline etc. However as a starting price to reach out to a new customer market, pricing of Soko Glam's product will be a percentage cheaper to



build consumer trust and gain a customer support base taking into consideration exporting costs. Discounts and vouchers will be available to gain a good consumer relationship (more information in Promotion )

Soko Glam will bring products into the UK Spring/Summer season as the aim of this line is to offer light to minimal makeup with SPF pigments for a more natural 'effortless dewy' look. In order to reach out to my targeted audience promotional aspects like advertisement through fashion magazines and billboard will be set up in Asian/Oriental locations (Chinatown, City Centre). Advertisements on media platforms like YouTube will also gain a good customer awareness as nowadays many youths have knowledge and access to new and advanced technology where they will be informed on the go. In order for Soko Glam's product to stand out from other promotional products, the brand will offer giveaways through monthly/yearly subscription and one to one makeup consultant in store to educate customers about the new brand and its product range. A lively atmosphere with models modelling the product will also be in store as a function event to gain customer awareness and interest.



Conclusion. In conclusion Soko Glam's business concept into venturing out to the UK and internationalising its brand image will be successful due to a multicultural demographic and influences with celebrities, fashion, music and makeup. The business strategy will magnify Soko Glam's potential in a new market offering products that are rare or are not currently available in the market catering mainly to students in the Asian demographic. Next steps to take after expanding into a foreign country will be for Soko Glam to open its own store offering Korean products not only catered to the Asian/Oriental demographic but also the young demographic in general through hair and skincare products.



Reference.Text:http://sokoglam.com/pages/behind-soko-glam (accessed 12.05.2015)http://www.hancinema.net/looking-for-best-of-korean-beauty-products-soko-glam--50985.html?spoilerfree=1 (accessed 12.05.2015)http://choosewashingtonstate.com/wp-content/uploads/2013/06/10_Reasons_to_go_International.pdf (accessed 14.05.2015)http://www.forbes.com/fdc/welcome_mjx.shtml (accessed 14.05.2015)http://www.bbc.co.uk/news/uk-30613957 (accessed 21.05.2015)Image:Soko Glam logo, online image, available from http://sokoglam.com/ (accessed 21.05.2015)Charlotte Cho image, online image, available from http://sokoglam.com/ (accessed 21.05.2015)Beauty begins here image, online image, available from http://sokoglam.com/ (accessed 21.05.2015)Soko Glam, online image, available from http://www.teenvogue.com/images/beauty/2015-05/soko-glam-rot.jpg (accessed 21.05.2015)Soko Glam product image, online image, available from http://sokoglam.com/ (accessed 21.05.2015)Korean beauty, online image, available from http://thezoereport.com/wp-content/uploads/2013/12/korean-beauty-soko-glam.jpg (accessed 21.05.2015)



Charlotte Cho store image, online image, available from http://www.mochimag.com/wp-content/uploads/2013/12/soko-glam_1.jpg (accessed 21.05.2015)Soko Glam product image, online image, available from http://www.mochimag.com/wp-content/uploads/2013/07/mineral-makeup.jpg (accessed 21.05.2015)

GDP graph, online image, available from https://www.google.co.uk/search?q=uk+economy+2015&biw=1366&bih=667&source=lnms&sa=X&ei=CwdeVeeRGsavU_e7gYgB&ved=0CAUQ_AUoAA&dpr=1#q=gdp+uk (accessed 21.05.2015)Instagram image, online image, available from https://cdn.shopify.com/s/files/1/0249/1218/files/StoryInstaIcon.png?4138 (accessed 21.05.2015)Online image, available from http://ell.h-cdn.co/assets/cm/15/02/54ac546fa456b_-_elle-korean-beauty-skincare-step-1-elh.jpg (accessed 21.05.2015)Online image, available from http://www.3cebeautyconcept.com/wp-content/uploads/2014/10/3CE-concept-eyes-style-nanda-highlight-beam-30ml-soko-glam-korean-makeup_large.jpg (accessed 21.05.2015)Soko Glam product, online image, available from http://sokoglam.com/ (accessed 21.05.2015)Soko Glam website, online image, available from http://sokoglam.com/ (accessed 21.05.2015)Charlotte Cho, online image available from http://cdn.shopify.com/s/files/1/0249/1218/files/Soko-Glam-Charlotte-Cho-Korean-Skincare-Beauty_large.png?9832020090733163181 (accessed 26.05.2015)


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