Baruch College

Luis Enamorado

Retail Marketing

Prof. Alen Greenberg

Differential Advantage

Diesel. Located at 1 Union Square West
Express. Manhattan Mall. 901 Avenue of the Americas

Introduction

Differential advantage can be defined as Unique benefits or characteristics of a firm, product, or program that set it apart and above its competitors in the customers' viewpoint. (www.businessdictionary.com). In this paper I will state the reason why two stores have a differential advantage over their competition. The stores are Diesel located in Union Square Manhattan and the other one is Express located at 34 street inside the Manhattan Mall. The reason I chose this stores is because I have been shopping at both stores for over 4 years and I really like their styles and I was intrigue about what’s their strategy on how they have an edge over their competitors. I know what’s their traffic on their store, and didn’t have to went to those stores for get the information needed to do this paper, I only went once to speak with the managers and the rest I was able to do it based on some research and the knowledge and experience I have from being a customer for both stores. I hope this research paper will met all your expectations and you learn something new about these retail stores.

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History
Diesel was founded by Renzo Rosso in 1978. He wanted it to be a leader, a new type of company that will focus on style and fashion. So he carved out a niche for itself in its field. He started surrounding with creative, talented people, innovators that matched his new ideas, by rejecting the slavish trend following typical of the fashion industry. He wanted to create the most dynamic and imaginative product available anywhere: he gave his openminded design team broad stylistic freedom, and their mission was to create an apparel line perfect for independent people who follow their own unique path in life and for those style-makers who express their individuality by the way they dress. (Diesel.com/history)

From the beginning they avoid to follow what the rest of the fashion industry thought of fashion and let their personal tastes lead them. They saw the world as a macro-culture, and that their staff reflects this: a cosmopolitan team that creates an unpredictable, dynamic vitality and energy within the company. (Diesel.com/history)

Now Diesel is a worldwide company that is part of the young culture. Diesel is an innovating international company that creates a wide collection of jeans, clothing and accessories. They are present in 80 countries and have over 5000 points of sale.

Target Market

Diesel’s target market as the manager of the store told me is basically:

New Yorkers = He described them as people from the manhattan that when they need a particular cloth they go to the store and just buy it to wear it to this particular occasion. He describes them as middle-class people who can afford to buy their products.

NYU students = This are students from New York University, which he described as middle-class students that have the support of their parents and can afford an expensive college as NYU, they have status and they are trendy and look for a brand that can express that.

Tourist = He described them as people who come from another country or another state to visit New York City and because Union Square is a place known to have a lot of stores they usually visit Diesel and because they are unique and different from the rest they usually buy couple of their products. It is more usual that if they come from a country that doesn’t have a Diesel store in their countries is more likely that they will purchase couple of their products as this brand is quite expensive and when a retailer sells them they charge more. I will give a personal example, I’m from Honduras and Diesel is only sold in some boutiques that are quiet expensive and target to high class people, so a jean can cost around $300 to $400, and the same jeans costs over here $200. This is when I used to come to USA to shop I will always buy as much as I can from Diesel.

If we based this customer profile of age I will say is between 18-24 years and if we think of occupation the perfect fit will be students. Although lately the manager says that diesels products are age resistant. This means that more teenagers are buying their clothing and they are planning to add a section of kids to their store, and not only teenagers but more mature people. He tell me that he have seen a young adult enter the store with his father and grandfather, they are just accompanying him but at the end they all leave buying something. This means that every one can appreciate their style and occasionally buy some clothing.

Their customers are very loyal to them. They tend not to be price sensitive as they are pleased on the quality and ideas every time they purchase any of their apparel. This is the main reason they don’t give discounts or coupons, because their customers knows that they are purchasing a distinct product that they are not going to find it anywhere else. They try to always have the best quality possible to satisfy their customers.

Marketing Mix

This is defined as “ Planned mix of the controllable elements of a product's marketing plan commonly termed as 4P's: product, price, place, and promotion. These elements are adjusted until a right combination is found that serves the needs of the product's customers while generating optimum income. Sometimes the first P (Product) is substituted by 'presentation.” (www.businessdisctionary.com).

Product

I will start by elaborating on their products. The manager of the store start by telling me that they don’t sell clothes they sell a behavior, a trend. This is what makes diesel a unique product in their particular store and every store around the world. They don’t based their style on their competitors or what the fashions dictates but on what their designers feels and think that is appropriate to be an apparel of Diesel. They hire designer people that come out of fashion colleges and have the same style and ideas as the brand. They try to choose people from manhattan that have free access to everything they can to inspire then and come out with their designs. This makes them so unique and that’s why he thinks that Diesel doesn’t have any real competitors, because they don’t have anything like this.

Their main product that they stands out is their Denim. They put more emphasize on this and they are well-known for their “cool” jeans. Throughout the years they have include more products in the store and now they have jewelry, shirts, tee shirts, shoes, belts, hats, underwear, and pants. As you can see they have every product that their customers they might need and they put their personal distinction.

They work with 6 collection each year. They try to accommodate each collection to each season of the year. They have 2 preview collections each year on the store to reduce the amount of time the same clothing is in the store.They have a lot of new outfits available to their customers, this will prevent them to get bored of the same products, and will visit more frequent the store looking for new styles and clothing.

They recently are trying to come up with Diesel Gold, a more luxurious line of products that are more expensive but will fit their upper class customers taste. They will buy this particular line of products because of its exclusivity of prices. They used even better quality materials.

Some samples of their products sold in this store are:

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Price

Their prices aren’t cheap at all. They categorized them as a different brand and price based on this. Denim which are their main product costs between $180 to $300 depending on the style. They know that their customers are loyal to them and that they will pay for their clothing. That’s their main reason to open a new line of clothing Diesel Gold, because their customer were requesting a more unique and more exclusive products on the store so they can differentiate from the “normal” Diesel clothing.

When they put new products in display they don’t change their prices or give discounts on anything. They only held 2 a Sale twice a year, in which they put all the products they couldn’t sell and are from old collections. These sales only last 1 day and they announce like 1 month previous having it. Anything that can’t be sold in these sales they sell them on their many outlets.

I will provide a sample prices of their products on the following chart:

Products |Styles |Prices | |Denim |Slim |Between $170-$300 | |Shirts |Dressing Shirt |Between $120-$145 | |Footwear |Dress Shoes |Between $170-$280 | |Outwear |Jackets |Between $220-$320 | |*Prices are from the store.

Place

They are located in 1 Union Square west. Specifically in 14 street and University Pl. The subway is within 2 blocks from the store specifically the 4 train. This is the main reason that they chose this particular location due to its heavy traffic of people. The store is located in the corner of 14th street. I will say that 1 block from the store you can distinguish it because of their big sign. They try to always have a “cool” store that will attract their customers attention and even new people just curious about the store. The front windows they have a display of some of their outfits well dressed to attract customers and they give freedom to their staff member to decorate and accommodate their products they feel will create a cool and fun atmosphere for the customers on the store. Lastly, they have a DJ with all the equipment so he can play the music that will suit the store, is most likely techno music and goes very well with the brand and the store.

One important aspect of this particular store are their unique staff. They select them based on their appearance as they want to transmit their ideas through them. They are not the common staff dress with suits and all formal, but quite the opposite. When i was in this store I saw and confirm this, most of the staff had some unique things. One of them had purple hair and had a mohawk. The staff is dressed by the store with Diesel products to show and represent what the brand and the store stands for. Even the manager that was kind enough to give me the interview was dressed casually for the same reason. They are well trained to give the best customer service possible and always please the customers in everything they can.

After I conclude my interview with the manager I examine the stores near Diesel and they were not a single vacancy in 3 blocks. This means that this area is very busy all the time and very good for business. I will say is perfect because is located in a very good neighborhood for this particular store. Stores around it are ShoeMania, a subway (sandwich), Forever 21 and many others.

Picture of the actual Store:

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Promotions

As I said before they don’t use any types of price promotions despite their sales twice a year. Their emphasize are on the advertisements. They advertise as crazy, and through most of the channels. For instance they use billboards throughout Manhattan, on the cabs, and through their website. Another important way is word or mouth. As I said before their customers are very loyal to the brand so they usually talk very good things about their products and in particular about this store.

Another important strategy they use is that they don’t have the same products on every store but each store has their own products. This will make a particular customer that wants a particular product go through all the stores looking for it until he finds it and purchase it. This makes that customers get into the store and find different things, reducing boredom and monotony on their stores.

Finally, a very good way they promote their store is making parties and inviting everyone they think is interested on purchasing any of their product. When I was doing the interview with the manager he gave me two free invitation to a party they were hosting to introduce the new winter collection and they did an awesome job presenting their products on that party.

Competition

The store manager was clear and confident when he told me that they don’t have any competition. Not the store neither the brand. They are so well positioned into the market that they don’t feel any brand or store can compete with them.

I will agree to him as I didn’t see near the store any possible competitors, and because they are well established with their customers none of them will go to a different store but Diesel. I think this is why they are doing well in this economy as the manager told me. The only thing they have done to revert a possible downturn in their sales is to advertise even more and create product awareness on their new collections or any new product they are launching.

Express

History

Express is the must-have sexy, sophisticated fashion brand for work, the weekend, or going out. It’s what’s new and what’s now for young fashion-forward women and men. We started nearly thirty years ago as an experiment – an offshoot of another successful retail concept. There was nothing but opportunity in front of us and we took it.

Today, we find ourselves in a similar place. In July of 2007, we became an independent, privately held company and the spirit of starting something new found its way back into our business. We aren’t inventors – there are so few of those in the world of fashion today. Nor are we imitators – that is far too easy.

Express, they are innovators. They find inspiration and trends from all over the world and interpret them in a way that is uniquely Express. They have become the preferred destination for the latest trends, essential styles, and must-have key items. Today, we operate more than 550 stores across the United States and an online store at express.com. (www.express.com/history)
Target Market Target Market is defines as: A specific group of consumers at which a company aims its products and services (www.entrepreneur.com/encyclopedia) Express has a very narrow primarily target market which consist of:
Males in their late 20. This is primarily because they are graduating from college and are in pursuit for a job career. Therefore, they have to get rid of their tee shirts and jeans and start purchasing more formal clothing. In Express they can have all what they need with a sense of fashion. They are always innovating in their designs and styles to attract them. If I will put along an age range will be between 21 and 35 years men that want to dress formally for their every day routines but at the same time be fashion vanguardist persons.
For women will be around early 20s. The reason is about the same although with a slight change. Women care more than men of what they wear on a daily basis so Express always focus more on every detail on providing the most late fashion on their clothing. One of their main focuses are as men provide women with the necessary styles they will need in their jobs without losing their fashion styles and always look trendy.
This isn’t strict as the manager told me, because he have seen many teenagers and adults wearing and adopting their clothing to be a more trendy and conserve a more fashion sense.

Marketing Mix As I describe this mix consist of Product, Place, Price and Promotion of the store to have a competitive and differential advantage over the store near them. I will start with:

Product They have a very broad line of products, from denim, shirts, suits and ties to tee-shirts, underwear and coats. All these products have the distinction of Express fashion and styles. All of those have the best quality they can provide to secure the customers satisfaction. They are very concern for both their men and women section and devote equal amount of time to introduce new lines of clothing to both sections. Express has their own Design studio located in the heart of Manhattan so they can get their inspiration to design all their new clothing for all of their collections. They are well trained designers chosen from fashion colleges. They are require to go to the fashion shows, and any kind of fashion event host in New York City to be update as much as possible about the most likely new trends that can become fashion.

Place The store is located at 34th in Manhattan Mall on the first floor. They have a big store, and in fact, is the first store when you enter this mall. Is very spacious and very well decorated to attract the customers and curious attention. On my first visit they were starting to decorate for the upcoming holidays having their staff members have freedom to decorate the store as they want. They encourage initiative, imagination and creativity as long as it expresses the store ideas and values. After they are done the supervisor gave them the approval. The main reason they chose this store was because of the high traffic in the area, and I personally agreed, I will say a million people walk through there and is perfect for them because they can expose themselves to a wide population. There are no vacancy stores around which is perfect because creates more traffic. Hence, because they are located on a mall this is also a very good things because people always take their time shopping on a mall due to its convenience. On the windows of the store were a lot of their products in display so the people who doesn’t know about the store can look at their styles and a sample of what they will find inside the store. In my opinion, this attract the customers to check out new clothing. Another thing that is in display outside their store are all the promotions or discounts they are giving out that particular day or period of time. Inside the store they have most of their products in display so the customer can walk through the store and find whatever they are looking for without the help of anyone. This particular store has a clear division between the men and the women section so customers won’t get confuse and have the staff member allocated on either one section or the other to serve their customers better. I will say is a very classy look-like store and very modern in the way they have their clothing display and make comfortable the shopping experience of the customers.

Price Their prices are fairly reasonable in comparison of the other brands and stores offering similar clothing. They are not price as a cheap company either because they recognize how positioned they are on their market and need to continue doing it with their pricing. Only the exclusive or more fashionable clothing they have are quit more costly that the rest of their products. Most people acknowledge this and are willing to pay extra to wear this line that has better quality and more and better details. I will provide with some prices of their products:

Products |Styles |Prices | |Jeans |Extra Slim Washed |$79.50 | |Pants |Stretch Wool Producer |$98 | |Shirts |Mk2 Fitted |$59.95 | |*Prices got from the store. One of the things that attract more to their customers are they big discounts, promotions and coupons offer throughout the year. For example they have on most of their products Buy 1 and the other 50% off. (Information gather on the store) Not only this but they keep sending coupons with discounts to their customers to keep buying from them. Recently they have been giving discounts on their website as they consider it one of their most important advertisement channels, which I will describe in more detail on the promotion part.
Promotion
Express has a very narrow advertisement channel but is quit effective for their purposes. As I said before their main advertisement channel is their website, in which you can see their collections, their products, their discounts, and everything that might catch the attention of the people who surfs their webpage. I find it very helpful every time i enter their website to check out what new things they have and the prices so when I need to shop I know what exactly I will purchase. Another advertisement that is well used by Express is In-Store Marketing. When someone walks by this store they enter to check what they have and are curious about their styles and clothing. Their staff members promote the store on a very good way and this helps a lot. Lastly, the most recent channel has been Television and billboard, although both aren’t used too much because they are so well positioned on their market they don’t feel the necessity to do it. Another reason because they customers knows that through their website they can checkout everything they want. They use this channel on special dates like fashion weeks, Christmas, black Friday, which are consider the heaviest dates of shopping.

Competition The two main competitors they might have are Forever 21 and H&M. The manager was clear in stating that he doesn’t consider them an actual competition because their products are “dispensable goods” (Express Manager). This means that customers just buy this products for a specific occasion but because they are low quality after they use it they throw them away. Another reason is because this two stores focuses on women and not on men. The last reason why they don’t consider Forever21 and H&M real competitors is because both stores lack of customer service and they are really careful on this to give the best customer service possible. Furthermore, although in papers both stores can be considered competitors to the store, they don’t feel threaten that these stores can take away their customers. Customers really know this and are loyal to the brand and the store and despite the other stores offer cheaper prices they keep purchasing their clothing at Express. Is the reason why Express has done well in this bad economy.
Reference Page

BusinessDictionary.com - Online Business Dictionary. Web. 18 Nov. 2009.
"History of the brand." Diesel.com. Web. 16 Nov. 2009. .
"EXPRESS: About Express." EXPRESS.com. Web. 18 Nov. 2009. .
"Small Business Encyclopedia - Business Encyclopedia." Business & Small Business. Web. 18 Nov. 2009. .
Diesel Manager. "Research Paper." Personal interview. 27 Oct. 2009.
Express Store Manager. "Research Paper." Personal interview. 3 Nov. 2009.