VICTORIA’S SECRET
MKT 2300

December 2, 2008 Intimate Brands, Inc. is the parent company of Victoria’s Secret which is headquartered in Columbus, Ohio (Glamorous, Intimate, Powerful, On-line posting). Victoria’s Secret is described as one of the hottest, sexiest, most glamorous stores in the world (Glamorous, Intimate, Powerful, On-line posting). They sell a variety of items that they refer to as “dazzling” and these products range from apparel, beauty products, sleepwear, hosiery, and what they are known for most, their intimate apparel (Glamorous, Intimate, Powerful, On-line posting). Victoria’s Secret’s net sales are 3.7 billion dollars, and they have over 1,000 stores throughout the United States (Glamorous, Intimate, Powerful, On-line posting). This company was established in San Francisco in the 1970’s, and acquired by Limited Brands, Inc. in 1982. It was not until the 1990’s when Victoria’s Secret began using hot super models to show off their sexy line of lingerie did they hit their stride (Victoria’s Secret, Par. 3). They have fashion shows periodically to showcase new and already existing items which get a large amount of publicity (Glamorous, Intimate, Powerful, On-line posting). The concept of Victoria’s Secret is to basically “establish a cozy, inviting atmosphere similar to that of a Victorian boudoir” (Glamorous, Intimate, Powerful, On-line posting). They showed an impressive comp-store sales growth of 11% last quarter and have reported annual earnings increases of at least 20% every year since October of 1995 (Wexner, 2008). The Victoria's Secret team has continued to build strong brand equity through innovative product introductions, expanding new business opportunities such as Victoria's Secret Beauty and building its global presence through the catalogue and a website that they now offer however; stores, the lingerie catalog, and Beauty Products are treated separately (Glamorous, Intimate, Powerful, On-line posting). The selling area is an astonishing amount of 5,126,000 square feet overall, and the typical sales per selling square foot is $731 (Glamorous, Intimate, Powerful, On-line posting). Each store has on an average of 5,111 selling square feet and the location of these establishments are based in mall settings and not usually found anywhere else (Glamorous, Intimate, Powerful, On-line posting). Limited Brands, Inc. employs approximately 90,000 people and the number of Victoria’s Secret employees is included in that. Unfortunately, the actual number of strictly Victoria’s Secret employees could not be found. From the top positions holders to the sales associates assisting customers, Limited Brands, Inc. strives to be the best and pushes Victoria’s Secret to continuously commit to building a family of the world's best fashion brands while offering captivating customer experiences that drive long-term loyalty and deliver sustained growth for their shareholders. Victoria’s Secret has a business to end user retail market in the United States mostly. This niche industry is being challenged in new ways and they are competing in a market for apparel, lingerie, and personal care products. Not only are their products up for competition, but there are also many other factors involved. In 2007, Limited Brands Inc. had a dramatic decrease in net income mainly due to Victoria’s Secret and Bath & Body Works, another company owned by Limited Brands Inc. They implemented a scheme to attract more consumers for the holiday season. Their main target was to teenagers, college students, and online shoppers. In the previous year, 2006, intimate apparel was the most passionate purchase for women and this was acknowledged by many competitors. JC Penny’s introduced a new line called “Ambrielle”, and other stores such as American Eagle and Lane Bryant increased their selection for lingerie as well. Victoria’s Secret is not just fighting for specific customer interest such as 18 to 35 year old women, but instead they found themselves competing for the potential all the way to the penetrated market across all ages young and old, all sizes, petite and full, as well as prices. Sharon Turney, CEO of the lingerie institution, says “The fix is to differentiate themselves from the rest of the pack” he also says, “reaching the customer in places where they tend to spend their time--surfing online or watching the tube--will help the brand to remain on the top in the eyes of their core audience” (Sherman, Pushing Up Results at Victoria’s Secret, Par. 12). Marshal Cohen, Chief Industry analyst at market research firm the NPD Group, says that Turney's new efforts should greatly benefit the company. (Sherman, Pushing Up Results at Victoria’s Secret) Victoria’s Secret’s main competitor would be Frederick’s of Hollywood. Capturing the glamour and thrill of Hollywood, Frederick’s of Hollywood is a world-renowned brand with an objective to make women feel confident, desirable, and romantic through its sensual intimate products and sinfully sexy apparel. The provocative and racy empire of Frederick’s of Hollywood was built by Frederick Mellinger, who debuted the push up bra in 1948 and the daring thong panty in 1981, which are both staples in every women’s naughty or nice drawers (Lukas, Par. 5). During the Great Depression, Mellinger worked for a women’s mail order lingerie company that produced the typical plain beige and white brassieres and accompanying bloomers. While employed with the lingerie company, Mellinger pitched the proposal of offering black bras, gowns, and panties to its customers and this proposition was met with scrutiny and outrage, which lead to his discharge from the company (Lukas, Par. 2). Upon termination, Mellinger went to serve in WWII and during chats with his fellow comrades about the pin up vixens that lied under their bunks; Mellinger concluded that his desire to see women in more daring unmentionables was a fantasy shared by men alike.

Capitalizing on the untapped market of ladies seductive sleepwear, Frederick Mellinger operated his own mail order lingerie company under the name of Frederick’s of Fifth Avenue in 1946 located in New York. Sales in his small Manhattan based business were sluggish and the staggering figures reflected a conservative America that was taboo about the exploration of sexuality. Also hurting his bottom line, local newspapers would not publish his ads because they were deemed as pornographic. To overcome this, Mellinger became more creative in his advertisements by running classified ads such as, “Bare Illusion Panties: To wear under your prettiest things when you want to feel extra alluring and just a little naughty too!”, which attracted local showgirls and dancers that sought more sultry intimate apparel (Lukas, Par. 3). Although the Broadway performers were Mellinger’s best repeat customers, he decided to head out west to Tinsel Town and revamped his emporium of slinky silhouettes with a new name of Frederick’s of Hollywood and was an instant victory with Hollywood divas that craved more glamour for their boudoir favorites. Fast forwarding to today with over 176 U.S. stores and thriving catalog and internet sales, Frederick’s of Hollywood has been Victoria’s Secret ultimate intimate apparel competitor. The two retail giants offer an assortment of accessories, beauty products, chic undergarments, and sexy sleepwear. Victoria’s Secret has continued to maximize profits by reaching a new market of young adolescents and teens through its Pink by Victoria’s Secret line which offers fun and flirty bras, panties, and loungewear trademarked by its signature dog logo. Imported from Italy, Victoria’s Secret introduced the U.S. to its latest line of fierce high fashion lingerie, Intimissimi. Unveiled in spring of 2008, Intimissimi is a young and fresh line that attracts younger women who have matured out of the Pink by Victoria’s Secret line and seek more sophisticated intimates, without having to sacrifice style over price. Victoria’s Secret Semi Annual sales send thousands of customers flocking to its stores each year, seeking to replenish their drawers with apparel and cosmetics at more than 50% off the original price. Strategically, Frederick’s of Hollywood offers similar discounts on its past season merchandise to lure customers away from the congested sales floor of its rival during the sales event. Commonly in large shopping malls the two retailers are located in a close proximity of one another dazzling potential buyers with their store fronts. Frederick’s is best known for its innovation and raunchy lingerie while Victoria’s Secret noted for its soft elegance, both companies alike offer coupons, gift cards, incentives, and rewards to its loyal customers, but only Victoria’s Secret offers the Angel Credit Card that can be used to make purchases in store, online, and accepted at Bath and Body Works. This payment flexibility allows customers to indulge more lavishly in the Victoria’s Secret brand. Victoria’s Secret is making great strides towards customer retention with its marketability to youth through its Pink by Victoria’s Secret line and newcomer Intimissimi and maintaining its sultriness with the lines of Sexy Little Things and Very Sexy intimates. Through this continuum of maturing tastes, the Angels at Victoria’s Secret strive to increase customer loyalty and repeat purchasers. With the convenience of Victoria’s Secret’s website, online shoppers can select from an array of colors, styles, and sizes in accessories, apparel, beauty products, intimates, shoes, and even swimwear. Designer labels such as Baby Phat, DKNY, and Juicy Couture can also be purchased from its website. One sector of the retail market the lingerie powerhouse fails to incorporate into its empire is plus sizes. Unfortunately full figured women have limited options for naughty nighties and shape wear and Victoria’s Secret has failed to act upon this demand and thus shrinking its pool of potential buyers. Cup sizes up to 42DD and apparel in 3X can be purchased through Frederick’s of Hollywood, which allows for any voluptuous women to feel like a vixen. Frederick’s is not the only retailer giving Victoria’s Secret a run for its money, on the lower end of the market brands like Hanes and Fruit of The Loom may not elude the same sophistication of an Itimissimi lace embroidered brassier, but instead capitalize on comfort and carry a relatively low price that attracts buyers. Also these cotton coverage Casanovas can be purchased at superstores like Kmart, Target, and Wal-Mart which allows buyers to pick up a pair of undies while shopping for bread or light bulbs. Department Stores like J.C. Penny, Nordstrom, and American Eagle Outfitters have introduced new lines of lingerie and added bra fitting services that offer comparable intimate items (Kapner, Par 5). Many designers like Calvin Klein, DKNY, and Kimora Lee Simmons offer intimate apparel and its most common for brand loyal customers to only purchase their designer favorites and this loyalty creates stiff competition. Not only does Victoria’s Secret compete in the realms of intimate fashions, but also in the beauty and cosmetic industry as it continues to evolve. Consumers undoubtedly control the market and Victoria’s Secret must remain sensitive to the shifts in consumer taste in order to remain successful. The core competency of Victoria’s Secret lies in the quality of its brand and customer satisfaction. Whether a woman is looking for a risqué teddy or a full coverage girdle, Victoria’s Secret has the products to help a woman flaunt her assets and glow with confidence. The company’s high value of customer service radiates through its stores, with employees offering beauty consultations and bra fittings. Making women feel desirable, soft, and pretty are feelings that are captured in the retailer’s cosmetics, undergarments, and sleepwear. Victoria’s Secret continues to increase customer satisfaction by boosting the self esteem of women with its top quality products. When Victoria’s Secret was first acquired by Limited Brands in 1982 they were known for only selling boring beige and white underwear. The new idea came into play that women would buy more underwear if they had an assortment of styles to select from including multiple colors and textures. By changing their products they hoped to become appealing to the masses (Kapner, Par. 7). Building upon their early on success, the company still remains centered on supplying women with options to fulfill their ever-changing moods and tastes. Victoria’s Secret uses racy print ads and tempting television commercials to market its brand. The merchandise pricing is very competitive with buy more save more incentives. For example, they sell 5 pairs of Pink panties for $25 and upon completion of a quick store questionnaire a customer can receive $10 off a purchase of $50 or more. With the vast majority of its products available in store and online, Victoria’s Secret continues to offer convenience to its customer’s allowing them to shop anytime worldwide. Deviating from the masses that use sex to sell their products, our new marketing strategy will tone down the overly sexed up image of Vicky’s Angels and portray a more innocent persona. With this wholesome approach we hope to attract new buyers that seek less daring delicates and introduce them to the lines of Body by Victoria, IPEX, and V.S. Cotton bras and panties that are not given the same attention in the media like the steamy Very Sexy line. Adored by men everywhere, the Angels of Victoria’s Secret have graced the pages of its catalog for years, blessing us with alluring appeal and exotic intimate imports. Revamping the image of the company, we want to add real women, not the typical size 2/4 to the model lineup. Branching out the model line up to include women from different walks of life will illustrate the company’s commitment to diversity and show potential customer’s that Victoria’s Secret represents them. In addition to mixing up the model lineup, we want to launch a new internet ad campaign. These ads will feature short video clips with slogans such as, “It’s not the handbag. It’s not the stilettos. Nor is it the makeup that makes me a woman, it’s what’s underneath it all.” Shying away from the bare all ads, the emphasis of our campaign is to leave more to the imagination, enticing customers to visit the stores and websites to see what is actually underneath it all. A long term environmental factor that could potentially play a role in Victoria’s Secret’s outlook is obvious by the chosen location for the company’s stores. They have been placed in a majority of malls, and the particular site is almost, if not always, set up close to competitive stores. These competitors offer all of the products that Victoria’s Secret does and more. This could pose a threat because as years pass people become more and more time conscious and prefer to get things done all in one place if possible. Unless the customers are hard-core Victoria’s Secret fans, as other stores continue to produce better lines of lingerie and other products, they may just forego the “dazzling” brand for one that is more convenient for them while shopping. Victoria’s Secret has to evolve to meet the changes on the horizon by keeping up with the current market trends in order to maintain the level of success that they desire. As the growing market is always changing, it is imperative for Victoria’s Secret to expand their technology with the changes around them. E-business is changing everything, and their future depends on how they manage the transformation. Victoria’s Secret’s success begins with a rock-solid understanding of the core value of the products being brought to the customers. With the launch of www.victoriassecret.com in 1998, Victoria’s Secret began the E-Transformation. Their catalogue website experienced remarkable demand, growth and record sales. As Victoria’s Secret continues to improve their online services, their sales will continue to improve. The company has also continued to offer more products and services to their consumers by selling clothing, perfumes, make-up, accessories, etc. If they continue to implement new products, their consumers will continue to buy their products. The market is expecting an even higher rate of repeated buyers in the future. Victoria’s Secret integrated marketing approach to benefit its multi-channel business is a good step towards making an efficient use of its budget. In addition to this, as Victoria’s Secret continues to provide their customers more than one channel for shopping, their overall customer loyalty will continue to improve as well. (Wexner, 2008). Since the internet is changing advertising and marketing in many different ways it is beneficial for a company to participate in this newer promotional strategy. Print media was one of the biggest methods of advertising for many years. Many companies still continue to invest in print media advertising; however, the new internet advertising methods are bigger and more important. Interactive marketing is a customer-focused marketing process that is based on using the internet, intranets, and extranets to establish two-way transactions between a business and its customers or potential customers (Kurtz, 2008). In addition to this, target marketing has also become an important tool in developing advertising and promotion strategies to strengthen a company’s E-commerce initiatives (Kurtz, 2008). Victoria’s Secret is doing their best to keep up with the times and has already begun to do this. They are now placing ads on a common college student website known as Facebook with hopes to increase sales further. Other concepts that could be beneficial for Victoria’s Secret are the pulling and pushing strategies. By using the pulling strategy there is a promotional effort put forth by the seller that stimulates the demand of a product which will in turn exert pressure on the distribution channel. The high demand of the particular product will motivate retailers to ensure the correct amount of inventory to meet these demands. On the other hand, by using the pushing strategy a promotional effort by the seller is directed to the members of marketing channel rather than final users. Motivating retailers to promote products by spending extra time and effort on them will increase customer awareness and longing of the product thus increasing overall sales.
WORKS CITED

“Glamorous, Intimate, Powerful.” 2007. Limited Brands. 2008. http://www.limitedbrands.com/brands/vs/vss/index.jsp

Kapner, Suzanne. “Victoria’s Secret Could Use a Little Lift.” 2007. CNN Money 15 November 2007. http://www.money.cnn.com/2007/11/15/news/companies/kapner_victoriassecret.fortune/index.htm.

Kurtz, David L. Contemporary Marketing 13 ed. Ohio: Thompson South-Western, 2008.

Lukas, Paul. “Underwear Model Frederick Mellinger’s Racy Creations Made His Business a Star.” 2003. CNN Money 1 February 2003. http://www.money.cnn.com/magazines/fsb/fsb_archive/2003/02/01/336849/index.htm.

Sherman, Lauren. “Pushing Up Results at Victoria’s Secret”. 2007. Forbes. 7 Dec. 2007. http://www.forbes.com/markets/2007/12/06/victorias-secret-marketing-markets-equity- cx_ls_1206markets1.html.

“Victoria’s Secret.” Chiff.com. 1999 - 2009. http://www.chiff.com/pop-culture/victorias-secret.htm

Wexner, Leslie. “Intimate Brands, Inc.” 2008. Fran Finnegan & Company http://www.secinfo.com/dsVS7.514x.d.htm