TABLE OF CONTENTS
CHAPTER 1: COMPANY INTRODUCTION 7
History 7
Company Background 7
Company Earnings 8
Product Analysis 9
Product Line 9
Product Advantages 10
U.S. Operations 10
The Assignment 11
Company strategy 12
CHAPTER 2: SECONDARY RESEARCH 13
Industry Analysis 13
Retailers 14
Competitors 14
Integrated Marketing Communication 16
Online 16
Search Engine Key Words 17
Target Market Analysis 19
Target Market Behavior 21
CHAPTER 3: PRIMARY RESEARCH 23
Research Purpose 23
Qualitative Research 23
Research Overview 23
Research Design 24
Research Findings 24
Quantitative Research 25
Research Overview 25
Research Design 25
Research Findings 25
CHAPTER 4: STRATEGY 29
Brand Positioning 29
Branding Strategy 29
Logo 29
Product Line Strategy 30
Pricing Strategy 31
Retailer Strategy 32
Consumer Strategy 36
Sponsorship 37
Catalogs 42
Online Strategy 42
Critical Success Factors 50
CHAPTER 5 – FINANCIALS 51
Budget 51
Consumer Marketing Budget 51
Retailer Marketing Budget 51
Operating Budget 53
Operation Revenue 53
Operating Expenses 53
Overhead Expenses 53
Profit and Loss Statements 54
Measurements 54
Bibliography 56
Appendix 61
Appendix A 61
Appendix B 80
Appendix C 89
ACKNOWLEDGMENT
We would like to give our sincerest gratitude to everyone who has contributed in the making of this thesis project. It would not have been possible without the support and guidance from everyone who have helped us during the process.
First of all, we would like to express our deepest appreciation to the CEO of Kingsland, Carsten Mikkelsen, for giving us the opportunity to work for Kingsland and showing confidence in our work throughout the execution of the thesis. We are extremely thankful for the support, information and open communication that he has shown us throughout the process.
Furthermore, Professor Paul Kurnit, Professor Martin Topol and Professor Harvey Burt Markovitz for sharing their knowledge and experience in their fields, and for showing support, motivation and guidance. We appreciate that they have been available at all times, and their willingness to help.
In addition, we want to show our appreciation to everyone who has participated in our research regarding the thesis. We are thankful for their openness and willingness to take the time to help us with the project.
In final, we would like to express our deep and sincere gratitude to our supervisor Dr. Randi Priluck for the continuous support. She has shown us immense knowledge, motivation, guidance and patience. We could not have had a better advisor and mentor for the thesis project.
EXECUTIVE SUMMARY
We wrote our bachelor thesis project in cooperation with Kingsland AS, a Norwegian brand of high-end equestrian apparel. They have expanded successfully in Europe, and are in the process of expanding to both Asia and the U.S. Kingsland has had operations in the U.S. since 2008, but the U.S. market entry has been challenging due to problems with their distributors. This has led to difficulties in establishing brand value and a unique positioning in the market. Because of these problems Kingsland wants more control over their U.S. operations, and is now reviewing their options.
Our client wanted us to develop a detailed marketing plan on how Kingsland should re-enter the U.S. equestrian market.
We have studied the industry and the target market in the U.S. The focus has been on retailer purchasing behavior, consumer behavior and customer demand. In order to clarify the U.S. market, conducting research was essential. We gathered secondary data to develop general knowledge about the industry and the target market. Secondly, we conducted primary data through both qualitative and quantitative research. The qualitative part consisted of depth-interviews, both with a local retailer, and with an experienced female equestrian. The quantitative consisted of an online consumer survey and a telephone retailer survey. In addition, we met with the CEO of Kingsland, Carsten Mikkelsen, and went with him on an exhibition for retailers in the industry.
The research indicated that the industry of English equestrian apparel size is approximately $400-
$700 million, and the financial growth since the recession has led to a growth in demand for equestrian apparel. The retailer situation is fragmented with over 1000 retailers. The majority of retailers determine their product offerings based on customer demand, and about 50% know or have heard of Kingsland. The competition is high, with primary competitors such as Ariat, Pikeur, Tailored Sportsman, Kerrits and Ovation. Kingsland’s competitive advantage is their unique breeches concept, their European style and exceptional quality. The consumer research indicated that most of the respondents had heard of Kingsland, but very few were familiar with the brand. We also discovered that Kingsland’s product line might be too decorative for the U.S. consumer who tends to prefer more conservative products.
Based on our research, we have developed our recommended strategy that can be divided into five subcategories; branding, product line, price, retailer and consumer. The branding strategy consists of a recommendation of brand positioning in the U.S., and a change of logo. Concerning the product line strategy, we recommend that Kingsland only introduce their competitive product line of show jumping and dressage, in addition to their Breeches Concept. The pricing strategy
recommends Kingsland to adjust some of their prices to remain above-market, but still at a premium price point. The retailer strategy consists of building relationship with high-end retailers in the industry. In final, the consumer strategy consists of recommendations on promotional activities, such as sponsorship, ads in magazines, catalogs and a social media plan.
LIMITATIONS
It is taken into consideration that the study conducted has limitations. The study does not include the entire U.S. equestrian market, but a niche within the market that might deviate from other equestrians. Further, the marketing budget is quite small for covering such an extensive market. In addition, limitations during primary research occurred and did affect the reliability and validity of the research findings.
CHAPTER1:COMPANYINTRODUCTION HISTORY
Kingsland Equestrian is a Norwegian brand of equestrian apparel. It was founded by Lin and Dag Ove Kingsroed in 1999 and has grown into one of the leading companies in their niche of equestrian apparel and horse gear.
Lin Kingsroed had a vision to make functional and elegant equestrian apparel. She designed her own product line and established a storage facility in her home. Today, 14 years later, Kingsland has become an international brand and Lin Kingsroed is the designer and creative director.
Increasing popularity of the brand has led to a wide range of products. The combination of top quality materials and a classic up to date styling has made Kingsland a popular brand among many of the world’s top equestrians. The company is a major sponsor of top riders and shows worldwide.
Today, the Kingsland collection is sold through more than 1000 equestrian stores. (Kingsland, 2013)
COMPANY BACKGROUND
Kingsland is a designer, producer and marketer of equestrian apparel. Their headquarters is located in Sarpsborg, Norway. In addition, they have offices in Hønefoss, Hong Kong, China and a warehouse in the Netherlands. The company works closely with 15 wholesalers, and operates in 29 different countries. Kingsland AS is a privately held Norwegian company, and is not listed in the public stock exchange. Kingsland holds three subsidiaries: 1) Kingsland Production is focused on product development and located in Norway, 2) Kingsland BV is the European selling arm operating from Holland and 3) Kingsland Hong Kong manages production in Hong Kong.
Kingsland’s product line includes clothing and accessories for show jumping, dressage and casual wear, as well as a selection of horse tack. Continuous improvement and innovation in design and production have always been important to the company. The organization is fairly small and takes advantage of being flexible. They see themselves as a major player in the industry and always try to be ahead of trends.
Kingsland has 34 employees, 23 of whom are located in Norway, five in the Netherlands and six in China (Kjelstrup & Wiggen Consulting AS, 2012). The company is in the process of hiring one sales representative in the US and is expecting him or her to start before the summer of 2013, (Appendix A, Meeting with Carsten Mikkelsen, 2013).
COMPANY EARNINGS
Kingsland AS and their subsidiaries earned a total of $11 million in revenue in 2009, and $16 million in 2010, a growth rate of 46%. The large increase in revenue between 2009 and 2010 was due to a number of factors. One of these factors was investment in sponsorships and an increase in exhibition spending, mostly in Europe (BDO accountants & Belastingadviseurs B.V., 2011). A second factor was a new marketing manager with a stronger focus on sales. However, profits did not increase significantly due to increased costs. (Revisorgruppen, 2011).
Kingsland has experienced steady growth in sales since they began operations in 2001. The company considers 2012 as a year to position the business for future growth. The three year avarage return on assets (ROA) is 20%, which is similar to the 19% ROA for the luxury clothing industry.
The following table shows the company’s revenues 2009 through 2012.
Kingsland Group`s annual revenue, (Annual Account , 2009-2011)
Year Norwegian kroners US dollars Annual growth rate 2009 kr 61,824,000 $ 11,200,000
2010 kr 90,428,000 $ 16,000,000 46 % 2011 kr 101,512,000 $ 18,400,000 12 % 2012(B) kr 106,000,000 $ 19,300,000 4 %
A debt service ratio (DSR) over 2 is considered secure by banks, and Kingsland’s DSR of 4 therefore indicates that the company has a strong cash flow. The financial indicators suggest that Kingsland is in good financial health, and they can therefore expand operations and cover liabilities.
(Kjellstrup & Wiggen Consulting AS, 2012)
PRODUCT ANALYSIS PRODUCT LINE
Kingsland’s product line consists of four different seasonal collections annually. In addition, they have a “Never Out of Stock”-collection that consists of the Classic Collection, the Classic Horse Gear and the Kingsland Breeches Concept line. The design of Kingsland’s products is classical and traditional, with an exclusive European style. The majority of the product line is white, black and earth tones. The idea behind Kingsland’s products is to make sure they keep the look of the rider classic, but improve the fit and material of the clothes.
Kingsland use a lot of details on their products, as for example visible logos, decorative buttons, quotes and colored lining. The products are made with European materials, but the majority of the items are produced in China and India.
These pictures represent examples of high-end Kingsland products.
PRODUCT ADVANTAGES
Quality and European design are Kingsland’s product advantages. Quality is important in a sport like horse riding because riders spend hours on the horseback leading to high levels of wear and tear. The equestrian sport has royal origins and a cultural connection to European countries.
America’s luxury consumers may be interested in the allure of the monarchy. Dressage competitions are elegant, as are the clothing and accessories, which appeal to a luxury target.
Kingsland is the only manufacture that has it’s own breeches concept, which is consists of a wide range of models and sizes. (Kingsland, 2012)
(Smartpak, 2010)
U.S.OPERATIONS
Kingsland has operated in the U.S. since 2008, but it has not been a company priority. Their U.S.
operations had a revenue of $550,000 in 2012, but a large portion is held in wholesaler inventory (Appendix A, Meeting with Carsten Mikkelsen, 2013). Kingsland’s U.S. market entry has been challenging for the company due to problems with wholesalers, which has led to difficulties in establishing a unique position in the market. Through 2012 Kingsland sold through two wholesalers, JPC Equestrian Inc. and D5 Global Inc. The two contracts are about to expire and Kingsland is reviewing other options. Ideally Kingsland would like to eliminate both contracts.
JPC Equestrian Inc.
The east coast wholesaler JPC Equestrian, Inc. is a large producer of equestrian apparel in the U.S.
market. The company has a well-established logistics system and distributes a number of different equestrian clothing lines throughout the United States. JPC prefers to produce and sell merchandise at a low price point, and therefore lacks experience in selling high-end apparel. (JPC, 2013) This does not match Kingsland’s strategy to position itself as a high-end brand. Kingsland would like to withdraw from the present agreement, and negotiate a new agreement on production, distribution and storage.
D5 Global Inc.
D5 Global Inc. is a small wholesaler who exclusively sells Kingsland products. There have been some issues with their sales and marketing operations. The owner handles the line, but does not exhibit the product in an upscale manner, which has reflected poorly on Kingsland. Kingsland has expressed their desire to end the relationship, but one obstacle is the estimated $700,000-$800,000+
inventory held by D5. Kingsland is concerned that D5 will dump product into the market hurting Kingsland’s image in the US. (Mikkelsen, Expo Show, Philadelphia, 2013)
Kingsland does not consider its prior U.S. operations a success, and will therefore review its strategy and reenter the market. Kingsland has already decided that they need to be more involved with their U.S. operations and will establish a wholly owned subsidiary. Their challenge will be to research the market, locate suitable retailers and establish both brand awareness and an appropriate position relative to competitors.
THE ASSIGNMENT
After trouble with the wholesalers, Kingsland is now reviewing their options in the U.S. market and wanted us to answer the following assignment.
COMPANY STRATEGY
Kingsland’s management has outlined a set of strategies that they intend to pursue. They include:
1. Hire a sales manager for North-America
Kingsland is currently searching for a North American manager. We strongly recommend that the sales manager has connections within the industry and is familiar with sales of equestrian apparel. The plan is to hire the new sales manager before the summer of 2013, but after the problems in the US, taking time and finding the right person is critical.
2. Develop an International website
Kingsland now owns the international URL www.kingslandequestrian.com. The URL redirects people to the Norwegian URL: www.kingsland.no, which is published in English.
However, we recommend a dedicated site for the U.S. market.
3. Establish an American subsidiary
Kingsland is in the process of establishing an American subsidiary, which will be responsible for the North American operations.
4. Build brand value
Kingsland wants to establish brand value through brand positioning. Kingsland has a reputation of using sponsorships and events, but when it comes to the U.S. they are exploring a variety of alternatives.
CHAPTER2:SECONDARYRESEARCH INDUSTRY ANALYSIS
Showing is a term used when you compete in a horse show either in western or English style discipline. In the U.S., Showing has annual revenue of approximately $10.8 billion.
(Theequestrianchannel). However, the English style apparel industry is expected to be a fraction of the total. Kjelsrup and Wiggen Consulting AS estimated that the American and German market sizes are equivalent with an estimated market size of $400-$700 million. The U.S. market represents a particular opportunity for Kingsland because the market is fragmented with a number of independent companies selling through small retailers. Few sellers have deep inventories, automated inventory-control systems, extensive customer databases or brand equity, and are therefore, unable to effectively control a significant portion of market share. (Wikinvest, 2009) The market in the United States consists of individuals and families who own horses or are involved in the English discipline riding. There are approximately 9 million breeded horses in the U.S. and 2 million households own one or more horses (Theequestrianchannel). According to a survey, 73% of all horses are used for recreational purposes, and 37% list English discipline as their reason for owning a horse. (The State of the Equine industry , 2012)Therefore the total market size in the US is approximately 540, 200 households who purchase English discipline equestrian apparel.
According to the chart below, Texas, California and Florida are the states with the largest equestrian markets. However, the states with the highest incidents of show jumping are Florida and California, as Texas tends to feature a more Western style of riding.
Texas 25 %
California 22 % Florida
20 % Oklahoma
9 % Kentucky
9 %
Ohio 8 % Missouri
7 %
The U.S. equestrian market is well developed with a number of organizations for people who are interested in riding. Over 200,000 Americans are members of equestrian organizations, and the largest organization is The U.S. Equestrian Federation (USEF) with 88,000 members. The majority of members tend to be active in competition, while the remainders are horse enthusiasts. Of the 200,000 members almost 120,000 are involved with English style. (USA Equstrian, 2013)
RETAILERS
The retailer situation in the U.S. is fragmented. The typical retailer has one store and stocks multiple brands of equestrian apparel. Retailers order products on a “just in time” basis and usually order small quantities. There are, however, a few dominant players such as Dover Saddlery and Smartpak, which also operate online stores. Ecommerce represents a relative small portion of the total market, but there are retailers like Smartpak who specialize on ecommerce. Consumers are buying high-end apparel online more frequently than before (Four out of five major luxury brands now have e-commerce sites, 2011). There are currently 1448 stores in the U.S. who sell English style apparel. (Riding resource, 2013). The chart below lists the top two U.S. retailers and their revenues, both online and in-store.
Retailers Revenue Stores in the U.S.
Dover Saddlery $ 80 800 000 17
Smartpak $ 75 100 000 1
Currently, Kingsland’s products are sold through the retailers listed in Appendix A. Most of the retailers are located on the east cost of the United States, but they are present in both of the top two retailers.
COMPETITORS
There are five primary competitors and over 20 secondary competitors in the U.S. market. The five primary competitors were selected based on their positioning, their market coverage and brand awareness. Below is a description of Kingsland’s high-end primary competitors in order of brand awareness as determined by our retailer survey.
Ariat was founded in 1990 initially developing footwear for riders. Today they are a large company and distribute their products globally. They are respected in the U.S. market for their authentic
design, and high quality products. Ariat is also expected to be the largest competitor in terms of revenue with $300 million worldwide. They aim to be the people’s choice, and are a true American favorite. Their slogan is “Ariat. Performance Is In Our Sole.” (textart). Their signature products are shoes made for riders in all equestrian disciplines. Ariat currently have a large professional and casual product line. Ariat is the strongest brand in the US in terms of sales. (Ariat, 2013)
Pikeur is a well-established brand that has been an international market leader for over 50 years. It is considered to be the brand with the strongest positioning in apparel for riders of English discipline. Pikeur is internationally renowned for exceptional fit and quality. Today they sponsor several of the world's best riders. They offer both collections of show jumping and dressage.
However, they do not have a wide product range, running different mode (Saddlery, Dover saddlery) of the same product. Pikeur is the brand most similar in quality and style to Kingsland.
Tailored Sportsman was founded in 1920 in New York. They was the first to make garment tailored breeches, and their apparel is highly regarded as the epitome of classic English equestrian style.
They have a long tradition in the U.S. market with high quality show jackets and breeches. Their apparel offers superior craftsmanship and a true sense of timelessness. (Dover Saddlery)). Their collection consists mainly of breeches and show jackets
The following brands offers apparel at a lower price point, but must be considered as primary competitors, as they have large market coverage and are well-known in the equestrian circle.
Kerrits is a Swedish brand, which was established in 1991 after the creator of the brand got a lot of attention from the media for making excellent apparel for athletes of various sports. Their main focus is functional clothing that provides innovative design for the riders’ specific needs for a reasonable price. Kerrits did not expand to the U.S. until 2012, and they did so by partnering with domestic fabric mills and production facilities. They have experienced great success since their launch in the U.S. Their collection of apparel focuses on casual wear as well as clothing for competitive riding. (Kerrits)
Ovation is a well-known brand in equestrian apparel for riders of all disciplines. Ovation's technical clothing is designed to meet weather's changing needs, while still being fashionable, flattering, and functional to affordable prices. Ovation offers both classic and colorful styles to suit the needs and disciplines of many riders. Their main focus is apparel and helmets. (DoverSaddlery)
A list of Kingsland´s secondary competitors can be found in Appendix A.
INTEGRATED MARKETING COMMUNICATION ANALYSIS
There are many similarities among the primary competitors’ advertising methods. Most of the brands focus on sponsorships of famous professional riders and events. Additionally, all the brands use their own websites and various social media platforms as promotional tools. Some of the brands also advertise in magazines where they have had full-page ads or selected products from their collections. The table below provides information about the advertising methods of the primary competitors by January 2013. More detailed information can be found in Appendix A.
Ariat Pikeur Tailored Sportsman
Kerrits Ovation
SponsorEquestrians X X X
Sponsorevents X X X X
Ads Magazines X X
Social Media X X X X
Own Website X X X X X
Expo Displays X X
ONLINE ANALYSIS
Most of Kingsland’s primary competitors use social media in their marketing strategies. The dominant platforms are Facebook, Twitter and their own websites. They use the different platforms for promoting their products, sponsorships and events. Most of the competitors write in English, except for Pikeur, which uses German.
The chart below indicates that Ariat is the most active of the five brands in the social media arena.
They have a large number of followers, and a strong Twitter presence. Ariat uses the different forms of media to connect with their followers, promote their retailers and their own sponsorships.
Tailored Sportsman on the other hand is not active in social media, and does not seem to use this tool to gain promotional advantages. Below is a summary of the competitor’s activity online. A full summary can be found in Appendix A
Ariat Pikeur Tailored Sportsman
Kerrits Ovation Kingsland
Facebook Likes Talking about
250,178 21,858
149,958 361
18,612 2,736
3,449 31
37,599 814
37,599 814
Youtube Videos Views
38 132,231
4
23,427 No
11 38,571
1 0
1 66
Blog No No No No No No
Twitter Followers Tweets
9,414
2,422 No No
3,773 1,502
707 39
803 353
Own Website Yes Yes Yes Yes Yes Yes
Almost all the brands use Facebook to enhance consumer engagement. Ariat, Ovation and Kerrits are also active on Twitter, and the accounts are used for communication with the consumer, and for advertising. The other brands are not leveraging social media for marketing purposes. All of the brands use their own website as the primary source for the display of equipment, apparel and events.
SEARCH ENGINE KEY WORDS ANALYSIS
Google Adwords is an advertising tool that enables agencies to buy keywords or search terms for specific products and services. If anyone searches for the chosen keyword, the company´s ad will appear next to or above the Google search results. Google divides search terms into 3 groups: high volume, middle volume and low volume search terms.
Google Trends is a web tool that shows how often the particular keywords or search term is entered relative to the total search volume across various regions of the world. (Google Adwords)
• High volume
High volume search terms are the most common search words in a given category. These terms are typically broadly applicable and not specific to the brand. The following keywords are high volume
search terms that would drive potential customers to Kingsland and other competing brands on Google.
- Breeches
Breeches are one of the main products that Kingsland and the other competitors offer.
Google trends implicates that the word is a popular keyword within the North- American region. (Google Adwords Breeches)
- Equestrian
This high volume search term has not been bought as an Adword. There are a few online retailers that are listed as organic search results in addition to Wikipedia and other irrelevant websites. Google trends indicate that the word has a moderate popularity within the North- American region. (Google Adwords Equestrian)
• Middle volume
Middle volume search terms are slightly more specific and can be applicable to multiple brands.
The following keywords are middle volume search terms that would drive potential customers to Kingsland and other competing brands on Google.
- Equestrian apparel
This middle volume keyword has been bought by an online equestrian store called “Calevo”.
The store does not sell Kingsland. Other organic results are equestrian retailers and one of Kingsland’s competitors: Horze. Google trends show us a rather low popularity in the search term, however the interest areas are situated in New York, California and Florida, our target locations.
- Equestrian competition wear
“Calevo” has bought the middle volume keyword. The second organic result is Kingsland’s U.K website. Other organic results are equestrian retailers in the U.S. However, Google Trends implicates that the term is not used often, as it does not have enough search volume to show a graph.
- Dressage apparel
Both Pikeur and Calevo have bought this keyword. Other organic results are competitors such as FITS and Asmar Equestrian.
- Show jumping apparel
Calevo has bought the keyword. Other organic results are several retailers in the U.S. The keyword does not have enough volume to show a graph on Google Trends.
• Low volume
Low volume search terms are very specific and often only apply to your brand. When establishing awareness of a brand, it is important that the brand is easy for consumers and other interest parties to find. The search term ”Kingsland” is not purchased by Kingsland, neither by another company.
However, there are several organic results that show up before Kingsland Equestrian. The search term has a moderate to a high popularity rare on Google Trends. This means that there are people that search for Kingsland. More information about key word trends can be found in Appendix A.
TARGET MARKET ANALYSIS
Our target market consists of professional women English riders who have high income and educational levels, own their own homes and likely own horses. Professional riders are those people who have competed in an equestrian event within the past 5 years and who are committed to the sport of riding. Our target is based on data from the United States Equestrian Federation (USEF), as may be found in Appendix A.
The membership of the USEF is 85% female, which of 66% have a college degree and 40% own a farm. They also compete in equestrian events at least six times per year. The average household income of the target is $185,000 annually, and 38% have assets higher than $500,000. In addition, 80% make or influence purchasing decisions at work, which may imply that they tend to be of managerial positions. The market value of the average home of the target is $594,000, and 22%
own two or more homes. On average they own three vehicles, four horses and spends $16,000 per year on equine-related purchases.
They also spend over $800 per year on equestrian apparel. The following chart shows the key information about the members of USEF.
United states equestrian federation
Members 88,000 Women 74,800
Average income $ 185,000
Competitons annualy (PM)* 6
Equine-related purchases (PM) $ 16,000
Equestrian apparel (PM) $ 830
*(PM)= Per member. (USA Equstrian, 2013)
In 2008, Brakke Consulting divided horse owners into three divisions; professional owners, recreational horse owners, and casual and intensive recreational owners. The first segment consists of people who own horses, and are involved in racing, breeding, polo and showing. The population of recreational owners may be further segmented into owners of high and moderate or low enthusiasm groups. Both segments own horses as a hobby, but the differences are that the intensive enthusiasts attend competitions and are interested in the professional sport of the industry. The Kingsland target in the United States consists primarily of these intensive enthusiasts, which include riders of English discipline. These consumers are mature and affluent people who spend more time on horse related activities than the other segments.
Professionals Recreational/
Intensive Enthusiasts
Recreational/ Casual
Median Years Own/
Lease:
25 years 18 years 15 years
MedianAmount willing to pay for a horse:
$5,000 $4,000 $3,000
Median hours spent per week on horse related activities:
25 Hours 18 Hours 15 Hours
Influencers: Tend to be most frequent participants in the chat rooms
Rely on horse
publications and web sites for equine information
Turn to other horse owners more
frequently than other segments
TARGET MARKET BEHAVIOR
Simmons Choices 3 studied 1,291 recreational riders and 351 professional riders. The data indicate that the target market is active online and in social media. Equestrians are heavy users of Google, Yahoo, iTunes and Facebook as shown below.
Recreational equestrians Professional equestrians
Total 1,291 351
Facebook.com 22% 22%
Google.com 55% 60%
Itunes.com 21% 17%
Nytimes.com 7% 4%
Usatoday.com 6% 4%
Yahoo.com 45% 43%
Wsj.com 4% 5%
Webmd.com 10% 9%
A survey conducted by Shullman Research Center in March 2013 on consumers with household incomes higher than $250,000 a year suggested that ads, electronic devices and apps attract this segment. The top four locations where advertising was seen or heard in the past 30 days by the segment was television, magazines, radio and websites. The top three electronic devices planned to purchase among the segment was smartphones, tablets and digital media receivers.
A semi-annual tracking study conducted by The American Affluence Research Center, of the moods and spending plans of the wealthiest 10% of U.S. households found that the affluent represent almost half of all consumer spending. The affluent limited their spending during the prior recession and as the U.S. emerges from difficult economic times, Kingsland has an opportunity to be a considered brand in the equestrian market that is likely to grow with higher spending among the wealthy.
Based on the information about the market, Kingsland’s target market are women between 34 and 54 years old. She has a collage degree, works as a professional equestrian or competes on a
professional level and has $185,000 or more in household income. She owns at least one horse and may be classified as “the professional equestrian”. She is active on Google, Yahoo, iTunes, Facebook and websites connected to the horse industry. In addition, we would recommend Kingsland to focus on California and Florida as their primary market. However, since Kingsland has indicated that they view the New York as important for promotional activities, we will also consider introducing Kingsland to the English discipline market of New York.
CHAPTER3:PRIMARYRESEARCH RESEARCH PURPOSE
To understand the U.S. market, we conducted both qualitative and quantitative research. Our objective was to determine retailer and consumer attitudes and behaviors regarding equestrian apparel, specifically for the Kingsland brand.
QUALITATIVE RESEARCH RESEARCH OVERVIEW
Our first interview was with a local retailer to determine issues relevant to the retail market from which we developed the following research questions aimed at determining retailer attitudes:
1. What are the methods for choosing products and brands for merchandising in stores?
2. Which brands are the most popular?
3. How familiar are retailers with Kingsland and what are their attitudes toward the brand?
4. What is consumer demand for equestrian apparel and specific brands?
5. Do retailers attend expos and shows?
6. Are retailers attracted by particular promotional methods?
Kingsland’s goal is to reposition its brand in the US market to attract the target of English riders.
We conducted an initial exploratory in-depth interview with an experienced 39-year-old female rider from which we developed the following research questions for the consumer target:
1. What are the general riding habits and preferences of customers?
2. Which are the preferred brands and outlets for purchase?
3. How do consumers find information about riding apparel?
4. What are the purchase frequency and price points?
5. Are customers familiar with Kingsland and other brands?
6. Which specific products do customers purchase and their preference for types and styles of jackets and breeches?
7. Do American consumers know European and US competitive riders?
RESEARCH DESIGN
Our retail analysis began with an in-depth interview with a high-end equestrian retailer to determine general market trends and consumer demand for Kingsland. We visited the store January 30th where we interviewed the owner for about one hour. To study consumer behavior, we also conducted an in-depth interview with an experienced equestrian by telephone on February 20th at 9pm. The interview lasted for 20 minutes. The subject was a 39-year-old woman, who lives in the Hudson River Valley. She owns two horses, is married and has two teenaged daughters who also ride competitively.
RESEARCH FINDINGS
Findings from the in-depth interview with the local retailer:
1. The retailer was familiar with Kingsland and thought it was a high quality brand. He has sold Kingsland in the past, but there have been some complications with the distributor, specifically that either the product or the bill did not arrive.
2. There were also issues in dealing with Kingsland directly, but these problems should be solved with a dedicated sales representative.
3. The Kingsland product line may be too fancy for the US consumer who prefers a more conservative product. Specifically consumers prefer fewer appliques, less embroidery, earth tone colors and smaller logos. The Kingsland products feature many of these attributes.
4. The retailer said that he was concerned about the fit of Kingsland products not satisfying conservative consumers. In addition, the retailer felt the sizes were limited, but he was not aware of the new breeches concept line.
Findings from our in-depth interview with the 39-year-old experienced female rider:
1. The subject rides regularly in the summer, approximately six times a week. During the winter the subject rides less often because of the weather conditions.
2. The subject competes in show jumping regularly.
3. She has a couple of show shirts, eight pairs of breeches and two show jackets.
4. She exclusively purchases apparel in stores, because she prefers to try it on. She never buys online.
5. The interview subject stated that it was important to purchase apparel with great quality and fit, and for a reasonable price.
6. She bought the brands with which she was familiar and based on past satisfaction with them.
7. If she were to try a new brand, it would be important to her to get to know the brand first, either through sales personnel in stores or on various online forums.
8. She had heard of the Kingsland brand, but knew very little about it.
QUANTITATIVE RESEARCH RESEARCH OVERVIEW
Based on the findings from our qualitative research, we developed a retailer telephone survey and a comprehensive online survey aimed at English style riders. Our objective was to determine retailer and consumer attitudes and behaviors regarding equestrian apparel, and specifically the Kingsland brand. The interview guide and questionnaire appear in the Appendix B.
RESEARCH DESIGN
We surveyed 36 retailers in New York, Florida and California by telephone. We asked 14 questions about their selling methods and knowledge of Kingsland. Due to the small size of the respondent base, a quantitative analysis is inappropriate.
We designed a comprehensive survey to examine consumer behavior in the equestrian apparel market, based on information from our in-depth interviews. The survey instrument consisted of 19 questions alternating between Likert scales and semantic differential scales.
We located riders using a convenience sampling technique, specifically snowballing. In addition we posted links to our Qualtrics survey on over 50 web sites, forums, Facebook pages and blogs. To encourage participation, we offered the chance to win a $100 gift certificate for Kingsland products.
After posting for four weeks we received 32 respondents. The interview guide and questionnaires appear in the Appendix B.
RESEARCH FINDINGS
The results from the retailer survey indicate that there are two groups of stores: high-end stores and low-end stores. High-end stores report their highest priced breeches selling at over $250. Low-end stores sell their highest priced breeches for less than $250. Because Kingsland sells breeches at approximately $310 in the U.S., we were more interested in the high-end stores. These are our findings:
1. The majority of retailers determine their product offerings based on customer demand, customers who come into the store and ask for specific brands.
2. The top brands among the all the retailers were Kerrits and Ariat, and the top brands among the high-end retailers were Ariat, Pikeur and Kerrits.
3. For breeches, the top brands among all the retailers were Pikeur and Kerrits, and the top brands among the high end retailers were Pikeur,
4. The average of the highest priced breeches among the retailers were $248, and among the high-end retailers it was $317.
5. Out of 35 retailers, 17 were either familiar or very familiar with the Kingsland brand. The high-end retailers were even more likely to know the Kingsland brand.
6. About a third of the retailers have consignment arrangements.
RESEARCH CONSUMER ANALYSIS
Our survey provided information on the target’s riding habits, equestrian apparel purchasing tendencies, familiarity with Kingsland, favored brands and potential promotional outlets. As a result of the consumer survey, we recommended a promotional strategy aimed at building awareness of the Kingsland brand among members of our target. The complete results from the survey can be found in Appendix B
Riding Habits
The results from the consumer survey indicate that all the subjects participate in English discipline riding, and are therefore within our target market. Even though most respondents have not participated in a competition in the past year, 77% indicate they have been involved in events and shows. Since only a few respondents competed in the past year, it may not be totally reflective of the target market.
Apparel Purchasing
Every respondent had purchased at least one pair of breeches in the past year, and 80% bought 2 or more pairs of breeches as shown in the following chart:
50% of the respondents purchased their equestrian clothing online, while 37.5% went to a store.
Only 3.1% bought their apparel at a show or an event
When asking about the most important considerations the respondents have when purchasing breeches, 100% answered that the quality is either very or extremely important. 81.3% answered that the style is important, while 62.7% care about the colors. 70% also believe that the price of the breeches is important.
0 % 20 % 40 % 60 % 80 % 100 % 120 %
Horse back
riding Competition Event
Riding Habits
0 % 10 % 20 % 30 % 40 % 50 %
1 pair 2 pair 3 pair 4 or more pair
Purchased breeches the past year
Kingsland’s Apparel
We showed the respondents a picture of one of Kingsland’s white breeches and asked four questions concerning it. 59.4% of the respondents liked the breeches, 56.3% liked the fit, 40.7%
liked the color and 43.8% would like to wear these breeches.
When asking the same about one of Kingsland`s show jackets, 68.8% liked the jacket, 65.6% liked the fit, and 65.7% would like to wear it.
Familiarity and Attitude Toward Kingsland
Most respondents (87%) had heard of Kingsland, but very few indicated that they were very familiar with the brand. We asked how likely the respondents were to purchase Kingsland’s breeches the next time they were purchasing breeches. Only 13% answered that they were very likely to choose Kingsland. In contrast over 40% indicated they were likely or very likely to purchase Pikeur, one of Kingsland`s biggest competitors.
We also wanted to know if the American consumers knew Kingsland’s current riders in Europe, which we discovered that a majority of our respondent did not.
Promotional Outlets
39.6% of the participants answered that equestrian magazines are either very or extremely important in the decision-making process when buying equestrian clothing. 18.7% answered equestrian blogs, while 25.1% believe that the website is important. Forums are also a way of finding information about equestrian apparel, and 25% of the respondents answered that it’s an important part of the decision process.
CHAPTER4:STRATEGY
The given assignment was to create a detailed marketing plan of how Kingsland should re-enter the U.S. equestrian market. The high-income target market, and the strong quality and exclusive appeal of Kingsland, leads us to recommend entering the high-end part of the equestrian market. We intend to establish Kingsland at the top of the market of equestrian apparel in the U.S., positioned above Pikeur in terms of quality, style and elegance. Our recommended strategy focuses on branding, product line, pricing, retailers and consumers. The strategy is created to evoke consumer demand with the purpose of attracting retailer orders.
All of the recommended strategies will be implemented and executed by the U.S. sales representative, with assistance from the Norwegian headquarters if needed.
BRAND POSITIONING
When entering the U.S. market, we recommend Kingsland to strive for the following positioning:
BRANDING STRATEGY LOGO
A key element of Kingsland’s high-end positioning is the branding strategy. They have several different logos for various purposes, which may confuse consumers. When entering a new market it is important to stay consistent with the branding and positioning to achieve awareness. We recommend Kingsland to use one logo when entering the U.S. market. In addition, the logo should be a reflection of the wanted positioning, which means that Kingsland should choose a logo that looks luxurious and exclusive to be consistent with the high-end positioning.
The logo we recommend is “The Shield”, because the design is clean and elegant. The crown expresses high classification, and it is associated with the monarchy, The logo consists of Kingsland’s traditional colors, and the “KL” works well as an abbreviation of the brand name.
PRODUCT LINE STRATEGY
Kingsland has a wide product range in Europe that consists of both competitive clothing and a line of casual clothing. When re-launching in The U.S. we recommend that Kingsland focus on apparel for show jumping, dressage and the Breeches Concept to build the premium positioning of the brand in the U.S. The Breeches Concept should be their signature product line, since this is a unique feature that differentiates them from the competitors.
After conducting both our qualitative and quantitative analysis, we discovered that the conservative U.S. consumers tend to look at Kingsland’s apparel as too decorative with too many details. Most American consumers tend to prefer equestrian apparel clean and simple, without visible pockets, buttons and big logos. We therefore recommend that Kingsland introduce their classic apparel to the U.S. market, in the first product launch. When the brand has become well established, we recommend Kingsland to introduce the casual line to take advantage of a broader segment.
Even though the target market is women, we recommend introducing a small selection of items for men as well. Almost all of Kingsland’s primary competitors have a selection of menswear, and these items can also be used for women who do not want breeches or jackets of slim fit. It will be a small selection of breeches in earth tones and black show jackets. We recommend that Kingsland emphasize on the following items in the Breeches Concept and the following items in the show jumping and dressage line:
Breeches Concept
Here is an example of Kingsland’s classic breeches in earth tones, and without too visible pockets or logos.
PRICING STRATEGY
Kingsland sells at a premium price point, with an above-market price. The premium price matches Kingsland’s position as a high-end brand. Kingsland also emphasizes design, quality and strong warranty.
In Norway, Kingsland sells at a premium market price, but in the U.S. the competitive market prices are lower than in Norway, even for the high-end brands. Therefore, Kingsland should adjust some of their prices to remain above-market, but still at a competitive price point. The chart below shows the prices for Kingsland products at Smartpak, one of their current retailers. Kingsland’s prices are higher than Pikeur’s prices, one of their primary high-end competitors. Due to the high incomes of the target market and the desire for luxury and quality, we recommend that Kingsland strive to be the most exclusive brand in the category by securing the highest prices on the market.
Product Kingsland Pikeur
Show jackets $495 - $550 $340 - $470
Shad belly $900 - $965 $879
Breeches $288 - $395 $285 - $380
Show jumping
Solid colored items from the
showjumping line. No colored collars, big buttons or too visible logos.
Dressage
Simple, but elegant pieces from Kingsland’s dressage collection that we believe will fit the American consumer market.
RETAILER STRATEGY
The retailer survey suggested that Kingsland has a limited awareness among retailers. The survey also showed that retailers purchase by demand. Kingsland has to be available for end users and with a limited marketing budget, they cannot rely on demand driven sales alone. We recommend that Kingsland use both a push- and pull-strategy to build awareness among retailers and drive consumers into the stores to demand Kingsland products. The strategy is a direct marketing strategy approach and includes mail, email, telemarketing and face-to-face marketing. As suspected and discovered during the in-depth interview with the retailer, the employees plays a big role in influencing consumers. Kingsland is dependent on the retailer’s knowledge to defend the premium price. We therefore recommend Kingsland to create a brochure that explains how Kingsland’s products are unique and give a list of important benefits.
Our retail strategy has three goals:
1) To build brand awareness among high-end retailers.
2) To establish relationships with retailers, and encourage them to recommend Kingsland to consumers.
3) To concentrate the strategy in a limited geographic area, and maximize the sales representative’s efficiency.
As mentioned, Kingsland will focus on the three states, California, Florida and New York. The effort will help hone the strategy for the entire market, while maximizing efficiency of personnel.
The emphasis will also be on high-end stores to support the high-end strategy of the brand.
• Send a mail with a brochure, a personlized letter and a gift.
• Send an email to the the nonresponding retailers.
Telephone
• Telephone the nonresponding retailers. The objective is to get meetings.
Personal
meeting
• Send the sales represantative to showcase the brand and write orders.
The strategy is designed to establish relationships with the objective of getting the retailer to agree to a meeting and then to write orders. The first contact with the retailers is critical. It will need to be done in a professional way to yield a high response rate. We recommend that Kingsland send a personalized letter and a small gift, in addition to the brochure. This is quite normal in the U.S.
market and is documented to have a positive effect when used right (Markovitz, lecture notes 2013).
A sample of the personalized letter is displayed underneath and can be sent to retailers without major changes. The gift we recommend is a promotional box containing pens, notebook and a calculator. We chose this gift because it is useful, inexpensive, help build a relationship and potential reciprocity for the retailer.
The email will be sent to the retailers that have not responded to the direct marketing. This mail acts like a follow up. The email is also designed to be personal, which will help to increase hit ratio. The core of the email would be to present Kingsland and to get the retailers to be interactive, and schedule a meeting.
The retailers that do not respond to the mail and email component of the campaign will be contacted by telephone. The survey indicates low awareness of the Kingsland brand among retailers in California, Florida and the New York. This means that a face-to-face meeting is important to build relationships and gain trust, in addition to promoting the products. The meetings have to be pre- planned with the retailers. This part of the strategy is far more expensive, but also potentially rewarding. The sales representative is the face of Kingsland and has to act in a manner that reflects the company. This part is depended on the sales skills of the representative and the process should be logged and monitored for improvement.
Sample letter to retailers:
INVESTMENT
We determined that there are 261 retailers of English style in California, Florida and New York.
However, we have not screened for high-end stores that are Kingsland`s target. Some of the suspects have a very limited supply of English style apparel, and some sell only on consignment.
Based on website searches and the retailer survey there are 131 target retailers in the targeted states.
(Riding Source)
The meeting expenses include flight, car rental, hotel and merchandise to feature. A total expense is set at $250 per meeting. This is calculated on the assumption that the sales representative manage to attend 4 meetings per day, which is a modest estimate.
Kingsland has informed us that the average order of Kingsland products is approximately $2,000 and yearly order is set at $18,000. From financial reports we have found that Kingsland`s variable profit margin is 38%.
Total targeted retailers 261
Retailer screened 131
Mail $30
Meeting cost $250
Cost per unit Quantity Cost Info
Mail $ 30 131 $ 3,930 131 Target stores Meeting $ 250 92 $ 23,000 92 Meetings generated Sum
investment
$ 26,930
The chart above gives a good estimate of the total investment needed to conduct the retailer strategy. Other expenses such as salary are classified as overhead expenses and are included in the profit and lost statement later in the marketing plan.
The hit ratio of the strategy is expected to be 70%, meaning that 7 out of 10 retailers are expected to agree to a meeting. At the meeting the sales representative is expected to close 32% of the retailers.
This is achievable for a good sales person. The time frame for the strategy is estimated to be four months. After this increase in awareness among consumers and retailers will most likely lead to higher demand and the possibility for expanding the number of retailers. Keeping track of the retailer is critical and the sales representative will need a form of CRM system to handle the large amount of information.
Collaborations with new retailers:
Generated annual revenue:
Gross profit
CONSUMER STRATEGY
From the retailer survey we discovered that 90% of the retailers determine which products to sell based on customer demand. Therefore it is critical for Kingsland to increase the awareness among customers to create demand for Kingsland products with the retailers.
Our consumer strategy has two goals. These are:
• Create awareness among consumers
• Create demand for Kingsland products
We have developed a consumer strategy to meet the needs of the American consumer market. We recommend executing the strategy as follows:
30 92
* 32 .
0 ≈
000 , 540
$ 18000
*
30 =
000 , 205
$ ) 38 . 0
* 540000
( ≈
SPONSORSHIP
Kingsland sponsors top riders in Europe and Asia to enhance the brand’s value among the target market. A number of brands in the U.S. also sponsor well-known riders. The chart below shows Kingsland’s top competitors and the riders they sponsor.
Competitor Sponsorship arrangements
Ariat Cord McCoy, Gina Miles, Shawn Flarida, Brendon Clark, Taos Muncy, Beezie Madden
Pikeur Álvaro Affonso, Miranda Neto, Tailored
Sportsmen
No listings of any sponsorship available.
Ovation No listings of any sponsorship available.
Kerrits Lauren Chumley, Rochelle Costanza, Beverly Gray, Jessica Heidermann, Carol Kozlowski, Ashley MacVaugh, Leanna Merchant, Lynn Palm, Tamra Smith, Barbara Strawson, Steph Teeter and Sharon White.
We recommend sending an invitation to potential riders to determine their level of interest in Kingsland’s products. Next, the sales representative will need to follow up the invitations, and offer to provide the rider with apparel for top events. The top riders Kingsland should consider for sponsorship are well known riders, particularly women within the English discipline. The cost of a sponsorship with one top rider is about $20,000-$30,000, and Kingsland will therefore only have the resources to have such an agreement with one top rider in the U.S. In Appendix C, you can find a chart of some of the top riders we see fit these criteria.
Sponsorship
• Sponsor top riders
Magazine
ads
• Display ads in popular equestrian magazines
Social Media
• Be active on Facebook, Twitter and interact with bloggers.
Catalogs
• Create catalogs with visuals of Kingsland's products
MAGAZINES
As part of the consumer strategy, Kingsland will be advertising in top equestrian magazines.
Magazine advertisements can create awareness among the target consumers and lead to demand. In order to reach a relevant audience, it is important to carefully select magazines that have the same profile. We have identified three different U.S. Magazines that fits these criteria. The following magazines are Elite Equestrian, Equestrian Magazine and Dressage Today. We recommend Kingsland to start advertising in these magazines in July 2013, in order to create the necessary demand from consumers. The merchandise will be in store by Christmas; it is therefore crucial that the target market has established an awareness of the Kingsland brand at this point.
The similarities between the three magazines are the demographics of their readers, which is consistent with the target audience of Kingsland. Approximately 85 percent of the magazine readers are upscale women with a considerable amount of discretionary income. These women are active in equestrian sports. They own an average of four horses and compete at equestrian competitions at least six times each year.
Elite Equestrian
Elite equestrian is an established American equine magazine dedicated to provide stimulating editorial as well as engaging layout for the reader. The editorials include lifestyle articles, upper level events, travel, fashion and much more for horse owners and equestrians of all disciplines. The magazines goal is to reach equestrian with the most discretionary income and people who attend in horseshows. The magazine has a strong and growing number of 50,000 readers including free on- line subscribers. Elite Equestrian sponsor top horse shows around the country and distribute their magazines at these events. It is also distributed at training facilities, tack shops, events, barns, pet stores etc.
Kingsland will advertise on the back cover of Elite magazine in four issues through November, January, March and May. This will cost $1,000 per issue.
Equestrian Magazine
Equestrian Magazine is the official publication of the United States equestrian federation. The magazine is available at no cost for all USEF members, which includes 80, 000 equestrians and horse owners. The editorials cover competitions and lifestyles of equestrians in the United States. Equestrian Magazine is published bimonthly, the issues can be downloaded or read through a free of charge Equestrian Magazine app. The readers of Equestrian magazine are upscale and educated with a discretionary income.
These readers are also very involved with USEF. The Equestrian Magazine sends an e-mail newsletter to over 34,000 subscribers
every week. Kingsland will have its own advertisement in these newsletters in July, August and September 2013. This consists of 12 insertions. The cost will be approximately $4,800.
Dressage Today
Dressage Today is an American equestrian magazine specifically dedicated to the sport of dressage. Dressage Today editorials cover rider fitness, feeding of dressage horses, competition results from all around the world, the latest fashion trends and profiles on top horses and riders. It is an online magazine that is run by The Equine Network. A network website for equestrian magazines that reaches 1.5 million horse owners every month and reaches every segment of the market. Dressage today readers are mostly striving competitors. The magazine is published every month. Kingsland will have a 2/3-page advertisement in the July Issue of dressage today. The price will be $2,605.
A media kit can be found in Appendix C
Examples of a full-page ad:
Example of other ads online and in magazines:
Banners:
Side ad:
HORSESHOWS
As part of the consumer strategy Kingsland will be present at a horseshow within the equestrian competition season. Kingsland will be handing out free catalogs and offer their products at their own booth. This is a way to directly communicate with consumers, create awareness and create demand for Kingsland products among the retailers.
It is important that the horseshows attract the target consumers for Kingsland. Below you can see two examples of the booth:
