Hugo Boss

Chapter 9- Developing New Products and Services

I decided to write about this chapter because I think that Hugo Boss represent different approach when it comes to product development process.

Hugo Boss is a part of clothing industry, and because of that their obligation is creating a cloth that people are going to buy not because they have to, but because they want to be fashionable. Every few months Hugo Boss have to change their products because every season something else is “in”, and they can survive on the market only by creating or inventing different colors, materials and designs of cloth, that people are going to buy if they want to be fashionable. I think that this is very hard job because they really can’t test the market and ask consumer for the opinion. Internal development (creative team) of Hugo Boss is very important for them because they are having huge number of competitors, and they have to prepare cloth for next season in silence, so that nobody can’t copy from them cloths before is exposed on fashion week.

Hugo Boss divided their product line in groups that are representing changes in trend. For example, Boss line is having from season to season similar products because for years business people are wearing suits and ties, but they are doing additions to that line by providing people 100% silk ties, or shorter skirts, or women are nowadays wearing more manly suits. Boss Green provides sport cloth and they, for example, improved their sweatshirts giving the opportunity to take of the hood if you want to.

Few years ago Hugo Boss expands their production providing jewelry with their brand name on, and they watched how profit from jewelry increases every year. Because of that, and because customer are buying more and more crystal jewelry, they made a deal with Swarovski, who is going to make exclusive collection for their Boss line next year.

In the end I would like to say that clothing industry is very hard. You have to take care about every segment of production, and you have to be good in projecting future trends. Hugo Boss have a hard job because every collection must be made almost year before it’s introduced to customer, and have to be different because trends are changing. If they want to be on top of the industry their job is to be creator of future fashion.

References:

Unknown Author (2007), trends-UK/Hugo Boss, Retrieved December 17, 2007 from: http://www.trends-uk.com/catalog/product_info.php?products_id=725&osCsid

=973fc9c140e3df820a2460e0e59220c1

Bearden, Ingram, LaForge, (2001). Marketing, Principles and Perspective3/E. New York:The McGraw-Hill Companies, Inc.

Author unknown (2007), Bnet research center/hugo Boss/ HUGO BOSS: License Agreement, Retrieved December 17, 2007 from: http://findarticles.com/p/articles/mi_pwwi/is_200703/ai_n18736700

Chapter 12- Price Determination and Pricing Strategies

In the following paragraphs, I would like to explain little bit about pricing strategies in Hugo Boss. Also because Hugo Boss is giving franchise to lots of retailers, I will try to compare some prices in few stores and over the internet.

First off all, I would like to point out that Hugo Boss is producing his cloths in Tunisia, India, China, Turkey, Italy and Germany. In the first three countries, working conditions are poor, and work force is cheaper than in the other countries. So I think that their prices of cloths worth much more less than they really are. Also, I noticed that in Croatian Hugo Boss, prices are slowly increased every few months, but because their prices are inelastic, that means they can afford that to themselves and not lose clients.

Because they have more than 210 franchise worldwide, and more than 5 700 POS stores there are some changes in prices of the cloths. I have been in Shopping Center Emporium Ljubljana, Slovenia and the price of one pair of shoe was the same as the price in Hugo Boss in Vlaška in Zagreb (the only difference was exchange rate).

Hugo Boss is very famous, so they have very high prices (also because of the quality). Hugo Boss is doing premium pricing when they are selling dresses. They use 100% silk, and other expensive material, so they have higher prices for that cloth. I noticed that they don’t use psychological pricing because people that shop there don’t care that much about prices.

In the end I must say something about our Hugo Boss and Renimo d.o.o. company that is selling Hugo Boss cloth. Almost year ago I got card in Hugo Boss for collecting a points and I thought that they will send me lots of catalogs, but instead of that, they contact me every time new cloths comes and they are sending me birthday and Christmas card. And the best part of that card is that I could get a present if I collect 100 points (every point worth 50 kunas) I will get present, and also they gave you discounts before discount for other starts.

References:

Bearden, Ingram, LaForge, (2001). Marketing, Principles and Perspective3/E. New York:The McGraw-Hill Companies, Inc.

Unknown author (2007), Hugo Boss AG/Company/Corporate Profile, Retrieved: December 18, 2007 from: http://group.hugoboss.com/en/unternehmensprofil.htm

Unknown author (2007), Renimo d.o.o. Retrieved December 18, 2007 from:

http://www.hugoboss.hr/modules.php?r=hugo_boss

Chapter 13- Marketing Channels

Now, I would like to say something about distribution of fabric, cloths, accessories throw Hugo Boss. Hugo Boss is producing and selling products all over the world, so very important thing for them is having a good relationship with their distributors. Also I would like to mention where you can find Hugo Boss cloths.

Hugo Boss chooses to distribute their products to customer exclusively throw Hugo Boss stores, and selectively throw some special cloths store. That allowed them to expand their selling by targeting exclusive customers in their stores, and giving the opportunity to other customers to buy cloth in a mall, or somewhere like that. Hugo Boss is providing a huge number of stores (more than 5900) for their customers. Hugo Boss is also using single channel strategy because you can find their cloths only in expensive clothing stores, or in Hugo Boss store.

When we talk about distributors and retailers, Hugo Boss made special network infrastructure that allows tracking down inventory of all stores worldwide. Also they have sourcing offices and distribution hubs all over the world, so that they could produce and distribute cloths as soon as possible. That shows that they are also a part of backward integration because they own factories around the world. Also they are buying from China distributor fabric because is cheaper than producing themselves, but because they have language problems with them, they are now in negotiating stage with India.

References:

Bearden, Ingram, LaForge, (2001). Marketing, Principles and Perspective3/E. New York:The McGraw-Hill Companies, Inc.

Unknown author (2007), Hugo Boss AG/Company/Corporate Profile, Retrieved: December 18, 2007 from: http://group.hugoboss.com/en/unternehmensprofil.htm

Unknown author (2007), Money control/CBNC TV 18 News/ Hugo Boss looks at India for sourcing textiles. Retrieved December 18, 2007 from:

http://www.moneycontrol.com/india/news/business/hugo-boss-looks-at-india-for-sourcing-textiles-/09/08/300903

Chapter 14-Retailing

Retailing is the most important way that brings Hug Boss AG huge profit. Because of that Hugo Boss have more than 5900 stores over the world and they are growing more and more every year.

Hugo Boss is moving across the world by giving the franchise to foreign companies, so they could sell cloths to their country. Also they are selling cloth in some retail chains (but they must be some retail with expensive cloth and on a good address, or in some mall).

Hugo Boss is paying great attention to atmospheric in their store. I visited store in Spain and Croatia, and I noticed that stores were white; every store has some space that divides Boss, Green and Hugo collection, so it’s very clearly. Also salespeople are very nice and polite, and they will help you if they can. Also they are willing to change the cloths if it’s their foul and you have the ability to reserve the cloth for a day or two if you don’t have money right now. And I mentioned that in Croatia salespeople treat you in a same way even if you don’t buy anything, or if you buy cloth in a huge amount. Also, Hugo Boss in Croatia is providing new service “Mobilni Boutique”. If you don’t have time you can call the store and ask them to bring you cloth at home, so that you can try and buy cloth in peace. Also this service is available 24 hours a day, and prices are same as in the store.

Hugo Boss is trying very hard to leave a good impression after visiting their store, and I like when all stores are in the same way so that I can recognize the brand even if I don’t see the sign above.

Unknown author (2007),Hugo Boss in New York, Retrieved December 19, 2007

From:www.adsce.com/Portfolio/Retail/HugoBoss.htm

Unknown author (2007) Hugo Boss store in Stockhlom, Retrieved December 19, 2007 from: www.daviddesign.se/news-from-david/

References:

Bearden, Ingram, LaForge, (2001). Marketing, Principles and Perspective3/E. New York:The McGraw-Hill Companies, Inc.

Unknown author (2007), Renimo d.o.o./Novosti Retrieved December 18, 2007 from: http://www.hugoboss.hr/modules.php?r=hugo_boss

Unknown author (2007), Hugo Boss/ Company/ Corporate Profile. Retrieved December 18, 2007 from: http://group.hugoboss.com/en/unternehmensprofil.htm

Chapter 17- Advertising and Public Relations

Advertising is one of the most important tools for informing, remanding, and persuading people to come to Hugo Boss store. Besides advertising, there are tools that help Hugo Boss to stay on good reputation, such as public relation and publicity.

Hugo Boss, like all other clothing companies spends millions and millions Euros for advertising their products. They are advertising themselves throw all kinds of media, from television to newspaper and internet. For example, half page in American Cosmopolitan cost 105 700$ (black and white) to 132 200$(4 colors), and that is just one page in one monthly paper. I must mention that Hugo Boss in Croatia only advertise fragrances on television, and in newspapers advertises cloths and fragrances also.

Hugo Boss has their own web site on the internet, so anyone can see their latest fashion shows and cloths. The pages are also divided on cloth and fragrances, which I liked very much. Also, ads are divided according to line of product. For example, Boss Green advertises with their fragrance sport oriented man, while on Boss fragrance is representing nice and gentle female (two pictures explains better what I wanted to say).

In the end I would like to say something about PR department in Hugo Boss. Hugo Boss puts every press release on their web page; they are putting almost every month financial reports, so that their shareholders can be in touch with numbers. I think that they care a lot for all stakeholders.

Unknown author (2007) Boss ad, Retrieved December 20, 2007 from: www.bluebellgroup.com/.../hugo_boss.html

Unknown author (2007) Boss Green ad, Retrieved December 20, 2007 from: www.fantom-xp.com/es_21__BOSS_-_Hugo_Boss.html

References:

Unknown author (2007), Cosmopolitan/Rates/Cosmopoiltan Media Kit. Retrieved December 20, 2007 from: http://www.cosmomediakit.com/r5/showkiosk.asp?listing_id=474162&category_code=rate&category_id=27809

Bearden, Ingram, LaForge, (2001). Marketing, Principles and Perspective3/E. New York:The McGraw-Hill Companies, Inc.

Unknown author (2007), Hugo Boss/English. Retrieved December 20, 2007 from : http://www.hugoboss.com/index.html

Chapter 18- Consumer and Trade Sales Promotion

Hugo Boss must have specialized and sophisticated sales promotion because their customers are wealthy people, who care a lot about how salespeople behave to them. Hugo Boss recognized that, and in the next paragraph I will try to explain in which way Hugo Boss perform customer’s wishes.

Hugo Boss is not using coupons, rebates or something like that in their stores. As I mentioned in one of the chapters Hugo Boss in Croatia (Zagreb and Split) is giving something like VIP cards, but you are collecting points and after a 100 collected points, you get some price. For me, for example that is some kind of motivation, because I will rather buy something in Hugo Boss in Vlaška street, or in City Center one (Ljubljanska Avenue). Also new service that is provided in Croatian Hugo Boss is “Mobilni Bouique”. It’s a new service that allows customers to shop from home for the same prices as she is buying in store (advantage is that salespeople can be available 24hours a day). When we talk about fragrances, during some holidays or promotions of new fragrances, Hugo Boss usually give some make-up bag if you buy their product, I mean fragrances shop Iris is making that kind of promotion.

One of the important thing for every clothing companies are trade shows. Every company would like to have their clothing collection on some Fashion week in Milan, Rome, New York, or Paris. Those Fashion weeks are reserved for the best designers because all famous and important people around the world travel just to see new collection and to order cloth for themselves. Hugo Boss is also representing their cloth for years on Fashion weeks and that is important for them because there is no better publicity that read in the newspaper how some celebrity is wearing Hugo Boss suit.

References:

Bearden, Ingram, LaForge, (2001). Marketing, Principles and Perspective3/E. New York:The McGraw-Hill Companies, Inc.

Unknown author (2007) Fashion Week, Retrieved December 20, 2007 from: http://www.fashionnetwork.tv/

Unknown author (2007) Iris/ Parfummerija. Retrieved December 20, 2007 from: http://www.iris.hr/parfumerija.php

Unknown author (2007), Renimo d.o.o./Novosti Retrieved December 18, 2007 from: http://www.hugoboss.hr/modules.php?r=hugo_boss

Chapter 20- Direct Marketing Communications

When it comes to direct marketing communications Hugo Boss must pay a lot attention to that because if they want to have well (under the good I mean wealthy) customers, they need to have special method to reach them. These following paragraphs I will explain throw Hugo Boss in Croatia because I know only that Direct Marketing Communication.

Renimo d. o. o. is sending postcards, leaflets and flyers to their customers that posses their VIP card. They are also sending a mail in which they inform you that new collection is in the store. Also, Renimo d. o. o. is sending information when discounts start, so that you can come first day and shop while there is more cloths in the store available. I got a birthday card from them, and that is very nice way to show customers that you care for them and that you think about them (they sent me a card that is written by hand, and I think that that is a great plus).

In the end I would like to say something about invasion of privacy in ethical sense. Not sending bunch of catalogues and sales letter, Hugo Boss is taking care for customers privacy, which is great when we consider the fact how many catalogues are in ours mail box.

References:

Bearden, Ingram, LaForge, (2001). Marketing, Principles and Perspective3/E. New York:The McGraw-Hill Companies, Inc.

Unknown author (2007), Renimo d.o.o./Novosti Retrieved December 18, 2007 from: http://www.hugoboss.hr/modules.php?r=hugo_boss