Giordano’s current positioning strategy is value for money or quality merchandise at affordable prices. That’s differentiating their products compare to other rivals. Moreover they put their service different with high level of service provided to customer, their sales staff is dedicated, ever smiling, well mannered and helpful. Those positioning strategies were success due to filling a gap in the market for trendy, yet reasonably priced unisex apparel, reinforcing the positioning with the appropriate marketing communications and the delivery of quality service.
Giordano reposition itself against its competitors in its current and new markets: The possibility of changing current positioning in the light of developments in the industry, particularly with respect to consumers’ desire for trendier fashion, as well as the increase in the number and strength of competitors should also be discussed. For instance, students could critique the firm’s interpretation of these trends and its subsequent decision to upgrade its image and capture the up-scale segment. Obviously, this move may cause problems with its current core target segments.
This was apparent from the failure of its Giordano Ladies’ venture, because the positioning strategy failed to differentiate the up-scale segment from the value-conscious segment. Giordano has fought hard to establish its brand name for its value-for-money proposition, but it is also because of its established branding that Giordano cannot easily change its positioning. However, it can be seen that Giordano took measures to avoid the problems of brand dilution, and to overcome its apparent difficulty in moving consumers’ perception of Giordano towards a high-end positioning.
For instance, it established a new product line, Bluestar Exchange, to cater to the needs of its existing value-for-money segment and revamped the core brand with extensive marketing communications and gave its stores a new look. Giordano initially tried to acquire Theme International in November 1999 to carry its line of up-market ladies apparel, but its take-over bid was rejected by Theme’s management and stockholders. Instead of giving up entering the up-market segment, it re-launched Giordano Ladies and Giordano Junior to carry a trendier line of apparel, with encouraging results.
We may conclude that, Giordano should not lose its focus on customer services as one of its core differentiating factors. Should it have different positioning strategies for different markets? There are possible problems with having different positioning strategies in different markets. For instance, the recent slight shift towards a higher end from the current low-end value-for-money positioning in Hong Kong was not fully executed in its other markets.
Customers in these markets may become confused as to what Giordano stands for, and this inconsistency makes effective service strategy implementation difficult, particularly as consumers are becoming increasingly mobile and travel more frequently between Giordano’s core markets. In addition, economies of scale in apparel purchase, design and market communications may be diluted, if different strategies are followed across markets. If this trend persisted, Giordano may dilute its brand name and possibly might weaken its competitive advantage in other areas as well.
Probably, Giordano would do better to keep a consistent positioning, keep its management focused on its core strengths, and send a clear message to all its staff and customers. Giordano are slowly and gradually moved its positioning upwards to meet the rising affluence, and hence the resulting desire for high end apparel, of its core target segment. As Giordano enters into new markets and face strong and similarly positioned competitors in these markets (The Gap in the US, Japan and most European markets), the pressure to adopt a slightly different position that suits the unique market situation of a particular country may increase.
In this case, students could suggest that Giordano acquire another existing brand or start-up a new business entity under a different brand, with its own positioning strategy. In fact, this is illustrated by Giordano’s recent venture, Bluestar Exchange, which catered to amore price-conscious, mass-market segment. However, this strategy is extremely risky due to the costs involved in building a new marketing strategy and brand, and students may come to the conclusion that having a consistent positioning may be the etter option even if it means competing head-on with established brands.
In conclusion, a potential strategy for Giordano could be to maintain its positioning in Hong Kong and over time slowly and gradually shift its position in its other markets slightly more up-market to follow its Hong Kong positioning. This strategy would have the added advantage that it would move upwards together with its core target segments, which is also developing upwards in terms of education and increasing disposable income due to most of Giordano’s Asian markets are developing fast.
We believe that in the balance, it would be better for Giordano to maintain a consistent positioning across all markets, even when Giordano decides to enter countries with entrenched competitors with similar positioning. Should these competitors be too strong, we feel that it would be better not to enter this market rather than try to establish a new brand and strategy. The main reason is that this would be expensive and high risk as less of Giordano’s core strengths could be transferred to this new market, and benefits from economies of scale could not fully be reaped like in terms of manufacturing volumes, marketing and training.
Courtney from Study Moose
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