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MKT60010 Marketing Management
Assignment 1: Individual
Case Study: Kate Spade New York
Name / ID: Felix Wong Vui Cheng / 101209895
Unit Convenor: Dr. Carolina Sandra Giang
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Contents
Executive Summary
1.0 Introduction..........................................................................................................................3
2.0 Analysis of the main context of the case study....................................................................4
3.0 Conclusion............................................................................................................................8
4.0 References............................................................................................................................9
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Executive Summary
Kate Spade New York (KSNY) is a luxury fashion accessory brand which was founded in
1993 by a former senior fashion editor. As the company expanded its business, it formed
business partnership with several other brands such as Lenox to market its diverse array of
bath and body products, besides selling handbags. The main target market of KSNY consists
of professional working women who are aged between 25 – 44 with attributes like optimism
and creativity. As the company’s business continues to thrive, management began to look for
ways to increase its revenue by penetrating deeper into different areas of segmentation
demographics using both qualitative and quantitative market research. When sufficient data
from customer insights are finally collected, the management of Kate Spade began to refine
the brand identity and launch new marketing campaigns (both conventional and social media)
to increase its brand awareness and appeal to different age groups of customers. They are
effectively leveraging the brand equity of KSNY. Brand performance monitoring is
subsequently conducted to identify rooms for improvement. The management also planned to
use different marketing strategies to expand its international brand presence without diluting
it.
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1.0 Introduction
This article summarizes the case study review of Kate Spade New York, American
fashion company founded in 1993 by a former senior fashion editor. The company sells a
variety of products from handbags to bath and body categories through licensing partnership
with Estee Lauder and home goods collection with Lenox (Colon and LeSavage 2018). The
main target market of KSNY is professional woman aged 25 – 44 characterized by being
optimistic and live an exciting life. In market research, by applying in-depth quantitative and
qualitative research, the management of KSNY decided to expand the demographics of their
customer base and refine the brand identity to leverage on the its equity. Efforts have been
made in how to brand new products using customer’s insights from the survey. From there,
suitable marketing campaigns were decided to penetrate new markets and strengthen Kate
Spade’s brand awareness. The report further discussed the challenge of KSNY brand
extension, its branding options followed by several managerial recommendations at the end.
Secondary data have been heavily used to complement the relevant marketing theories in this
case study analysis.
Figure 1: One of many global outlets of Kate Spade (Source: https://fortune.com/2017/02/17/kate-
spade-sale-presidents-day/).
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2.0 Analysis of the main context of the case study
Following the acquisition of KSNY by other companies twice, a new senior executive
management team was introduced which includes the likes of Creative Director Deborah
Lloyd, CEO Craig Leavitt and Chief Marketing Officer Mary Beech. The marketing team
commissioned a comprehensive market research to develop a deep profile of KNSY core
customer. Both demographic and psychographic traits were revealed in the research finding.
In an effort to maximize their advertising dollars more effectively, fashion retailers like
KNSY tried to reach the most number of potential buyers with the least amount of effort and
one of the classical tools marketers use is market segmentation which uses a collection of
variables (e.g. demographics, geographic and psychographics) to divide all consumers into
distinct groups for different targeting so that marketing executives can more narrowly focus
on which of customers that generate the most value for their business (Pooley 2007, p. 1).
The subject of interest is strongly connected to the brand, a college-educated and
high-income female working professional displaying traits of optimistic, curious, playful,
strong and live their life to the fullest. Hence, given the insights, the team decided to refine
the brand positioning of KSNY by creating a true lifestyle brand underpinned by a strong
brand voice. From there, KSNY brand value statements were established to guide the
development of new designs, products, displays, advertisements and digital marketing
campaigns. The concept of creating a brand value statement is important in developing
marketing plans for they are fundamental to marketing strategy and performance via the
communication of all benefits, favourable points of difference or parity and a resonating
focus (Goldring et al. 2017, p. 57 – 58).
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The management of KSNY believed that the brand equity of KSNY could be further
leveraged given the explosive growth of global luxury accessories market. The meaning of
brand equity is rather ambiguous. Raggio and Leone (2007) argued that brand equity is the
perception or desire that a brand will meet its promise of benefits. Hence, the team started by
revising and updating the company’s brand identity, the product design team developed
“collections” for every occasion to reflect the Kate Spade New York girl’s fascinating life.
Moreover, beginning from 2010, a series of annual themes such colour patterns and travel
destinations were incorporated into new KNSY designs that launched monthly.
In addition, the boutique and retail store display of KSNY were refreshed with regular
window and merchandise visuals replacement to refresh the brand identity. The company also
ventured into the online space by setting up a retail website with an engaging homepage to
drive the consumers down the online purchase funnel, backed by its strong presence in social
media of Facebook, Instagram and Twitter. There are several benefits of using social media
for business such as building brand reputation (Ngai et. al 2015) and strategic brand
management (Laroche et. al 2013). To boost its e-commerce capability, attractive features
that customers enjoy which include free shipping and well-targeted promotions helped KSNY
to grow its online sales exponentially. Finally, advertising campaign featuring bright colours,
joyful music and happy, playful scenes of KSNY models to reflect the brand’s trait of
interesting life.
Figure 2: Kate Spade’s official website (Source: https://www.katespade.com/).
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Throughout the brand voice monitoring process at KSNY, the marketing team ensured
that each season’s ad campaign was well coordinated whereby all brand touchpoints like
website design must reflect the chosen theme. By monitoring the brand voice development,
the management at Kate Spade must always pay close attention to the different types of touch
points their customers may experience in the different phases of their purchase journey
because in these days, customer experience is at the very top of every firm’s priority list
(Stein and Ramaseshan 2019, pp. 51 – 53). What’s more? Berry, Carbone and Haeckel (2002,
pp. 85 – 89) argued that experience is created not only by those elements which fall under
retailer’s control like service quality and store atmosphere, but also by elements that are
outside of the retailer’s control such as the customer’s shopping purpose.
Furthermore, luxury brands like KSNY should be knowledgeable in what social
media can do for them and define a clear strategy to improve customers’ experience and their
perceptions of social media brands (Phan et. al 2011). For example, as stated in the article,
chat feedback in social media engagement should be taken seriously and store employees
must be trained to gather and direct customers’ feedback to headquarters to facilitate
management decision-making process such as the relaunch of a discontinued handbag or test
a new Kate Spade product category prior to full introduction.
On top of that, several metrics of KSNY brand identity were also measured by the
team. The level of brand awareness (whether its aided or unaided) is one of them. Having a
high level of brand awareness is paramount as research has shown that it can facilitate a
consumer’s buying choice (Keller 1993) and how people without prior purchase of a product
category will search less and select the known brand over higher-quality brand (Hoyer and
Brown 1990, pp. 141 – 148). Besides that, the application of Brand Health Tracking (BHT)
relative to its competitors was also deployed by the management.
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As (Bhattacharya and Lodish 2000, p. 6) mentioned in their research finding, a
healthy brand is one that is effective in satisfying its target customers’ needs by positioning
itself as an attractive purchase option to customers, supported by different types of marketing
mix such as advertising, promotion, and perceived product quality. Brand tracking, when
done right, presents many benefits to a company. It allows brands to deliver a single message
that connects emotionally to their audience and bring in rich market intelligence data that can
inform both future marketing campaigns and the development of new products and services
(Steadman 2020).
When KSNY business in the market is matured, the marketing team began to look
beyond the current achievement by exploring opportunities for growth. The purpose was to
create new demands for the customers. The use of demand management techniques to
customize services for different customers is important while improving the overall
efficiency of distribution network, this is because the strength of distribution affects the
firm’s competitiveness in terms of supply chain cost and customer experience (Lau 2012, pp.
639). This was done through brand extension strategy by introducing new product categories
to appeal the brand’s core audience.
The success of brand extension depends heavily on the extension fit (Volckner and
Sattler 2006, pp. 18 – 34) and consumers tend to respond more favourably to extensions that
perfectly accommodate their perceptions of parent brand (Viot 2011, p. 217). Kate Spade also
expanded its international presence from Asia to Europe as well as broaden its demographic
base by including other age groups with two different brand strategy options which are brand
diffusion and the creation of a separate brand to target a totally different audience than the
parent brand. A diffusion brand is a step-down line extension of a luxury brand that allows
other demographic segment of consumers (e.g. young working adults with lower purchasing
power) to experience the possession of luxury products at a more affordable price to display
their status symbol, this branding strategy helps to establish economies of scale for company
like Kate Spade besides being able to reinforce and revitalize the brand with renewed
awareness (Phau and Cheong 2009, p. 211 – 212).
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3.0 Conclusion
After reviewing the article, it is learned that in order to truly create a loyal customer
base for any brand, the marketing team must first conduct an in-depth market analysis
through demographic and psychographic segmentation. With a solid customer profiling, only
then will the management be able to launch the right marketing campaigns to appeal their
core customers. Managers of global brands like Kate Spade must assess the performance of
their marketing strategies in different markets with a systematic monitoring, and the follow-
up of brand performance is what separates a high-performing brand from its lower-
performing counterparts (Romaniuk, Wight and Faulkner 2016, p. 469). Organisations like
KSNY must always be agile to adapt to their customers’ changing demands, to be on par with
what their competitors are offering in the market. Moreover, from a digital marketing
analytical point of view, social media activities were found to be able to generate online
interaction among users which could lead to word-of-mouth (WOM) effects, subsequently
improving the brand value. Hence, it is recommended for retail marketing executives of
luxury brands like KSNY to carefully define the content of marketing communications on
social media by paying attention to the aspects of entertainment, interaction, trendiness,
customization and word-of-mouth. Managers should be adept at presenting their brands on
social networking platform using the most effective visual, auditory and tactile sensory
effects to effectively monitor the values of their luxury brands (Arrigo 2018, p. 672). Finally,
organisations should adopt a holistic marketing approach which involves interconnected
marketing activities to ensure their customers remain committed to their products than those
offered by their competitors (Bhasin 2018) in order to improve their business
competitiveness.
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Word Count (1668)
4.0 References
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Ana, C & Halie, L 2018, How Kate Spade Built an Empire: A Timeline, Glamour, viewed 26
August 2020, <https://www.glamour.com/story/kate-spade-life-career-timeline>.
Bhattacharya, C, B and Lodish, L, M 2000, ‘Towards a system for Monitoring Brand Health
from Store Scanner Data’, Marketing Science Institute – Working Paper, pp. 3 – 27.
Berry, L, L, Carbone, L, P and Haeckel, S, H 2002, ‘Managing the total customer
experience’, MIT Sloan Management Review, vol. 43, no. 3, pp. 85 – 89.
Catherine, V 2011, ‘Can brand identity predict brand extensions’ success or failure?’,
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Deborah, G 2017, ‘Constructing brand value proposition statements: A systematic literature
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Elisa, A 2018, ‘Social media marketing in luxury brands’, Management Research Review,
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Hoyer, W, D and Brown, S, P 1990, ‘Effects of brand awareness on choice for a common,
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Keller, K, L 1993, ‘Conceptualizing, measuring, and managing customer-based brand
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Ngai, K, W, T, Tao, S and Moon, K, K, L 2015, ‘Social media research: theories, construct
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Pooley, P, K 2007, ‘Marketing Segmentation’, Pensacola Business Journal, vol. 27, pp. 1 –
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Phan, M, Thomas, R and Heine, K 2011, ‘Social media and luxury brand management: The
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Phau, I and Cheong, E 2009, ‘Young consumers’ evaluations of diffusion brands’, Young
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Raggio, R, D and Leone, R, P 2007, ‘The theoretical separation of brand equity and brand
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#:~:text=One%20of%20the%20key%20benefits,over%20a%20period%20of
%20time.&text=The%20regular%20collection%20of%20rich,marketing%20and%20brand
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