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1. 1 Introduction The costume jewellery market is one that stays stable even with an economic crisis. You can count several ranges in this market, from the Fashion jewellery (made from non-precious metals) to silver jewels. Thomas Sabo is one of those operators in this market. An analysis of Thomas Sabo will be to respond to the demand of the chief executive of Pandora, the first competitor of Thomas Sabo. They want to learn more about this brand because they start to take more and more of the market share. Then this report will be useful to positioned Pandora in the future. This analysis provide information about the market, the brand, their strategy, their challenges, competitors, all Pandora have to know to position itself on the market. Title : Thomas Sabo Source : First of all Thomas Sabo was created in 1984 by the great Thomas Sabo, Austrian and passionate of jewellery. He decided to open his own company in the historic city of Laun Der Pegnitz in Bavaria (Germany)1 and give to his brand his name. His aim was to create top of the range silver jewellery with a special design. One of the strengths of Thomas Sabo brand is the variety of the collections (two per annum presented on the same time as Fashion week); you can customize your bracelet or your necklace. The jewellery is flexible and can be used to adapt to all your outfits with or without colors and as well bright or mat. 1 2 Title : Susanne Kölbli² In 1990, Susanne Kölbli2 joined the company and became the Creative Director. Together Thomas Sabo and Susanne started to give a recognizable image of Thomas Sabo brand3. In 1998, the first shop opened in Germany and now there are approximately 120 shops all around the world. Nevertheless in this market there are a lot of competitors so we will see what are the competitive advantages of Thomas Sabo in order to resist in the market and take more market share. The first part of the report we will examine the environment in which Thomas Sabo develops as well as provide a corporate analysis. After we will assess the competition, finish with the retail market strategy and with their future challenges and positioning. I) The Marketing environment 1.1 Costume jewellery market The costume jewellery market represents an excellent section of resistance to the economic crisis. It is estimated to be a 5% increase each year. The jewellery market represents 4.1 billion Euros. According to the files Opportunities in the UK jewellery market 4the silver market peaked in 2011 but silver loses value each year, the ratio with gold is now 1 for 40. 2 the-brand/susanne-koelbli/ 3 4 3 The costume jewel purchase is a small part of the customer budget and its more impulsive expenditures. Silver is more popular than gold. The costume jewellery is a superfluous pleasure, which we will not give up to. This market is very cosmopolitan with a variety of styles, brands and ranges. Its a stable market but with a large choice of products, manucturing style and delivery channels. In the costume jewellery market you can find a lot of bottom in the line such as Claires and Moa or a very top of the range (, Thomas Sabo and Swarovski). The costume jewellery tops of the range are alternative to the luxury brand of jewellery. According to the market research Jewels tree5 There is a new type of behavior which characterizes luxury jewellery buying by modest customers; this is called the trading up. To react to this new behavior some intermediary brands come out likes Agatha, Eliot Bijoux, Pilgrim, Folli Follie and Borgia. There is a proliferation of the offer, a multiplication of the brand and a really quick replacement and always more creativity in this market. If a brand wants to resist in this market, they have to be really reactive and ingenious. In this market we can note different delivery channels and the retail outlet branching out: traditional jewellery, department stores, store chains, supermarkets, hypermarkets and luxury brands. So then in this market the positioning is essential. The market tendency is to branch out with new product like watches or perfume (diversification on the men jewels market for example who start to be an important part of the market share), create limited collections to attract customers with the idea of we are not a lot to have this product and allow to the customer to customize the jewel. 5 4 There is an improvement of the personalization offered by setting up a customer loyalty management with newsletters, games contests, pictures and videos. To differentiate, the brand tries to take part of the responsible citizen, the UK consumer is becoming more socially conscious and like to know where the products are coming from. Passion for shion among young people and the importance of women that offers the pleasure of buying costume jewellery is a real asset to the jewellery market however rising unemployment is a brake increasingly important because the spending power decreases. 1.2 Porters five forces - The bargaining power of suppliers The suppliers dont have much power because now Thomas Sabo is a big organization, its mostly because Thomas Sabo wants a certain quality if the supplier can give this quality they can negotiate prices because there is not a lot of suppliers that work correctly and respect Thomas Sabos charter. - The baigaining power of buyers They dont have any choice to negotiate the price but there are a lot of competitors so if they have problems with the brand they will go to another retailer and tell all their friends comments through social networks. This is the reason why its really important to maintain good relations with our customers. - Rivalry between competitors in the market There are several different competitors, the difference is done with the creativity of the collection and everybody try to be more exceptional. We will find several ranges and brands.
5. 5 - Threat of new entrants The costume jewellery is a market high demand so a lot of retailer tries to entrance in the market because its easy, now we can find costume jewellery in the haircuts, in the ready to wear chains, on supermarkets and a lot in internet so the company must differentiate. - Threat of substitue products Here for Thomas Sabo the substitute product are the bottom of the range products that are less expensive and copy the concept. Title: Diagram of the Porters 5 forces Source : Author. Lot of news entrants, several retails outlets. Competitor product Social network The bottom of the range product, copying the concept Quality respect Price negotiation Competitor in the market
6. 6 1.3 Technology and E-commerce Expose to an increase of the jewels in the department stores, ready to wear chains and shion designers, internet takes an important place in this market. Online sales became more and more significant. The jewels are a perfect product for Internet because of its small size, we dont need to test it and the picture shows exactly what the product looks like. With Internet we can win over new targets like men who dont want to spend time going on all the shop to find the perfect jewel. The presence of the Internet is inevitable and the presence on the social networks too. But the jewelers must be careful about the social networks lots of people give their opinions and comment, its really hard to make a reputation but its really easy to destroy it. With the emergence of the E-commerce, the sales are accelerating because the supply is more important and easily accessible. Customer can see a lot of different models at different prices. Comparing became easier and the competition becomes harder. Over time, there has been a noticeable shift in consumer behaviour; the consumer is now keen to differentiate himself/herself and desires a product that is more personalised. This is why Thomas Sabo has a good concept for this present-day consumer because you can create your own jewels, chose the colour, the model and the price. Thomas Sabo wants to convey an image of luxury brand accessible to everybody, because if you do not have a lot of money you can start your bracelet with the cheapest ones and complete it later, tell your mily that you want charms (jewels that you can add in your bracelet) for Christmas or for your birthday. And after few years you can have the perfect bracelet or more charms than you need and change everyday the aspect of your bracelet.
7. 7 II) Corporate analysis 2.1 Corporate Identity Thomas Sabo the German brand start in 1984 is now a lifestyle brand with a lot of creative jewels, this brand is really appriciate by the Star who buy it and wear it as Snop Dogg, Nicky Hilton, Beth Ditto, Robbie William and Monica cruz. The master mind in the organisation are Thomas Sabo himself (picture) and Susanne Kölbli his creative director who work together to do the best to win always more market share, be creative and dynamic. The brand offer 4 different lignes6: - Thomas Sabo Sterling Silver - Thomas Sabo Charm Club - Thomas Sabo Watches - Thomas Sabo Beauty Title: Thomas Sabo Watches and Perfume Sources : Google images 6 8 The sector who represent the majority of the revenue is Thomas Sabo Charm Club, this is also the principal activity of Thomas Sabo, the other lignes are more diversification. The direct sale is the bigest part of the retail. They would like to associate shion jewellery with luxe7. All the lignes are harmonised on this way we can wear it gather together. There lignes be very well in all occasion with so much originality. Thomas Sabo and his team want to find the optimal quality. We can find their collection in more than 200 retail outlet and they have more than 2000 official partners on the five continents. The corporate policy is to became leader on the market, they adopt a creative policy and reactive with a strong creation, they would like to answer as better as they can to the demand and for long time. Their goal are create new universes to answer to the needs of customize our products and the internationalisation8. For the coporate culture what is really important is the interest for the others culture in the world including their own lifestyle to take inspiration. Thomas Sabo loves travel all over the world, before have his hown conpany he was a globetrotter. The second point is base on the following of shion industry to work with shion industry, this is more the part for Susanne Kölbli. 2.2 Parent company Thomas Sabo doesnt have any parent company they are alone but they work with a lot of wholesaler so they have to find wholesaler who reprensent their quality, their dynamism. They work together to became more international 7 2011&why the most perspective niche for the average price and also for Thomas Sabo. In conclusion the direct competitors of Thomas Sabo are the jewellery shop on the street we propose silver jewels with a nice design, the jewellery who have the same or approximately the same concept as Thomas Sabo like Pandora or Nomination, Swarovski, Charmed by Argento and Trollbeads and Links of London (the jewellery and charm bracelet specialist). Or the brand who propose the same concept but in a cheaper price. In the other hand the indirect competitors are the jewellery who propose to customise your own jewel like Thomas Sabo, because they have the same target (people who wants to have something special, dont find everywhere). They work a lot on internet, so on web site we can find a lot of different brand, who are their direct competitor because its easy, in one clic you can compare, prices, design, quality, service.
12. 12 3.2 Retailers competitive strength Thomas Sabo has a lot of competitive strengh because they propose the perfect answer to the current demand. They have a good average price with the respect of quality and service to the customer. You can customize your own jewels but not so much like that its easier for us to produce and control their stocks. They are original, they has got many collection and different chamrs. With this lot of choice we can find the perfect jewels for women but also for men. Thomas Sabo doesnt forget a part of the market. One of their most important competitive strength is that Thomas Sabo had choose the travel retail as a main channel, sale in the retail outlet such as international airport, cruise boat, this is a good way to be know all over the world and there is not a lot of competitor on this sector. The conquest of male customers is one of the competition advantages of Thomas Sabo. Jewelery demand for man is real: it is estimated a market of 150 million euros. Brands are more likely to launch a line of jewelry male, and whatever their price positioning. Thomas Sabo differs again by offering a balance between man and woman. Nevertheless, the problem remains the distribution channel: the mens collections have to be sold in the same outlets that line of jewelry for women at risk of discouraging male customers not wishing to buy accessories in a concept originally conceived for Women? Where a distribution channel should they be dedicated? The answer is Internet who represents today an ideal solution. They also have strategy who didnt work but now they have correct it like at the beginning on internet some parts of countries were excluded from the scope of delivery.
13. 13 Customer loyalty has been a long ll into place. An issue more important than the consumer of jewelry is very volatile and there is a real potential for loyalty. The retailer has identified as competitive threats the rise of conterjects because that form a parallel market. Firm use the name Thomas Sabo to sale their own product in a cheaper price, customer could be desapointed to the quality and give a bad image of the brand. IV) Retail Market Strategy 4.1 Target audience The target audience of Thomas Sabo is men and women between 20 and 35 years old. This is the core target, working people, females who are shion concious, they are middle class, in white-collar or blue collar jobs such as chief executive or secretary. Their shopping behaviour is buying on internet, ability to mix different style, need to have jewels for all the occasion. For Thomas sabo the second target is mothers and daughters who want to live a special shopping experience, th In a third part they have in target people who want to make a gift like a men buying for their wives or daughters. 4.2 Company Image Thomas Sabo want to convey a image of originality, dynamism, international way of life. They also want to belong to the luxury and high quality product. They use star to convey their image, Nico Rosberg the Formule 1 driver for the man and Katty Perry for the woman. This two person represent exactly the brand, active people, shion, sporty, international, original.
14. 14 This strategy help to convey a certain image of the brand. They also use their retail outlet to show the luxe of the brand, try to make live a experience to the customer, like that they cant forget the brand. On their web site they use the color like black and white because its seems color of rich brand, of luxury product, also a very clear and easy website. Compare to their customer they give a image more confidence, the customer trust on the offer because of what they look like and because of the big reputation. 4.3 Use of technology In last few years there is an increase of the E-commerce in the jewellery market as well as all the industry. Nowadays that represent a real important part of the selling (25%) . Every company have to take care of manage this area. Thomas Sabo have an internet website where you can order charms, necklace, bracelets, watches and perfum. They also have few web site who sell their items. The web selling represent a important of Thomas Sabos selling. However the problem with the e-commerce part is that the number of competitor grow up every day especially from the luxury brand or the accessories brand.10 They also use internet has the perfect tools to communicate with their costummers or their future costumers through the social network, blog, internet news . They can speak about us, promote their events and their collection11. 10 11 15 Internet is the indispendable tool to communicate with suppliers, take order, control the chain of distribution. It is easier and quick, if there is no use of the technology a company is not productive and can not take market share. With the expension of the technology its find different ways of shopping as the customer can try the items on internet before buy it with the augmented reality, Thomas Sabo just have in project to use this kind of technolgy in a near future. 4.4 Location strategy The global strategy of Thomas Sabo is to be international, however there is some country where they have a bigger number of market share, some place where its easier to us to integriate. Thomas Sabo is most represented in Europe compare to the United States or Asia. The most difficult country to integriate are asian ones because there is lots of problem with copyrate. It exis 200 Thomas Sabo Shop in the world. The intern market of Thomas Sabo is blend of Germany, Austria and Switzerland. Thomas Sabos location strategy is devided in diffferent location such as shop, boutiques, internet shop. Thomas Sabo is present all over the world in different mode12: - Boutique of the brand in the capital or principal town in a country - Shop In Shop or corners : in department store worldwide , upmarket (for example : Harrods in London, Globus in Switzerland, Printemps in Paris and South Korea with Hotel Lotte) 12 16 - Travel retail: in the airport, train station or in the plane. (for example : Zrich Airport Terminal A and inflight with Lufthansa, Condor or Austrian Airlines ) In this distribution 75% represent multi-brand shops and 25% exclusive boutiques. The travel retail also represent 15% of the Thomas Sabos selling.13 The travel retail sector is independent distribution channel who sale products in sales outlets at international airports or on board aircraft of various international airlines. Linking the brand with travelers is increasing its popularity internationally. 4.5 Merchandising strategy Their concept is based on visual merchandising that appeals to the consumer, where they can find a huge variety of items of very high quality, attractive in their designs, colours and shapes. Their customer is a contemporary woman looking for a shionable accessory, not just jewellery. Thomas Sabo wants to have attractive shop where all customers can live an unforgettable experience of buying and not just buy something. The exceptional ambience and design high-end in the boutiques offer a shopping experience unforgettable and emotional, with all that entails. In addition, the shops provide immediate feedback to customers on collections, which in turn can influence the design of future collections. This is for the eclusive shop but THOMAS SABO brand is also present in the spaces shop in shop stores in exclusives department store who are busy and where there is a requirement of absolute quality in an environment of choice. 13 17 They now try to oraganize a new concept of merchandising with the self service shop. Title: The news self-service sales Thomas Sabo Specialty shops are supported by a complet partner program with subtle concepts about the furniture and the layout of the sales floor, a st delivery service, a control platform B2B comfortable, not to mention the intense activities of supervision and advisory assistance provided by the external service14. Thomas Sabo works with more than 2000 wholesaller all over the world who are commit to delivery their product around the world. 14 channels/wholesale/ Source : 18 4.6 Pricing strategy The pricing strategy in Thomas Sabo brand is to find the best price acceptalbe to the costumer. They have a special position in the market, they are the lowest price in the luxury industry but they have the higher price in the medium market. This is the reason why they attract lots of people, because the middle class can buy this kind of luxury jewel but for a attractive price for this level. The price are included between 22€ and 2000€ for a charms, 30€ to 500€ for a empty bracelet. This strategy is benefic for their sale because they offer exactly what the customer desire, a luxury jewels for an accessible price. Title: BCG matrix Source: Author Relative Market share MarketGrowthRate STAR Question Marks Cash cows Dogs
19. 19 4.7 Communication strategy Thomas Sabo himself, like many creative forces he does not like giving interviews to journalists, nor does he allow his picture to be taken15. However this is not the aim of the brand, they use many different means to communicate with their costumer about their product, the brand, sold, the new collection. Thomas Sabo had found the perfect mixte to communicate. They use all the tools they have in hand such as internet, media, star, The brand strategy is supported by strong advertising campaigns and public relations activity. The point of sale is very important the final look is crucial. First of all they are present in the shion magazine or professional magazine with different advertising, something regarding charms or perfumes or watches, dpending on wich magazine they put their advertising. Of course they have a web site and they are following in all the social network such as cebook, twitter, Pinterest. They also use shion blog to communicate with their n and their most loyal customer who wants to know everything about the news. Thomas Sabo had also choose a star marketing strategy, they decided to have some muse for the brand who could represent the image of the brand in a real person. The most recent one is Katy Perry since january 2011 who represent the collection Sterling Silver16. The aim is to try to popularize their collection via taking a muse who is adulated and mediated particulary by the target costumer. 15 16 20 Thomas Sabo communicates with the sponsoring like with the offical individual sponsor of the pilot Nico Rosberg. This idea is to be seen on the formula 1 by all the men who for example could later buy a jewels for their wifes. Charity events are another way that Thomas Sabo use to communicate, its good for their image and their reputation. They participate to the House of children RTL. To finish with Thomas Sabo communication as a german company they are present in the German cinema, to help the creation of movies and sponsoring the film launch. Thomas Sabo have a good communication strategy because they became really knows in the world, the idea their communicate interest people, customize your jewels, choose your price all message that the customer wants to hear. V) The Company in the future 5.1 Strengths and weaknesses As seen in the SWOT analysis Thomas Sabo have different Strenghts to developed his brand however they also have few weaknesses but they need to take care of change this weaknesses in strenghts. They have to conquer news market to be present everywhere. They have to be careful about they price strategy because if they became to expensive most of the costumers will stop to buy their brand. 5.2 Challenges and opportunities In the future Thomas Sabo have a challenge, continue to open more shop in the world and develop the self service shop. The desire a bigger expensionto the USA , Japan and chinese market.
21. 21 Their opportunities is to have different range of price and now differente range of produit. They diversify theirself through new collection of product such as watches and perfum. There is a big entrance of the technology in the customer behavior, the augmented reality start to be the way of shopping in the future. Some jewels shop began to use the augmented reality to impress their customer because they can try a jewels when they dont actually have the jewels in hand17. One of the big challenge for a company is to win the loyaulty of their costumer, this is one of the must important challenge for Thomas Sabo in the future. They start with Charms Club who is an opportinuty they have to win the loyaulty of their costumer. 5.3 Future strategy The future strategy would be to develop the self-service and augmented reality system because its a news way of sale. Everybody doesnt have time to buy gift so that could be a good idea to develop this system. Propose exclusive collection as Thomas Sabo start to do is a good idea to stimulate the sales, people want always something news, something that not everybody will have. They have to work on the impulse buying. The third point were Thomas Sabo could take care of in the future could be the planet with a brand eco-friendly. Be careful of where they buy, what they buy, if the employees are well-treated, well-paid. That could be also a good idea to communicate with, give a perfect image of the brand. The last point of the future strategy will be based on the male market, nowadays its never seen wear to wear for men without accessories, Thomas Sabo was one of the first to offer accessories for men. It was a good idea and they won money in being the first on the market. However they have to continue to propose the best offer now they have more competitors. 17 22 Conclusion To conclude with this report, Thomas should be for the future using the way of the self-service and the using of the augmented reality because the technology selling represent the future, if they are not In, they will lost lots of market share. This king of selling is news and they can surprise the costumer with this tools. They also have to work with an eco-friendly system because nowadays people are really interested by the organic product, product who takes care of the evironment, where the employees are well treated, etc. They must continue to have creative idea for the charms, why not more develop the system of customize and giv more power to the customer. Like that the customer could practically create his own jewel. The biggest success of Thomas Sabo this last 2 years was the entrance in the male market, they to develop again this target because they represent a big part of the market and in constant evolution. Give the image of rock men power was totally approriate to the men target costumer. Improve this way will open more doors to Thomas Sabo18. The success of Thomas Sabo is because of Thomas Sabo himself a traveler all over the world who take idea from different culture, different country, he would like to continue in this way of creator so now he says that they dont look after the market now , they do what they want to do 19. 18 19 
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