CASE: Tommy Hilfiger

OPENING CASE: Tommy Hilfiger

The Tommy Hilfiger brand has been very successful since its introduction in 1988. The brand became an almost overnight success with creative advertising that created a mental association of the name with other designer brands. International sales account for approximately half of all sales and the company is seeking ways to harmonize its American and European operations and designs. But markets differ and Tommy Hilfiger recognizes some of the issues. European operations are more expensive, and prices are higher in Europe than in the United States due to the need for more design changes in Europe, and the fragmentation of the European wholesale and retail system. In the United States, the retail market is more concentrated and produces greater efficiencies that can be passed on to consumers. Also, in some cases, European consumers were demanding higher-quality materials be used for the clothing. Price differentials between Europe and the United States can bring about a few difficulties such as gray market activity and image problems.

Questions

17-1 The chapter explains five international marketing orientations. Which one applies most to Tommy Hilfiger? Explain why.

The strategic marketing orientation indicates a firm is committed to continually serving foreign target markets and to making incremental product adaptations to satisfy local customers. Similar marketing principles apply in domestic and foreign markets; however, country differences may cause companies to apply these principles differently abroad, such as offering product variations to correspond with local preferences. (LO: 2, Learning Outcome: To be aware of product alterations when deciding between standardized and differentiated marketing programs among countries, AACSB: Dynamics of the Global Economy)

17-2 The chapter explains five elements in the marketing mix (product, pricing, promotion, branding, and distribution). In which of these have Tommy Hilfiger’s operating practices been the most standardized globally? Explain why this has been possible and desirable.

Hilfiger’s promotion and branding strategies have been the most standardized globally. This was necessary as a way to convince stores to stock the products and to convince customers to want it. Because of this approach Tommy Hilfiger has become a global brand with strong recognition and a distribution network in over 90 countries and more than 1000 retail stores throughout North America, Europe, Central and South America, and Asia Pacific. (LO: 2, Learning Outcome: To be aware of product alterations when deciding between standardized and differentiated marketing programs among countries, AACSB: Dynamics of the Global Economy)