Order Description
A Case of H. Samuel [i]
Introduction
High street Jewellers H Samuel and Ernest Jones, both are part of the same Signet Group, but often appear on the same high street of the UK, and appear to compete head-to-head for customers. The Signet Jewellers Ltd is world’s largest specialist jeweller. The group operates in the middle market jewellery segment and has number one positions in the U.S., Canada and UK specialty jewellery markets. Signet operates approximately 3,600 stores primarily under the name brands of Kay Jewellers, Zales, Jared The Galleria of Jewellery, Ernest Jones, Peoples and Piercing Pagoda.
The company started modestly in Liverpool in 1862, when Harriet Samuel took over her father-in-law’s clock-making firm, before expanding into a major jewellery group. It was known as the Ratner Group, until its chief executive Gerald Ratner, famously compared its earrings to a 99p prawn sandwich. The remarks proved devastating to the company as shoppers deserted its stores and 300 were closed. Ratner resigned in November 1992 and the group subsequently changed its name to Signet.
H. Samuel is a mass-market jewellery chain, operating in the United Kingdom and Ireland. H Samuel has 348 stores in the US, UK, Republic of Ireland and Channel Islands.
Product range:
The product range includes diamonds and other precious stones, gold and silver and “fashion” jewellery, teenagers’ and children’s jewellery, along with a large range of watches and giftware. There are a variety of products under each product line for people of different segments; lifestyle, economic standards, males, females, teenagers, occasions and so on. The company believes that expressing romance and appreciation through bridal jewellery and gift giving is very important to its customers. The company believes that their customers associate its’ brands with high quality jewellery and an outstanding customer experience.
Future aims:
As per Mckinsay report, jewellery industry seems poised for a glittering future. Annual global sales of €148 billion are expected to grow at a healthy clip of 5 to 6 percent each year, totalling €250 billion by 2020. But the industry is as dynamic as it is fast growing. Consequential changes are under way, both in consumer behaviour as well as in the industry itself. Jewellery players can’t simply do business as usual and expect to thrive globally; they must be alert and responsive to important trends and developments or else risk being left behind by more agile competitors. Today, the jewellery industry is still primarily local. The ten biggest jewellery groups capture a mere 12 percent of the worldwide market. and only two—Cartier and Tiffany & Co.—are in Interbrand’s ranking of the top 100 global brands. The rest of the market consists of strong national retail brands. Some industry observers project that the ten largest jewellery houses will double their market share by 2020, primarily by acquiring local players. Recent deals include British company Signet Jeweller’s 2012 acquisition of US-based retailer Ultra Diamonds and the Swatch Group’s acquisition of Harry Winston in January 2013.
Three types of consumers driving the growth of branded jewellery:
• “new money” consumers who wear branded jewellery to show off their newly acquired wealth
• young consumers who turn to brands as a means of self-expression
• emerging-market consumers, for whom established brands inspire trust and the sense of an upgraded lifestyle.
Jewellery contributed most global personal accessories sales in 2016, and often determines industry performance due to its fluctuating unit prices. Variations in local dynamics for both real and costume jewellery around the world presents ambitious jewellery players with a new set of challenges over 2016-2021. Despite macroeconomic factors that continue to plague the personal accessories industry, jewellery growth has remained resilient in tough times, registering the fastest growth within personal accessories in 2016. Demand for jewellery continues to be largely attributed to fine jewellery, which accounted for 87% of total jewellery sales in 2016. Internet retailing was the fastest growing channel for jewellery in 2016, with a rise in value of 16%. Asia Pacific remains a key growth region in the world for jewellery, registering the fastest regional growth rate in 2016, at 10%. China and India continue to account for a large proportion of jewellery demand in Asia Pacific.
Looking at positive prospective in the global market, the H Samuel is exploring opportunities for international expansion. However, the questions are how and where? The company is exploring its options to expand into ONE of four major markets, namely China, India, Nigeria and Thailand.
[i] Source:
The Guardian (2012), accessed online 1st June 2016: https://www.theguardian.com/money/2012/may/11/store-wars-h-samuel-ernest-jonesa
https://www.dailymail.co.uk/news/article-2565938/H-Samuels-jewellery-heist-High-street-chain-uses-pricing-trick-make-shoppers-think-theyre-getting-bargain.html
https://www.timetrade.com/system/files/industry-briefs/TimeTrade_Jewelry_Vertical_Industry_Brief2.pdf
https://www.mckinsey.com/industries/retail/our-insights/a-multifaceted-future-the-jewelry-industry-in-2020
https://www.euromonitor.com/finding-future-growth-in-fine-jewellery-asia-in-focus/report
Consultancy brief:
Hired as an international marketing consultant you have been asked by H. Samuel to carry out a thorough analysis of the market and recommend them one international market to enter in the year 2019.
You should analyse the global market, recommend a target market/country, decide a suitable mode of entry and develop appropriate international marketing mix strategy.
You should prepare a report for the board of directors addressing your consultancy brief, the report should answer the following questions.
Assignment Questions
Quetion1: Analyse the macro and competitive factors that impact the global jewellery industry. [LO1, LO2]
Question 2: Analyse the internal business environment of H. Samuel using Porter’s Value Chain. [LO1, LO2]
Question 3: Critically evaluate the potential target markets of China, India, Nigeria and Thailand. and then select ONE of the target markets using 12 Cs framework of screening and justification. [LO2, LO1]
Note: Question 3 requires you to evaluate the market attractiveness of the 4 potential markets (namely China, India, Nigeria and Thailand), using 12Cs framework, compare the market attractiveness and decide ONE country / market to target.
Question 4. Recommend an appropriate mode of entering your chosen country and justify your choice. [LO3, LO1]
Question 5: Critically analyse your targeted country’s socio-cultural factors and develop an appropriate marketing mix to succeed in your selected target market. You must link your proposed marketing mix to the company’s SWOT and the cultural factors and justify your answer. [LO3, LO1]
