Charlotte Russe in Japan

1
Charlotte Russe in Japan

• By
• Shreelakshmi Adarsh
• Anoosheh Bahramipour
• Mohammad Ben Tarif
• Guillermo Barrera

2
Outline

• Country Review
• General
• Economy
• Demographics
• Business Review
• Market Analysis
• Opportunities
• Challenges
• Internal Analysis
• Marketing Strategy
• Conclusion and Recommendation

3
Country Review

• General
• Area 377,835 sq km (slightly smaller than
  California)
• Capital Tokyo
• Population 127.5 million
• Literacy Rate 99
• Government Constitutional monarchy with a
  parliamentary government

4
Country Review

• Economy
• GDP 3.582 trillion
• Composition by sector
• Agriculture 1.3
• Industry 25.4
• Services 73.3
• GDP real growth rate 2.7
• GDP per capita 28,200
• 
  Est. 2003

5
Country Review

• Economy
• Exports 447.1 billion
• Main Exports motor vehicles, semiconductors,
  office machinery and chemicals
• Export Partners US, China, South Korea, Taiwan
  and Hong Kong

6
Country Review

• Economy

Est. 2003
7
Country Review

• Economy
• Imports 346.6 billion
• Main Imports machinery and equipment, fuels,
  foodstuffs, chemicals, textiles and raw materials
• Import Partners US, China, South Korea and
  Indonesia

8
Country Review

• Economy

Est. 2003
9
Country Review

• Demographics
• High population density 329.5 persons per sq km
• 50 of population on 2 of land
• Total population 0.96 male/female
• Age structure
• 0-14 yrs 14
• 15-64 yrs 67
• 65 yrs and over 19

10
Country Review

• Demographics
• Population growth rate 0.08
• Life expectancy at birth
• Male 77.74 years
• Female 84.51 years
• Total population 81.04 years
• 6th Worldwide
• Comparing to US of 77.43 years

Est. 2004
11
Business Review

• Charlotte Russe is an American womens clothing
  company.
• First store opened in Carlsbad, California in
  1975
• Trendy womens clothing.
• Very reasonable prices.
• Targets women between the ages of 15 and 35

12
Business Review

• Products
• Satisfies broad range of ready-to-wear apparel to
  match all lifestyle needs
• Casual
• Social
• Career
• Special occasions
• Dresses, shirts, tops, skirts, pants, shorts and
  all types of seasonal wear as well as outerwear
• Accessories such as shoes, jewelry, handbags etc.

13
Business Review

• Performance
• Today Charlotte Russe owns 256 stores
• Sales in 2003 fiscal year over 450 million
• Acquired Rampage stores in 1997, taking it from
  16 stores to 55 stores today

14
The Question
15
Should Charlotte Russe enter the Japanese market?
16
Market Analysis

• Opportunities
• Worlds second largest apparel market after USA
  25 Billion
• Womens clothing dominates the market with the
  highest percentage of sales
• Imports of apparel increased 10.9 in 2003

17
Market Analysis
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Market Analysis

• Imports from US

0.8 Value 1.6 Quantity
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Market Analysis

• Imports from China

23.7 Value 80 Quantity
20
Market Analysis

• Local production decreased 20 yearly
• 2001 2003.

21
Market Analysis

• An increase of 20 in the last year.

22
Market Analysis

• Opportunities
• The real success stories are in the specialty
  store sector.
• Store-based sales, that account to 80 of the
  total sales, increased 6.1 in Feb 2004.
• 2.5 increase in Sales in Feb 2004. 5 in Womens
  clothing sales.

23
Market Analysis

• Summary of Feb 2004 sales increase

24
Market Analysis

• Japans economy expanded a real 1.7 in the
  October-December period
• the best showing in 13.5 yrs
• Backed by strong corporate capital investment,
  exports and consumer spending

25
Market Analysis

• Opportunities
• The average age of marriage for females 27 years
  and increasing
• Japans birth rate is among the lowest of the
  worlds advanced economies

26
Market Analysis

• Opportunities
• Fashion-conscious women
• U.S. products have basic acceptance in the market
  (makes authentic U.S. apparel a popular market
  segment)

27
Market Analysis

• Most popular American brand names in Japan
• Polo Ralph Lauren
• Stussy
• X-Girl
• Gap
• Nike
• Levis

28
Market Analysis

• Challenges
• An overall decline in the US apparel exports
• A stagnant economy clubbed with effects of the
  Asian financial crisis.
• Yen continues to teeter to the US (making US
  goods more expensive to the Japanese market)

29
Market Analysis

• Challenges
• A very little room for error (shipments must
  neither be too early nor too late)
• Clothing produced by American companies has been
  traditionally designed for the Western womens
  figures)
• Japanese are highly conscious of the quality of
  sewing

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Market Analysis

• What do Japanese females demand for?
• Brand name
• Affordable price
• Quality of sewing
• Fabric texture
• Trendiness

31
Internal Analysis

• What does Charlotte Russe offer?
• Popular American brand name
• Good quality clothing reasonable price
• Trendy
• Good fabric texture

32
Internal Analysis
Stussy 57
X-Girl T-shirt 50
GAP 30
33
Marketing Strategy

• 4 Alternatives for penetrating the Japanese
  market
• Hire Japanese trading companies to act as agents
  to export our goods
• Sell directly to Japanese trading companies who
  can then import these goods into Japan
• Sell through a U.S. based company that is
  familiar with the Japanese apparel market and has
  connections with Japanese importers or businesses
• Sell directly to the market through specialty
  stores

34
Marketing Strategy

• Target Market
• Young female trend-setters rather than
  trend-followers
• Control the most discretionary income in Japan
• Are concentrated in large cities such as Tokyo
  and Osaka

35
Marketing Strategy

• Mail order catalogs
• Billboards in cities like Tokyo and Osaka
• Television and print advertising through select
  channels of media
• Participating in Japanese tradeshows or visiting
  trade shows in the United States that attract
  Japanese attendees

36
Conclusion Recommendation

• Big population
• Big market segment
• High purchasing power
• Fashion oriented women
• Few U.S. competitors
• Very affordable prices
• Specialty stores advantage
• Brand name
• Nice clothing
• Excellent business opportunity.

37
Thank You!

• Any Questions?