The Bucharest Academy of Economic Studies The Faculty of Business Administration English Section

Jolidon - A Romanian Company Which Penetrated The Foreign Market

Asist.univ.drd. Cristiana Munthiu Students: Scarlat Aurelia-Stefania Tudose Ana-Maria Ungureanu Magda Group 132

Bucharest 2012

Table of Contents

1. Product presentation.................................................................................................................... 3 2. SWOT analysis ........................................................................................................................... 4 3. Segmentation, targeting, positioning .......................................................................................... 5 4. The attractiveness of the product using the marketing mix ........................................................ 5 5. References....................................................................................................................................8

1. Company and product presentation Founded in 1993 in Cluj-Napoca, Romania, Jolidon achieved the leadership on the Romanian underwear and swimwear market and became one of the major competitors on the international market. The story of the Jolidons success looks like an American classic movie: one enterpriser, Gabriel Cirlig, identified on the Romanian market after 1989 two types of products needed, but not to be found, that were lingerie and swimming suites. He started with a few dedicated and ambitious co-workers a little business. The initial shop with 3-4 sewing machines, the minimum logistic to work lingerie and 2 persons to sew became in 14 years a factory of which dimensions intimidates any European lingerie producer. Presently the group has more than 3300 employees and a chain of 133 Jolidon shops, half of them being in the main cities in Romania and the other ones in Europe, South Africa, SUA, Canada and even Asia. In 2004, Jolidon made an important investment by taking-over its main competitor on the Romanian market, Argos SA, with more than 800 employees and more than 60 years of tradition in the field of underwear and swimwear. The collections range produced by Jolidon and Argos is very wide, covering the different types of clients needs in lingerie and swimwear field. Through design and colors the collections join the international trends, being also a trend setter on the Romanian fashion. During the years, Jolidon invested a lot in technology and design, and also in trademarks, collections and brands protection. The beginning of 2006 makes Jolidon one of the most prestigious names in the world lingerie field, the Romanian brand recognition and value confirmation coming from the land of lingerie, France. In February 2006 in SIL Paris Jolidon gained one of the three prizes of excellence during the Ultralingerie event. In the same year, Jolidon takes-over the company named LCS Conf SA-who returned, after the assumption, at the name full of tradition Flacara, one of the most prestigious textile confections factory in Romania, with over 50 years history, more than 1000 employees and a prestigious brand name: Falla. At the beginning of 2007, the group Jolidon adds two more well-known Italian lingerie names: Infiore and Chiaro di Luna, by over-taking the company Emmenci which was founded over 25 years ago and has become one of the most known lingerie producers in Italy. Since its founding, Jolidon concentrated over acquisitions and development in the textile industry, but for the last years the group has extended its activity in the field of financial investments, being the major shareholder with 58 % shares for Interdealer Capital Invest SAlocated all the time through the first 30 companies with the same field of activity. Also, Jolidon entered on the real-estates domain by taking-over the company Cetate SA Suceava. The company now creates different products for different needs, ranging from the lowend to the high-end in fashion lingerie and swimming suits. Their designs are simply a perfect combination of fantasy and creativity. The company makes products for men, children and women, in different sizes (from S to XXXL), different colors, which satisfy even the most exigent customer. These include casual lingerie, represented by the Linea Continuativa and Fior collections; comfort underwear through the She collection; functional lingerie (large size) represented by the Comfort&Lady collections; fashion lingerie represented by Jolie,

Joligirl, Jolidon Fashion, which are refreshed twice a year with spring/summer and autumn/winter collections. Jolidons latest collection is entitled Prelude, a premium brand that blends precious fabrics and accessories with prevailing fashion trends, as well as the exceptional work of Jolidons designers. Prelude is a refined line for women in love with fashion and luxury. The individuality of the models is created not only through particularly original cuts, but also by making use of unusual accessories. From classic black-white combinations with gleaming crystals, romantic filigree laces, handmade accessories and elegant drapes, to aggressively cut low-necks and avant-garde lines, each model is itself a finely crafted piece of jewelry. The swimwear collections boast the same luxury features. Jolidon is one of the few companies at international level that offers an exceptional variety of swimwear products on a yearly basis. Each year, the swimwear collections offer about 200 new models for women, men and children. 2. SWOT analysis of the company Strengths: - Accessible prices for the products; - High quality; - Original designs of the products; - A lot of shops located in commercial centers and populated areas; - Having its own factory; - Diversified products, satisfying various customers; - Well-known foreign suppliers; - A high demand for the companys products on the market. Weaknesses: - High prices for certain products; - Not having shops in every large city in the country; - Unsustainable marketing campaigns (low advertising budget); - No annual or semester fashion shows for improving its brand name and for advertising about its recent collection. Opportunities: - The geographic position if the country in Europe; - Contracts with foreign partners; - Online shops; - New shops in the country and abroad. Threats: - Powerful competition; - The decline in consumers purchasing power as a result of the global financial crisis;

- The bargaining power of suppliers (they may increase the price of raw materials which would affect also the price of Jolidons finished products); - Most of its competitors in the lingerie and swinwear field offer discounts on their products more than Jolidon. 3.Segmentation, targeting, positioning At the start of the 1990s, the Romanian lingerie and swimwear market was still an unexplored area. The market only offered a scant selection, made up of limited imports and a single Romanian brand, Argos. Jolidon was born in 1993 out of a desire to reply to this need and, as a result, it contributed much to shaping the lingerie and swimwear market in Romania and to educating and influencing the consumers buying behavior on this segment. Currently, Jolidon is in full development on a market on which it holds the leading position. Jolidon holds almost 50% of the Romanian lingerie and swimwear market, giving it considerable influence over local developments in this field. The Jolidon brands reputation is also sustained by its network of 50 brand shops all across the country, which will shortly increase to 70 stores. European Fashion Lingerie is the companys tagline. representing its positioning and it is the main feature of Jolidon brands. While other traditional brands offer, most commonly, French or Italian style lingerie, Jolidon summarizes this tradition and takes it to the next level, closer to the 21st century reality, offering the entire world fashionable European lingerie. The segmentation process was based on the customer lifestyle, keeping in mind the complementarity of the existing brands and the newly proposed ones. Jolidon is an umbrella brand for two key-brands: Jolidon Fashion and Jolidon Clandestine, strategically repositioned on the medium/premium segment. Following the rebranding from 2008, Jolidon Fashion has repositioned itself as a FASHION lingerie, but the changes in its global strategy transformed the slogan to European Fashion Lingerie. This expresses Jolidons option to present itself as a trend setter not just a manufacturer of comfortable and accessible products. Jolidon Clandestine was created to occupy the provocative lingerie niche in which Jolidon was not present. The brand is dedicated to the active woman, sophisticated and dynamic at the same time. Falla, Argos, Lilly, Kelitha and Eclizia cover the rest of the lingerie market segments. Jolidon is a well-known international presence. Through its branch offices, in Italy, France and Hungary, Jolidon is strongly represented on these markets, using almost all the distribution channels, though it also has customers in all other European countries and on the other continents. The target market is represented by women and men with the age ranging between 16 and 50, having high and medium income level. Jolidon also produces lingerie and swimwear for children (girls as well as boys). The demand for lingerie and swimwear was on an upweard trend in recent years and this path can be explained by the increase in the living standards, high awareness, the influence of the reference groups and the high level of education. Researches also revealed the fact that people begin to be interested in quality, brand name and performance, and do not accept anymore no name brands. 4. The attractiveness of the product using the marketing mix
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Product All the collections produced by Jolidon and Argos are particularly wide and, covering different consumers needs in the lingerie and swimwear field. Through design and colours, the collections contribute to international trends , also being a trendsetter in terms of Romanian fashion. Over the years Jolidon has invested large amounts of money in technology and design, and also in trademarks and brand protection. The lingerie collections are created and structured not only for the specific categories of consumers: women, men(JD) and children (Jolidon KIDS), but also in accordance with their needs. These include casual lingerie, represented by the Linea Continuativa and Fior collections; comfortable underwear lingerie through the She collections; functional lingerie (large size) represented by the Comfort and Lady collections; fashion lingerie represented by Jolie, JolieGirl and Jolidon Fashion, which are refreshed twice a year with spring-summer and autumn-winter collections. An important part of Jolidon production is represented by the swimwear outfits and complementary products. The swimwear collection is an illustration of the brands core values: innovation, originality and flawless quality of the product. The collection is addressed both to those for which bathing suits have a purely functional role, but also to the ones that use bathing suits as a declaration of their personality. Price For determining the price coordinates for the marketing mix and the strategies for this aspect, a series of factors which also determine the price dynamic on the market were identified. These are: the demand, the production costs, the competition, the dimension and the structure of the distribution channels and the promotion. Generally, the higher the price of the product, the lower is the demand for it. Given the position of the company on the market and the high demand for its products, Jolidon products are accessible for everyone, having a low-medium price. The production costs set the minimum level of the price because the company has to cover all the costs for producing, distributing, and selling the products. The price is in direct proportionality with the population revenues. Because the underwear and swimwear produced by Jolidon target a broad category of customers, the price level should be established in accordance with the medium revenues of the customers. Also, due to the significant competition level, the prices need to be attractive for the customers in comparison with the products of the other companies. At the begining, the strategy was to penetrate the market by having low prices for the high quality products the company offers. Later, after the customers started to buy regularly from Jolidon, the prices slightly increased in order to cover the initial costs. Now, the prices reflect the qualities of the products and their durability in time but they are also kept at an accesible level which ensures a high demand. The company has recently adopted another price strategy, that of odd-even pricing. In this way, the consumers price perception is influenced; based on some research results it was observed that people are willing to pay 99.99 Ron for one product instead of 100.00 Ron, because they perceive the product cheaper than it really is. On another hand, it is a form of psychological pricing that suggests buyers are more sensitive to certain ending digits. Place
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Jolidon has 133 shops out of which 65 in the main cities and commercial centers in Romania, 3 in Budapest- Hungary, 35 in all Italy and 10 franchise boutiques in France. The underwear and swimsuits are exported widely in the whole world, the main destinations being: Italy, France, Hungary, Germany, Switzerland, Belgium, Slovenia, Croatia, Poland, Leetonia, Russia, Austria, Cyprus, Malta, USA, Canada, Japan, South Africa, Lebanon, Israel. Due to the fact that there are no intermediaries and the sale is made directly by the producer, the distribution process goes smoothly and without missunderstandings. The company has its own transportation means so they do not depend on other companies to make the distribution. Also, by having its own shops, the company is able to keep the prices at the desired level while no commercial accession is made. Another advantage of direct selling is the high level of control the company has upon its products and sales and the possibility to easily observe the customers and the competition. This gives them the possibility to make market prospects and improve their offerings. Promotion The most important promotion engine for Jolidon proved to be, over the years, the product itself. With the intention of meeting the consumers needs in the best way possible, through unbeatable quality and prices, Jolidon products themselves have been the surest means of achieving the loyalty of existing customers and winning new ones. The Jolidon and Prelude collections are being promoted through media campaigns in the printed press and TV, aiming not only at promoting the products, but also informing and educating potential clients. Jolidon believes that underwear and swimwear items are not merely fashion items. These products need to fit consumers, adapt to their size, age and contemporary trends, so that they feel as comfortable as possible and the best express the wearers personality. Other means of communication and promotion for Jolidon are the participation in various specialist international fairs and events, such as the Salon International de la Lingerie and Lyon Mode City, attended by professionals and experts from all over the world, in which Jolidon has constantly participated for almost ten years. As a result, customers have a large range of in formations methods of gaining knowledge of the firm: the press, television, internet, financial papers, magazines. Jolidon has its own web site which contains updated photos of collections. There are also catalogues from which they can order their chosen products. Also, Jolidon is an important sponsor in the sports domain. It supports the Romanian volley championship and a handball team from Cluj Napoca.

5. References 1. http://www.dailybusiness.ro/stiri-lifestyle/jolidon/ 2. http://www.jolidon.ro/ 3. Philip, Kotler. Kevin Lane, Kelle. 2006. Marketing Management, 12th edition. Pearson Prentice Hall