Fast Fashion - Peter Schonbeck guest lecture

As you would expect from a leading MBA programme, at Royal Holloway we like to expose the student group to a variety of external speakers where ever possible, in what is frankly speaking a very packed and demanding schedule.  Thanks to our leading research reputation and long history as a place for thought leadership we are lucky to boast a rich and wide variety of guests who are keen to share and learn from interaction with RHUL staff and students.

A strong supporter of the MBA programme in recent years has been Peter Schonbeck who brings over 25 years work experience in the fashion industry, which includes senior positions with global brands such as Levi Strauss, Timberland, Tommy Hilfiger and Barbour. 

During Peter's guest lecture slot he covered the changes in the nature of the industry, with examples from high fashion companies such as Burberry, Levi Strauss, VF, Superdry, Inditex and Uni Qlo.  The sector that has been remarkable for experiencing strong growth, despite a challenging economic climate in the west since 2008, thanks to impressive sales in Asia, and the emergence of a cadre of people keen to show their wealth and status using luxury fashion clothing and accessories.  Many students find this phenomenon very intersting and it is a popular dissertation topic. 

Peter introduced the concept of fast fashion using the example of the highly successful Spanish fashion brand Zara, part of the larger Inditex group, which describes itself on its website Inditex.com (2013) as "One of the world's largest fashion retailers," with "eight store formats -Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe - boasting 5,887 stores in 87 markets."  The fast fashion model breaks away from the traditional seasonal collections model by offering an ever evolving range of clothing with monthly updates of lines, seeking to reflect the latest innovations.  Staple classics (a little black dress or navy polo) are bulk manufactured with long order lead times and shipped using the lowest cost option to offer consumers strong value for money options.  Added to these are shorter runs of quick turn over items that might reflect an "in" colour or design that might be considered temporarily as high fashion, which are able to command the price premium their local (quicker) European manufacturing process carries.

Steve McQueen TM Barbour Waxed Jacket

The market push towards fast fashion and premium brands sees the middle market squeezed, according to Peter.  This seems to fit with Porter's concept of generic strategies, which identifyies just three key strategic options; low cost (fast fashion), differentiated (luxury) and focus.  Traditional brands such as privately controlled Barbour, who have historically benefitted from a conservative position in the outdoor clothing market, might be seen as a good example of a focus brand. 

Historically unencumbered by shareholder driven requirements to grow revenues and profits, the Barbour brand has been happy operating with relatively stable sales to traditional market segments. However, this is now changing.  Inspired by uncovering worn wax jackets from an elite forces veteran found in the archives and in good marketing style re-cycling an old idea but giving it a contemporary twist, conservative Barbour launched a new line recognising the iconic movie legend Steve McQueen.  As a keen biker, McQueen chose to wear a four pocket, belted variant of the traditional wax jacket, a design that pushes rain away from the legs whilst allowing freedom of movement.  The further development of quilted jackets and lighter summer apparel enabled Barbour to address the seasonality in its business and open into warmer climate markets such as Italy and Japan. 

One of the dangers Barbour has clearly considered is the risk attached to moving away from being an iconic, timeless brand and the potential roller coaster ride that can see fashion brands experience on a fast ride that includes twists and turns, highs and lows, and the danger of been seen as being out of fashion, rather than transcending it as Barbour did successfully for many years. 

More Nuts ? or More Caramel ?

More Nuts ?  or More Caramel ?

I found myself in B2B marketing a couple of weeks ago identifying the price (and product) taker position for most customers in the B2C context, which is often different in a B2B context where some proposition tailoring or development might reasonably be considered on both buyers and suppliers.

One of my favourite brands, McDonald's, came to mind to as an example.  Whether you love the gherkin or not, I doubt very much if you will get McDonald's to leave out the spicy green slither of pickled vitamins.  When you work with groups of truly global students it is always helpful to have a range of familiar global brands to use when you want to invite students to draw on their own experience.

As a truly global traveller (I have visited McDonald's in more than 45 countries worldwide) I know that Mickey D's offers a pretty similar (but not identical) short order menu everywhere.  Okay - strictly speaking Burger King did promote a customisable burger experience (along with flame grilled burgers and toasted buns) with a tag line along the lines of "Have it Your Way" allowing choice of ketchup and onions.  Fortunately, this didn't come up.

Randomly I then picked on a Snickers and suggested it would not be reasonable to ask a confectonary retailer to increase the amount of nuts in the bar, nor change the mix of fluffy mallow and chewy caramel. 

Imagine my surprise and quite frankly speaking, embarassment, when a week later I noticed strange labels on my favourite chocolate bar.  What's this I thought ?  More Caramel, More Nuts ?  Limited Edition. 

Does 'Limited Edition' engender a sense of urgency "buy me now or regret it forever" ?

Clearly following the current trend (possibly initiated in UK by Walkers crisps) for engaging consumers and putting out new product development into production, allowing consumers themselves to influence the final decision. 

Clever, thought I.  (I'm going as an oversized Yoda in an authentic Jedi dressing gown to a fancy dress party soon, needing to adopt his sentence structures, am I).  They can assess the produce sales speed and figure out if consumers prefer a mixture that has more of either of the key ingredients.  But, engaging my logistics/supply chain management MBA learning, it soon dawned on me this was going to be less clear.  Assuming even numbers of product delivery and identical point of sale display might see the more popular item put on reorder and result in sales demand pulling through the more popular product (our B2B Marketing class voted for more Nuts, I was up for more caramel with a sizeable minority).  However there are a number of potential pitfalls in this methodology.  What if consumers preferred the (not available) original formulation ?  What if  (as happened in our College shop - packed full of sweets and very popular with students) most popular option sold out, and the reorder didn't happen until the rest of the stock was also sold ?  Or worse still - what if boxes were put on special offer (2 for 90p) down the back and withdrawn from the regular point of sale. 

Being different - not an obvious brand attribute ?

Indeed, the samples I bought for inclass consumption were found nestling with the current Kit Kat promotion - four flavours, the strongest consumer vote sees it reach mainstream production (if only for a limited period).  This heavily promoted TV advertising campaign seeks to encourage consumers and fans to vote using Facebook.  Rather than tapping into actual consumer behaviour (n.b. issues with Snickers research methods) they are looking to engage the market and express their feelings towards the brand and register their attitudinal preferences.  Of course, facebook can enable a 'fair' vote (one person, one vote) except we know that professional bloggers and alike have been known to have multiple online personalities.  And of course, a single vote does not allow for differentiation by numbers of servings - surely it is important to consider the views of heavy buyers more that those of infrequent consumers.  It is dissertation proposal deadline tomorrow, I've clearly been far to focussed in critiquing possible methodologies.

Obviously Mint is in there as a decoy - the only time chocolate should be consumed with mint is after a very good dinner party and a glass or two of wine.  The idea of Chocolate fudge again is a bit of a personal no-no.  Anyone born outside the world of Cadburys "chocolate flavoured coating" as the EU requires the labelling of our high fat, low on cocoa formulation will question just how much dust from the coca bean is present.  "Yum, yum ! - cardboard and brown dust."  So the choice is clearly Coconut (unusual) or Hazelnut.  I went Coconut & it was ok - but not amazing.

Wasabi: zingy horseradish taste similar to chilli chocolate

Kit Kat have done this kind of democratic, virtual-and-digital market engagement before I'm told, with peanut butter winning out.  It's clever, it appears to work. I'm not sure it really is about creating new product formulations or clever brand extensions, merely putting in place a change for a while.  But I wonder at what point will these kinds of actions just become just random noise and lack traction ?  

Personally I prefer the Japanese duty free specials, four fingers (not the chunky) in a boxed set - Sakura or my most favourite - the green coloured, wasabi flavoured Kit Kat.  (pictured above right).

At this point, I've come to my senses and recognised that I've entered marketing geek territory and time to get stuck into something else. 

It's Snow fun at Royal Holloway

Royal Holloway, University of London MBA candidates 2012/13

MBA programmes are renowned for being intense and particularly challenging.  Opportunities for taking a break and having some fun are relatively rare. 

This movie was shot and edited by MBA candidate James Wang as some of the group, from warmer climates, experience snow for the first time in their lives. 

The back drop of our historic theme building 'Founders', a Victorian take on a French chateau, and the ultra modern Windsor buildling, where some of the MBA lectures take place.  The campus looks even more stunning when covered in a thick blanket of snow. 

Thanks to James Wang for allowing his video to be show cased here.

Snow Tyres: Let it snow ! Let it snow ! Let it Snow !

For the first time I have invested in a pair of new snow wellies for my Beetle.  I'd just seen my red bug fail its MOT due to insufficient tyre tread.  Expecting a 90 min wait I'd killed time looking around all the warm public places in our village and nursed a large pot of tea for an hour in our coffee shop.  I had even purchased a couple of car magazines, surely being disloyal and looking at new cars was going to tempt fate and see an expensive failure result.  Luckily for me, this was not the case. VW's are gooood. 

 

When asked if I wanted to wait another 40 minutes for a new pair of tyres for more than £200, I declined due to extreme frustration around a wasted afternoon and no desire to wait a single minute longer.  I figured I could try out the specialist tyre place that is literally down the end of our road.  Whilst it doesn't look much different (historic images from the 1920s or whenever cameras were in their infancy anyways). 

It resembles the kind of one person garage that each village will have had in days gone by.  You'll know the kind of place I mean, located on the road to be able to offer in person petrol sales delivery and with a building just big enough to hold one or two vehicles inside, jacked up with their engine parts being tinkered with by grease monkeys in blue overalls.

It wasn't about the pricing - I figured tyres are tyres and this seemed entirely reasonable, surely it wasn't worth shopping around.  But pig headed as ever, I was going to use the local specialist because the other time I'd used them I had driven straight in, been the only customer and got an amazing service for a puncture at a tiny cost. 

Just like the case study I'd learnt during my MBA studies: Japanese car industry break through in Europe - offer a fully loaded product at a great price and you will find customers in their millions.  You really can have a mould breaking better product and lower price - the idea that low price equates to low quality and high quality requires a high price is a concept I often look to challenge.

 

Continental Tyres promotional video clip with a powerful emotional appeal

Of course, this time (having given up due to a queue on a previous attempt) I had to queue.  As it happens, this was just enough time to negotiate a price and discover that winter tyres would be much cheaper than I suspected.  We have had a bit of a frost, but worse winter weather is expected.  As I write Frankfurt and Berlin airports are closed due to heavy snow.  On the campus Royal Holloway MBA we have worked closely with Contiential Tyres over five years on a live business consultancy and some of the wisdom shared by Guy Frobisher from their marketing team had landed.  Winter tyres =  a great idea. 

I was intrigued at how such a fast service could be delivered, when I had been quoted 40 minutes for this work at a generalist motor mechanics.  Putting my MBA operations management knowledge into action I sought to analyse the systems being used.  I noted clear role specialisation, yet some very effective team communication.  With six bays and the ability to blitz a four wheel change with four mechanics, the wheels are off your car before you can walk into the customer waiting areas.  Within 20 minutes my tyre change and credit card payment was completed.  If the store room for new tyres were co-located with the main workshop space (a very tight footprint the legacy of a historic business, carefully organised to offer maximum working bays) I am sure a couple of minutes could be taken off the change time. 

Good pricing, fast service, happy customers, no wonder they don't have to worry too much about marketing, Word of Mouth is going to be very powerful. 

The Royal Holloway 2012 Cohort - Who we are ?

Royal Holloway Founders building seen through Windsor windows

Once again our MBA course has been highly attractive to students from all over the world. The 2012/13 cohort of 35 (pictured above) has grown 20% on the previous year, in spite of a 30% reduction in applications. Changes to the post study work visa arrangements have seen applications drop off significantly from India, a historically strong market. Early anecdotal evidence shows that Royal Holloway MBA has been successful at attracting more, high caliber students whilst many institutions have seen their programme enrolments reduce.  

The gender balance is fairly even with 54% women and 46% men, wholly appropriate for a College that is proud of its historical origins as a Victorian ladies college. This is an important and unusual feature of the Royal Holloway MBA programme. At other leading UK MBA programmes and as seen with AMBA accredited Universities data the MBA gender breakdown usually sees around a 70% male and 30% female blend, indicating that the MBA is often a more masculine dominated course. AACSB, another global programme accreditation body, shows parity across the sexes when looking at all masters degrees.

Our students' varied business backgrounds

An essential entry requirement is extensive work experience, again the sheer variety evidenced in the MBA work profiles is very impressive. It includes; digital marketing, project management, IT, banking, insurance, finance, accounting, aviation, NGO (United Nations) administrative, entrepreneurial, charities, beverages brand manager and Disneyland.

Royal Holloway is proud of its AMBA accreditation which requires MBA students to have at least three years postgraduate work experience. This experience will come to bear towards the end of their year-long programme when they are required to work in groups as management consultants and recommend a viable solution to a real business problem set by one of our industry partners.

Where do our students come from?

The 35 students hail from 21 different countries; USA, UK, Bermuda, India, Russia, Senegal, South Korea, South Africa, China, Japan, Colombia, Taiwan, Hong Kong, Sweden, Norway, New Zealand, Turkey, Latvia, Israel, Canada, and Mexico providing a truly international learning experience. It is believed that this is the first time all of the populated continents of the world have been represented on the full time Royal Holloway MBA.

The Royal Holloway MBA 2012/13 Cohort - Where do they come from ?

 

 

National Press coverage of The Royal Holloway MBA

Study Pods in the School of Management Foyer

One of my personal targets for this year was to see if we could get some coverage of the campus MBA programme in the national press.  The distance learning programme had received coverage from both the FT and Telegraph, as the trend towards non-traditional full time study was a popular news theme.  

Sadly, my attempts to generate interest from internal newsletter type pieces had brought no returns.  In my previous corporate existence supplying some reasonable copy (using tactical quotes from the right senior people you wanted profile with) and an appropriate photo always brought results, and the right photo could mean placement on the front or back covers.

Not in the UK national press it seems.  

Once I took a step too far and used an embarrassing photo of a close colleague in a social context (wearing a silly hat) without his permission.  I have learned my lesson here - always, always, ask for permission if you are going to use images of people - we all tend to be a bit particular on how this is done.

The rule on photos was always "no line ups" and this has stayed with me since then - although you will notice in this blog a number of "prohibited" line up photos, most because we all seem to want to have such photos and the editorial guillotine operated on MBADirector  is not as exacting as it might be. 

I must thank Tanya Gubbay and the three featured MBA students for helping make this happen. 

FT.com coverage of three current campus MBA students, which went in the Asian and North American editions of the paper, so truly global.

"Don't post a silly picture of me on Linked-In, I'll never get a job !"

MBA 2011/12 Graduation

 

I must say I was slighty sceptical about the re-introduction of winter graduations for post graduate students.  The thought of driving rain and freezing temperatures and not putting the extravagant Picture Gallery and Chapel centre stage as the location made me have some serious reservations.

 

Gone.  Totally dispelled.  And as our head of school is often keen on impressing, "evidence based decision making is key ! ".  Resulting on the relatively short gap since Royal Holloway MBA students have submitted their dissertations (end of August) there was an impressive 60% attendance at the ceremony today.  With a surprising number flying in especially for graduation, this made for a fantastic group who seemed to have a really fun time together.



Royal Holloway 2011/12 MBA cohort.  Picture: Sigrun M Wagner

The ceremony was described as appropriately formal and smoothly run.  No scrimping on style for the big celebration of successful learning journeys completed.  Trumpetted by bearskin soldiers in their immaculate uniforms the College Principal reinforced the quality of their masters degree, reminding us that Royal Holloway placed 119th out of 6,000 in a recent evaluation of the worlds best universities.  The graduation ceremonies at Royal Holloway (I've done several now as you might imagine) deliver all the right ingredients in just the right measures, pomp, purpose, and lots of preened photo opportunities, using the stunning Founders building as a back drop. 

 

This years MBA cohort achieved particularly strong results with 3 distinctions (70%+) and 10 merits (60%+) and were the first ever group to have undertaken a week long international study visit (in conjunction with our partner business school institution at Stockholm University).  They were also recognised for the ground breaking off campus business consultancy engagement that was undertaken with senior management from Thorpe Park, one of the 93 business units that comprises the Merlin Group, second only to Disney in the amusements sector.

 

After all the formality in the Monkeys Forehead (a favourite with students each and every year) the MBA group, packed full of happy, smiling faces, were celebrating their achievements, with a chance to let their hair down a bit and to plan their next reunion !

 

In the pub, Amir's plea to those taking photos "Please don't post a silly picture of me on Linked-In, I'll never get a job if you do !"  personally, I think it's ok to celebrate the achievement of an MBA....