Marketing Plan Aristocrazy - Group 13_final

Group Number: 13Member’s information:Jaume TortLotte van OosterhoutMartí PellicerClàudia MarcóMehdi BenaliKostis AnastasopoulosCompany: AristocrazyDate of delivery: 23.04.2017

Executive summaryThe Spanish jewelry company Aristocrazy is quickly developing and at the moment situated in threedifferent continents. Entering a huge new market full of opportunities, such as the Chinese market,would be a major step for the young company. This report explains how Aristocrazy should positionitself to enter the Chinese market successfully.Desk and field research has been used to make the analysis.This marketing plan includes the following:  Chapter 1: The introduction will explain more about Aristocrazy’s history and includes the research question.  Chapter 2: The internal analysis has led to an overview of Aristocrazy’s strengths and weaknesses. Explained is why Aristocrazy is accessible for a broad range of people, how the franchise business model helps the company to expand quickly and how their fashion shows have helped to strengthen their brand image. Furthermore, chapter 2 makes clear that Aritocrazy needs more knowledge of the Chinese market to enter it, that they might have less control about what happens in the franchise stores and how they should be alert for loss of identity due to the every time growing product range.  Chapter 3: The external analysis describes the opportunities and threats of the Chinese market for Aristocrazy. The popularity of Western products, the rise of the (upper-)middle- class and affluent population in China and the increasing number of online shoppers are the most important opportunities. Threats are strong competition, the threat of imitations and the fact that at the moment jewelry shopper tend to go to a physical store.  Chapter 4: A SWOT matrix summarizes the strengths and opportunities of Aristocrazy.  Chapter 5: Information about China’s largest e-commerce company Alibaba and their services is given. With an international marketing mix is explained how Aristocrazy should put itself on the Chinese map. There are two target groups that need to be approached differently, the younger middle-class and the older upper-middle-class. The company should make use of its European roots and combine the popularity of the TV show Game of Thrones with their Game of Thrones collection. Rings, bracelets, earrings and necklaces will be sold and gold and diamonds will be often used materials because they have an exceptionally popularity in China. Prices in China will be higher than in Europe due to import duties, VAT and a suitable and feasible margin. Communication will be done with digital (WeChat, Alibaba, Baidu) and physical (shopping malls, exhibitions and fashion shows) channels. Alibaba and WeChat will play a main role in the communication. Distribution will be done with the help of Alibaba’s warehouses and the products can be delivered at the consumers home addresses or at a pick up point.  Chapter 6: The conclusion explains again why it is recommendable to enter the Chinese market and the favorable circumstances, such as the growing consumer market and increasing incomes. Furthermore, the conclusion points out that it is necessary for Aristocrazy to use a renewed strategy to enter the market successfully. Aristocrazy must keep up to date with the latest trends to make this new business adventure a success. 2

Table of contents1. Introduction .............................................................................................................................................. 42. Internal analysis ........................................................................................................................................ 4 2.1 Organization........................................................................................................................................ 4 2.2 Marketing mix ..................................................................................................................................... 4 2.3 Financial situation ............................................................................................................................... 43.External Analysis ........................................................................................................................................ 5 3.1 Market analysis ................................................................................................................................... 5 3.2 Market trends ..................................................................................................................................... 7 3.3 Customer analysis ............................................................................................................................... 7 3.4 Market competition ............................................................................................................................ 7 3.5 Competitors Analysis .......................................................................................................................... 74. SWOT Matrix............................................................................................................................................. 85. Internal marketing mix.............................................................................................................................. 9 5.1 Required information on how to enter the Chinese market .............................................................. 9 5.2 targeting.............................................................................................................................................. 9 5.3 Brand positioning.............................................................................................................................. 10 5.4 Product.............................................................................................................................................. 10 5.5 Price .................................................................................................................................................. 10 5.6 Communication................................................................................................................................. 11 5.7 Distribution ....................................................................................................................................... 116. Conclusion............................................................................................................................................... 11Bibliography ................................................................................................................................................ 13Appendix ..................................................................................................................................................... 15 3

1. IntroductionAristocrazy is a subsidiary of the Spanish Suárez Group, a company for luxury jewelry. The Suárez familyare jewelers since 1940, a new generation decided to start with Aristocrazy: A company with a clearinternational orientation, which produces affordable, accessible, high-end jewelry as a fashioncomplement (About Aristocrazy, 2015). The company has put itself on the map in three differentcontinents and keeps developing itself every month. In this report, a description on how Aristocrazyshould position itself to successfully enter the jewelry market in China. 2. Internal analysis2.1 OrganizationAristocrazy is founded in Spain and has entered the markets of five other countries within a couple ofyears. The franchise business model has played a key-role in this development. At the moment, morethan 220 people are working for Aristocrazy with an average age of 30 years (About Aristocrazy, 2015).Those franchise stores have knowledge about their own market and how to sell Aristocrazy’s goodsthere. When Aristocrazy is planning to sell their products online to customers in China, they need helpfrom outside to enter the market successfully. They will probably not have enough knowledge of theChinese market themselves to reach the customers and make the export adventure a success(weakness, page 8).2.2 Marketing mixA marketing mix of Aristocrazy’s current situation is created to understand more about Aristocrazy’scurrent strengths and weaknesses. The marketing mix can be found in appendix 1. The marketing mixpoints out prices play an important role in the accessibility of Aristocrazy’s jewelry (strength, page 8),that the wide variety of products reaches a broad public (strength, page 8), that Aristocrazy’s quickexpansion is due to their franchise business model (strength, page 8) and how the company was the firstone with a fashion show for jewelry ( strength, page 8). Furthermore, it explains how the manydifferentproductions can also lead to a loss of identity (weakness, page 8) and how they lose controlwith franchises (weakness, page 8).2.3 Financial situationMillion € Aristocrazy’s revenue has increased for all the years since their existence in 1. Revenue Aristocrazy 2009. In 2015, their revenue was almost €25.000.000,-. The development of 30 Aristocrazy’s financial situation is 25 showed in figure 1. Unfortunately, not 20 more information about Aristocrazy’s 15 financial statements is available, so no 10 further analysis can be done. Growing revenue is a good sign, but conclusion 5 cannot be drawn yet. Therefore, this 0 cannot be qualified as a strength yet. 2009 2010 2011 2012 2013 2014 2015 Source: Sabi Year 4

3.External Analysis3.1 Market analysisA market analysis has been done to understand more about opportunities and threats of the Chinesemarket.3.1.1 Demographic 2. Percentage of Chinese female population The Chinese population was in 2016 1.373.639.000 (AllePercentage 48,58 records, 2016). As a result of 48,56 the one-child policy in China, 48,54 the female population is 48,52 decreasing (figure 2). The one- child policy does not apply 48,5 anymore since 2015 and a 48,48 growing female population 48,46 can be expected. At the 48,44 moment, the female 48,42 population in China is 48.48% of the total population 2008 2009 2010 2011 2012 2013 2014 2015 2016 (Population, 2017). YearSource: Worldbank l www.tradingeconomics.com14.3% (93.903.845) of the Chinese female population is between 15-24, 16% (104.859.353) between 25-34 and 31,6% (208.170.183) between 35-54. Aristocrazy’s new demographic target group (potentialcustomer group) consists of 406.933.381 Chinese females (Live China Population Clock 2017, 2017).3.1.2 Economic 3. Expected growth per country The past 3 decades China transformed from anNominal private consumption $ trillion 16 impoverished country to an economic and political 14 2,6 superpower (Vogel, 2013). 12 At the moment, also the Chinese consumer market 10 is in the midst of a transformation. First of all, 8 there is a rise of the upper-middle-class and 6 12,4 2,3 affluent households 4 (opportunity, page 8). They are the driving force 2 4,2 1,6 0,4 0,5 0,3 10,,43 behind the growth of 0 1,3 2,4 1,8 1,8 France consumption (Kuo, 2016). US China India Japan Germany UK Country Private cosnumption 2015 private consumption 2020Source: Economic Intelligence Unit : BCG Analysis 5

According to a research by Credit Suisse has China with its 109 million people in the middle class, thebiggest middle class in the world. Middle class was measured as wealth rather than income to avoidtemporary unemployed people (Yan, 2015). As a result, expenditure increases. According to a researchof the Boston Consulting Group and AliResearch (research department of Alibaba) will the growth ofconsumption keep growing. Figure 3 shows expectations of some country’s real and expected growth.3.1.3 Social CulturalOnline shoppers in China spend per purchase 176% more at foreign products than at domestic products(China's e-commerce market, 2016). Also non-online shoppers tend to spend more money on foreigngoods. In China the population can show their professional and high level of lifestyle with owningWestern goods. It is a way to stand out of the crowd and have something special. Additionally, Chinesegoods are perceived as having better quality than Chinese goods (Cheok, 2015) (opportunity, page 8).Aristocrazy must consider that their products might be copied when they create more brand awarenessin China. Copycat and imitation products are a problem in China and it might harm Aristocrazy’s brandimage and name (Zakkour, 2014) (threat, page 8).3.1.4 Technological52.2% (721,434,547) of the Chinese population used the internet in 2016 (Internet Live Stats, 2017).According to China’s National Bureau of Statistics grew the percentage of online retail sales in 2015with a growth of 26.2% up to 13% of total retail sales (Digital Commerce 360, 2017). Due to theincreasing number of the Chinese population and the improved and new mobile applications dosmartphones and tablets overtake personal computers (PC) for the online purchases. More than 50% ofthe online purchases are being done on mobile devices at the moment, they are the preferred choice foronline shopping (The Indian Express, 2015). This also the result of the affordable budget phones and theincreasing availability of internet.In 2017, 43.48% of the total Chinese population uses a smartphone. 92.3% of this group was between18-55 and 42.2% of the smartphone users were female (Statista, 2017). 4. Total retail e-commerce sales E-commerce is booming in China and is expected to grow even more theBillion $ 500 coming years (opportunity, page 8). 400 Boston Consultancy Group and 300 2012 2013 2014 2015 AliResearch expect that e-commerce 200 Year will become a more important retail 100 channel and that 90% of the online purchases will be done by a mobile 0 device (Kuo, 2016). Furthermore, 40% 2011 of online shoppers post or read reviews. US China3.1.5 PoliticalAll companies have the right to import safe goods to China. Import or export duties and need to be paid.Import tariffs on jewelry items vary depending on the materials. The import tariffs for gold and platinum 6

are 35% (+17% VAT) and the import duty rate for sterling silver is 20% (17% VAT) (Global TradeSolutions, 2016).3.2 Market trendsGold is one of China’s main import products. Due to the fall in gold prices in 2013 rose the demand forannual jewelry sales in 2013 by 25.8% (opportunity, page 8). The young Chinese population has fallen inlove with gold and the demand for real diamond also increases. China’s share of consumption in totalglobal sales of diamonds is expected to increase with 20% the next coming 10 years. The child jewelrysector is smaller in China and receives less promotion efforts (China's Jewellery Market, 2016).Furthermore, the Chinese audience has a weakness for Western TV shows. Game of Thrones is one oftheir favorite ones, this creates opportunities for Aristocrazy’s Game of Thrones collection (Asia Times,2016) (opportunity, page 8).The main channel where Chinese get information from about the jewelry is from shopping malls anddepartment stores (threat, page 8). The necklace is at the moment the most popular item and gold thefirst choice material. Chinese buyers are looking for trendy/clothing complementing jewelry that theymainly use when they go to their work (China's Jewellery Market, 2016).3.3 Customer analysisThe customer analysis will give a clear image of who Aristocrazy’s potential customers from China mightbe, what they value and how they make their purchases decisions. By understanding the potentialcustomers thought and buying habits, Aristocrazy will understand better who and for whom to put theirproducts on the market.As described before, child jewelry is not a big hit in China. Therefore, the target group begins with theage of 25. The target group has an upper or middle class income and follows the latest trends. She buysonline and uses social media to find and compare products and make decision.Two examples of customer profiles are created, they can be found in appendix 2.3.4 Market competitionPort’s 5 forces system is being used to understand to understand more about the competition in China’sjewelry sector, threat of new entries, bargaining power of buyer and supplier, threat of substitutes andcompetitive rivalry. The analysis can be found in appendix 3. The main findings of the analysis are thefollowing: bargaining power of the suppliers is low (threat, page 8), rivalry among competitors is high(threat, page 8) and bargaining power of buyers is low (opportunity, page 8).3.5 Competitors AnalysisThe competitors analysis will provide a complete picture of the industry to Aristocrazy. Rank within theindustry is significant , but valuable insight can only be given when the exact position of our companybetween it’s competitors is taken under consideration.In the terms of huge competition Aristocrazy faces between other global companies, which are alsotrying to enter, survive and then prevail the Chinese market, has to analyze its one of them andassimilate their strong techniques and assets. So it has to keep an eye on the unique selling point ofcompetitors, with which they distinguish in the market and take the necessary measures against them. 7

Then, examine their target market and plans and conclude in how costumers think and what are thebuying habits in China.Main competitors right now are : Pandora, Folli Follie, Tous and Uno de 50Two examples of Competitor Analysis can be found in appendix 44. SWOT MatrixThe SWOT matrix present the strengths and weaknesses of Aristocrazy and the opportunities andthreats of the Chinese jewelry market in a matrix. 8

5. Internal marketing mix5.1 Required information on how to enter the Chinese marketBefore the international marketing mix is presented, are different methods explained about how theChinese market can be penetrated.Due to the fact that more and more foreign businesses understand the huge opportunities of theChineses market, has the Chinese government added regulation to protect its domestic market andindustries.The main rule to get into the market is by the use of a Chinese partner. This can be done as a jointventure with another company or with a private domestic investor.The second important aspect of entering the market, is to understand the importance of marketingadaptation of all the aspects of the business. This part requires a lot of knowledge of the Chinese trends.Furthermore, texts need to be translated in Chinese, designs need to be adapted and many otheraspects has to be taken into account to put the business in the best shape for the new market.At the moment, there is one organization which is giving the full package of needs to start a project inthe rice country. This company is Alibaba.Alibaba is providing the facilities to put a foreign company in the Chinese market.- Logistics: Two warehouse’s in Europe (Germany and UK) are directly connecting the Chinese supply chain (for example from Spain to final costumer).- Partnership: Bringing all the necessities to get approval of the Chinese government.- Marketing: Full adaptation of the company to the Chinese final costumers.- Chanel: Alibaba Ecommerce network.5.2 targetingAs Aristocrazy has a lot of assorted products with varying prices, they can distinguish two differenttarget groups. The target groups consist mostly of women in the working class who earn enough moneyto spend on jewelry.The first target group of the Chinese market, 25-35 year old females, use to buy jewelry in the cheapersegment because they do not have enough money to invest in expensive jewelry. They are tech-savvyand do their purchases online.The second target group consist of females between 35-55 years old. They have been working in acompany for many years. Their work experiences influences their salaries positively. They use to havetheir live on track and they can spend more money on jewelry. This target group buys online and inphysical stores. They tend to compare products and like to be advised before they do a purchase.More or less 660.000.000 Chinese inhabitants have the age of the target group. A little bit less than 50%of them are women.Concluded: Aristocrazy should approach a clear targeted group and understand their purchase behaviorand focus especially on them. 9

5.3 Brand positioningAristocrazy should offer their products as typical European jewelry in China. The Chinese populationprefer Western goods over domestic goods and they are willing to pay more for it. Western products areperceived as better quality and they are being used to differentiate. Aristocrazy should position itself asa brand that sells top quality, original, European jewelry that is different than the common Chinesejewelry. Customers will not only buy good quality jewelry then, but an image. Aristocrazy’s productsmust give customers a feeling of wealth and give them self-confidence. It must become an indicator ofsocial status and success.The uniqueness of Aristocrazy’s products will be an important factor in China. Exclusivity will attractcustomers.5.4 ProductThe essence of Aristocrazy represents royal class. However, the products are not only accessible for theupper layer of the social class, but for a broader range of people. European royalty is something that fitsin the current Chinese market trends.The materials for the products must be chosen carefully. Aristocrazy should choose for gold (pink gold,white gold and tricolor gold) and platinum for the highest segment and silver for the lower segment.Diamonds can be used to decorate the jewelry.The following product categories will be offered to the Chinese market:  Rings  Bracelets  Earrings  NecklacesSpecific collections need to be sorted out to offer to the Chinese market. Materials play an essential rolewhen the selection of the collection will be made. Furthermore, Aristocrazy must take the advantage ofthe popularity in China of the American TV show Game of Thrones. Aristocrazy’s Game of Thronescollection will be fully offered in China and become Aristocrazy’s showpiece. This collection consists offour representative pieces of four of the Major Houses: Baratheon, Targaryen, Stark and Lannister.Another item of Aristocrazy that will be offered to the Chinese market is the collectable TummyGame.Collectable items can play an important role in brand loyalty.5.5 PricePrices for Aristocrazy’s products will be higher in China than in Europe. This is the result of taxes and thewillingness of the Chinese population to spend more money on European products.The taxes consist of import duties, 35% for platinum and gold and 20% for silver, and VAT of 17%.Furthermore, Aristocrazy has to find a suitable, realistic margin for each product and understand whatthe population is willing to pay for the products.Aristocrazy can offer products in all different kind of price ranges, from € 40 up to € 6.000. This means,the brand is accessible for all kind of people, regardless their incomes. 10

5.6 CommunicationCommunication will be done through digital and physical channels of China: 1. Alibaba (digital): Chinese e-commerce company that provides consumer-to-consumer, business- to-consumer and business-to-business sale services via web portals. Founded in 1999 by Jack Ma. 2. Wechat (digital): An instant messaging, commerce and payment services social media application developed by Tencent. It was released on 2011 by Tencent group, invented by Xiaolong Zhang and named by Ma Huateng. 3. Baidu (digital): A Chinese-American web services company headquartered in Beijing. It was founded in 1999 by Robin Li and Eric Xu. It’s design is similar to google and includes the possibility to search for news, images, songs and other functions. 4. Shopping malls (physical): corners in shopping malls for publicity and information. 5. Influencers (digital): we will contact diferent famous fashion chinese influencers to help us promote Aristocrazy mainly in WeChat. 6. Fashion show jewelry exhibitions. Examples of well-known and well-valued jewelry exhibitions are the Chengdu International Jewelry Fair, Shanghai Jewelry & Gem fair, Dahe International Jewelry Fair and the China International Gold, Jewelry &Gem Fair, Shanghai.5.7 DistributionFirst phase: From Spain to ChinaDuring the first period, Aristocrazy will use Alibaba’s warehouses. This can give guarantee that theproducts will arrive the customers in good conditions. The products will be send from Aristocrazy’sheadquarter and storages in Spain to Alibaba’s warehouses. Alibaba has two warehouses in Europe: onein Germany, the other in the UK. The costs of using Alibaba’s warehouses as a storage will vary from€4.000 to €8.000 each year. The products will be send from the warehouses in Germany or the UK toChina. The coming years, Aristocrazy might look for their own warehouses to storage their products inChina.Second phase: From China to the costumerOnce the products has arrived in China, customers can receive it in two different ways:1.) E-commerce channel: the products will be send to the customer’s home address.2.) Collection points in shopping mall corners: a physical place where customers can pick up theproducts that they bought online. The shopping mall corners are publicly and also being used to provideinformation.6. ConclusionAt the moment Aristocrazy is conquering new markets in the US and South America and is ready for anew step. Due to the fact that China’s middle-, upper-middle-class and rich population is growing, theconsumer market grows as well. E-commerce has caused a transformation in China and has become apopular purchase channel. Demand for jewelry is high due to the big consumer market. Therefore, thebargaining power of buyers is low. This makes China an attractive market to enter. Unfortunately, thebargaining power of suppliers is also low because competition is tough. Furthermore, Aristocrazy should 11

keep in mind that imitations of their products might be created on the Chinese market and take actionagainst this when necessary. It is recommended that Aristocrazy enters the Chinese market and keepsthe threats and their own weaknesses into account.When Aristocrazy enters the Chinese market the company should, first of all, target the right targetgroups: women between 25-35 and women between 35-55 years. Secondly, they have to make use ofthe fact that they are a European brand since the Chinese population like Western products. With theirGame of Thrones collection and bracelets, rings, earrings and necklaces of gold and sometimesdecorated with diamonds their jewelry will be what their Chinese target group is looking for. Fourthly, asthe Chinese population is willing to pay more to foreign products than to domestic products, it will notbecome a problem to add the import duties and VAT costs to the selling price. Fifthly, communication isa very important aspect when the company is going to enter the market. Several digital and physicalchannels must be used properly to catch the attention of the (potential) customers, create brandawareness and make it to a sale. Also (fashion) shows and exhibitions will be used to put themselves onthe Chinese map. Finally, it is recommended to use Alibaba’s warehouses during the first cooperationperiod. Products will be send from Spain’s headquarter. The products can reach the customers by an e-commerce channel or at a collection point in a shopping mall corner.Penetrating the Chinese market can become one of Aristocrazy’s new success, but they need to use atotally different strategy to benefit from it. If Aristocrazy is able to be successful in China, they can startthinking about their own production and distribution methods and channels . 12

Bibliography(2015, November 15). Retrieved from The Indian Express: http://indianexpress.com/article/technology/tech-news-technology/smartphones-and-tablets- overtake-pcs-in-chinas-online-retail-sales-says-report/(2017). Retrieved from Digital Commerce 360: https://www.digitalcommerce360.com/2017/02/06/online-shopping-china-grows-262-2016/About Aristocrazy. (2015). Retrieved from Aristocrazy: http://www.aristocrazy.com/en/about- aristocrazy/?___SID=UAlle records. (2016). Retrieved from http://www.allerecords.nl/land-met-de-meeste-inwoners/Analytics. (2017, 04). Retrieved from Market Share Stats & Traffic Ranking: https://www.similarweb.com/website/aristocrazy.comAsia Times. (2016, April 25). Retrieved from http://www.atimes.com/article/lifestyle-heres-why-china- loves-game-of-thrones/Aydan Bahadir, F. G. (2016, March). European Parliament. European Parliament, p. http://www.europarl.europa.eu/atyourservice/en/displayFtu.html?ftuId=FTU_6.5.3.html.Cheok, L. (2015, July 10). Chinese Demand for Foreign Brand Products. Retrieved from Moduslink: Chinese Demand for Foreign Brand ProductsChina's e-commerce market. (2016, Decembre 14). Retrieved from News Centre: http://sites.nielsen.com/newscenter/chinas-e-commerce-market-untapped-potential-for- global-companies/China's Jewellery Market. (2016, August 5). Retrieved from HKTDC Research: http://china-trade- research.hktdc.com/business-news/article/China-Consumer-Market/China-s-Jewellery- Market/ccm/en/1/1X000000/1X002MMK.htmChinese Market Entry. (2016). Retrieved from B2B International: https://www.b2binternational.com/publications/china-market-entry/Global Trade Solutions. (2016). Retrieved from https://www.dutycalculator.com/dc/186975847/jewellery-watches/jewellery-of-precious- metals/gold-jewellery-other-without-jadeite-rubies/import-duty-rate-for-importing-gold-and- platinum-from-italy-to-china-is-35/Internet Live Stats. (2017). Retrieved from http://www.internetlivestats.com/internet-users/china/Kuo, Y. (2016, January 24). World Economic Forum. Retrieved from https://www.weforum.org/agenda/2016/01/3-great-forces-changing-chinas-consumer-market/Live China Population Clock 2017. (2017). Retrieved from Live Population: http://www.livepopulation.com/country/china.htmlPopulation. (2017). Retrieved from Trading Economics: http://www.tradingeconomics.com/china/population-female-percent-of-total-wb-data.html 13

Statista. (n.d.). Retrieved from https://www.statista.com/statistics/321482/smartphone-user- penetration-in-china/Statista. (2017). Retrieved from https://www.statista.com/statistics/321482/smartphone-user- penetration-in-china/Stores Aristocrazy. (2015). Retrieved from Aristocrazy: http://www.aristocrazy.com/en/franquicias- nuevos-mercados.html/?___SID=USuárez, J. (2014, July 29). Aristocrazy's street-style jewelry. (F. f. Spain, Interviewer) Retrieved from Fashion from Spain: http://www.fashionfromspain.com/fashion/en/global- navigation/interviews/interview-detail/4762065.htmlVogel, E. F. (2013). Deng Xiaoping and the Transformation of China.Yan, S. (2015, October 14). CNN Money. Retrieved from CNN: http://money.cnn.com/2015/10/14/news/economy/china-middle-class-growing/Zakkour, M. (2014, April 30). Copycat China Still a Problem for Brands. Retrieved from Forbes: https://www.forbes.com/sites/michaelzakkour/2014/04/30/copycat-china-still-a-problem-for- brands-chinas-future-just-ask-apple-hyatt-starbucks/#13500ce42156 14

AppendixAppendix 1Product: Aristocrazy works with three main product lines: basic, trendy and fun. Also watches are part ofAristocrazy’s product line. Every year, two main collections are being launched. Materials such as silver,gold, diamond, sapphire and other stones are being used for the jewelry and watches. A serpent (2010)and crocodile (2011) are icons of the company. In 2014 Aristocrazy launches the “Game of Thrones byAristocrazy” collection and makes use of the popularity of the TV show. Aristicrazy’s broad range ofproducts and prices are responsible for the company’s varying customer base. This is exactly where theSuárez family aimed for when they set up this new brand. Product manager Juan Suárez said in aninterview: “We have jewelry for all kinds of occasions and all kinds of woman. It sounds like a typicaladvertising claim, but it’s true: Aristocrazy is a brand that mothers and daughters can come in and buytogether.” (Suárez, 2014). This reflects how diverse Aristocrazy’s products and customers can be. At theother hand, The company must be aware that the wide variation of products (from wedding rings withdiamonds to Game of Throne necklaces) can lead to loss of brand identity because customers do notunderstand where the brand stands for anymore (weakness, page 8).Price: Aristocrazy offers products in a wide price range from €29,00 for a sterling silver earring up to€2550,00 for a gold and diamond ring. The price is an important tool of Aristocrazy to make the jewelryaccessible for a broad range of people (strength, page 8).Place: Aristocrazy is located in in Portugal and Spain in Europe (61), in Mexico (13), Guatemala (1), Chile(4) and in Florida in the United States (2) (Stores Aristocrazy, 2015). This makes a total of 82 stores in 3different continents. Aristocracy works with a franchise business model that has led to internationalexpansion and has brought the company to new markets (strength, page 8). Since individuals can makeuse of Aristocrazy’s franchise system, Aristocrazy might have less knowledge about and control on whathappens in the franchise stores (weakness, page 8).Promotion: Eight months after Aristocrazy was founded, took the first shooting of the first internationalcampaign place. In 2012 presents the company the first fashion show in the fashion jewelry sector(strength, page 8). Due to success is this fashion show being used now every year to launch a newcollection. Aristocrazy’s website is visited around 80.200 times a month in 2017 (Analytics, 2017). Newmessages are posted almost daily on Facebook, Instagram and Twitter and around once a month onLinkedIn, Youtube. The products of Aristocrazy can also be found on Vimeo and Pinterest.Appendix 2Potential customer profile 1 Demographics Psychographics - Female - Values a healthy lifestyle - 35 years - Cares about her appearance - Shanghai - Finds fulfillment in her career - Teacher - Very active on social media (WeChat) - Lives with her husband - Loves following new trends - Annual income €37.000,- Buying habits - Makes purchases online around twice a week on her laptop and mobile - Makes own purchase decisions 15

- Uses reviews to compare and products and make decisionsPotential customer profile 2 Demographics Psychographics - Female - Enjoys surfing on the internet - 46 years - Reads fashion magazines - Shenzhen - Passionate about her work - Marketing manager - Busy family life - Lives with children and husband - Cares about her appearance - Annual Income € 68000,- Buying habits - Purchases in upper class shopping malls and online - Makes own purchase decisions - Is inspired by magazines and goes shopping goal-orientedAppendix 3Porter’s five forces  Threat of new entryThe importance and opportunities of entering the market of China has become more aware underWestern investors. Business people see the changing demographics and the rising incomes, this leads toa broader audience that wants to enter the market in China. However, the business market and theculture is sometimes difficult to understand for foreigners who want to do business in China (ChineseMarket Entry, 2016). Additionally, import taxes for jewelry are relatively high in China. The availability ofinternet channels make it relatively easier for Western companies to enter the market.For jewelry suppliers from China it is easier to enter the market, but keep into account that their jewelryfrom China might be for a different target group, not the target group that wants the more luxuryWestern jewelry.As a conclusion: threat of new entries from Western countries is moderate and jewelry suppliers fromChina are not Aristocrazy’s main competitors.  Bargaining power of suppliersThe suppliers are the businesses that sell jewelry in the market of China. China’s huge potential hasattracted many international and domestic jewelry (re)sellers on the jewelry market. As a result, thebargaining power of supplier has increased and will probably increase more the coming years (China's 16

Jewellery Market, 2016). At the moment, the bargaining power of suppliers is medium-low (threat, page8).  Bargaining power of buyerThe buyers will be mostly the domestic buyers. The bargaining power of the buyer will be low(opportunity, page 8). Jewelry is booming in China and the (upper-)middle class is increasing. As a result,the demand for jewelry goes up and the bargaining power of the buyers goes down.  Threat of substitutesThe threat of substitutes is small. There are two main substitutes for jewelry: watches and real assets,investments and bank deposits. Buying or having a watch may prevent potential customers to buyjewelry such as a bracelet. Therefore, watches are a threat of substitutes of jewelry.Furthermore,jewelry is often perceived as a long term investment. Potential jewelry buyers can also decide to investin real assets, stock markets, fund investments or to put the money on the bank. Therefore, this can alsobe perceived as a substitute. Since Aristocrazy’s jewelry maintains different price levels, also in thelower segment, and their products are more perceived as a fashion wearable, expected is thatAristocrazy’s jewelry will not be used so often for long term investments.Jewelry is being offered all over the internet in China. Nevertheless, Aristocrazy’s has opportunities todifferentiate itself from other products with their materials and Western brand image.  Competitive rivalryIn general, the competition in the Chinese jewelry industry is quite strong (threat, page 8). Domestic andforeign jewelry companies, such as Cartier, have successfully entered the market. There is not onedominant player on the market, but several ones with different market shares. Aristocrazy mustdifferentiate itself with its products and brand image to become a successful player on the market, forexample while using the fact that it is a European brand, their reliability or with their special collections. 17

Appendix 4Competitors Analysis Pandora is an international Danish jewelry manufacturer and retailer founded in 1982 by Per Enevoldsen. The company started as a family-run jewelry shop in Copenhagen. The company has a production site in Thailand and its jewelry is sold in more than 100 countries on six continents throughapproximately 8,100 points of sale, including more than 2,100 concept stores.Unique Selling Point: Over the years, Pandora has earned a reputation for creating high quality designerfashion products to cater to the super rich and the premium luxury segment of the market. On top ofthat, Pandora is also renowned for its creation of unique customized products. More specifically, isknown for its customizable charm bracelets, designer rings, necklaces and (now discontinued) watches.The jewelry is made from high-quality materials at affordable prices.Target Market: The fine jewelry market of Pandora can be split into 3 price segments:  The affordable segment. This segment is defined as jewelry with a price less than USD 1,500, in which PANDORA operates more and the luxury. The affordable segment accounted for 57%, or USD 83 billion, of the fine jewelry market (2009)  The luxury segment Here prices vary between USD 1,500 to USD 10,000  High-end jewelry segments High end jewelry prices are greater than USD 10,000 and target to higher class individuals with higher incomes.Pandora’s significant targeting plan is based on identifying the following global trends:  Branding: brands entering the Chinese market and taking market share from local jewelry shops and other international companies (like Aristocrazy).With this, the company managed to be really competitive. 18

 Fashionability: jewelry is increasingly perceived as an accessory. The company adjusts its products based on the changing spending habits.  Customization: increasing demand for personalized jewelry. Referring to both affordable and high-end jewelry segment the company gives the opportunity to costumers to buy their custom made charms.  New customer segmentation: for example, more female individuals become self-purchasers as there is an increasing number of working women in China.The overall size of the bracelet and charms fine jewelry market was estimated to be worthapproximately USD 9.6 billion in 2009 (measured by estimated revenues at retail value).Also, between 2000 and 2009, Pandora’s fine jewelry market experienced an annual growth ofapproximately 6%. Folli Follie was founded in 1986 in Greece by Dimitris Koutsolioutsos. The first shop was in the commercial district of Athens. Folli Follie is an international lifestyle fashion brand, which designs, manufactures anddistributes jewelry, watches and accessories. It started by manufacturing jewelry and in 1994 launchedtheir watch line. In 1995 the first overseas store opened in Japan. Nowadays the company creates andoffers fashion in 30 markets with more than 670 points of sale worldwide.Unique Selling point: Folli Follie established itself as a pioneer in the market when it introduced,amongst its first collections unique jewelry creations made of silver combined with ‘’murano glass’’ andlater on complete jewelry collections made of stainless steel in silver or gold color combined withdiamonds - a trend followed by many others. Also the company following the mindset that nowadays,ladies watches are no longer considered only as simple time pieces or expensive jewels, but everydayfashion accessories launches a big collection designed by top Greek, Swiss, British and Italiandesigners(Ceramic Collection, the Leather Collection, the Jewelry Watches, the ‘’Premium K’’ Collection)for every taste.Target Market: Folli Follie , following a similar plan with our company has a huge range of productsreferring to individuals seeking from something affordable and daily to very luxurious charm jewelry. 19

 Emerging markets: China is the favorite driver, seeing Chinese consumers at the key driver for luxury goods demand going forward, and that had as a result that the company has its most stores open in China(185 out of 380 total stores are located in China)-when only 70 in Japan, which is one luxurious market showing moderating growth. Primary targets are the Chinese youth, the international employees of the group and the Chinese post-modern woman & man. Secondary targets are China’s major cities, fashion shows, local agencies. The company right now is working the launch of the Folli Follie in China, by trying to combine the Folli Follie’s “way of doing” with the local Chinese market-introduce the brand, while paying attention to the Chinese needs and expectations. 20

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