Saturday, February 23, 2013

Chapter 4. The Marketing Environment

Being a high-quality and luxurious company, Tiffany & Co. mainly is targeting a specific section of the population, which is represented by upper-middle and upper-upper classes of males and females whose income is high enough to shop for high-end products.

Speaking about age groups, Tiffany's consumers consist of a few generations such as Generation X, baby boomers and Generation Y. Having its own values and interests, each generation is motivated to shop in the stores for its own reasons. For example, generation X has sufficient funds to shop for high-end products representing the group's lifestyle as well. Baby boomers like to purchase high-quality products despite their limited income. Meanwhile, generation Y buys Tiffany's products to follow the celebrity trends.
Having a reputation of one of the finest jewelers in the world, Tiffany & Co. has a strong image and position, which provides the company a steady balance sheet. While women are the main users of the product, the company constantly works on new strategies to expand the market by introducing more products for the male gender. Now, the company sells men products - jewelry, cuff links, accessories, leather goods, watches and fragrances. 
Also, Tiffany & Co. is opening new stores outside of the US expanding its radius globally. For the past 15 years it opened about 80 foreign locations, plus more than 60 in the territory of the US. International sales bring almost half of the company's revenues from outside of the Americas. Tiffany's foreign sales are mainly focused in Europe and Asia. David Schick, who is an analyst for Stifel Nicolaus & Co. in Baltimore, says that the company's foreign stores are more profit-making because they are smaller and situated in a very populated areas which bring more sales per square foot.
Tiffany & Co. focuses its marketing on a specific target markets as it specializes in an explicit area and satisfies wants of a limited group of people. For this reason, the company is very wise about where to open new stores, how to evaluate its products to match with its exceptional image and how to sell retaining its high-end customers.

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