Saturday, March 16, 2013

Chapter 15. Retailing

Tiffany & Co. is a specialty store which has a concentrated product assortment such as jewelry. But, it has a substantial depth since it provides a great variety of designs.

 The company headquarter's location, which is the Upper East Side of Manhattan, was chosen based on analysis of the area's socioeconomic characteristics. Mainly, the upper class people reside in the area which means that the store is located right in the heart of the luxurious life. Also, the store is positioned on the 5th Avenue, which is the city's main shopping site for tourists. 

As mentioned before, Tiffany's prices are pretty high which means that the gross margin is high as well. Plus, it's another indication of the quality's level and its prestigious image. 

My experience visiting the store was pleasant and useful. Acquainted with the most influential factors in creating a store's atmosphere, I paid close attention to the store's organization:

  • Employee type and density: Sales assistants are very friendly, mannered and knowledgeable about the product. There are a few workers at each counter so customers do not have to wait for the next available one. They are ready to answer to all your questions. Definitely, with this type of organization the customer cannot be overlooked and will be given sufficient time and help to make the right choice when shopping.
  • Merchandise type and density: All merchandise is displayed in a tasteful and uncluttered arrangement. Every type of product such as china, leather goods, engagement rings are placed in a certain room or floor. So if a customer knows exactly what he is looking for, he knows where to go. Each item is set in the way that a customer can appreciate its beauty. 
  • Fixture type and density: Fixture is classic, elegant and simple. The flagship store kept the 19th century look.
  • Sound: I noticed there was playing a flowing and unobtrusive music to create a relaxing atmosphere.
  • Visual factors: Dominant colors of the interior are different tones of brown which is a warm color. Thus, it creates a feeling of warmth and coziness.  As the character from "Breakfast at Tiffany's," Holly Golightly, said, "The only thing that does any good is to jump in a cab and go to Tiffany's. Calms me down right away. The quietness and the proud look of it; nothing very bad could happen to you there."

Sunday, March 10, 2013

Chapter 6. Consumer Decision Making

As the world's premier jeweler and socially responsible  company, Tiffany sets a great example for its peer industries. Nowadays, consumers become more concerned about the background of a company where they purchase products from. Recent studies confirmed that most of the customers would rather buy the same product at the higher price from a socially and environmentally  responsible company that supports a cause the customers care about. This is the reason why Tiffany & Co. has so many loyal customers who despite high prices devotedly come back to shop.

Talking about the types of consumer buying decisions, to buy Tiffany's product most likely will involve extensive decision making since it is an expensive purchase. Making a purchase for the first time a customer would like to get some information of the quality of gems and metals that the company sells and what is the resource. Plus, shopping in Tiffany often associates with some significant event in life such as an engagement or an anniversary. And, it requires a responsible and right decision to make. 

However, a regular customer, who has all the necessary information about the company's product, probably will use a limited decision making. Having trust and experience, a customer will spend less time on making a choice. 

Tiffany is a symbol of prestige and elegance and this image influences customers' perception significantly. Leaving a certain lifestyle, some customers will shop in Tiffany to obtain a certain image and social class recognition.

Sunday, March 3, 2013

Chapter 5. Developing a Global Vision

Since the moment of Tiffany's creation, the company expanded drastically not only in the territory of the United States, but globally also. Only in 2012 Tiffany & Co opened 25 stores: 11 stores in the Americas, 6 stores in Asia Pasific, 1 store in Japan, 2 stores in Europe and 5 stores in Emerging Markets. Besides operating retail stores and boutiques, it engages in direct selling through Internet, catalog and business gift operations, which contributes to the market expansion significantly.
Producing exclusive product such as diamond rings, Tiffany & Co. has a high degree of global standardization. Tiffany's authentic designs are recognizable around the world. 

Being a high-end company, Tiffany & Co. is always aware of economic development of the country where it is planning to open a new store. As a sophisticated industry, the company picks locations, which are expected to have a good purchasing power. It means that all Tiffany's stores are located in the well-developed countries where customers can afford to spend money on luxurious product.

On January 19, 2012 Tiffany & Co. announced that it entered into a strategic joint venture with Damas Jewellery, a company located in Dubai, the United Arab Emirates. Damas Jewellery was previously related to Tiffany & Co. in operating Tiffany’s retail stores. Now both companies are contributing capital to the joint venture. As Frederick Cumenal, executive vice president, said, "We are very pleased to extend our relationship with Damas Jewellery through this joint venture, which will enable us to better integrate five existing TIFFANY & CO. stores into our worldwide store network and enhance awareness of our brand in the United Arab Emirates. We see very exciting opportunities to expand our sales throughout this important region."

Another attempt to expand its market, Tiffany & Co. had with the world’s largest watch maker, Swatch, in 2007 which did not go well. For Tiffany & Co. it was a strategy to distribute Tiffany’s brand watches around the world. In September 2011 the deal was eliminated which caused some legal issues between the two companies.  

Tiffany & Co. distributes its product only in its own stores. The company has fixed prices on its products, which you would never buy on sale.