Target Market Type of Jewelers : *retail jewelers, fine jewelers, online jewelers, big box jewelers

Tiffany - Premier retailer of distinctive and luxurious jewelry Bulgari Cotsco Blue nile *retail jewelers, fine jewelers, online jewelers, big box jewelers Main consumer wealthy american

Drivers of change Internet + big box retailer : change the way many customer shop for jewelery Online shopping : provide convenience, great selections (size, desing and price point), easily compare price, returms policies, (downside : customization factor/ able to see + discussion consultation Global recession : diminished the appeal of global brand names because value conscious customer Value conscious customer : more value to their money concern to high end jewelery Price: low price form competitor like cotsco slow-growth economic : shift in consumer preference and buying habit, and this difficult for tiffany for international expansion + premium price differentiation strategy Ability to buy online , big-box stores, consumer awareness (grading of the diamond) Household earning start to drop sale of luxury goods decline (annual rate at 2.7%) Rise in gold price pushed up overhead cost, Budget cutting measure : cut wages, harsh credit conditions during recession close retail store avoid bankcruptcy and save cost Increased competition from non-jewelry outlets such as super centers and online retailers, threatened the profit of forms like Tiffanys&co. because offer lower price and one-stop shopping centers/ competition from non-traditional jewelers : causd the size. Sales growth and profitability to slow

Although the industry in mature stage but forecast growth potential, increase in consumer sentiment will keep the industry in order Industry has evolved from from germstones and diamonds to expanded product line (everything including accessories to luggage), but most common is still diamonds and gold- largest are from diamond sales(48% from industry revenue) most likely to increasein marriage rate, increase in overall rise in personal wealth / gold as investment value increase in price of gold, Switch in consumer purchasing trend from gold ring to platinum ring Product segment : (1) diamond (2) gold (3) watches but declined due to increase in number of smartphones, PDA with built in clocks (4) wide varity of germstones, pearls, silverware, tableware and other accessories (KSF) Depth of product line differentiate them from other competitors (KSF) signature trademark and reputable brand name suach as tiffany blue box ( set apart from competitors (KSF) recent recession price has become more important factors ever (increased the pressure on big-box and supercenters that carry large selection and low-priced jewelry Value conscious buyer big box stores gaining market share, buy from big box store rather than high-end customer (for more carats diamond) / Discount store like wallmart have largest market share in diamond industries (everyday low price and one-stop-shopping atmosphere Highly-fragmented industry (top 20 retailer inly make up 28.1 percent of total market share Big-box stores : Opportunity to take advantage in 1.recessionary time 2. Penetrate the industry 3. Continue to take market share from designer retailers Does brand really matter? After recession:Increase value conscious buyer + hold on disposable income/ new retail version/ price or value? In recession : quality +size > pride buying from the brand jewelery but in Cotsco no high end service + luxurious ambiance QUESTION : At tiffany, pay premium brand extra $6K (consumer buy products because of brand, quality)? The Market Market concentrations highly depended on population and per capita income 4 largest player have 20 percent of the total jewelry market Highly fragmented:, with no single dealer owning in excess of 10 percent of total market 5Forces

High volume of retail store Vast avaibality of jewelry products Low barrier to entry, industry is highly competitive and constantly growing Economy and disposibel income influence the competitive landscape (KSF) Try to create store at high traffics areas and more affluent areas

SWOT 1. Strength a. since 1800 quickly and greatly expand their company and business operation b. bought silversmith operation, added the design and manufacturer of silver c. institute the 925/1000 silver standards d. win multiple award at jewelry and silverware conventions e. best seller - Tiffany engagement ring setting f. more than 40 million dollar precious stone g. prime location 5th avenue, san Francisco, Beverly hills California, Houston h. growing sales i- sold to avon in 1979 and avon increase product line of less expensive items but was critized : like turning the store to average dept store rather than fine jewelry store then sold to group of investor : reinstate the exclusivity and luxury of tiffany &co g. 1986 expanded to Europe / 1987 went to public with ca 30 retail locations worldwide/ 1999 added 20 new stores worldwide / h. 1999 launch their first online stores and website I provide grant to non profit organization j. 2013 175 years excellence in sales worldwide over $3Bill U.S g. train skills employees k. proud of their high quality standard

l. 90% of overall sales from its jewelry selection / sale of gold and silver is one third of company revenue / another one third from wedding ring and band / much of sales are from ever expending product line stong brand and image rating like Signet and Tiffany : able to weather the effect of recession , become leading indicators of recovery in the industry Rise in gold price pushed up overhead cost ; imperative in manage their purchasing and overhead cost/ purchase are 50% of firm cost structure

2. Weakness 3. Opportunity 4. Threat a. slow-growth economic : shift in consumer preference and buying habit, and this difficult for tiffany for international expansion + premium price differentiation strategy b. recession in 2008/2009 : sales declining profit and growth c. 2007/2006: increase retail price due to rising cost of gole and diamonds d. recession : but rebound because of their storng brand : Rise in gold price pushed up overhead cost

Tiffanys Strategy

a. 1999 - bought stakes in diamond supplier, aber diamonds b.dis- continue their sales to retailer in us and Europe to gain control of their image c. in 2010 expand : AP (8), EU(3) d. Priority maintain the luxury brand and service, target more affluent populations, maintain non-haggling policy e. mission statement to be the most respective jewelers f. focus on customer service strict hiring standard g. train skills employees

h. bluebox given to customer : as a symbol of high quality products, commitment to excellence, solid tradition and consistency, respect for customers needs, prestine reputation I. vastly open it product offerings: to all types of buyers j. Current /main business strategy : to continue expand product line BUT that does not diminish prestigious brand name selective in the types of products the carry k. continue its target market though its blue book catalogue, website, new retail market j. expanding its accessories line : acquire luxury handbag and footware : lamberton trues from samsonite/ eyewear, key chain, handbags, scraves, women and men jewelry etc l/ variety of silver products for multiple sporting events o. manufacture 60% of its jewelry to maintain its standard / outsourcing non jewelry items m. strong growth potential for the future : sales grew in 2011, 18 %, 3.6 billion n. remain one of the top high quality players ( along with bulagary and cartier) m. brand means everything prestige and wealth = set the company apart from other jewelry company p. sued ebay for trademark infringement and false advertising (cauntefied products) l tiffany believe that cost is not everything when getting well-known high quality, last for life time quality. Largest segment of consumers are more affluent individuals (high to meduium income) Financial 50% from overall revenue are from retail store

6% revenue on advertising and marketing 4Cs Carat clear clarity and cut

Consumers / important about consumers Status effect denoted wealth, class , status and symbols 67% - is planned purchase, Important to consumers, 50% of respondent : product quality, sales person honesty, serviced receive, sales person knowledge Less than 50% : store display, brand name, store locations, recommendations from other shoppers, advertising, store hours, Many unbrabded stores make up large chunks of the market : but well-known brand give consumer confidence, willingness to purchase based uponbrand rather than price point

Largest segment of consumers are more affluent individuals (high to meduium income) As a gift Christmas and valentines Age 45 to 64 make the majority sales because establish disposable income (expected to increase in the future Largest market segment : 20 to 30 years old because increase in marriage rate at this segment U.S jewelry industry 30 billion industry with annual growth rate of 3.1 percent Positive growth rate in 2011 but took hit in recession 2006 Signet group 9.7% market share 1300 stores in the US 75% of its overall sales KSF superb customer service, value driven product line, strategic marketing plan, onsite customer financing Location mall via Kay jewelers Target market medien annual income

Recession in 2006, forced to lower its price to cater more value conscious customers Operates other mall retail stores in order to meet a wide range price point for customers Jared the galleria more high end retail segment, target medium-high income, off mall retailer with higher price point than kay jeweler , focused on customer service, knowledge about products, onsite design and repair service Effect on recent recession, revenue decrease in 2008/2009 / prior recession : increase revenue +location weatherd the recession by shifting it focus on more value driven brand, kay. Recession has forced the company to stop new store openings, cut advertising budget, lay off workers, Improve it growth by target marketing strategies and lowering its price in its mall based stores Reach its penny-penching (value conscious ) customer with through inexpensive charm bracelet line Once economy inprove: show positive growth and continue its expansion Bulgari S.p.A Top luxury goods and jewelery 41 companies in 21 differ countries, 295 retail stores over 3800 employee worldwide Wide range of products, including jewelery, watches, accessories, perfume, skincare, leather goods, Prime location : flagship store in Via Condotti, Rome / expand to new York, geneva, paris, Fast growth brand, able to expand internationally Famous with watch/ expand product line, began offering fragrance, fine jewelery, luxury goods retailer, silk scarves Joined venture with ferragamo to market and distribute ferragamo and ungaro perfume Partnering with Rosenthal to sell haisware : china-ware,crystal,tableware,stemware Licensed its product line to luggage and accessories for Cardilac retro (car maker), named Imaj Acquire 3 swiss-watch maker from The Hour Glass Ltd Signed license agreement with Marriot international to create chain of Bulgari branded hotel Expand : open large store in Rusia, japan, paris Signed contract with Hegdeli Holdings (China) expand company watch line

2011 bought over by Louis Vuitton (LVMH) Focus : (like tiffany) superior quality product + customer service, able to maintain sophisticated and luxurious brand name Business goal : achieve customer satisfaction , excellence in every aspect of business ( design, production, distribution, high quality standards in every process Blue Nile Largest online retailer of diamonds and fine jewelery Online browse thousand of diamond, 4Cs, setting and price set apart from brick and mortar Strategy : educate customer to purchase, give customer knowledge, provide all the amenities that brick and mortar offer (sizing, gift wrapping, financing, insurance and appraisals) / just-intime method, save inventory cost by allowing its retailer advertise on their website (purchase only when customer make order) Mobile website (apps) and able to compare the price with competitor Suffer from recession but slight increase in sales (2010) - because of large increase in international sales + half diamond lies outside US focus more on expanding international Redirect it strategies to non-bridal jewelry (earing + necklace) : due to decrease in number of formal wedding (recession + social belief about wedding) Cotsco Largest warehouse chain (sales over 87Billion in2011) One-stop discount shopping Product line everyday groceries and bakery, wide range of jewelry and diamonds Must purchase membership to get the benefit of Cotsco membership fees worth