Amber Hassen

Brand Audit

Amber Hassen
Product and Brand Management

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Table of Contents
Title Page......................................................................................................................................... 1
Company.3
Subsidiaries/Financial Data/Key Personnel...4
Recent News..7
Industry Competition......8
Category/Method of Distribution........8
Major Players......9
Factors.......11
Products within Category of Brand...13
New Product Introduction, Benefits and Appeal...14
Innovations...15
Recent News about Competitor.16
Brand Analysis..........17
Consumer Profile.......19
Advertising/Marketing Communications.......21
Media for brand...23
Promotions for brand...25
Digital Strategies for brand.26
Pertinent Info and Brand Value....29
Qualitative & Quantitative Research.....30
Recommendations..36
Resources..37

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A. Company

- Neiman Marcus is a luxurious privately-held American department

store headquartered in Dallas, TX. Founded in 1907 by Herbert

Marcus, Sr., his sister Carrie Marcus Neiman, and her husband A.L.

Neiman. The trio had a successful previous business working with

sales firm in Atlanta. They traveled to Dallas to start a retail business

instead of investing into the Coca Cola Company. Many of the

wealthy in Dallas wanted to show off so purchases of Neiman Marcus

new luxury clothes that werent normally found in Texas grew

popular and set off their business.

Subsidiaries:

- Their subsidiaries include Bergdorf department stores and Neiman

Marcus Direct. Neiman Marcus Direct is focused with a direct

marketing division and Neiman Marcus Group Inc. is their parent

organization. Other subsidiaries include: NEMA Beverage Corp,

Quality Care Solutions Inc., NMGP LLC, NM Nevada Trust, Worth

Avenue Leasing CO, NEMA Beverage Parent CORP, NM Financial

Services Inc.

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Financial Data

- After the founders initial investment of $25,000 for the start of

Neiman Marcus, the Bergdorf Goodman flagship store in New York

acquired a split from Neiman Marcus along with Edwin Goodman in

1987.

- Their financial data below consists of their revenues of 2005-2012.

There is a subtle increase in gross profit through the years.

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- Per Neiman Marcus Group report of 2016: DALLAS

(BUSINESS WIRE)--December 13, 2016--Neiman Marcus Group

LTD LLC today reported financial results for its first fiscal quarter

ended October 29, 2016. For the first quarter of fiscal year 2017, the

Company reported total revenues of $1.08 billion, representing a

decrease of 7.4% compared to total revenues of $1.16 billion for the

first quarter of fiscal year 2016. During the quarter, comparable

revenues decreased 8.0% and the Company reported a net loss of

$23.5 million compared to a net loss of $10.5 million for the first

quarter of fiscal year 2016. Adjusted EBITDA, which is described on

page 7 of this release, for the first quarter of fiscal year 2017 was

$122.9 million compared to Adjusted EBITDA of $164.3 million for

the first quarter of fiscal year 2016 (NM Group).

Key Personnel

Karen W. Katz: President and Chief Executive Officer, Neiman Marcus Group

LTD LLC

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James Gold: President, Chief Merchandising Officer, Neiman Marcus Group LTD

LLC

John Koryl: President, Neiman Marcus Stores and Online, Neiman Marcus Group

LTD LLC

Joshua Schulman: President, Bergdorf Goodman and NMG International

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Michael Fung: Interim Executive Vice President, Chief Financial Officer and

Chief Operating Officer, Neiman Marcus Group LTD LLC

Recent News

- Neiman Marcus recently opened a new store in Fort Worth. This

department store is high tech based. This provides customers with a

unique shopping experience. For example, this store has an open-sell

cosmetics department.

- All the cosmetics are self-serve displays. Additionally, two dressing

rooms have memory and Sunglass mirrors to videotape and share

outfits. This is very impressive for Neiman Marcus to add to their

stores to further emphasize a luxurious feel.

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B. Category/Industry and Competition

Category

- Neiman Marcus has a brand category consisting of luxury goods.

These goods include designer women, men, and childrens clothes,

handbags, shoes, home, cosmetics, and jewelry. Their category started

with just clothes but is now quite large. It is common for a department

store to have this type of variety with their supply of different

products.

Methods of Distribution

- Through their supply chain network, Neiman Marcus has been

investing in new facilities that will provide more accurate supply

chain readings. This will give the company better control on

adjustments that need to be made when rapid changes occur. Also, the

company could provide scanners that would not require secondary

labels on their shipment products to their distribution bulk stores. This

cuts their cost of resources tremendously and makes the process more

efficient.

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Major Players

- Nordstrom is one of the biggest competitors for Neiman Marcus.

Nordstrom is not as high end as Neiman Marcus but they do offer

moderate pricing on their designer items. They also have comparable

prices to Neiman Marcus when they sell the same goods. Another

major player is Barneys New York. Barneys has dominated the

luxury goods department retail store in New York. Neiman Marcus

has their sister store Bergdorf Goodman that also competes with

Barneys New York. Below is a comparison of Neiman Marcus and

their leading competitor Nordstrom.

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Factors

- Seasonal factors in retail are crucial to department stores. Events like

black Friday bring in a tremendous amount of revenue. Studies have

shown sales in December are always the highest with holidays such as

Christmas occupying it. January and February have some of the

lowest seasonal sales due to severe weather conditions.

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- Regional factors have a strong influence on the expansion of new

Neiman Marcus stores. There are also socio-economic factors that

influence development. The regions Neiman Marcus occupies have

considerable trade growth potential that creates high investment

potential.

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C. Products within Category of your Brand

Share of category and product form

- Online sales of Neiman Marcus clothing and shoes (mostly catered to

women) account for 25% of their revenue.

- Neiman Marcus currently holds 5.36% market share with their

ecommerce investments.

- Neiman Marcus features many designers and sells their products.

Examples include: Jimmy Choo, Gucci, Christian Louboutin, Chanel,

and Michael Kors.

- Much of designer brands are designed and manufactured in France.

Many of the clothings and shoes are handmade using high quality

leather and different textures.

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New Product Introductions, Benefits and Appeals

- Neiman Marcus has recently added in new items to their luxury home

furnishings. Home dcor such as vases, paintings, drawers and chairs.

They even include certain items exclusively for upcoming holidays

such as Valentines Day.

- The benefit and appeal of these products is that the variety of them are

purchased by women and men that live together. Both sexes

collaborate on different designer pieces to place inside their home.

Neiman Marcus has established luxury brand awareness that attracts

exclusive wealthy individuals to intrigue in their new products that

provide the same high quality standards.

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Innovations

- For Neiman Marcus to seamlessly improve and integrate a

higher quality shopping experience, one of their strategies

includes creating an iLab. The team behind iLab create

innovative ways such as Bluetooth beacons that act as GPS

locators that communicates with customers on the app. This

method attracts customers to the in-store location. The app

will also tell customers when the shoes they want go on sale.

Neiman Marcus main objective is to combine an online and

in-store shopping experience.

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Recent News about Competitors Product

- Nordstrom has hired a new chief innovation officer to implement a

stronger customer-centric effort. In 2016, Nordstrom struggled

through layoffs and departures on its digital team as it adjusted its

strategy for competing more effectively against Amazon and others.

The company said Monday that it has been working over the past few

years to deliver a more seamless, personalized and relevant shopping

experience for customers by enhancing its stores, Nordstrom.com site,

and Nordstrom app (GeekWire).

- In conclusion, both Nordstrom and Neiman Marcus are working

towards the same goal of providing highly innovative ideas and

products to further enhance their department stores. Nordstrom has

also quickly dropped brands that do not meet adequate sales (ex.

Ivanka Trump Brand).

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D. Brand Analysis

- Both Nordstrom and Macys hold top spots in bestselling

designer brands. For women, these brands are Vince Camuto

and Tom Ford. For men, these brands are Versace and rag &

bone. Fortunately, Neiman Marcus offers these brands as

well but may need to be advertised more to attract the

consumers that buy a lot from them. When comparing the

pricing trends between the different department stores that

sells these brands, it is relatively steady. Below shows an

estimate of growth among brands in different department

stores across the country. So far the United States holds the

top spot with an estimated revenue of 161.5 billion.

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- This is a further break down of the department stores impacting the

billions of dollars in revenue the United States brings in. Neiman

Marcus is slowly gaining as it increases its exposure and creates new

partnerships with exclusive brands.

Recent News about Competitors brand

- Nordstrom: Nordstrom's co-president discounted the impact of

dropping the Ivanka Trump fashion line reported better sales and

profits for the fourth quarter. The retailer posted $201 million in net

earnings during the three-month period ended Jan. 28, or $1.15 per

diluted share, vs. net earnings of $180 million during the fourth

quarter the previous year, or $1 a share (USA Today).

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E. Consumer Profile

Demographics and Frequency of purchase

- The demographics of users varies between the different brands that

Neiman Marcus offers. Most Neiman Marcus shoppers are adults

ranging between 20-70 years old. Each user usually shops at Neiman

Marcus once or twice a month. Note that during holiday seasons and

different weather patterns, customers will visit more frequently. Most

of Neiman Marcus shoppers purchase from their department store or

from the separate brand name either online or in store.

Heavy user profile, Awareness & Attitude, Decision makers

vs purchaser

- The age group of people Neiman Marcus tries to attract is mainly

focused on both genders that have similar spending habits. The selling

point of Neiman Marcus is for them to provide people with the highest

quality of clothes, shoes, accessories, fragrances, and home

furnishings. Neiman Marcus represents successful people who are

willing to splurge to give themselves pride of their wealth.

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- Furthermore, the awareness and attitude of this brand has grown

stronger. Neiman Marcus wants to attract the customers that go

strictly to separate brand stores and change their views by letting

customers shop the same brands at their department store. They do

this by implementing different strategies to lure in potential

customers. This ties in with their decision makers vs purchasers.

Their target market may be more convinced to shop at their

department store rather than some competitors due to their increasing

technological awareness and advances in understanding what

customers want.

Normal Purchase Cycle, Brand Loyalty/Switching

- The normal purchase cycle of customers that shop at Neiman Marcus

is every one-three months. Neiman Marcus is doing its best to build

brand loyalty by maintaining their tradition of leadership in the luxury

brand world. If a brand loses customer loyalty it can greatly hurt the

companys sales so Neiman Marcus sets plans and steps to help

prevent losing a customers trust.

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F. Advertising/Marketing Communications

The most creative strategy that Neiman Marcus has done is

advertising their clothes on performers at the south by southwest

music festival held in Austin, Texas. They offered panel booth

discussions by day and marketed performances at night. The

retailer used emerging female artists to model their brand instead

of generic models so that it can attract a broader audience. This

resulted in a successful campaign that attracted 80 million

impressions from social media and the press throughout the whole

festival. This shows that Neiman Marcus wants to attract young

women who are fashion conscious. This campaign called Make

Some Noise was implemented by the CMO of Neiman Marcus to

attract the next generation of Neiman Marcus customers.

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Examples of past and current executions

- Last spring, Neiman Marcus launched a campaign called Art of

Fashion. The luxury retailer hired two dancers to help choreograph

the photos from the shoot. They wanted it to be fun and energetic by

attracting free-spirited yet elegant women that embodies Neiman

Marcus by having a youthful energy with colorful designer clothes to

reflect that and the spring season.

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Information on competitive brand

- Nordstrom has been a long-time competitor of Neiman Marcus. In

2016, Nordstrom released their own TV spot called See Anew.

Nordstrom has not done one of those since 2013 and promoted spring

apparel by providing a positive view of fashion by including models

that danced in their clothes. Nordstroms marketing goal was to attract

younger customers.

G. Media for Brand

Seasonality & Regionality

- In terms of brand spending, Neiman Marcus has continued to increase

the amount spent on advertising their retail products. As the seasons

change, clothing items normally sold all year long such as denim or

simple shirts are still available. Neiman Marcus starts to include more

ads targeting swimming wear towards the summer months and vice

versa but with slightly different modifications each time.

- As for regionality, each state has a slightly different spending pattern

that is greatly influenced by society, lifestyle, and weather. For

example, with the northern states Neiman Marcus focuses more on

winter and fall apparel knowing that it is normally colder there.

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Media Employed by Top Brands

- Social media has dominated the way brands connect with consumers

and potential customers. As technology continues to rapidly advance,

traditional methods of marketing tactics have decreased.

Spending patterns

- The forecast for consumer spending patterns in retail are expected to

increase by 4.2% of 2017. This has an impact on our economy

alongside gasoline. Department stores are now increasing their share

in the retail marketing world. Households tend to spend more on

department store goods targeted for women.

Spending compared with market share; competitor spending

- Designers are spending most of their funds in advertising including

Neiman Marcus top competitor Nordstrom. Neiman Marcus must

advertise in a way thats efficient and fashionable so that they can

differentiate themselves from other designer-heavy stores.

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H. Promotions used in category

- Social Media: One of the most growing categories to promote

products, Neiman Marcus has used this to their advantage. By using

Twitter and Facebook, Neiman Marcus can efficiently communicate

with their shoppers when deals are going on.

- Advertising: Neiman Marcus has print ads in fashion magazines that

focus on their higher end clothes. They also use a PR strategy that

exhibits proper media exposure. Neiman Marcus has even started to

offer details on Groupon.

Major brand promotion types

- Print advertising of models in the brands clothing.

- Communicating the brand through different types of public relations

related to social media platforms and hosting events.

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Competitor Promotions

- Nordstrom offers multiple promotions throughout the year the same

way Neiman Marcus does. Nordstrom tends to focus on their online

sales whenever they do their promotions. Nordstrom also focuses on

engagement between their customers on their social media networks

instead of trying to sell their brand.

I. Digital Strategies

- The purpose of neimanmarcus.com is to promote awareness for the

brand and increase sales. You can shop for their products in all the

different categories. The website has a clear design that provides

convenience for customers as well.

- As for E-Commerce activities, Neiman Marcus is implementing an

omnichannel strategy which includes a personalization feature on their

website that focuses on the customers size. For example, if a

customer viewed a size 7 shoe, neimanmarcus.com will show shoes

available in a location nearby that offers those shoes in that size.

Neiman Marcus online sales have increased to 1.3 billion dollars in

sales over the past three years so this strategy is very efficient for

Neiman Marcus.

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Social Media Activities

- Facebook: 975,743 likes

- Twitter: 389,000 followers, 31,000 tweets, 11,500 likes

- Instagram: 1.1 million followers, 6,564 posts

SEO

- Neiman Marcus will use this form of marketing to aid in the ranks of

their search engines to provide traffic for their website. Neiman

Marcus has optimized their search engine on their page so that it is

visually easy to read.

Market automation efforts

- Neiman Marcus has recently put a lot of effort in improving their

relationship with their customers for them to continue being faithful to

the company. Therefore, the average of customers returning to their

stores or browsing online has increased once they began to focus on

this. Neiman Marcus uses CRM software like other retail stores to

collect different statistical information. Therefore, they have

reassurance that they can stay ahead of their competitors.

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Hootsuite Dashboard

Extensive Section on social media strategy

- I believe the social media extensions for Neiman Marcus support the

brand very well because they are slowly getting recognized by other

competing brands as a potential threat. The target market age group

for Neiman Marcus is spread out immensely so that they attract a wide

variety of traffic. Social media executions that target a set of people

(mostly women) have worked well for Neiman Marcus. In addition to

Neiman Marcus online outreach, they also have bloggers that fully

support and execute the brand.

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J. Pertinent Information

- Personal Interview with the CMO of Neiman Marcus:

At the core of our business, Neiman Marcus is about delivering an incredible

luxury service experience. Weve been doing this in-store for over 100 years and
with the increasing use of the internet, mobile devices, social, and other channels,
maintaining that high touch service is more important than ever.
As our personalized e-commerce service moves closer and closer to an in-store
experience, we develop a deeper relationship and further trust with our clients.
Relationships and trust result in customer loyalty. And loyalty means business.
Its a cycle, more loyalty means more business, more business means more
innovation to better service our customer.

K. Brand Value

- I believe the brand value of Neiman Marcus has increased

tremendously. They are #78 of one of the largest private companies

in America with a revenue of $5.1 billion. Neiman Marcus has 42

store locations across the nation and two Bergdorf Goodman stores.

As the value continues to increase we will hopefully start to see

Neiman Marcus locations across the globe.

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II. Brand Exploratory

Qualitative Research

Quantitative Research

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- According to the survey, Neiman Marcus has a target market of

mostly young adults. It is good to see that much of the 20 respondents

have purchased something from there within a month. I believe this is

mainly because of the variety of brands Neiman Marcus offers. Their

advertising is mainly focused in magazines and social media. Women

are mostly Neiman Marcus shoppers as well. Overall, these people

have a positive outlook on Neiman Marcus.

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Recommendations

- Neiman Marcus should build a unique brand personality while using

their social media platforms to connect with shoppers on a more

personal level.

- Plan strategies to target male consumers. Look for men who are

interested in fashion and connect with bloggers to showcase their

designer wear.

- Create more visuals in advertising such as in television or billboards

to make the brand come to life. Take advantage of fashion weeks and

other special events catered to the brands they sell.

- Offering consistent sales and bonuses for people who shop at their

department store and not just the specific brand store.

- Become more active on Youtube to increase social media presence.

- Adjust to millennial shoppers to avoid imbalances on the average age

groups that visit Neiman Marcus.

- Develop a strong distribution network for online shoppers by

providing quick and efficient deliveries and a customer satisfaction

oriented return policy.

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Resources

Investor Information. (n.d.). Retrieved April 21, 2017, from http://phx.corporate-

ir.net/phoenix.zhtml?c=118113&p=irol-
SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWd
lPTExMjc2MTgzJkRTRVE9MiZTRVE9MyZTUURFU0M9U0VDVElPTl9QQUdFJmV4cD0m
c3Vic2lkPTU3
New Neiman Marcus in Fort Worth built with tech and convenience layered on top of art and
fashion | Retail. (2017, February 08). Retrieved April 21, 2017, from
http://www.dallasnews.com/business/retail/2017/02/08/new-neiman-marcus-fort-worth-built-
tech-convenience-layered-top-art-fashion
Slack, E. (2013, September 24). Neiman Marcus. Retrieved April 21, 2017, from
http://www.scw-mag.com/sections/solutions/196-neiman-marcus
Seasonal factors in retailing. (n.d.). Retrieved April 21, 2017, from
https://dupress.deloitte.com/dup-us-en/economy/behind-the-numbers/2014-holiday-retail-sales-
forecast.html
Jones, S. (n.d.). Luxury online retail market to reach $41.8B by 2019: report. Retrieved April 21,
2017, from https://www.luxurydaily.com/luxury-online-retail-market-to-reach-41-8b-by-2019-
report/
Gaudin, S. (2016, January 19). Neiman Marcus wants to merge the online and in-store shopping
experience. Retrieved April 21, 2017, from
http://www.computerworld.com/article/3024226/retail-it/neiman-marcus-wants-to-merge-the-
online-and-in-store-shopping-experience.html
Schlosser, K. (2017, January 09). In latest digital initiative, Nordstrom names longtime exec to
lead new innovation team. Retrieved April 21, 2017, from http://www.geekwire.com/2017/latest-
digital-initiative-nordstrom-names-longtime-exec-lead-new-innovation-team/
Jones, C. (2017, February 23). Nordstrom posts higher profits; Trump impact 'negligible'
Retrieved April 21, 2017, from
http://www.usatoday.com/story/money/2017/02/23/nordstrom/98318526/
D. (n.d.). Why Neiman Marcus Is a Fan of South by Southwest. Retrieved April 21, 2017, from
http://www.adweek.com/digital/why-neiman-marcus-fan-south-southwest-163327/
Neiman Marcus Art of Fashion Spring 2016 Campaign. (2016, February 20). Retrieved April 21,
2017, from http://www.fashiongonerogue.com/neiman-marcus-spring-2016-campaign/
Roman, E. (2015, January 06). Neiman Marcus CMO Answers 4 Questions for Marketing
Innovators. Retrieved April 21, 2017, from http://www.huffingtonpost.com/ernan-
roman/neiman-marcus-cmo-answers_b_6417616.html

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