Kwanpen Case Study
Even if the Government of Singapore support its local brands with initiatives like Get-Singapore (SPRING Singapore), the Singaporeans don’t seem ready to prefer these brands to international ones. Through the case of Kwanpen we will try to understand why Singaporeans are not warming up to local brands, why Kwanpen is successful abroad and not in its domestic market, what are its weaknesses and finally we will foresee what Kwanpen’s ways of success could be in Singapore. Consumer Behavior:
Singaporeans and desire for luxury:
Singapore is among the top 10 destinations for luxury brands worldwide (69% of all luxury retailers present). Luxury stores are present everywhere in the city more particularly in Orchard Road and shopping centers. Between 2006 and 2010, sales of luxury goods grew by 18% 1. Even if the sales have slowed down during the crisis of 2009, they rose again in 2010 The luxury goods become more and more popular whatsoever watches, clothes or handbags. One of the main reasons of this trend is the growth of high-income households. The annual disposable incomes above US$75,000 increased by 4% between 2006 and 2010, so more Singaporeans are able to afford luxury goods. On the other hand their awareness to luxury brands (especially European ones) increased significantly. Luxury brands take more and more importance in lifestyle magazines and all others advertising mediums. We know that usually Asian people attach importance to the image. When they buy a product they think about the image returned by this product. Many business men and women, with high incomes, deal with foreign clients; they want to present a groomed image. That is the reason why they are willing to buy luxury products. Other high-income earners in Singapore are the expats. They tend to buy luxury goods and then influence the local trends and the way Singaporeans see luxury products. This desire to own luxury brands coupled to high incomes and advertising presence in Medias will maintain and increase the demand for luxury brands. Luxury companies expected to benefit from important sales over the forecast period. However, growth of luxury goods seems not be able to affect non-luxury products, because most Singaporeans are still prudent with their spending. Why Singaporeans prefer global brands instead of local brands? 2 “Rider’s digest trusted brand survey 2008”, 23 April 2011, My Paper According to the newspaper “My Paper” market survey, 26% of Singaporeans favour local brands (so 74% favour global brands)2. Even if there are many strong local brands such as Tiger or Singapore Airlines the support of home-growth brands is very low. So we will try to understand why Singaporeans have a preference for global brands instead of local brands. The main reasons that come in mind are that Singaporeans attach a lot of importance to their image. The 2 notions of status and belonging are key points of the Asians consumer behavior. Singapore is a modern society that keeps deep collectivist orientations significantly. Status
The Singaporean society is highly, individuals are strongly sensible of their place within the group, institution or society as a whole, and their attitude, dress and speech corresponding to their status. They are extremely fussy about the need to keep their dignity. They attach great attention to the choice of products; prices, brand and presentation should reflect its own social status. As to personal appearance, color, material and style of clothing, they must match the social status that defines the age, sex, occupation… Singaporeans wear luxury goods show to others that you are part of high class. The quality of the product has less importance than the image that the brand will reflect. Kwanpen has the opposite positioning in Singapore.
It is essential for Asian people to be accepted by his peers and the fear of rejection, exclusion, is intense, creating a need to always be part of the trendy...
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