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Lilly Pulitzer Strategic Brand Extension Paper

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          LIFE’S A PARTY FOR LILLY LOVERS:
BABSON
COLLEGE
          GROWING & STRENGTHENING LOYAL BRAND
          CO...
Executive Summary
        From sailboats, to buttons, birthday cake, lipstick or African critters, Lilly Pulitzer has a
pr...
pieces, and soon enough everyone else desired the new and innovative clothing line as well.
Eventually, Pulitzer no longer...
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Lilly Pulitzer Strategic Brand Extension Paper

  1. 1. 1 LIFE’S A PARTY FOR LILLY LOVERS: BABSON COLLEGE GROWING & STRENGTHENING LOYAL BRAND COMMUNITIES WITH NEW PRODUCT OFFERINGS Alexandra R. Glazer Marketing Management Professor Metraux March 11, 2013
  2. 2. Executive Summary From sailboats, to buttons, birthday cake, lipstick or African critters, Lilly Pulitzer has a print for it all. I am Alexandra Glazer of Glazer Consulting and I will be the Account Coordinator on the Lilly Pulitzer Alcohol Brand Extension Account. Lilly customers are not like most other retail customers, because buying Lilly Pulitzer coincides with portraying a certain lifestyle. In Oxford Industries‟ words, a lifestyle brands are “those brands that have a clearly defined and targeted point of view inspired by an appealing lifestyle or attitude”. There is a cult following that forms this brand community supporting the label. In some ways these existing customers make introducing new product offerings more simple, because of the already existing, easy to access and eager audience. However, because there are such loyal fans, each new product must be strategically examined to avoid damaging this strong bond between customer and brand. The attachment Lilly lovers have formed for the brand is part of the reason why Lilly Pulitzer often asks consumers for their input. Though the company is actually not that large, there are only 17 retail stores nationwide, its presence feels larger because of the enthusiasm behind the brand. Lilly originally became best known for their sundresses, but over 50 years later they have become known for a lot of their lifestyle products. Most customers are not one-time buyers but rather own several items to fully outfit their life in Lilly, outside of just retail. One of the most highly coveted items is actually the Lilly Jeep Cherokee or Lilly golf cart, the ultimate sign of a real Lilly fanatic. If Lilly fans will flock to anything with the Lilly print and script logo, why not introduce a colorful and classy alcohol brand extension that fits in with the company? Through much research, it was proven just how perfectly this idea fits with the already existing marketing, partnerships, products and overall content they use. Suggested will be a partnership with Skinny Girl Cocktails, to a form an exclusive limited time offering, Skinnylilly. Glazer Consulting has prepared a multifaceted marketing plan surrounding social media with three steps: an awareness campaign with Facebook contest prior to the product launch, a Foursquare & tracking widget implemented throughout the launch and the Shake it Up: Cocktail Picture Contest after the product has been in stores. It all started with a juice stand… The year was 1959 in Palm Beach Florida - Lilly Pulitzer was a New York socialite working at a juice stand when she developed a line of colorful dresses to hide the citrus stains she was getting on her clothes. Jackie Kennedy was photographed often wearing these classic
  3. 3. pieces, and soon enough everyone else desired the new and innovative clothing line as well. Eventually, Pulitzer no longer wanted to own the company, and so it was bought by Sugartown Worldwide Inc. in 1993 and then again by Oxford Industries in 2010 for $60 million (New York Times); however, Pulitzer does still remain active. Before acquisition Oxford‟s operating income was just over $40 million until Lilly Pulitzer boosted sales and increased income to just under $70 million (2011 Annual Report) (Exhibit A). Oxford Industries “acquires additional lifestyle brands [they] believe fit within [their] business model” (2011 Annual Report). Their mission which further explains why Lilly Pulitzer operates the way it does says, “lifestyle branded products create an emotional connection with our target customers [and] can command greater customer loyalty and higher price points at retail, resulting in higher earnings” (2011 Annual Report). From 2011 to 2012, comparing the second quarters, Lilly Pulitzer increased net sales by 24.5% proving just how financially stable this company is (2012 Quarterly Report) (Exhibit B). Lilly‟s customers are primarily affluent, female tastemakers, between the ages of 16 and 45, with preppy influences, who likely started wearing the brand at a young age and continued doing so through adulthood. There are certainly different degrees of “Lilly Lovers”, but there exists a particular segment with an obsession. One interviewee expressed, “I surround myself and my closet with everything possible that is Lilly”. Because the brand of Lilly itself has this much power over its customers, there is virtually no competition because nothing can substitute for a Lilly dress. In other words, the brand personality is comprised of “thinking” and “feeling” thoughts. “Thinking” Lilly would be symbolized by someone stating, “Lilly is preppy excellence, classy, and the unofficial uniform of the preppies.” How people feel about Lilly would be expressed through a customer stating, “I am young, independent, and stand out when wearing Lilly. Lilly adds a pop of color and an element of fun to each and every day.” At the core of Lilly Pulitzer are the building blocks the company is primarily associated with and operates on such as socialites, patterns, color, classy, preppy, east coast, and more. Their extended identity is comprised of partnerships, lifestyle products, men‟s clothing and more. A full look at the core and extended brand identity can be found in exhibit C. New Product Offering for Lilly Pulitzer
  4. 4. Glazer Consulting has made its mission to determine what the best product for Lilly Pulitzer to expand into will be. Oxford Industries believes “a successful lifestyle brand opens up greater opportunities for direct to consumer operations as well as licensing opportunities in product categories beyond our core” (2011 Annual Report). In order to make this determination, a vast compilation of research deemed necessary. The team thought carefully about what Lilly Pulitzer could be lacking and what kind of product would make sense for this company. Ultimately, the idea that spurred the most excitement and promise was a Lilly-branded line of alcohol products. This seems to make complete sense as the company sells everything needed for a party sans the actual alcohol to fill the cocktail shakers, wine glasses, and pitchers. While some concerns are inevitable, Lilly Pulitzer promotes the idea that Lilly girls enjoying their cocktails with patterns such as Drinks on Me, Spike the Punch, and Scorpion Bowl. In addition, in 2011, Lilly Pulitzer paid tribute to Gosling‟s signature drink, “Dark‟N Stormy” by creating a limited edition print featuring the Goslings bottle available in only a few select items. The marketing for this print included the words “our new party friend”, “happy hour” and clearly displayed the Gosling‟s logo (Exhibit D). In fact, many articles were published commending the “refreshingly fashionable pair” (Newport Stylephile). After all, does this idea not seem to fit in extremely well? In order to further explore the concept, the Glazer Consulting team had to determine what kind of alcohol would sell best and how it would be marketed. With the remaining questions still unanswered, the team sought out and approached Lilly‟s loyal fan base with the potential idea for answers. Meet the Lilly Lover Mentality Lilly Pulitzer fans are unlike many others; the brand has cultivated a strong, opinionated, and energetic following, otherwise known as a brand community. These fans enjoy being involved with the brand as much as possible, and often contribute valuable insights that give the company accurate direction of how to proceed. Interviews and a survey were administered and Glazer Consulting received great results. Starting off very generally to confirm the team‟s thoughts, fans were asked to think of words used to describe Lilly Pulitzer. To no surprise, many of the words overlapped including “colorful prints”, “playful”, “timeless”, “classy”, “whimsical”, “summer” and so forth. The team also thought it would be important to get deep inside consumer minds and find out what Lilly really means to them. Here are quotes that truly showcase the consumer‟s product infatuation:
  5. 5. “Lilly Pulitzer Successfully branded happiness; wearing Lilly seeing Lilly, owning Lilly makes you happy” “I surround myself and my closet with everything possible that is Lilly” “I love the lifestyle the brand promotes. Her pieces are timeless and I will be able to wear for life” The company has never come forth and said what exactly it is that they are promoting, rather they leave the interpretation up to customers through their happy go lucky, always summer attitude and imaginative prints. The fact that so many people can be on the same page, idealizing about this lifestyle that Lilly Pulitzer represents, is extremely powerful. One survey respondent said, “I love both the Lilly style and what being a Lilly girl is all about”; to someone else in the brand community, you just know what „being a Lilly girl‟ means without having to describe any further. In terms of habits, 92% of respondents said that they purchase Lilly products because of the print or pattern, following with 70% being because of brand loyalty. Another finding was that 80% of those surveyed, follow Lilly on at least one social media site and also have participated in a social media sweepstakes, contest, poll, etc. We found that the largest motivator for participating was because the prize was enticing with 62%. Fans Back Brand Extension After getting basic information from Lilly Lovers, the alcohol brand extension concept was introduced. When fans were asked if they would purchase an alcohol product if it was available, 92% agreed that it was an exciting opportunity, and of that, 82% suggested that cocktail mix would be the best area to penetrate. One respondent noted, “People are so loyal to their wines, where they are made, and the vintage, I think a cocktail mix would work better.” Glazer Consulting is not oblivious to the fact that alcohol could spur some concerns about how this could affect Lilly Pulitzer‟s image. 64% of those on the survey answered that the idea does not bother them or that they love the idea and that it fits perfectly with the brand. Though this was a high percentage, the sensitive segment concerned the team, thus Glazer Consulting took the idea to corporate to get some additional feedback. Corporate Concerns
  6. 6. While listening to the fans is always important, companies must ultimately make decisions based on what is best for the brand‟s overall image. One employee gave some great advice on how to approach the brand extension: “We want to keep the brand as 'family friendly' as possible... we often promote how a Lilly Girl loves to party and enjoys her cocktails, but I don't think we'd ever go into alcoholic products that would so drastically tie us to that image” Glazer Consulting took that notion to heart and thought about how to get around this negativity that may result. One idea brainstormed was to do a partnership with another company that has a similar existing image and mission. When the team shared this possibility with the employee, she agreed this was the best angle to take to best combat any negative retaliation toward the brand. Current Marketing Techniques The company has several different marketing approaches that they take, most with the underlying theme that they don‟t need to spend much money on advertising expenses because of their loyal fans. These techniques include social media sites: Facebook, Twitter, Instagram and Pinterest with widgets, sweepstakes, contests, polls etc., brand representatives, guerilla marketing, promotional events, partnerships, and the personal accounts of Lilly Lovers. On Facebook alone Lilly boasts 477,000 likes, with 67,000 on Twitter, 55,000 on Pinterest and lastly 47,000 on Instagram. Their social media sites have had history of successful campaigns including Lilly Love, Next State Print, Cracker Tracker, Get the Squeeze, and Lilly Loves Greek. Key Findings Glazer Consulting has concluded the determining factors that must be included in the product launch of a new Lilly Pulitzer product offering, in particular this alcohol brand concept. Being consistent with the signature colors and patterns on the bottle‟s artwork will be important. It is apparent fans are definitely interested in having this product, but there are concerns about the negative connotation surrounding the existing “family brand”. Lilly‟s strong social media presence and history of online campaigns makes it clear that fans are very engaged online.
  7. 7. Proceeding Properly: Analysis Glazer Consulting has come to several conclusions on how to properly precede in the best interest of Lilly Pulitzer. First, the alcohol brand extension will be a limited edition, cocktail mix line to prevent from any permanent brand dilution and negative connotation associated with irresponsible drinking. There will be a social media campaign implemented with enticing prizes to encourage participation. While it is recognized that there are concerns about brand image, if Lilly has partnered with Goslings‟ in previous years and come out strong, no issue should be anticipated if this brand extension is strategic in its marketing. Introducing Skinnylilly After much conducted research, Glazer Consulting has found a solution that allows for an alcohol brand extension while keeping brand reputation successfully intact. Lilly was able to avoid attacks with Goslings because it was approached appropriately and consumers had an attachment to the Dark‟N Stormy beverage. Glazer Consulting‟s solution for this is to form a partnership with Skinny Girl Cocktails to co-brand and develop a limited edition, low calorie, special product under the name “SkinnyLilly” (Exhibit E). Skinny Girl has established themselves in the industry as sophisticated and classy, not to mention the company is extremely financially stable as the fastest growing “ready to drink” beverage in the spirit industry, seeing 388% growth in just 2011 (Hsu).While partnering with an already existing company not only makes financial sense, the limited edition aspect and co-brand will prevent any permanent associations of alcohol to the “family brand” of Lilly Pulitzer. Another key element to this brand extension is the fact that the line has been chosen as a cocktail mix as opposed to hard liquor or beer which has an entirely different negative connotation. When marketed appropriately, “Cocktail Mix” conjures up an image of older socialite women, casually sipping a drink at a friend‟s garden party.. Launching SkinnyLilly under these two very reputable and established companies, we believe, will deter the sensitive segment to any attacks on the sub-brand. In perspective, Lilly Pulitzer already produces several alcohol associated products: cocktail shakers, pitchers, wine glasses, coozies, tailgate coolers, in addition to blatant alcohol named prints including scorpion bowl, drinks on me, spike the punch, mint julep, etc. If the brand is already treading so close to the line of promoting alcohol, with little concern to these products, it seems slightly hypocritical for consumers to lash out.
  8. 8. Why Skinny Girl? Skinny Girl has been chosen for a number of reasons as the right partner for this brand extension. It is not just about Lilly having a partner, but it is about having the right partner. This partnership seems seamless because of their very similar core and extended values. Both brands pride themselves on being feminine, with a sophisticated, classy, and flirtatious theme. In addition, Lilly‟s slogan “Life‟s a Party, Dress Like it”, fits well with Skinny Girl‟s mantra, “Drink like a Lady” (Exhibit E). The Skinny Girl image portrays the idea that if you are going to enjoy a beverage, make sure you act like a lady while you do - and this is continually important in maintaining the high end image that both brands choose to portray. Not only does Skinny Girl say to drink like a lady, the celebrity endorsement of very accomplished Bethenny Frankel (founder and previous owner), says be a role model as well. Bethenny is a well-respected celebrity chef and socialite who originally gained her stardom being on Bravo‟s Real Housewives of New York City. Since then, she has had 3 of her own TV shows, 4 self-help books, an array of other products under the Skinny Girl brand, an exercise DVD and more. She alone has almost 875,000 Facebook followers on her personal page not including any of her additional brands or their presence on Twitter, Blogger, or other sites. Combining two networks of fans with a strong brand affiliation is very positive for SkinnyLilly; fans are going to flock to this product as many of them are already overlapping customers. And of course, the financial stability and success of Skinny Girl makes the company an appealing partner. Partnering with Lilly makes sense for Skinny Girl, as the company will sell to a potentially untapped market of women. This will not only serve as strengthening the Lilly Pulitzer brand community, but as a bonus for the Skinny Girl brand that is already on the rise. Getting the product to stores will be of no issue as Skinny Girl already has accomplished an effective supply chain with established distribution partners, vendors, etc. Marketing SkinnyLilly Marketing a product is the most crucial element in ensuring that any product will be successful. Fortunately for Lilly Pulitzer, they take advantage of marketing products through social media because of their well-established online fan base which costs little to no money in advertising. Glazer Consulting has prepared three marketing suggestions to implement for the
  9. 9. marketing of SkinnyLilly Cocktail mix. There will be 3 phases, of which each will have their own marketing campaign. Phase One: Generating Awareness & Buzz In Phase 1, before Skinnylilly actually hits stores, there will be a Facebook campaign focused on generating awareness for the product. In order to get fans excited for the launch in the coming year, Lilly will reach out to its audience asking them to choose what the flavor and name of this cocktail mix will be (Exhibit G). In order to add another element of fun, Lilly lovers will also submit a short description/story behind the name of the cocktail and why it is relevant to Lilly. The best flavor as determined by other Lilly Lovers will become the name that is used for SkinnyLilly. What this means is that after all entries are received, the Lilly community will be able to actually vote on five of the best entries. Entrants will need to accumulate votes, which will involve a plethora of sharing, comments, likes, etc. and even more word of mouth. The winner will also receive a Lilly dress of her choice from the summer collection as something to look forward to. This shows that Lilly really cares about its customers by getting their input and giving back by rewarding a Lilly dress which is something exciting to a consumer.. The objective of this campaign is to generate as much hype and awareness for the product as possible. If people are excited about the launch, they will talk to others about SkinnyLilly and anticipate its arrival to stores. In addition, providing such a large opportunity for Lilly Lovers to be so active in brand decisions makes fans feel closer to the brand. Phase Two: Tracking Campaign & Foursquare Specials After SkinnyLilly has been officially launched and reaches stores, it is important to continue the buzz and get fans to the stores to buy and try the product. Similar to earlier campaigns with Florida‟s Natural Grapefruit Juice and Barnum‟s Animal Cracker, Lilly will create a “cracker tracker-like” (Exhibit F) widget through the Facebook page for consumers to check in where they have found the product, maybe add a photo, and share their experience and excitement. Connecting the widget to the location-based social media app Foursquare will allow this to be even easier. Anyone can log in to Facebook and then check in through Foursquare, activating a “Newbie” special, notifying all of their friends of their actions and their location. Check-ins with photos and comments will be available to add and will be mapped on the “Cocktail Country” tracker map where anyone can click to see the nearest sighting (Exhibit H). Foursquare operates on location based marketing and brings in clientele through checking in
  10. 10. with certain badges and specials. The “Newbie” special is for first time check-ins that usually comes with a discount. Retail stores of SkinnyLilly will be asked to activate a 25% off Newbie special for anything in the store other than SkinnyLilly, therefore benefitting more sales and driving traffic to this said liquor store (Exhibit H). Phase Three: Shake it Up: Cocktail Picture Contest The final phase of the SkinnyLilly marketing plan is the Shake it Up Cocktail Picture Contest. This part of the plan will go live two months after SkinnyLilly products are in stores. The rationale behind this is that there will be ample buzz from the launch and tracking campaigns; however, the excitement may begin to wear off after two months. To prevent any lag of sales during this limited edition product cycle, there will be another sales peak provoked after the picture contest details are revealed through Facebook. Glazer Consulting is also anticipating many fans to go out within the first two months to purchase the product and may not return back to the store as quickly for round two. The picture contest asks for loyal fans to create their favorite cocktail using SkinnyLilly and post the ingredients. However this is just part one; fans must also take a picture of themselves in their favorite Lilly dress while enjoying their cocktail and featuring the SkinnyLilly bottle in the photo. In order to drive traffic back to the stores, as this picture campaign requires a bottle to be in the picture, fans will be obliged to return to the store, purchase additional product, and experiment with recipes. By posting different recipes, this will give other fans ideas of how to use their SkinnyLilly and provoke more drinks, thus more bottles purchased! As usual, a prize is a large motivator for Lilly Lovers, so cocktail shakers and glassware sets in the SkinnyLilly print will be rewarded to the contest winner. Timeline/Wrap Up Skinnylilly will be in stores from spring through fall of 2014. In order to best market the product the following will be the schedule of marketing materials and when they will be distributed through proper Lilly Pulitzer channels. Phase One will roll out one year prior to the launch of the campaign and it will be 5 weeks long which gives enough turn over time for creative. After the product is in stores, phase two will launch and be available for the length of the campaign. The last part of the campaign will be implemented after 2 months and will last a total of 7 weeks. Winners and 10 runners up will be announced 2 weeks after the competition ends.
  11. 11. Exhibits A. B. C. Accessories Partnerships Lifestyle Products Sorority Line Men’s Clothing Socialites Iconic Classy Preppy East Coast Sundresses Palm Beach Playful Patterns
  12. 12. D. E. “Life’s a Party” Flirty Feminine Classy Sophisticated Life of the Party “Drink Like a Lady”
  13. 13. F. G. H.
  14. 14. Appendices Oxford Industries Income Statement, 2011-2012 Lilly Pulitzer 2012 Operating Income Annual Report
  15. 15. Works Cited De La Merced, Michael J. "DealBook." Prep Stays Hot as Lilly Pulitzer Is Sold for 60 Million Comments. New York Times, 21 Dec. 2010. Web. 11 Mar. 2013. Hsu, Tiffany. "Bethenny Frankel's Skinnygirl Leads Spirits Growth with 388% Boom." Los Angeles Times. Los Angeles Times, 09 Apr. 2012. Web. 11 Mar. 2013. "The Newport Stylephile." The Newport Stylephile. N.p., 5 July 2011. Web. 11 Mar. 2013. "Oxford Industries, Inc. – 2012 First Quarter, Quarterly Report." Oxford Industries, Inc. - Quarterly Report. N.p., 06 June 2012. Web. 11 Mar. 2013. "Oxford Industries, Inc. - 2012 Second Quarter, Quarterly Report." Oxford Industries, Inc. - Quarterly Report. N.p., 30 Aug. 2012. Web. 11 Mar. 2013. "Oxford Industries, Inc. – 2011 Annual Report." Oxford Industries, Inc. - Annual Report. N.p., 30 Mar. 2012. Web. 11 Mar. 2013. "Really? Bethenny Frankel‟s Skinnygirl Is Fastest Growing Brand in the US." Really? Bethenny Frankel's Skinnygirl Is Fastest Growing Brand in the US. BrandManager, 9 May 2011. Web. 11 Mar. 2013. "Skinnygirl Cocktails Are Fastest Growing Liquor Brand, Report Says." NBC News. N.p., n.d. Web. 11 Mar. 2013. "Stick to Your Brand Even When the Sky Is Falling." Digital Surgeons. N.p., 23 Aug. 2012. Web. 11 Mar. 2013.

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