MR14 Project Report American Eagle Outfitters

8/9/2019 MR14 Project Report American Eagle Outfitters

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Contents

Project Objective........................................................................................................ 2

About The Company...................................................................................................2

Research Methodology...............................................................................................4

Analysis and Results...................................................................................................4

Recommendations.................................................................................................... 2

Re!erences................................................................................................................"

Anne#ure.................................................................................................................. 4


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Project Objective

To per!orm a mar$et research to identi!y and analy%e the mar$et potential & target

consumer segment !or 'American (agle Out)tters* to enter +ndia and design the

ideal product port!olio to be o,ered in the +ndian Mar$et.

About The Company

IntroductionAmerican (agle Out)tters is an American clothing and accessories retailer-

headuartered in Pittsburgh- Pennsylvania. +t /as !ounded in 011 by brothers erry

and Mar$ 3ilverman as a subsidiary o! Retail entures- +nc.- a company /hich also

o/ned and operated 3ilverman5s Mens/ear. The 3ilvermans sold their o/nership

interests in 00. American (agle Out)tters is the parent company o! Aerie and

!ormerly o! 11 $ids.

Company HistoryAmerican (agle Out)tters- +nc. 6A(7 is a chain o! mall8based stores that sells casual-

outdoor8inspired !ashion apparel. 9ith nearly ::: shops in the ;nited 3tates and

Canada- A( enjoyed average annual sales increases o! "< percent !rom 00= to

2::. This gro/th rate earned A( a ran$ing o! ="rd among >ortune maga%ine5s list

o! !astest gro/ing companies. Retail outlets in regional shopping malls account !orthe vast majority o! sales- but the company also sells its gear via a /ebsite and its

?magalog?88a combination li!estyle maga%ine and catalog. A(5s Canadian operations

include the Thri!ty5s@luenotes chain- as /ell as ramear shops and Bational

ogistics 3ervices- a distribution arm. The company also operates a small

distribution center- (agle Trading- in Me#ico.


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The vast majority o! the chain5s sales are generated !rom private label brands88

American (agle Out)tters- A(- and A( 3upplyD this !ocus on private8label

merchandise /as launched through a 002 repositioning and /as intended to

di,erentiate American (agle !rom its mall competitors- such as The imited- The

Eap- and Abercrombie & >itch. To $eep up /ith the latest !ashion trends- the

company employs an in8house design team- /hose merchandise designs are thenmanu!actured to speci)cation by outside vendors or by American (agle5s

manu!acturing subsidiary- Prophecy td. This private8label@in8house design system

enables American (agle to $eep tight control o! uality and hold prices do/n.

Customer credit is o,ered through an American (agle Out)tters credit card.

Appro#imately 2= percent o! the company5s stoc$ is o/ned by the 3chottenstein

!amily- /hose 3chottenstein 3tores Corp. is a large privately held company based in

Columbus- Ohio- /ith numerous retail holdings. ay . 3chottenstein acted as C(O o!

American (agle !rom 002 to 2::2- /hen he stepped aside to ma$e room !or co8

C(Os Roger 3. Mar$)eld and ames . O5Fonnell. 3chottenstein remained as

chairman o! the board.

Target SegmentsThe brand targets


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!raming o! the uestionnaire and the applicability o! the analytical tools to the

project /as also be re)ned /ith the help o! secondary research in order to reduce

and eliminate any errors or biases /ith respect to the same. 6>or e.g.buying

behaviour o! similar target group may be identi)ed through secondary research in

order to get ualitative inputs as /ell as to re)ne the output7

Analysis and Results

ased on the data obtained !rom the primary research- t/o statistical methods have

been identi)edH

Fiscriminant Analysis

>actor Analysis

(ach o! these methods has been e#plained in detail in !urther sections.

!iscriminant Analysis

The data obtained through primary research /as coded and analy%ed using

'Fiscriminant analysis* utility in 3P33. The purpose o! using this method o!

analysis is to identi!y the !actors /hich di,erentiate the customer segments

/hich shop !or apparels online or oJine.

The selection o! channel- online or oJine- has been selected as a dependent

variable and the predictor variables areH Eender- Age- Monthly >amily+ncome- Occupation.

>ollo/ing tables sho/ the output o! Fiscriminant analysis in 3P33- !or the

given data.

Tests of "#uality of $roup eans

9il$s5 ambda > d! d!2 3ig.

Eender .02: =:.1


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Pooled %ithin&$roups atrices

Eender Age Monthly

>amily +ncome

Occupation

Correlation

Eender .::: .202 .:G0 .


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a. >irst canonical discriminant !unctions /ere used in the analysis.

>rom canonical correlation value- it can be said that 2G."K o! variation in

dependent variables is e#plained by predictor variables.

%il's( )ambda

Test o! >unction6s7 9il$s5 ambda Chi8suare d! 3ig.

.11 2".unction

Eender 8.1==

Age 8.24G

Monthly >amily

+ncome.41:

Occupation .=42

The standardi%ed discriminant !unction coeLcients indicate the relative

importance o! the independent variables in predicting the dependent. 3o-

Eender- Monthly>amily+ncome- Occupation are relatively more important in

discriminating t/o groups.

Structure atri-

>unction

Occupation .=1"

Eender 8.41:

Monthly >amily

+ncome.4:2


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Age 8.2=unction

Occupation 8.2:

Eender 8.:"1

Monthly >amily

+ncome.:1irst- /e chec$ i! there is a patterned relationship amongst our variables byre!erring to the Correlation matri#. A correlation matri# is simply a

rectangular array o! numbers /hich gives the correlation coeLcients

bet/een a single variable and every other variables in the investigation.

.O and /artlett(s Test

aiser8Meyer8Ol$in Measure o! 3ampling Adeuacy. .


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This table sho/s all the !actors e#tractable !rom the analysis along /ith their

eigenvalues- the percent o! variance attributable to each !actor- and the

cumulative variance o! the !actor and the previous !actors. Botice that the

)rst !actor accounts !or 0.200K o! the variance- the second


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Rotated Component atri-a

Component

2 " 4

ocation .actor 2.

>ollo/ing clusters have been identi)ed based on the results.

Cluster alue !or money

Cluster 2 rand a/areness

Cluster " (ase o! purchase

Cluster 4 (#perience o! shopping

Recommendations


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Recommendations 1based on +actor Analysis2

ased on the results obtained through >actor analysis- American (agles

Out)tters should !ocus on a!orementioned !our major !actors to cater to all

the needs o! an +ndian consumer.

Recommendations 1based on !iscriminant Analysis2

+t is recommended that American (agles Out)tters should obtain the

demographic in!ormation o! an area and utili%e that in!ormation to calculate

discriminant score to arrive at a decision /hether to invest in bric$8and8

mortar store or to cater the segment through online channel or both.

2


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References

. httpH@@///.cs.uu.nl@docs@va$$en@arm@3P33@spss=.pd!2. httpH@@///.u$.sagepub.com@burns@/ebsiteK2:material@ChapterK2:2


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o Somema$er

o O/n usiness

o 3ervice

o Retired

How much do you usually spend on apparel / accessories per month? *

o W Rs -


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MR14 Project Report American Eagle Outfitters

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