Tiffany & Co

Fashion accessories

Tiffany & co. case study

Mercadies Cochran dr. j Kim

June 7th, 2015

IN 1837, CHARLES LEWIS TIFFANY AND JOHN YOUNG ARRIVED IN NEW YORK CITY WITH A VISION TO REDIFINE GLAMOUR AND STYLE AROUND THE WORLD. they FIRST BEGAN WITH A POP UP STATIONARY STORE, LATER ADDING JEWLERY AND SILVERWARE. (WICKELL, 2014)

iT WASN’T UNTIL 1853 THAT TIFFANY GAINED COMPLETE CONTROL OVER THE FIRM AND RENAMED IT TIFFANY & CO. (WICKELL, 2014)

Mission statement: to be the world’s most respected and successful Designer, manufacturer and retailer of the finest jewelry. (FARFAN, 2014)

THE CHANEL GLOBAL headquarters: (tiffany, 2015) TIFFANY & CO. 727 Fifth Avenue New York, NY 10022

TIFFANY AND CO. HAS FLAGSHIP STORES ALL OVER THE WORLD FROM AUSTRALIA TO HONG KONG. THE UNITED STATES FLAGSHIP STORE IS LOCATED ON FIFTH AVENUE IN NEW YORK, NEW YORK. (TIFFANY, 2015)

Brief history of the company

Organizational structure of the company and role of the parent company

“The company” is a publically owned company. Its operating segments are as follows:

The company

Tiffany & co.

American regions Asia-pacific region JAPAN REGION EUROPEAN REGION

•  48% OF NET SALES FOR 2014

•  INCLUDES THE

UNITED STATES, CANADAM MEXICO AND BRAZIL


•  INCLUDES

australia, china, hong kong, korea, macau, malaysia, singapore and taiwan


•  INCLUDES all

Japanese department stores and free standing stores


•  INCLUDES Austria,

Belgium, Czech republic, France, Germany, Ireland, Italy, the Netherlands, Spain, Switzerland, and the united kingdom (Investor, 2015)

Organizational structure of the company and role of the parent company

(Investor, 2015)

Through Tiffany and Co. the Company is engaged in product design, manufacturing and retailing

activities.

The company’s long term objectives include: •  To increase store productivity •  To achieve improved operation margins •  To improve asset productivity and cash flow •  To maintain a capital structure that provides

financial strength and flexibility to pursue strategic initiatives and allows for the return of excess capital to shareholders.

Management structure of the company

NAME POSITION

Frederic Cumenal Chief Executive Officer

Ralph Nicoletti Executive Vice President and Chief Financial Officer

Jill Beraud Executive Vice President

Jean-Marc Bellaiche Senior Vice President- Strategy and Business Development

Victoria Berger-Gross Senior Vice President-Global Human Resources

Pamela H. Clous Senior Vice President-Merchandising

Leah M. Harlan Senior Vice President- Secretary and General Counsel

Andrew W. Hart Senior Vice President- Manufacturing, Diamonds and Gemstones

Caroline D. Naggiar Senior Vice President and Chief Marketing Officer

John S. Petterson Senior Vice President- Global Operations and Customer Services

(Investor, 2015)

Anisa Costa - President

STRUCTURE OF THE COMPANY’S BUSINESS

Retail: currently about 98% of all tiffany & co. sales come directly from retail. This includes what is bought in stores, online and through catalog Wholesale: tiffany & co. gets less than 1% of their sales revenue from wholesaling Licensing: 1% of revenue is accounted licensing

(TIFFANY & co. annual report, 2014, PG 15)

Retail Wholesale Licensing

FINANCIAL PERFORMANCE OF THE COMPANY OVER THE PAST FIVE YEARS


4.24

4.03

3.79

3.64

3.08

2.53

2.34

2.15

2.15

1.82

4.84

1.81

4.16

4.39

3.68

2015

2014

2013

2012

2011

NET SALES AND GROSS PROFIT IN MILLIONS, NET INCOME IN THOUSANDS

Net Sales Gross Profit Net Income

All products by tiffany & co.

Engagement Jewelry Collections

1.  Women's bands 2.  Men's bands

1.  Necklaces 2.  pendants 3.  Bracelets 4.  Rings 5.  Earrings 6.  Charms 7.  Brooches 8.  Men's jewelry

1.  Tiffany T 2.  The Atlas Collection 3.  Return to Tiffany 4.  Tiffany 1837 5.  Tiffany enchant 6.  Ziegfeld collection 7.  Tiffany keys 8.  Tiffany celebration rings 9.  Tiffany metro 10.  Tiffany victoria 11.  Tiffany yellow diamond 12.  Elsa peretti 13.  Paloma picasso 14.  Tiffany & co. schlumberger

(tiffany, 2015)

All products by tiffany & co.

watches Accessories gifts

1.  Tiffany ct60 2.  Tiffany east west 3.  Alas collection 4.  Cocktail watches 5.  Patek philippe &

tiffany 6.  Men’s watches 7.  Women’s watches

1.  Cuff links 2.  Sunglasses 3.  Tiffany leather

collection 4.  Fragrance 5.  Key rings 6.  Writing instruments 7.  Silver accessories 8.  Men’s accessories 9.  Elsa peretti

1.  Her 2.  Him 3.  Baby gifts 4.  Home 5.  Business gifts 6.  Little luxuries 7.  Special occasion 8.  Engraving 9.  Customization

(tiffany, 2015)

Price points

•  Tiffany & Company’s key demographic is high class females ages 28-54. The average customer usually has a strong interest in fashion, shopping and luxury products. Thus the average price, depending on the product, tends to stay well above $1,000.00

•  However, because Tiffany and Company is popular among all

income classes and seen as a stamp on social respectability there are products available for under $250.00

(Butcher, 2011)

Size ranges

•  Most necklaces are available with a 16” or 18” chain. it's EXTREMELY RARE FOR THEM TO BE ANY LONGER OR SHORTER

•  The bracelets come in small, medium or large with a corresponding measurement of circumference

•  Earrings, charms, pendants and broaches are all one size fits all

•  WATCHES COME IN ONE SIZE BUT HAVE THE ADJUSTABLE BAND OR CUSTOMIZATION OPTION TO MAKE IT FIT PROPERLY

•  Rings come in standard sizes ranging from size 4 to 11

•  Most jewelry offered through Tiffany & Co can be customized to a customers preference

(TIFFANY, 2015)

Quality standards

•  As a leader in the jewelry industry, Tiffany & Co. has always been committed to obtaining precious metals and gemstones and crafting our jewelry in ways that are socially and environmentally responsible. But our efforts extend beyond our own supply chain. As longtime leaders in the jewelry industry, we work to advance rigorous and responsible mining standards. We also invest in diamond-producing countries, actively advocating for preservation efforts and effective government oversight.

•  Tiffany & co. prides themselves on going above and beyond the 4c’s of diamonds; cut, carat, clarity and color. For example. Tiffany frequently rejects stones that would normally be accepted by other jewelers

•  Every diamond is backed with a full lifetime warranty

(TIFFANY, 2015)

Brand image and logos “Since its beginnings, 176 years ago, Tiffany & Co remains an iconic

presence in the American culture. During its long existence, Tiffany & Co become one of the most powerful luxury brand supported by good marketing strategy and free publicity from the pop culture. Tiffany &

Co is renowned not only for its diamond jewelries and the iconic blue box, but also for depicting American glamour and supporting wealthy

Americans to put a stamp on their social respectability.” (Nita, 2013)

Brand image and logos

MARKET SIZE OF THE Company’s PRODUCT CATEGORIES

•  The company’s principal item is jewelry which accounts for 92% of world wide net sales

•  The company offers an extensive selection of Tiffany & Co. brand jewelry at a wide range of prices

•  Statement, fine and solitaire jewelry accounts for about 22% of sales while engagement jewelry and wedding bands rings in just shy of 31%. Fine jewelry takes the largest segment of sales with 41%


COMPETITION IN THE GLOBAL JELWERY MARKET

PROMOTIONAL STRATEGIES AND TYPES OF ADVERTISING

•  Tiffany & co. regularly advertises through newspapers, magazines and digital media such as internet adds, television, radio and social media

•  In 2014 The company spent $283,6488,000.00 (6.7% of

worldwide net sales) on advertising, marketing and public media relations



•  Tiffany & co. participates in media activities and marketing events to maintain customer awareness of the Brand



•  tiffany & co. publishes the blue book, annually, to showcase its newest high end jewelry



•  Tiffany & co. products have also been placed in an array of cinema shows including, breakfast at tiffany’s and the great Gatsby

•  Very seldom does tiffany & co. use billboards


VISUAL DISPLAY TECHNIQUES

•  The tiffany & co. in store experience is built one hundred percent around their target customer. The store is sleek, very classy and extremely clean at all times. Giving every customer the rich experience they deserve.

•  The online store is just as organized, perfectly laid out and exceptional to navigate.

VISUAL DISPLAY TECHNIQUES •  For this season’s holiday windows, Moore took inspiration from

the Manhattan skyline and Upper East Side street scenes. He and his team “walked the streets, sketching and photographing many of the buildings and the evening views from the rooftops.” After editing the field research, Moore closely oversees the next phase: Each window is “sketched, modeled, mocked up, and prototyped several times before we land on the final design,” he explains. The finals are then given to craftsmen in Brooklyn, who build, carve or sculpt the settings that will appear in the store’s five windows. Installation takes two full nights at the Fifth Avenue flagship. Sample sets are also created for stores around the world. While the global rollout varies from market to market, all of the installations are completed by the middle of November

(PODOLSKY, 2013)

PACKAGING

(SANCHEZ, 2013)

•  PACKAGING FOR TIFFANY & CO. IS SIMPLE WITH A TRADEMARK ALREADY MADE ON THE TIFFANY BLUE COLOR.

•  THE LITTLE BLUE BOX WITH WHITE RIBBON: THE SIGNATURE

PACKAGE OF TIFFANY & CO. HAS HELPED SHAPE IT’S BRAND TREMENDOUSLY; EVERYONE WANTS THE LITTLE BLUE BOX

•  89% OF THE LITTLE BLUE BOX IS MADE FROM RECYCLED GOODS, HELPING TIFFANY & CO. TACKLE THEIR CARBON FOOTPRINT

•  TIFFANY & CO. ALSO USES SOFT HANDLE BAGS AND JEWLERY BAGS FOR PACKAGING OF SMALLER OR LARGER ITEMS

DESIGN AND MANUFACTURING

•  THE COMPANY MOSTLY MAUFACTURERS JEWLERY IN NEW YORK, RHODE ISLAND AND KENTUCKY

•  LAST YEAR, THE COMPANY ESTABLISHED MUFACTURING OPERATIONS IN THAILAND AND A DESIGN OPERATION IN THE DOMINICAN REPUBLIC

•  THE COMPANY ESTABLISHED OPERATIONS THAT PURCHASE, SORT, CUT AND POLISH ROUGH DIAMONDS IN BELGIUM, BOTSWANA, MAURITIUS, NAMIBIA AND VIETNAM. WITH CAMBODIA BEING ADDED JUST LAST YEAR.


GLOBAL DISTRIBUTION AND BRAND PRESENCE OVERSEAS


•  Tiffany & co. is divided into four segments across the world thus making global distribution run smoother

•  The main source of global distribution is through retail, in store, online and via catalog

•  Tiffany & co. does less than 1% of wholesaling due to its high quality products

•  The American region makes up the largest portion of retail sales with Europe coming in last with only about 12% of the sales.

GLOBAL DISTRIBUTION AND BRAND PRESENCE OVERSEAS


•  Below is a chart that shows the region segments and their percent net sales contribution during 2014.

•  Surprisingly japans had the highest sales with

engagement rings and Europe with fashion jewelry.

American sales

Asia- pacific sales

Japan sales

Europe sales

Statement, fine & solitaire jewelry

23% 24% 20% 17%

Engagement jewelry & wedding bands

23% 38% 46% 23%

Fashion jewelry

44% 37% 27% 56%

STORES CARRYING THIS PRODUCT AND BRAND

Year U.S Canada & Latin America

Asia-pacific

Japan Europe Emerging markets

total

2011 87 15 58 55 32 0 247

2012 91 24 66 55 34 5 275

2013 94 27 72 54 37 5 289

2014 95 27 73 56 38 6 295

•  above is a table showing the current number of stores in each region segment according to the tiffany & co. annual report

•  Tiffany & co. plans to add about 12-15 more stores in

2015 and 2016


STORES CARRYING THIS PRODUCT AND BRAND

•  Tiffany & co. products are only sold exclusively through venues under the company

•  This includes in store, flagship, pop up shops, online and catalog through tiffany & co.

TOP COMPETITOR IN THE MARKET- HISTORY OVERVIEW

in the 1970s David yurman designed a necklace for his wife in which a glariest fell in love with, urging him to make more. He did and they immediately sold out, launching yurmans first jewelry business however, It wasn’t until 1980 that the David yurman company and brand was born and quickly earned the jury award for the infamous starlight necklace Soon after, in 1981 David yurman one designer of the year and from there his brand increased into a design icon

(yurman, 2015)

TOP COMPETITOR IN THE MARKET- HEADQUARTERS AND FLAGSHIP STORE

(yurman, 2015)

The first flagship store opened in 1999

on Madison Ave.

In 2006 he opened a flagship boutique on North rodeo dr. in

Beverly hills

In 2008 he opened his first

international boutique in Hong Kong then in Paris

in 2010

TOP COMPETITOR IN THE MARKET- OWNERSHIP/STRUCTURE OF THE COMPANY

(bloomberg, 2015)

•  David yurman enterprises is a privately owned company and its headquarters currently resides at

David yurman enterprises llc. 24 Vestry Street New York, NY 10013 United States

•  Sybil yurman is the co-founder, president and chief

marketing officer

TOP COMPETITOR IN THE MARKET- PRICE POINTS AND SIZE RANGES

•  Most necklaces are available with a 16” or 18” chain. it's EXTREMELY RARE FOR THEM TO BE ANY LONGER OR SHORTER

•  The bracelets come in small, medium or large with a corresponding measurement of circumference

•  Earrings, charms, pendants and broaches are all one size fits all

•  Rings come in standard sizes ranging from size 4 to 11

•  The price points are a bit steeper than tiffany & co. with most items rising well above $1,000.00

(Yurman, 2015)

TOP COMPETITOR IN THE MARKET- BRAND IMAGE AND LOGOS

David yurman lets his products do the selling by using minimal color and simple advertisements. He is the definition of “sex sells” marketing

TOP COMPETITOR IN THE MARKET- GLOBAL DISTRIBUTION AND PRESENCE

•  Because David yurman is a privately owned company it was hard to find the information on the global distributions.

•  However, after much research you can conclude that David yurman gets most revenue from in store and online purchases

•  With his continuous drive to open up stores internationally his global revenue will keep increasing

REFERENCES www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=8170504 h@p://thepackaginginsider.com/jewelry-‐packaging-‐Effany-‐co-‐packaging-‐goes-‐green/ h@p://gotham-‐magazine.com/holiday/arEcles/the-‐man-‐behind-‐the-‐Effany-‐and-‐co-‐holiday-‐windows h@p://impressivemagazine.com/2013/08/11/Effany-‐co-‐in-‐american-‐cinema-‐and-‐tv-‐shows-‐2/ h@p://www.mobilemarketer.com/cms/news/adverEsing/4096.html h@p://investor.Effany.com/overview.cfm h@p://jewelry.about.com/od/jewelrydesignerprofile1/p/charleslEffany.htm h@p://retailindustry.about.com/od/retailbestpracEces/ig/Company-‐Mission-‐Statements/Tiffany-‐Mission-‐Statement-‐-‐-‐Mission-‐-‐Headquarters-‐-‐History-‐of-‐Tiffany-‐Retail-‐Stores.htm h@p://www.Effany.com/LocaEons/FlagshipStore/NewYork.aspx

Tiffany & Co

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