1. Charlotte Russe in Japan
By:
Shreelakshmi Adarsh
Anoosheh Bahramipour
Mohammad Ben Tarif
Guillermo Barrera

2. Outline Country Review Business Review Market Analysis
General
Economy
Demographics
Business Review
Market Analysis
Opportunities
Challenges
Internal Analysis
Marketing Strategy
Conclusion and Recommendation

3. Country Review General
Area: 377,835 sq km (slightly smaller than California)
Capital: Tokyo
Population: million
Literacy Rate: 99%
Government: Constitutional monarchy with a parliamentary government

4. Country Review Economy GDP: $3.582 trillion Composition by sector:
Agriculture: 1.3%
Industry: 25.4%
Services: 73.3%
GDP real growth rate: 2.7%
GDP per capita: $28,200
Est. 2003

5. Country Review Economy Exports: $447.1 billion
Main Exports: motor vehicles, semiconductors, office machinery and chemicals
Export Partners: US, China, South Korea, Taiwan and Hong Kong

6. Country Review
Economy
Est. 2003

7. Country Review Economy Imports: $346.6 billion
Main Imports: machinery and equipment, fuels, foodstuffs, chemicals, textiles and raw materials
Import Partners: US, China, South Korea and Indonesia

8. Country Review
Economy
Est. 2003

9. Country Review Demographics
High population density: persons per sq km
50% of population on 2% of land
Total population: 0.96 male/female
Age structure:
0-14 yrs: 14%
15-64 yrs: 67%
65 yrs and over: 19%

10. Country Review Demographics Population growth rate: 0.08%
Life expectancy at birth
Male: years
Female: years
Total population: years
6th Worldwide
Comparing to US of years
Est. 2004

11. Business Review
Charlotte Russe is an American women’s clothing company.
First store opened in Carlsbad, California in 1975
Trendy women’s clothing.
Very reasonable prices.
Targets women between the ages of 15 and 35

12. Business Review Products
Satisfies broad range of ready-to-wear apparel to match all lifestyle needs:
Casual
Social
Career
Special occasions
Dresses, shirts, tops, skirts, pants, shorts and all types of seasonal wear as well as outerwear
Accessories such as shoes, jewelry, handbags etc.
Prices of dresses range between $19.99 to $60.00.Average price for accessories: $12.00
Average price for accessories: $12.00

13. Business Review Today Charlotte Russe owns 256 stores
Performance
Today Charlotte Russe owns 256 stores
Sales in 2003 fiscal year over $450 million
Acquired Rampage stores in 1997, taking it from 16 stores to 55 stores today

14. The Question

15. Should Charlotte Russe enter the Japanese market?

16. Market Analysis
Opportunities
World’s second largest apparel market after USA: $25 Billion
Women’s clothing dominates the market with the highest percentage of sales
Imports of apparel increased 10.9% in 2003

17. Market Analysis

18. Market Analysis
Imports from US
0.8%
Value
1.6%
Quantity

19. Market Analysis
Imports from China
23.7%
Value
80%
Quantity

20. Market Analysis 2001 $32 B $16 B 2002 $27.5 B $13 B 2003 $25 B $11.5 B
Year
Total Market
Local Production
2001
$32 B
$16 B
2002
$27.5 B
$13 B
2003
$25 B
$11.5 B
Local production decreased 20% yearly
2001 – 2003.

21. Market Analysis Year Exports 2001 $215 M 2002 $242 M 2003 $291 M
An increase of 20% in the last year.

22. Market Analysis
Opportunities
The real success stories are in the specialty store sector.
Store-based sales, that account to 80% of the total sales, increased 6.1% in Feb 2004.
2.5% increase in Sales in Feb % in Women’s clothing sales.

23. Women’s clothing sales
Market Analysis
Summary of Feb 2004 sales increase:
Total Sales
Women’s clothing sales
Store-based sales
+2.3%
+5%
+6.1%

24. Market Analysis
Japan’s economy expanded a real 1.7% in the October-December period:
the best showing in 13.5 yrs
Backed by strong corporate capital investment, exports and consumer spending

25. Market Analysis
Opportunities
The average age of marriage for females 27 years and increasing
Japan’s birth rate is among the lowest of the world’s advanced economies

26. Market Analysis Fashion-conscious women
Opportunities
Fashion-conscious women
U.S. products have basic acceptance in the market (makes authentic U.S. apparel a popular market segment)

27. Market Analysis Polo Ralph Lauren Stussy X-Girl Gap Nike Levis
Most popular American brand names in Japan
Polo Ralph Lauren
Stussy
X-Girl
Gap
Nike
Levis

28. Market Analysis An overall decline in the US apparel exports
Challenges
An overall decline in the US apparel exports
A stagnant economy clubbed with effects of the Asian financial crisis.
Yen continues to teeter to the US$ (making US goods more expensive to the Japanese market)

29. Market Analysis
Challenges
A very little room for error (shipments must neither be too early nor too late)
Clothing produced by American companies has been traditionally designed for the Western women’s figures)
Japanese are highly conscious of the quality of sewing

30. Market Analysis What do Japanese females demand for? Brand name
Affordable price
Quality of sewing
Fabric texture
Trendiness

31. Internal Analysis What does Charlotte Russe offer?
Popular American brand name
Good quality clothing & reasonable price
Trendy
Good fabric texture

32. Internal Analysis
Stussy: $57
X-Girl T-shirt: $50
GAP: $30

33. Marketing Strategy 4 Alternatives for penetrating the Japanese market:
Hire Japanese trading companies to act as agents to export our goods
Sell directly to Japanese trading companies who can then import these goods into Japan
Sell through a U.S. based company that is familiar with the Japanese apparel market and has connections with Japanese importers or businesses
Sell directly to the market through specialty stores

34. Marketing Strategy Target Market
Young female trend-setters rather than trend-followers
Control the most discretionary income in Japan
Are concentrated in large cities such as Tokyo and Osaka

35. Marketing Strategy Mail order catalogs
Billboards in cities like Tokyo and Osaka
Television and print advertising through select channels of media
Participating in Japanese tradeshows or visiting trade shows in the United States that attract Japanese attendees

36. Conclusion & Recommendation
Big population
+ Big market segment
+ High purchasing power
+ Fashion oriented women
+ Few U.S. competitors
+ Very affordable prices
+ Specialty stores advantage
+ Brand name
+ Nice clothing
= Excellent business opportunity.

37. Thank You!
Any Questions?