Loewe Presentation Final version_26.06.2012

Alina RafikovaAndreas Schelter

Andrew Geoffric HylesDimitur Ivanov

Johannes Streibich Katharina Klug

Preetham SamuelSudharshan Sharma Ravi Sankar

Industrial Marketing Management

ANALYSIS OF THE SALES FORCE IN GERMANY AND THE UNITED KINGDOM

02.05.2023

2Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich

Introduction

- Headquarters in Kronach- Consumer electronics industry- Traditional manufacturer- Premium segment

Paper- Sales force management process in Germany and the UK

New challenges- Family owned retail shops vs. huge electro chains

02.05.2023


Agenda

1. Loewe Business Profile

2. Germany:Market, Sales Process and Organization

3. United Kingdom:Market, Sales Process and Organization

4. Sales Force Comparison of Germany and the U.K.

5. Suggestions for improvement

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Loewe Business Profile

Founded in 1923 by Sigmund and David Loewe Radio manufacturing company Electrical, electronic and mechanical products and systems Consumer and communication technology 1931 first electronic television 1979 TV with fully integrated chassis 1998 first TV with internet access 1998 first flat-screen television

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Loewe Business Profile

Vision- Reach sophisticated people- Establish LOEWE as leading premium brand for home entertainment

Mission- Provide timeless design- Incorporate latest technology- Aspiration to be user friendly

Product portfolio- Television with different technology and design- Audio systems- Speakers

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Agenda






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Germany as a market for Loewe

GDP per capita: €31,500 Traditionally strong performance on the German market by

Loewe- Focus on the niche market

Increasing importance of mass producers in the premium sector - In 2011 Samsung overtook Loewe regarding market shares of high-

price TVs Competitors are already able to access the high-end market

Germany as Loewe’s main source of revenues

German market Foreign markets

76% 24%

30.6%

15.5%9.8%

Overall LCD TV market in Germany (01-03/2011)

38.4%

€ 2,000+ LCD TV market in Germany (01-03/2012)

10.4%30.4%

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Niche market entrance by competitors previously active in only mass market Stagnation of the German market of TV devices Changing market structure due to demographic changes

ThreatsDeveloping online market sales Growth of the 3D TV market Further development of

comprehensive entertainment solutions

Growth in other segments like audio and sound systems

Opportunities

SWOT Analysis Germany

High-end quality Strong brand recognition Customizable products Superb picture quality Broad partnering network Strong contact to the end user Flexibility of a medium-size company

StrengthsHigh research costs Low capacities High unit production costs

Weaknesses

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Loewe‘s sales concept

Core brand values

Meaningful

Innovations

Exclusive Individuali

ty

Minimalist Design

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Loewe‘s sales concept

Superstores

Mail-order selling

Online sales

Other distribution channels

Specialist retail On-site service and qualified advice as one of Loewe’s major USPs

Indirect, face-to-face distribution channel

(Direct sales only at Loewe Galleries at Harrods and Selfridges)

Customers need to be able to experience the products and to put Loewe’s marketing promises to a test

Overriding importance of the POS experience

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Distinct, predefined requirements: - Exterior store design - Product range, brand & product

presentation at the POS …

Loewe‘s retail cooperation pyramid

110

475

607

Galleries

Partner Plus (Reference)

Partner

+ Level of Cooperation

∑ 1192

Cooperation level dependant on: - Space for Loewe products - Share in the overall sales of the

respective retailer (“Shop-in-Share”)

Annual revenues € 170.4 million

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Loewe‘s retail cooperation levels

Partner Partner Plus Partner Plus Reference Galleries

5 TVs / store

10 - 12 TVs / store

20TVs / store

< 25 % of store sales

25 – 30 %of store sales

70 – 80 %of store sales

Shop fitting expenses

~ € 60.0005050

2080

5-year business plan: (Failure rate of 2-3%)

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Retailers

Feedback within the sales organization

Loewe Handelssenat

Fairs & road shows

Area Managers

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Agenda






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Porter‘s Five Forces - United Kingdom

Television market

(United Kingdom)

Rivalry among existing firms Nine main competitors Highly polarized market Shrinking / stagnant

market Rather similar

technologies

Threat of new entrants High share of fixed costs Significant capital

necessary Complex retail

distribution gridsBargaining power of buyers No switching costs Transparent market Product similarities

Threat of substitute products Internet entertainment Tablets / smartphones

Bargaining power of suppliers Limited number suppliers Technological dependence

(Sharp)

HIGH

LOW

LOWHIG

H

HIGH

MEDIUM

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GDP per capita € 27,700 Slow, but ongoing growth tendency in 2012/13 Highly polarized consumer

electronics market:

No member of the European Monetary Union Currency difference and risk of potential exchange rate

fluctuations: The GBP depreciated by 35 % between Sept. 2008 and June 2009

Legal system is based on common law

The UK as a market for Loewe

3rd largest market in Europe

40.5%

13.9%11.9% Market size: € 3,12 billionOverall LCD TV market in the UK (01-03/2012)

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Low market share Minor brand awareness Weak partnering network Limited brand experience

Weaknesses

High-end quality Customizable products Flexibility of a medium-size company

Strengths

Economic slowdown Shrinking consumer electronics market Exchange rate fluctuations Niche market entrance by competitors

previously active in only mass market

Threats

Online growth via John Lewis Significant profit potential Growth in other segments like audio

and sound systems

Opportunities

SWOT Analysis United Kingdom

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Loewe’s UK retailer pyramid

10

23

32

Galleries

Partner Plus

Partner

Customer installers

Annual revenues€ 6.2 million

+ Level of Cooperation

∑ 143

78

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Customer installers in the UK

Installation professionals Limited number of annual projects Specialization on home automation installations No or only small office Limited POS possibilities 50 receive direct deliveries, 28 source via nearby Loewe

Galleries Loewe needs to emphasize other advantages:

Substantial achievable marginsEasy and versatile integration into home automation systemsExclusive brand image

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Department stores as key accounts

Department stores account for the majority of revenues in the British consumer electronics market

Shop-in-shop concept with Loewe staff Control of the brand’s transportation, particular

products can be selected Flagship-store effect Brand awareness

30 stores 6% of consumer electronics turnover Employees receive a share of annual profits Low fluctuation rates Efficient online store (Orders linked to closest

store)

Direct sales

Indirect sales

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Agenda






Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich

Recruitment- Sourcing of new talent

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23

Does not contract recruitment agencies

Contracts recruitment agencies

6-8 Loewe promoters attract new potential workforce

Only little promotion

Cooperation programs like “Loewe academy”

Only few collaborations


Profile of prospective Sales Manager

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24

Ability to sell

Commercial background

Experience

Analytical & Conceptual

Marketing expertise

Technical under-

standing

Experiencewith retailers


Selection process

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25

Vacant job

Respective department analyses & determines

HR department gets involved and selects applicants for interview

Interviews are conducted by respective Sales Manager + support by HR department

Sales Manager decides, HR assists


Selection process

Potential RSM has to pass approximately three different interviews.

Applies at least to some extent the “law of three”

New RSM has to pass a six-month probation time

No formal influence in the recruitment of its indirect salesforce

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26


Training- Direct Sales Force

A high emphasis on well-trained sales personnel New RSM´s receive a first training in Kronach

RSM´s are continuously trained during the year in technological as well as management topics

Mentor system within the company safeguards that valuable expertise descends

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27


Training– Direct Sales Force

First training in the UK, then more intensive trainings at the Loewe Headquarters in Kronach

RSM get further trainings through Web sections or get updated by their supervisors

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28


Training- Indirect Sales Force

Main representative of the Loewe brand to the end consumer

Receive free standard product training

Aims to create a new generation of store ownership

& “ProCollege”: Ranges from basic training to Bachelor of

Arts in “Retail Management” 3500 - 4000 attendants/ year02.05.2023

29


Training- Indirect Sales Force

Sends at least one person from its retailers to ProCollege training sections in Germany

After they were educated in the trainings, they share their knowledge with their subordinates and colleagues.

Customer installers are the group of retailers that attends most trainings from Loewe.

Retailers are also trained by other retailers

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30


Evaluation of the Sales Force

Contracts the personal targets according to the area, opportunities and buyers power of the market

Main indicators:

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31


Compensation- Direct Sales Force

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32

80%

20%

Renumeration


Motivation - Direct Salesforce

Nonmonetary rewards are:

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33


Compensation- Indirect Sales Force Remuneration = high margin

Rewards galleries with awards

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34

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Geographical sales organization

Area Manager 1

Area Manager 2

Area Manager n

Store 1

Store 2

Store 3

Store n

…

…

…

Loewe’s German sales organization

North / East South / West B-to-B Customers

…

HotelsHospitals / Clinics

Loewe GermanyMANAGING DIRECTOR

SALES DIRECTOR

Board of Directors

Key Accounts

5 % of sales

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Customer-oriented sales organization

Loewe’s UK sales organization

Loewe UK LtdMANAGING DIRECTOR

SALES DIRECTOR

North

Partner PlusPartner

South

Customer InstallersGalleriesPartner

PlusPartner Key Accounts

InternationalB2B Customers

Loewe GermanyMANAGING DIRECTOR

20 % of sales

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Agenda






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Online solutions

Problems e-commerce:- Totally transparent- Anonymous internet mass market- No personal customer contact- Service issues

Example: John Lewis- Link of the online orders directly to the department store

Online store of retail business partners

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Online solutions

Online store on LOEWE’s website- Control on presentation and service- Link to closest business partner- Distribution grid in Germany

Advantages e-commerce:- Possibility to order 24/7- Possibility to order from any places - Time saving

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Online solutions

Combination of e-commerce with personal service

Provision of an online e-mail contact

Special mobile version of the website

Use social media- Free marketing possibility- Target group

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Online solutions

Age distribution of Facebook users in June 2012

Source: http://de.statista.com/statistik/daten/studie/39471/umfrage/Nutzer-von-Facebook-nach-Alter/

13 – 24 years

25 – 34

35 – 44

45 – 5455+

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Presence at key locations Also other retail

Enhancing brand awareness in the UK

“The world’s leading international luxury fashion destination, a one-stop-shop for the most exclusive brands in fashion, beauty and food.”

LONDONBRISTOLDUBLIN

MANCHESTEREDINBURGH

BIRMINGHAMLEEDS

Department stores in highly frequented locations

Specialization on luxury goods

POS-stands in the entrance hall Win-win situation: Dept. stores &

Loewe Implementation of QR-Codes

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Enhancing brand awareness in the UK Expand the distribution grid in the UK

Flagship stores / Loewe Galleries at key locations

Region Millionaires Growth until 2020London and South East 287,000 35%

Midlands 92,000 30%

North West 64,000 35%

South West 56,000 30%

Yorkshire 44,000 28%

Scotland 40,000 38%

Wales 22,000 27%

North East 14,000 46%

Wealth in 2010 and predicted growth until 2020:

5

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Enhancing brand awareness in the UK Expand the distribution grid in the UK

Flagship stores / Loewe Galleries at key locations

Edinburgh / SCO

Scottish capital

UK's favorite domestic holiday alternative to London (4m visitors / year)

“Compact” city center Princes street

Alina RafikovaAndreas Schelter

Andrew Geoffric HylesDimitur Ivanov

Johannes Streibich Katharina Klug

Preetham SamuelSudharshan Sharma Ravi Sankar

Industrial Marketing Management

THANK YOU FOR YOUR ATTENTION

Documents

Loewe Presentation Final version_26.06.2012