CASE STUDY 1.2 (CHAPTER 1 GLOBAL MARKETING INTHE FIRM (47 Hunter Boot Ltd: the iconic British brand is moving into exclusive fashion SS. ae ‘The Huntar boot brand (www.hunter-boot.com) has become « symbol of British country life and celebrity fashion. Hunter boots, designed over 150 years ago, were orignally created to deal with Britain's rugged and unpredictable weather. Today, Hunter is firmly established as a fashion brand beloved by Hollywood) celebrities. Arthur Wellesley, the first Duke of Wellington, instructed his shoemaker, Hoby of St James Street, London, to modify his eighteenth-century boot. They designed the boots in soft calfskin leather, removed the trim and made the cut closer around the leg. It was hard to wear the new boots in battle but it was, said that the Duke of Wellington wore the boots at the famous Battle of Waterloo in 1815. The boots were dubbed 'Wellingtons’ or 'wellies' and the name stuck. Wellingtons quickly caught on with patriotic British gentlemen eager to emulate their war hero. The original Wellington boots were made of leather; however, in America, where there was more experi- mentation in shoemaking, producers were beginning ‘to manufacture using rubber. One such entrepre- eur, Mr Henry Lee Nortis, moved to Scotland in search of a suitable site to produce rubber footwear. Eventually he found it on the farm of the Castle Mill in Edinburgh. Norris began his boct-making company, the North British Rubber Company (the company ‘Source: ey Bakery neges changed its name to the Hunter Rubber Company in 2004), in 1858. Committed to fit, comfort, durabiity and performance Hunter Wellington boots bear two rare and coveted stamps of approval of the British royal family. Production of the Wellington boot was dramatic ally boosted with the advent of World War I, due to the demand for a sturdy boot suitable for the condi- tions in flooded trenches. This made the wellies a functional necessity. By the end of World War |, the North British Rubber Company had produced more than 1.8 millon pairs of boots for soldiers. Shoe production ran 24 hours a day. ‘Again the Wellington made an important contribu- tion during World War Il, At the outbreak of war in September 1939, although trench warfare was not a feature, those forces assigned the task of clearing Holland of the enemy had to work in terrible flooded conditions. By the end of the war, the Wellington had become popular among men, women and children for wear in wet weather. The boot had developad to become far roomier with a thick sole and rounded toe, Also, with the rationing of shoes at that time, labourers began to use them for daily work. The company’s most famous welly, the original Green Wellington, was made over 60 years ago in the winter of 1955. it was launched alongside the Royal Hunter ~ another boot that remains in Hunter’ range today. From 1966 to 2005 a number of ownership changes took place, and in 2008, the Hunter Rubber Company was placed into administration as a result of cash flow problems. In spite of a reported tumover of over £5 mil- lion, accountants from KPMG said the firm suffered from high manufacturing costs, inchiding fuel costs, and made a loss from the expansion of its business to the US. Hunter reported a loss of £600,000 from September 2003 to the end of February 2005, when it had a net debt of £2.03 million.48 PART! THE DECISION WHETHER TO INTERNATIONALIZE 12006, a private consortium led by Lord Marland, Peter Mullen and Jutian Taylor bought Hunter out of administration and Hunter Boot Ltd was born. After rapid restructuring of the company, new supply routes and distribution partners were found in the UK and the US and the Hunter portfolio was rationalized to core products exhibiting the key skils and tradition of the company. Hunter re-established itself as a major player in the traditional country and leisure footwear market in the UK in the aftermath of the 2006 acquisition and positioned itself as a strong contender in the US — opening showrooms on Seventh Avenue in Now York and Camaby Street in London. A new management team was also put in place. ‘One Hunier Wellington tall boot is made from 28 individual parts. Each partis individually tailored and assembled by hand to support specific parts of the foot, calf and ankle. Hunters continue to be made and finished by hand from natural rubber. Because of this degree of ‘handmade’ in the production of Hunter boots, the management moved manufactur- ing from Scotland to China to cut production cost. Retail prices were also increased by 20 per cent, and modern ranges in a selection of colours and textures were added, ‘A major breakthrough for Hunter in the realm of fashion, as opposed to farms, came in 2006 when Kate Moss was seen wearing an Original pair in black at the Glastonbury music festival. Since then, the Hunter boot has become a familiar sight among celebrities, 07 catwalks and on high streets, as well as in the countryside. In September 2008, following the 2008 Olympics in Bejing, China, Hunter Boot Lid sent specially made gold Wellington boots to every member of the Groat Britair Olympic team who had won a gold medal at the Games. In 2010 the UK Prime Minister David Cameron bought pink and purple pairs of Hunter boots for his US trip, as gifts for Barack Obama's daughters. Hunter Boot Ltd today Since the downturn in 2006, Hunter has expanded its sales and profits rapidly, as seen in Table 1. Hunter has since seen strong growth with inter- national distribution in 90 countries, Hunter is moving into alliances with exclusive fashion designers In January 2009, Hunter announced that it would be collaborating with London-based luxury fashion designer Jimmy Choo for a limited-edition black Wellington boot, embossed with signature Jimmy Choo crocodile print and containing gold rivets and a leopard:print lining. Another boot was then launched in 2011. The boots costs £250 and were sold exclusively online at wivw.jimmychoo.com (the original version normally costs around £80). Jimmy Choo and Hunter Boot Ltd received a tremendous reaction from customers; the online ‘waiting list opened on 1 May, and by 16 May more than 4,000 fashion-conscious customers had already joined it, Today, the luxurious Wellington boots have become a classic lifestyle item at Jimmy Choo and can be purchased regardless of the season, and not only in traditional black, but in several variations. In March 2012, J. Mendel and Hunter two iconic brands dating back to the nineteenth century — joined forces in a special collaboration to produce the most glamorous of Wellington boots: exclusive to, North America, these limited-edition boots brought together the cumptuous look and feel of J. Mendel with the timeless functionality of Hunter Boot. The aiianean eae Millions of © 2010 2009) 2008 Sales (% fo" export) 56.3 (67.9%) 25.7 (48.6%) 18.2 (48.4%) Cost of sales 20.6 136 84 Gross profit 26.7 124 88 Pre-tax proft 159 41 35 Proft after tax 110 28 25 Number of employees 56 41 43 ‘Source oad oda cn ww nt bnSour: Bae Phot/Ros Feats. boots went on sale in November 2012 and retail at from $585 (£366) to$795 (6497) at Saks, Nordstrom, Gorsuch and hunter-boot.com. Hunter Boot Ltd has always been highly depend: ent on the celebrity factor. It has become something of a spert to collect photographs of celebrities, wearing different Hunter boots. Here are some examples of the Hunter brand preferred by some celebrities: VIDEO CASE STUDY 1.3 Nivea omic tom www powrsored.caulhalonson (CHAPTER 1 GLOBAL MARKETING INTHE FIRM (49 © Jennifer Aniston — Original Black Hunter wel Drew Barrymore — Original Navy Hunter wet Kate Moss ~ Original Black Hunter welles ‘Sandra Bullock - Original Navy Hunter wellies Alexandra Burke - Short Original Black Hunter boots Kings of Leon (Group) - WaterAid Hunter wellies ‘Angelina Jolie - Original Red Hunter wellies Madonna - Original Navy Hunter wellies Gwyneth Paltrow ~ Original Aubergine Hunter weliies © Kelly Rowland - Original Red Hunter welles. QUESTIONS. 4. What are the main reasons for the recent inter- national marketing success of the Hunter Boots? 2. Recently Hunter has added outerwear (eather footwear and hand-bags) to their international product range. What are the pros and cons of ‘extending the product range in this way? Should Hunter Boots Ltd include further products like ‘eyewear and watches? Sources: based on winHurter-bockcom: beerQbade's Blog: "Hunter Welington Boots and Cabbie” (hip:/beverbeder blogs. expetenceprject.com/770875 htm) Nivea (www.nivea.com) is Beiersdort's (www.beiersdort.com) largest biand in terms of sales, product and geographical reach. The brand is the market leader in a number of pro- duct areas, including skin care and sun care, especially in Europe. Questions 4. Which degree of market responsiveness and global coordination/integration does Nivea represent? 2. Do you think that the Nivea Vital commercial (shown in the video) is able to cross borders without any adaptation? Hf not, which elements should be adapted? 3. Which marketing problems does Nivea anticipate when penetrating the US market? Soin: Nv ond adr UK Li For further exercises and cases, see this book's website at www.pearsoned.co.uk/hollensen