Calvin Klein

"Anything, I wanted to do, I did. If there's something I want to do, nothing stops me."-Calvin Klein

CALVIN KLEIN

UNRAVEL THEIR COMPETITIVE
STRATEGY
PREPARED BY:
NUR QAMARINA BINTI MOHAMAD HANIF

HISTORY

One OF The Most iconic brands of the twentieth century got its start in
1968, when aspiring young designer Calvin Klein wheeled a rack of
impeccably tailored coats up New York’s 7th Avenue with Department
store buyers. By the mid 1970s, he was winning accolades for his clean,
modern sportswear. A pioneer of designer denim, the label rocketed to
prominence in the 1980s and 90s, when it became as well known for its
logo-centric branding and unforgettable ad campaigns as for its
confidently minimal “heroin chic” aesthetic. Current creative directors
Francisco Costa and Italo Zucchelli took over women and men’s design
duties in 2003 and 2004, and have continued to develop Calvin Klein’s
aesthetic of confidence, understatement, and perfected minimalist
tailoring. Still one of the highlights of Fashion Month, Calvin Klein
Collection is as directional and aspirational as ever.

MARKET
BACKGROUND

One of the most iconic names in the fashion industry is Calvin
Klein. CALVIN KLEIN WAS Born in the Bronx, New York. HE IS the ONE
OF designer WHICH IS became known for a minimalistic approach
that sparked a sharp shift towards streamlined clothes for
women in the 1970s. From his humble beginnings, Calvin Klein
managed to create an award-winning brand with multiple sub-
divisions SUCH AS womenswear, underwear, perfumes, jeans and
cosmetics, and ALSO FOR a reputation for provocative
advertisements.

Calvin Klein, Inc, a wholly owned subsidiary oF PVH Corp,
is one of the leading fashion design and marketing studios
in the world. It designs and markets women’s and men’s
designer collection apparel and a range of other
products that are manufactured and marketed through
an extensive network of licensing agreements and other
arrangements worldwide.

Product lines under the various Calvin Klein brands include
women’s dresses and suits, men’s dress furnishings and
tailored clothing, men’s and women’s sportswear and bridge
and collection apparel, golf apparel, jeanswear, underwear,
fragrances, eyewear, women’s performance apparel, hosiery,
socks, footwear, swimwear, jewelry, watches, outerwear,
handbags, small leather goods, and home furnishings
(including furniture). Currently Calvin Klein designs are
available in over 100 countries around the world

ACHIEVEMENTS

Over the years Calvin Klein has been recognized by the fashion
industry as being one of the iconic designers of the ages.
Amongst the many accolades that received are:

1. Coty Award - 1973,1974,1975
2. Council of Fashion Designers of America Award

1982,1983,1986
3. CDFA (Council for Fashion Designers of America) award

1993
4. America’s Best Designer of 1993 Award

PRICING STRATEGY

The Calvin Klein brand has chosen competitive pricing strategy
that can be modified according to the needs and requirements of a
particular line or product. In 1977, it was able to generate huge
revenue due to its penetration pricing policy because it wanted to
keep its prices lower than its main competitors.Its strategy has
been successful and its products have become very popular among
the older and younger generations as well as the middle and rich
people. Competitive prices have helped the brand maintain
customer loyalty through higher sales. Calvin Klein's products
are usually targeted at slightly higher prices as they are sold to
the middle- and upper-class individuals. So, Calvin Klein's trying to
keep prices a little lower than their rivals which is include Giorgio
Armani, Ralph Lauren, Hugo Boss and Tommy Hilfiger in order to
gain market share. From This pricing strategy, they able to
successfully capture the customer attention and gain popularity
among their customers.

Calvin Klein is a premium brand with sensible pricing policy as it believes in
the concept of massive volumes and as a result FOR  larger turnover.
Moreover, it has used a skimming strategy method to promote its premium
top-class products. Calvin Klein pursues a skimming pricing strategy where
these products have high margins, but, they are usually sold in smaller
volumes compared to other products. The strategy approach entails to
entering a market with premium prices and slowly decreasing the prices
through several offers and promotion to attract and maintain its customer
base. It also follows a target pricing strategy that seeks to compete with
the players in the market by setting their prices slightly lower than their
competitors  and  reducing its costs  accordingly to  generate  more  profit.
Because of  the competitive  prices,  customers tend to being loyal
to the brand and become loyal customers. Calvin Klein products can also be
purchased online. By offering multiple offers, products  are  sold at a
discounted price for old stocks or to match with the competitors' prices.

SMART PRICING?

Calvin Klein is a minimalistic brand which leading a premium apparel, clothing
and accessories brand that serving customers worldwide. Calvin Klein using
a price strategy that can be consider as a smart pricing in their industry.
During Calvin Klein enter the market, this brand using penetration pricing
strategy because they want to attract the customer to their new products
by offering lower prices than its competitor. This strategy is major
successful for their brand because they able to collect a huge revenue and
their brand become more popular in both older and younger generation which
are from middle and high class. Although Calvin Klein prices are high but it is
because their product have superior quality which it matches with their
prices. Calvin Klein also implement competitive pricing as their pricing
strategy. This brand always considers their competitors prices when setting
their product price. Because they have known as a premium product and
brand, their brand also can be called as a heritage brand. These brands are
often luxury brands that are able to set higher prices due to a meaningful
heritage. This can result in well-established brand value for Calvin Klein and
often consumer willingness to pay higher prices. This is one of the reason
Calvin Klein are known for higher quality, premium prices and exclusivity.  

SUGGESTION

In my opinion, one of the Calvin KlEin competitor’s which is Tommy Hilfiger should follow Calvin
Klein pricing strategy. Based on my readings regarding Tommy Hilfiger price strategy, this brand
is a high-end fashion brand and charges premium for their products. As compared to Calvin Klein,
Tommy Hilfiger prices come in the lower segment. This is the disadvantages that they are faces
which is lead to decrease the brands equity among the consumers. Tommy Hilfiger implement a
discount pricing for their pricing strategy and also always offers sale on its product in major
off season to other consumer who couldn’t afford their products. The collection from Tommy
Hilfiger are priced at a premium and the brand may not be affordable to the masses. This makes
them focus more on the higher income segment rather than Calvin Klein which is focus to both
high and middle income. Due to the high price of Tommy Hilfiger products, this brand has a low
penetration in economy segments especially in a lower income segments and thus Tommy Hilfiger
has low margins. I think Tommy Hilfiger also should follow Calvin Klein step to penetrate the
market and focus more to middle income people so that they able to attract more customers and
gain more profits. As a premium products and brand with a lot of competitors, Tommy Hilfiger
should use competitive strategy also for their strategy by considering other competitor prices
and set the price not too high from competitor such as Calvin Klein so that they can compete
more competitive IN GENERATING MORE REVENUE AND SALES.

CALVIN KLEIN

VS

TOMMY HILFIGER

REFERENCES

Bhasin, H. (2018, August 28). Marketing strategy of Calvin
Klein. Marketing91.
https://www.marketing91.com/marketing-strategy-of-calvin-
klein/

Calvin Klein Marketing Mix (4Ps) Strategy. (2020, April
19). MBA Skool Team.
https://www.mbaskool.com/marketing-
mix/products/17411-calvin-klein.html

Calvin Klein. (2020). PVH Calvin Klein.
https://www.pvh.com/brands/calvin-klein

Tommy Hilfiger Marketing Mix (4Ps) Strategy. (2020,
April 19). MBA Skool Team.
https://www.mbaskool.com/marketing
mix/products/17309-tommy-hilfiger.html  

Tommy Hilfiger SWOT Analysis, Competitors,
Segmentation, Target Market, Positioning & USP. (2020,
April 26). MBA Skool Team.
https://www.mbaskool.com/brandguide/lifestyle-and-
retail/2644-tommy-hilfiger.html