PRESENTATION BY: AYUSHA MITTAL

CM 321: FALL 2016 PROFESSOR PANEPINTO

http://shop.americantourister.com/http://www.fundinguniverse.com/company-histories/american-tourister-inc-history/

SOURCES

PRODUCT AND COMPANY

IN 1933, AMERICAN TOURISTER WAS BORN. Started by Sol Koffler in Providence, Rhode

Island. His dream was to build a tough suitcase that could sell for a dollar.

LUGGAGE AND TRAVEL PRODUCTS They sell a variety of suitcases, backpacks, duffels, wallets, travel accessories, and are

the official sponsor of Disney luggage.

ACQUIRED BY SAMSONITE CORP IN 1993 Samsonite is the leading American luggage

manufacturer and retailer, and one of the most popular luggage brands in the US.

“GORILLA” ADVERTISEMENTS Inspired by true-life accounts, these award-

winning ads showed ferocious-looking gorillas hurling and stomping on an

American Tourister case in a zoo cage.

CURRENT BRANDING

http://shop.americantourister.com/http://www.ibisworkd.comhttps://www.facebook.com/AmericanTourister

SOURCES

Travel…new places, familiar faces, and endless possibilities. American Tourister is ready to go when you are, ensuring your travels are met with confidence. We know how you travel, that’s why we’re the smart choice with gear that’s right for you.

BRAND TONE: SMART, FRIENDLY, FUN, PRACTICAL, VALUE CONSCIOUS, REAL, CASUAL

WORLDWIDE RETAIL SALES OVER 170 MILLION USD IN 2008. SECOND LARGEST GLOBAL LUGGAGE BRAND.

THE SMART CHOICE FOR YOU AND YOUR FAMILY.

http://www.mergentonline.com.ezproxy.bu.edu/companydetail.php?compnumber=80350 http://academic.mintel.com.ezproxy.bu.edu/display/590862/http://academic.mintel.com.ezproxy.bu.edu/display/716585/http://clients1.ibisworld.com.ezproxy.bu.edu/reports/us/iexpert/default.aspx?entid=1965http://clients1.ibisworld.com.ezproxy.bu.edu/reports/us/bed/default.aspx?entid=37http://clients1.ibisworld.com.ezproxy.bu.edu/reports/us/industry/competitivelandscape.aspx?entid=1965 https://www.statista.com/statistics/313683/net-sales-share-of-samsonite-by-brand/

SOURCES

TARGET AUDIENCE: KEY CHARACTERISTICS

AMERICAN TOURISTER TARGETS BUSINESS AND LEISURE TRAVELERS, AND SKEWS TOWARD FAMILY TRAVEL. CUSTOMERS TEND TO: ‣ Be about 44 years of age (2012) ‣ Be males and females ‣ Have a household income of $91,000 on

average ‣ Be married, with average 2 people in

household ‣ Be college graduates ‣ Be employed full-time ‣ Travel often for both business and leisure ‣ Read Newsweek or Travel & Leisure

December 2012 - US

Luggage

The luggage market is impacted by many factors including consumer confidence and their likelihood to spend, as well trends in the travel industry, namely fees associated with airline travel. Furthermore, many people do not purchase items in this category very often since most luggage items tend to last a long time and remain suitable for consumers’ travel needs.

However, recent innovations in the luggage market such as implementing technology or offering multi-purpose, functional luggage items have generated interest in the category. This along with the prevalence of using carry-on bags when traveling by plane can help encourage purchases in the luggage market. As such innovations continue and retailers and manufacturers begin to promote certain types of luggage more often, it will support growth in this category.

oxygen.mintel.com@mintelnewshelpdesk@mintel.comEMEA +44 (0)20 76064533Americas +1 (312) 9320400APAC +86 (21) 63866609LAR 0-800-095-9094

Ali LipsonSenior Retail &

Apparel Analyst

What We Think

Suitcases most commonly purchased type of luggage Most buy luggage for replacement needsMost think luggage is overpriced, yet willing to pay more for quality items

More than half buy luggage at mass merchandisers

More than half of those who have purchased luggage have done so as a replacement for old/worn out items. Nearly three in ten say they have purchased both for a specific trip as well as to upgrade from existing luggage.

Among purchases of luggage made in the past 2 years, 30% of those surveyed have purchased suitcases, while 27% have purchased both tote bags and backpacks, indicating that these are likely to be more commonly purchased items.

More than half of all luggage buyers have bought luggage at mass merchandisers, followed by mid-tier department stores. Mass merchandisers and department stores are favored for one-stop shopping, as shoppers can buy items in other categories in the store during one shopping trip.

Nearly seven in ten consumers surveyed think that most luggage is overpriced; however more than half say they are willing to pay more for luggage that is good quality, suggesting that there is an incentive among many consumers to buy more expensive luggage.

‣ Most users buy luggage for replacement needs (see graphic), and American Tourister products are known for their durability.

‣ Technological innovations have generated interest in the category. Things like luggage tracking and weight calculator could be attractive to consumers.

‣ Increasing airline baggage restrictions have increased carry-on bag purchases. Availability of spacious and convenient carry-on bags are consumer magnets.

OPPORTUNITIESDecember 2012 - US

Luggage

The luggage market is impacted by many factors including consumer confidence and their likelihood to spend, as well trends in the travel industry, namely fees associated with airline travel. Furthermore, many people do not purchase items in this category very often since most luggage items tend to last a long time and remain suitable for consumers’ travel needs.

However, recent innovations in the luggage market such as implementing technology or offering multi-purpose, functional luggage items have generated interest in the category. This along with the prevalence of using carry-on bags when traveling by plane can help encourage purchases in the luggage market. As such innovations continue and retailers and manufacturers begin to promote certain types of luggage more often, it will support growth in this category.

oxygen.mintel.com@mintelnewshelpdesk@mintel.comEMEA +44 (0)20 76064533Americas +1 (312) 9320400APAC +86 (21) 63866609LAR 0-800-095-9094

Ali LipsonSenior Retail &

Apparel Analyst

What We Think

Suitcases most commonly purchased type of luggage Most buy luggage for replacement needsMost think luggage is overpriced, yet willing to pay more for quality items

More than half buy luggage at mass merchandisers

More than half of those who have purchased luggage have done so as a replacement for old/worn out items. Nearly three in ten say they have purchased both for a specific trip as well as to upgrade from existing luggage.

Among purchases of luggage made in the past 2 years, 30% of those surveyed have purchased suitcases, while 27% have purchased both tote bags and backpacks, indicating that these are likely to be more commonly purchased items.

More than half of all luggage buyers have bought luggage at mass merchandisers, followed by mid-tier department stores. Mass merchandisers and department stores are favored for one-stop shopping, as shoppers can buy items in other categories in the store during one shopping trip.

Nearly seven in ten consumers surveyed think that most luggage is overpriced; however more than half say they are willing to pay more for luggage that is good quality, suggesting that there is an incentive among many consumers to buy more expensive luggage.

http://academic.mintel.com.ezproxy.bu.edu/display/590862/ http://academic.mintel.com.ezproxy.bu.edu/display/716585/

SOURCES

‣ Younger consumers (those aged 18-24) luggage purchase are more likely to be travel-specific, indicating a seasonal interest.

‣ Airline baggage restrictions and additional fees have lead to lower sales of larger and traditional suitcases in favor of totes, backpacks and carryons (see graphic.)

December 2012 - US

Luggage

The luggage market is impacted by many factors including consumer confidence and their likelihood to spend, as well trends in the travel industry, namely fees associated with airline travel. Furthermore, many people do not purchase items in this category very often since most luggage items tend to last a long time and remain suitable for consumers’ travel needs.

However, recent innovations in the luggage market such as implementing technology or offering multi-purpose, functional luggage items have generated interest in the category. This along with the prevalence of using carry-on bags when traveling by plane can help encourage purchases in the luggage market. As such innovations continue and retailers and manufacturers begin to promote certain types of luggage more often, it will support growth in this category.

oxygen.mintel.com@mintelnewshelpdesk@mintel.comEMEA +44 (0)20 76064533Americas +1 (312) 9320400APAC +86 (21) 63866609LAR 0-800-095-9094

Ali LipsonSenior Retail &

Apparel Analyst

What We Think

Suitcases most commonly purchased type of luggage Most buy luggage for replacement needsMost think luggage is overpriced, yet willing to pay more for quality items

More than half buy luggage at mass merchandisers

More than half of those who have purchased luggage have done so as a replacement for old/worn out items. Nearly three in ten say they have purchased both for a specific trip as well as to upgrade from existing luggage.

Among purchases of luggage made in the past 2 years, 30% of those surveyed have purchased suitcases, while 27% have purchased both tote bags and backpacks, indicating that these are likely to be more commonly purchased items.

More than half of all luggage buyers have bought luggage at mass merchandisers, followed by mid-tier department stores. Mass merchandisers and department stores are favored for one-stop shopping, as shoppers can buy items in other categories in the store during one shopping trip.

Nearly seven in ten consumers surveyed think that most luggage is overpriced; however more than half say they are willing to pay more for luggage that is good quality, suggesting that there is an incentive among many consumers to buy more expensive luggage.

BARRIERS

 

 

2

LuggageExecutive Summary – US – December 2012

Total retail sales of luggage were valued at $12 billion in 2011 and are expected to reach $12.7 billion in 2012. Though sales of luggage suffered during the recessionary years, this market is now on track for growth as the economy rebounds. Sales of luggage are expected to reach $15 billion by 2017, achieving growth of 25% between 2012 and 2017.

Market Factors  Consumer confidence likely to impact luggage sales

Consumer confidence is a key indicator of consumers’ sentiments toward the economy and their likelihood to spend money. An increase in spending is typically correlated with higher or growth in confidence as consumers feel optimistic about their economic prospects. Conversely, when consumer confidence is low, spending suffers and consumers remain more budget-minded.

Though consumer confidence is up as of November 2012, it has not yet returned to prerecessionary levels seen in early 2007. Luggage is a highly discretionary category, and as such sales are highly dependent on consumer sentiment — old luggage can be made to last one, two or more seasons if the traveler doesn’t have the spare cash. Consumers do not tend to purchase items in this category very often, as luggage typically lasts a long time, and as a result purchase triggers are typically based around the replacement of old/worn-out items or upgrading to a new style or material. If consumer confidence continues to rise, following a strong increase in October 2012, it is likely that it will positively impact the luggage market, as consumers will feel more inclined to spend money on nonessentials and increase their travel budgets.

Figure 1: Fan chart forecast of total U.S. retail sales of luggage, 2007-17

Source: Mintel

The Market 

INDUSTRY PROJECTION

Luggage sales expected to rise and industry projects strong growth as the economy rebounds.

Travel trends greatly affect the market for luggage. Business travel market continues to grow steadily, while leisure travel is dependent on consumer confidence in the economy.

COMPETITIVE ANALYSIS Samsonite continues to dominate in the luggage market.

Interestingly enough, Samsonite takes market share away from its subsidiary American Tourister.

Clear association of American Tourister with the parent company could generate brand trust and loyalty from Samsonite customers.

http://travelgearzone.com/best-luggage-brands/ https://www.statista.com/topics/1320/luggage-market-worldwide/ http://www.consumerreports.org/cro/news/2015/05/best-luggage-brands/index.htm

SOURCES

The top 30 luggage brands you see above were tallied based on feedback, ratings and reviews from over 230,000 customers from all over the world.

NOTABLE COMPETITORS WITH SIMILAR TARGET CONSUMERS

TUMI INC. (1975, USA) What’s working: Very consistent with customer reviews and feedback. Cater to first-class and business-class travelers. Variety of products.

TRAVELPRO (1987, USA) What’s working: Brand themselves as the choice of flight crews and frequent travelers. Aside from luggage, Travelpro sells clothes, shoes and even accessories.

DELSEY (1946, FRANCE) What’s working: Successfully combines style and functionality. Products are fashionable and very reasonably priced. Durability and security are major associations, call themselves “experts in keeping valuables protected while inside a bag”.

BRIGGS & RILEY TRAVELWARE (1993, USA) What’s working: Lifetime guarantee that covers all kinds of damages, even those that are caused by airline companies. First to develop the outsider handle and expandable suitcases.

PRIMARY RESEARCH METHODS: OVERVIEW

Survey available at: https://bostonu.qualtrics.com/SE/?SID=SV_9NWGbnkKPY8mUvj

‣ Focus groups would be conducted in 4-6 US colleges. ‣ Students can be recruited via the following:

‣ Partnership with university research centers that offer credit for participation.

‣ Posting in ‘quickie jobs’ and ‘job board listings’ on University websites.

‣ University mailing list. ‣ Each focus group would last 45-60 minutes. ‣ Each group would have at least 6 participants and maximum 10

participants. ‣ Incentives offerred:

‣ American Tourister travel kits OR ‣ $20 Starbucks gift card OR ‣ $20 in convenience points equivalent OR ‣ Free airline tickets sweepstakes

‣ Participants must be at least 18 years old, no older than 25, must own luggage and should have travelled in the last 6 months in order to qualify.

‣ At least 2 focus groups for each college/university.

METHOD 1: FOCUS GROUP

METHOD 2: ONLINE SURVEY

‣ Online survey hosted by Qualtrics. ‣ The survey would be distributed via university mailing list, and

university Facebook groups. Survey would also be shared on American Touristers’ social media channels.

‣ Incentive: Enter in a drawing to win roundtrip airline tickets. ‣ At the end of survey completion, respondents will be asked to

share survey with 5 friends and would be given a 25% online shopping discount at the American Tourister website for doing so.

‣ Participants must be between the ages of 16-30 for optimal results for the demographic.

‣ The survey would be distributed in the top 10 US cities with the highest-density college student population: New York City, LA, Chicago, Washington DC, Boston, Philadelphia, Dallas, Miami, San Francisco, Atlanta and Houston.

‣ Minimum sample size is 100 for a single city. ‣ The survey would be conducted over a week’s time period in the

first week of November - prior to Thanksgiving and Winter breaks, and just after Halloween. We assume people would already be thinking about travel during this period.

QUESTION WE’RE TRYING TO ANSWER: WHERE DOES LUGGAGE FALL AMONGST COLLEGE STUDENTS’ PRIORITIES?

GAIN INSIGHT INTO: WHAT IS COLLEGE STUDENTS’ PERCEPTION OF LUGGAGE IN THE CONTEXT OF THE BRAND AMERICAN TOURISTER? (PERCEPTION: FEELING OR OPINION ABOUT THE PRODUCT/SERVICE.)

METHOD 1: FOCUS GROUP QUESTIONS

1. What are the characteristics of your ideal luggage?

2. Do you use your luggage for anything other than travel?

3. Who buys the luggage you own? 4. What technology would you like to see in luggage? 5. What’s the brand of luggage you trust? 6. Have you heard of Samsonite? Follow up with –

have you heard of American Tourister? 7. Would you be more likely to buy American

Tourister if you knew it was a subsidiary of Samsonite?

8. What kind of luggage do you think they (Samsonite or AT) sell?

9. Do you like luggage with characters, like Star Wars or Disney? Or some kind of fancy print on them?

10. Ask participants to browse AT website and ask to choose top 3 they would consider buying for themselves. Discuss responses.

PARTICIPANTS: AGED 18-25; OWN LUGGAGE; ATTEND COLLEGE/

UNIVERSITY; HAVE TRAVELLED IN THE PAST 6 MONTHS; MUST BRING

LAPTOPS TO DISCUSSION.

METHOD 1: FOCUS GROUP RESULTS

ALLISON MOHRFELD, AGE 21. PREFERRED BRAND: TARGET? “I don't care about brands much. Only that it's gonna last long.” I put my other bags purses and shit inside when I'm not using - so storage is a good use especially at college.

JAMIE FIELD, AGE 21. PREFERRED BRAND: WHATEVER MY MOM BUYS “Luggage a necessity. Something that people don’t care enough to revolutionize.” “American Tourister makes me think of adventure. I would imagine them having lots of sturdy backpacks. “I feel like kids would really like this brand.”

ALEX FONG, AGE 21. REFERRED BRAND: LUIS VUITTON, RIMOWA “Luggage should be classy and spacious.” “I like that It's useful item because I use it for lots of things.” “Something I need than just want, so I would spend a considerable amount on it.” “Hell no. I would never buy from American Tourister.” “I could gift the rolling suitcases to my little cousins.”

MICHAEL PHILBIN, AGE 21. PREFERRED BRAND: NONE, REALLY. “I was always an over the shoulder duffle bag guy myself until I went to Japan and used a Rollie bag for the first time -changed my life. It doesn't look as cool but god damn if it wasn't convenient.” “It was one of my first adult purchases.” “Something I found worth investing in moving forward into my adult life.” ISABELLA BOLIVAR, AGE 21.

PREFERRED BRAND: SAMSONITE “I buy the brands my parents use. And mostly they bought all my luggage for me.” “I put colored ribbons on them because they all look alike when I travel , and I travel a lot.” “Samsonite is the one I use the most.”

BLAKE SNELLING, AGE 21. PREFERRED BRAND: SAMSONITE “I like Samsonite because they are useful bags and not hideous.” “I don’t care about color and prints, really.” “Luggage is not a valuable space for me to be self-expressive.” “I would buy American Tourister now that you told me it’s part of Samsonite.”

6 PARTICIPANTS, BOSTON UNIVERSITY STUDENTS

METHOD 1: FOCUS GROUP FINDINGS

1. Participants expressed that they never give luggage much thought, even when traveling.

2. Participants didn’t associate American Tourister with Samsonite, but said their trust in American Tourister increased when they learnt it was a subsidiary.

3. Participants’ top choices were persuaded by the low cost of products.

4. Participants would consider buying American Tourister products for a travel-specific purchase but not for long-term use.

5. Participants were somewhat put-off by lack of options and the amount of products featuring Disney and Marvel characters.

TOP PRODUCT PICKS

METHOD 2: ONLINE SURVEY THROUGH QUALTRICS

Apart from travel, what are the top 3 ways you could use yourluggage? (Drag and drop) 

Which luggage brand are you most familiar with?

Have you ever purchased your own luggage? 

Who usually buys your luggage?

     DisagreeSomewhatDisagree Neutral

SomewhatAgree Agree

My luggage isgathering dust till mynext travel.

  

It's annoying to worryabout luggage whentraveling.

  

Luggage takes up toomuch space in myhome.

  

Items Top 3 UsesDoing Laundry

Storage

For moving stuff

Grocery shopping

Going to the gym

To accessorize

Hiding things

Other

Yes

No

Parent/Guardian

Inherited from family member (grandparents, siblings, cousins...)

Usually borrow or loan from a friend

Gifted

What brand did you buy from?

How much would the following factors influence your luggage purchase?

How likely are you to buy luggage if there is some new technological

innovation done on it? 

Demographics

What's your age?

Which gender do you most closely identify with?

Other 

     Not At All Not Really Neutral Somewhat Definitely

Price   

Brand   

Matching pieces   

Wheels   

Color options   

Uniqueness   

Space/Expandable   

Life/Durability   

Lock/Security   

Friends/Colleagues   

Extremely likely Somewhat likely

Neither likely nor

unlikely Somewhat unlikely Extremely unlikely

15 or under 16­24 25­35 36­45 46 and over

Male

Female

Other

What's your take on luggage?

How important is luggage to you?

Do you own luggage? 

What type of luggage do you own? (Check all that apply)

How many pieces of luggage do you own? 

To what extent do you agree/disagree with the following statements:

Extremely important Very importantModeratelyimportant Slightly important Not at all important

Yes

No

Duffel Bag Briefcase/Laptop case

Hardside suitcase Garment bag

Softside suitcase Trunk

Backpacks Kids luggage

Carry­on Other 

Only one 2­3 4­5 6­7 8­9 10 or more

     DisagreeSomewhatDisagree Neutral

SomewhatAgree Agree

Buying luggage is an'adult' thing to do.   

Luggage offers asource of security andcomfort to me.

  

I use my luggage evenwhen not traveling.   

Apart from travel, what are the top 3 ways you could use yourluggage? (Drag and drop) 

Which luggage brand are you most familiar with?

Have you ever purchased your own luggage? 

Who usually buys your luggage?

     DisagreeSomewhatDisagree Neutral

SomewhatAgree Agree

My luggage isgathering dust till mynext travel.

  

It's annoying to worryabout luggage whentraveling.

  

Luggage takes up toomuch space in myhome.

  

Items Top 3 UsesDoing Laundry

Storage

For moving stuff

Grocery shopping

Going to the gym

To accessorize

Hiding things

Other

Yes

No

Parent/Guardian

Inherited from family member (grandparents, siblings, cousins...)

Usually borrow or loan from a friend

Gifted

What brand did you buy from?

How much would the following factors influence your luggage purchase?

How likely are you to buy luggage if there is some new technological

innovation done on it? 

Demographics

What's your age?

Which gender do you most closely identify with?

Other 

     Not At All Not Really Neutral Somewhat Definitely

Price   

Brand   

Matching pieces   

Wheels   

Color options   

Uniqueness   

Space/Expandable   

Life/Durability   

Lock/Security   

Friends/Colleagues   

Extremely likely Somewhat likely

Neither likely nor

unlikely Somewhat unlikely Extremely unlikely

15 or under 16­24 25­35 36­45 46 and over

Male

Female

Other

Powered by Qualtrics

Where are you from?

How often do you travel?

City

State

Country

Less than once ayear 2­4 times a year 5­7 times a year 7­9 times a year

10 or more times ayear

METHOD 2: SURVEY FINDINGS

66 RESPONSES SO FAR

80% FEMALE RESPONDENTS

97% AGE GROUP 16-24

85% USA RESIDENTS

Q1. How important is luggage to you?

1. Moderate importance. High importance for more frequent travelers, consistent with expectations.

TOP BRANDS AMONGST DEMOGRAPHIC

Q4-Whichluggagebrandareyoumostfamiliarwith? Q3-Whattypeofluggagedoyouown?(Checkallthatapply)

2. Samsonite is by far the most popular brand amongst demographic.

3. Demographic are versatile users of the various types in the product category.

Q8-Towhatextentdoyouagree/disagreewiththefollowingstatements:

PURCHASING DECISIONS AND PSYCHOGRAPHICS

5. 48% have never purchased their own luggage, and parents/guardians have made the purchase for them.

4. Associate buying luggage with adulthood and consider it an annoyance when traveling.

Q14-Howmuchwouldthefollowingfactorsinfluenceyourluggagepurchase?

6. For both male and female, top factors influencing luggage purchase include: price, wheels, life/durability, space/expandablility. Brand consideration higher for those that have purchased their own luggage.

FACTORS INLFUENCING PURCHASE

KEY INSIGHT

The type of luggage you own says a lot about your personality, whether you like it or not.

CHALLENGES FACED

FOCUS GROUP Hard to moderate and very time-consuming. People kept talking over each other, and the discussion often went on tangents. Some people looked annoyed with other participants.

It was hard to eliminate bias when people didn’t want to admit their buying behavior amongst peers or would agree with other participants just to avoid confrontation.

Finding participants also proved challenging, especially since I was hesitant to disclose what the discussion was about. I wanted the participants immediate reaction to luggage, which proved difficult.

LESSONS LEARNT

SURVEY It was really hard to formulate the questions for the survey, especially to keep the survey short. I kept having to come back to the ‘question’ I was trying to answer and modify it to be able to get the most useful information.

In the survey, I had to put a lot of thought into the order of questions so as to not influence responses to later questions.

I wasn’t able to modify the survey upon getting feedback, and it yielded very little qualitative data about the demographic.

SURVEY Secondary research and existing surveys greatly helped in understanding what to do, and what not to do. It also helped me formulate mutually exclusive and collectively exhaustive lists of options to give to respondents.

The quantitative data visualization was super helpful in noting trends and consistency with expectations. Cross-tab data analysis is something I will definitely utilize in the future as it greatly helped me in making sense of the data.

FOCUS GROUP Conducting the focus group before the survey data helped me understand the audience better .I even used some of the insights in my survey as the ‘agree/disagree’ statements.

The instant feedback was especially helpful in leading the discussion. The discussion flowed naturally when I didn’t ask questions directly and wove them into the conversation instead.

The participants got excited and more enthusiastic when I gave them something to do and instead of simply playing round-robin.

THANK YOU.