B. COMPETITIVE ANALYSIS
Advertising: One of the key factors in establishing a brand in France is to provide an adequate advertising budget. American companies should be able to effectively promote their image and reinforce their position. New products should be aggressively marketed to appeal to French children's tastes and to influence their fashion preferences.
The media has a tremendous impact on French children. Music and television are influential at an early age, and are thus excellent means for promoting products which are specifically directed towards children. According to analysts, children spend an average of 2 hours per day watching television. Additionally, 25 percent of French children have their own television sets.
Credit/delivery terms: Another important factor is the ability to offer credit terms and reorder services similar to those of French competitors. A European warehouse facility is an additional advantage in meeting short term delivery requirements.
Price: Price is also a key factor. If prices are competitive, U.S manufacturers will be able to penetrate the French market much more successfully.
Clothing characteristics:
- From the children's point of view: U.S. manufacturers should offer an attractive collection emphasizing colors. Children are attracted mainly by colors, design, patterns, and comfort.
- From the mothers' point of view: U.S. manufacturers should take into consideration French mothers' preferences. They prefer clothing that is easy to clean and which requires no ironing. They are also attracted by the quality of the product. Therefore the quality/price ratio is extremely important.
* Domestic Production
In 1995, the French children's wear industry was comprised of 128 companies employing a total of 8,000 workers.
The majority of these French companies are located in the Loire area (42 companies), Nord-Pas de Calais region (19 companies), center of France (11 companies), and Paris area (49 companies). The 1995 local production of children's wear was valued at USD 659.2 million and is expected to grow by approximately 3 percent in 1996 to reach USD 678.9 million. As mentioned in the summary and introduction, French firms continue to create new lines of products, both for local and export markets. However, many French companies have installed their manufacturing facilities in countries with lower labor costs (Portugal, Morocco, Tunisia, and Turkey and recently in Eastern Europe).
French production enjoys a strong image for both creativity and quality. This explains why many French companies realize more than 50 percent of their sales volume in foreign markets. In 1995, total French exports of children's clothing amounted to USD 359.4 million. According to specialists, French exports should continue to increase by approximately 10 percent
per year to reach USD 395.3 million in 1996.
In 1995, French exports registered strong results particularly in Italy (20 percent), Belgium (16 percent), and Germany (14 percent).
* 3rd-Country Imports
In 1995, total children's wear imports to France amounted to USD 579.6 million. According to market observers, 1996 imports are expected to increase by approximately 9 percent to reach USD 631.7 million. Most imports come from countries with low production costs.
Morocco held an important share of the French market in 1995 (17 percent of total imports), followed by Portugal (15.4 percent) and Tunisia (11.8 percent). Imports from Asian countries have experienced a recent decline, as many French companies set up highly competitive manufacturing facilities in Mediterranean countries. In 1995 as in 1994, Thailand and China retained only 13 percent and 12 percent of the total French import market, respectively.
* U.S. Market Position
In 1995, U.S. imports of children's wear reached USD 4.6 million, compared with USD 3.1 million in 1994. U.S. imports are expected to grow in the following years given the fact that French children are greatly influenced by American trends and television. The easy-to-wear clothing of American colleges and the streetwear of large cities appear especially attractive to French children. As a result, U.S. products such as t-shirts, polos, and jackets with names of football teams or American colleges are in high demand.
Proof of the success of American brands in France can be seen in the recent opening of a Gap store for children in Paris. According to the company's management, the store has drawn a record number of customers since its opening in May 1994.
Additionally, the American company Oshkosh B'Gosh is very successful in France. At the children's wear trade show Mode Enfantine, which takes place twice a year in Paris, American companies are making great gains with French buyers because of their products' originality. In light of the above, there appear to be numerous opportunities for U.S. companies to successfully penetrate the French children's wear market. In choosing clothes for export, firms should be careful to select products combining both comfort and fashion.
