ENVIRONMENT ANALYSIS

RAY BAN

MARKETING MANAGEMENT II

Prepared by:
ABHISHEK PAL (B19002)
AKSHAY (B19004)
LALIT TIWARI (B19026)
RITWICK (B19039)
SOURABH SHUBHAM(B19053)
Introduction
Ray-ban sunglasses were first introduced by Bausch & Lamb in 1937. The sunglasses were
originally created for enhancing the pilot visibility and vision at high altitudes.
Subsequently, the brand was acquired by the Luxottica Group, an Italian eyewear
company based out of Milan, Italy in 1999. Luxottica is a vertically integrated company
that designs, manufactures, distributes and retails its eyewear bands. In 2014, the company
owned 80% of the major brands in luxury eyewear in then $28 billion market. In 2017, the
group merged with major lenses manufacturer Essilor to form Essilor Luxottica. As per
Euromonitor, the merged company holds 25% of the market share of the global eyewear
industry. The next major competitor to the company is J&J which holds 3% market share.

Competition set
− Based on Customers: Segmentation based on
− Benefits: Myopic approach would be to choose the luxury sunglasses industry for
our analysis as the various form of eye wear including coloured contact lens
compete in the market.
− When they use it: Though the competition set may be decided to include all
products which compete for the consumers discretionary spends, the competition
set will be too broad and would not be for analytical benefit.
− Competition for the same budget: The prudent approach of choosing the industry
would be vision augmentation industry which would include any accessory used to
enhance our experience of viewing the world. Therefore, the competing industry
would include, eyeglasses, contact lenses, technological advances made in viewing
the world such as AR, VR.
− Based on Marketing Orientation:
− Product: the major brands are:
− Prada
− Versace
− Burberry
− Dior
− Christian Dior
− Hermes
− Dolce & Gabbana
− Gucci

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− Media: The Media is shared among the players- some digital while some select the
TV and Internet and other print channels
− Distribution – Most of these brands are sold in Malls- either in official stores and
e-stores wherein there’s no competition for Shelf space. However, collaboration
with other stores does give a tiff challenge.
− Advertising- Mostly Models are involved in the advertisements- which are made
mainly for the Internet and digital media.
− Price

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 − Promotion Strategy
− Based on Resource Orientation: The two major parts in a sunglass are:
 Lens: Soluble organic dyes and metallic oxide pigments, alongside the plastic or
glass.
 Frame: Maybe metal or plastic. Metal frames may use Nickel, silver, Stainless Steel
etc.
For now, given their ubiquity there isn’t much competition for the Raw materials and
other resources.

− Bases on Geography: Sunglasses are imperative, on the coast and areas where the
temperature is equatorial. On moving towards the Arctic zone, preference goes
towards goggles. The higher the altitude, the lesser is the demand for Sunglasses.
Even while flying or related activities, wearing goggles is a must and hence the market
doesn’t exist for sunglasses.

Environmental analysis
Keeping in view the above competitive set, we shall analysis the environmental factors
which may affect the industry.

POLITICAL
 GST: Earlier the price slabs for frames were 12% and 18% for lens. But after the
meeting, it was uniformly priced at 12%. This has brought down the prices of
Sunglasses and help the price benefit pass on to the customers.
 Brexit: There is uncertainty in market owing to the possibility of UK leaving
Europe. While many experts have been making speculations as what could and
should happen now, the unprecedented move to leave the UK casts shadows on
many businesses. The changing dynamics are sure to have an impact because of
the benefits that came in while being part of the European union both in terms of
doing business and other tax benefits. Business organizations therefore have to
deploy new strategies that might also involve moving the business altogether
therefore resulting in loss of market

SOCIAL
 Consumer Preferences: Changes in the taste of consumer in terms of fashion
could affect the popularity and impact the overall business. The business could be
negatively impacted by availability, accessibility and affordability of other options
like optical lenses.

 Digitalization: provides customer with various options like style, material, lens
color, etc. The company has a site Ray-Ban.com and it also needs to chalk out an
effective ecommerce strategy to tap into additional markets.

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  Investing in trending technology: A staggering 84% of Eye Care Professionals
forecast that blue-light-barring lenses will spike sales in the coming two years as
they recommend it to 41% of their patients, especially young and single-vision
patients. Statistics show that blue light/digital eyewear sales have far outrun sun
wear sales. This is a notable business trend for Luxottica to capitalize. Within sun
wear, polarized product continues to lead the pack although sun wear with photo
chromic lenses are also highly popular. Polycarbonate with a 74% share rules the
roost where lens materials are concerned, followed by high index (45%), and CR 39
(44%). AR coating continues to hold ground as the premium lens treatment, up to
70% in 2016 from 63% in 2015. These are some of the trends Luxottica should
investigate and customize merchandise and stocks accordingly.

ECONOMIC
 The discretionary spends by the consumers are expected to be under pressure in
the near future with IMF predicting lowest economic growth since the recession
with global growth pegged at 3%. Meanwhile India is expected to grow at the rate
of 6.1% in 2019 and 7% in 2020 with developed economies having a predicted
growth rate of 1.7%.
 In recent couple of years, there has been a slowdown in India. Due to various
government initiatives the Indian economy has taken a hit. This effect is expected
to fade away in medium to long run. As the economy is recovering from slow
growth there has been a fall in the sales of the company as sunglasses are not a
priority product for customers.
 As the company is present in multiple geographies other than India it is
susceptible to changes in the currency rates. It incurs manufacturing cost in USD,
Euro, Chinese Yuan and Australian Dollar and is exposed to currency risk.

TECHNOLOGICAL
Advances in the AR, VR and MR possess a significant threat to the existing industry
structure. The instant popularity of Pokémon go has served the purpose of defining the
potential market size for an adequately priced augmented eyewear. Further, these
technologies have the potential to expand the consumer journey map through internet
connectivity by providing engagement opportunities in terms of social networking,
gaming and streaming services.

Further, Microsoft has introduced HoloLens which as of now has been targeted at
businesses for data visualization tool may expand the eyewear category significantly.
Other augmented products by premium brands in audio industry such as Bose eyewear
headphones are also creating a niche within the industry.

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ENVIRONMENTAL
Myopic approach would be to choose the luxury sunglasses industry for our analysis as the
various form of eye wear including contact lens compete in the market.

Though the competition set may be decided to include all products which compete for the
consumers discretionary spends, the competition set will be too broad and would not be for
analytical benefit.

The prudent approach of choosing the industry would be eyewear industry which would
include any accessory used to enhance our experience of viewing the world. Therefore, the
competing industry would include, eyeglasses, contact lenses, technological advances made
in viewing the world such as AR, VR & and more importantly, MR.

Though these technologies may pose significant risk to the brand in the future, right now
the key component that is missing in the products emanating from these technologies is
style which has been largely defined by these products owing to their history and legacy.

Further, introduction of the internet into the purchasing decision of the consumer has
democratized the competition with features such as 3-D try-outs from the comfort of the
home and availability of larger variety and brands of the glasses has resulted in dilution of
the consumer segmentation as the consumer frequently jump segments based on moods
rather than life stage or their income levels. Further, the service offered such as home eye-
test is also blurring the line between the diagnostic industry and eyewear industry.

Further, Bose has introduced augmented glasses with headphones and has targeted 2 of the
five senses. Therefore, Bose may be seeing the industry as sensory augmentation industry
instead of a simple audio industry.

The imagination of the consumer has been captured in this dimension from popular media
indicating the coolness of the product and the demand for such product is there for the
taking. Viral popularity if the Pokémon go is a case in point for the next revolution in this
industry.

Though the experimentation on the google glass ended early, the product had the potential
to decimate the luxury eyewear industry. In toe, the Microsoft HoloLens which is right now
marketed at business consumers for productivity purposes possesses future threat by
migrating / introducing new brands for the consumer consumption rather than business
consumption.

LEGAL
The major legal issues concerning in the industry is with respect to the intellectual
property rights as the industry right now is ripe with technological advances. Considering
the global scale of the company, with major markets in China and India having tenuous IP

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laws, the introduction of the new product can pose obstacle in introduction and
popularization of such augmented products.

Further, the increasing protectionist attitudes being adopted by the countries as

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