UGG Dissertation

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Project Research DEO929 Fashion Communication

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Transcript of UGG Dissertation

Page 1: UGG Dissertation

Project ResearchDEO929

Fashion Communication

Page 2: UGG Dissertation

Contents

Introduction

Concept

Methodology

Objectives

Chapter 1UGG AUSTRALIA-HISTORY AND HERITAGE

Ugg’s DevelopmentsThe Future of UGG

Target AudienceChapter 2

Ugg’s expanding marketUgg’s competitors

Chapter 3Experiential Marketing

DifferentationCustomer Motivations

Customer Experience InnovationsChapter 4

Enhancing the BrandPromotion and Advertising

Achieveing the UGG lifestyle brand and experienceChapter 5

Proposal for the FutureThe Collaboration

The Service

Conclusion

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DissertationIntroduction

The research project being carried out will study UGG Australia and whether there is a market for the brand to expand using innovative brand experiences. The research aims to establish whether there is a viable and profitable gap in the market for UGG to expand their brand in the tourism industry to become more of a lifestyle brand or to expand the original brand through home furnishings and clothing. The outcome will be introduced into the tourism industry by collaboration with another brand/company and will aim to be a unique incentive for the UGG consumers. The initial research for the project will be carried out through:• Market research around the UGG brand.• Analysis of the companies target audience.• Competitors of the brand.• Researching into gaps in the market.UGG Australia remains a well known reputable brand that is notorious for luxury and comfort. The company was founded in 1978 originally providing footwear for male surfers. The brand has since diversed away from being a male dominated brand and has since produced footwear for all genders and ages. The brand image itself has been eclipsed by the recent success of the women’s section, more specifically the sheepskin lined UGG boots. UGG offers further footwear and other small acces-sories. It’s products are unique in that they are fashionable, comfortable as well as attainable. UGG’s mission statement aims to be “the premier brand in luxury and comfort.”(1)Currently UGG Australia is known mainly as a footwear brand and is featured in many big department stores and flagship stores around the globe. It’s well known reputation around the world has been established through many innovative ideas and advertising which are constantly changing and improving.

1) www.uggaustralia.com

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Concept

The research project is to see whether UGG could expand the UGG range and make UGG into more of a lifestyle brand filtrating into the tourism industry. The concept behind the project is to make UGG Australia into more of an experience for the consumer. Now a days brands are becoming part of our lives and more and more brands are not just selling their products but selling the whole lifestyle to go with it. The concept will be called “The UGG experience”.The idea is to attract a wider target audience and make the UGG brand go cross platform. Ex-amples of cross branding are companies such Virgin and Armani. Virgin have created an expe-rience in many different sectors of industry, from mobile telephones to transportation, travel, financial services, media music and fitness. They deliver their brand to consumers through dif-ferent experiences and innovations. Secondly, Armani have branched into the tourism industry creating hotels, nightclubs and restauraunts. This is the route The UGG experience will hope to take.With the growth of sports tourism there is a market for UGG to collaborate with a company such as Scott Dunn (luxury ski company) and open their own UGG ski chalets in many of the major ski resorts throughout Europe and the world (Val d’isere/Verbier/Whistler). The chalets will be extremely luxurious and fit in with the companies statement of luxury and comfort.“It is estimated that over 65 million skiers exist worldwide. About 43 per cent of that is market-ed in Europe, 42 per cent in the Americas and 20 per cent in Asia. The industry’s growth rate over the last decade has been remarkable: the globalization of skiing is quite apparent with the influx of foreign visitors to international destinations increasing dramatically every year”(2)The second part of the concept is to set up UGG experience days and packages these may in-clude family walks, hot air balloon rides, surf/ski lessons, cookery courses, spa days and many more. A current competitor for the experience days might be the Virgin owned experience days and packages. They offer a wide range of packages similar to the ones that are proposed for UGG. They Virgin experience days “launched in March 2001 under the name of Virgin Expe-rience. Originally offering experiences to corporate clients as a way of incentivising staff and customers, the company rapidly expanded to bring the Virgin values of quality, innovation, value for money and fun to the consumer experience gift market”(3). With the expansion of the original Virgin brand into more of a lifestyle brand they are now one of the world’s most respected brands and this comes down to brand loyalty and trust. The main objectives that will be carried out are:

• Broadening UGG’s target market through different marketing methods.• Looking into UGG as a company and what ranges and trends they already have.• Looking at UGG’s competitors and where they lie in the industry.• Researching into the tourism industry and if there is a gap in the market for UGG.• Researching into many other brands that have gone cross platform such as Virgin and Armani. • UGG experiences- researching into what UGG have done to create experiences for their consumers. • Researching into the Tourism industry and whether there is a gap in the market for UGG to go cross platform.• Researching into consumer behaviour in Tourism and the Ski Industry, whether there is a niche for UGG to create experience days around Europe or UGG chalets.• Will the main aim and concept work?

(2) Hudson, S.H, 2000. Snow Business A study of the international ski industry. 1st ed. Great Brit-ain: Simon Hudson.(3) http://www.virginexperiencedays.co.uk/about

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MethodologyThe main objective of the project is to gain an understanding of the UGG experi-ence’s target market and look into the tourism industry and surrounding market around the original brand.In terms of Primary research surveys will be carried out with the relevant target au-dience which will be between the ages of (20-45). This will help to establish the right target audience and it will help to gain insight into other peoples opinions. Question-naires will then be sent out to department stores such as Fenwicks which stock the UGG brand and up market tourist offices and travel agents such as Kuoni and Scott Dunn.Interviews will be carried out with the general manger of Fenwicks and a the man-ager of a small shop in Perthshire, Mona Liza and the director of Scott Dunn (Luxury Holiday company). This will provide information to support the proposed concept and aim to develop further answers. Focus groups will be carried out with the correct age group of my target audience, firstly a focus group with (27-28 year olds) and an older age group (40-50 year olds). The focus group will contain up to seven people and will help to again develop the proposed concept. Secondary research will be carried out by examining many websites such as the UGG Australia’s official website, relevant competitor websites and company analysis pages, books will be sourced from the Fashion section in the University library on tourism, cross branding and the ski industry. Journals and mintel reports on UGG statistics and lifestyle branding will be sourced and this well help gain basic informa-tion to form a strong concept.

ObjectivesThe short term objectives will be to develop the new lifestyle brand in a clever way to the consumer, with the aim of gaining a wider target audience and consumer base over the globe.The long term objectives will be to establish a good reputation of the UGG brand with its new experience and innovations and put UGG at the top of the fashion mar-ket over all of its main competitors.

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Chapter 1UGG AUSTRALIA HISTORY AND HERITAGEThe routes of UGG may be quite suprising to todays consumer as UGG originally started in Australia on the luschious beaches of Byron Bay. In the late 1960’s UGG boots were worn by surfers to keep their feet warm and dry when coming out of the water, a basic sheepskin was used. This is where the original brand started and who would have thought that it would later become a worldwide phenomenen. After Australia UGG made their way to different parts of America, firstly California. Here they were an immediate hit and were not only worn at the beach but started filtering into cities too.When the ski season came along UGG’s were spotted in many lodges such as in Aspen. It began to become a brand that was asscoiated with sports such as skiing and surfing. UGG really made their huge break when they hit New York with a storm, the sheep-skin boots were becoming more fashionable and eventually graced the pages of Vogue. After this they were seen all over the globe and on many different catwalks. UGG boots were seen down the streets of Amsterdam, Paris and Milan. “As it contin-ues to spread across the world, we have continued to offer new and unexpected ways to experience the brand. The UGG journey continues on and the love of UGG contin-ues to spread.” (4)UGG’s DevelopmentsCurrently UGG Australia is in a stable position in the current market. With many strong developments already in place. These developments include the UGG range for women and men which includes a large footwear collection, a selection of hand-bags/men’s bags and many cold weather accessories. They have a kids section which include “Big Kids”, “Little Kids” and “Infants” each sector again has a footwear collection and cold weather accessories section.The Future of UGGThere is a lot of opportunities for UGG to expand their original developments. The brand could start a beachwear line or a winter/ski line including winter ski jackets and sheepskin coats. A homeware section could be another option for UGG to sell homeware such as rugs/sheets/pillows etc. As mentioned in the concept previously the brand could become more of a lifestyle brand and filtrate into the tourism industry opening up UGG ski chalets/hotels in many well know ski resorts throughout Europe and the world or in many major fashion cities such as Paris and Milan. They could also open up their own experi-ence days which consumers could buy for friends/relatives. The experience packages could include ski lessons/surfing lessons which takes UGG back to its routes or a more relaxing day out could be an UGG spa day. For a healthier day out UGG walks and shoots could be arranged in many more mountanious areas such as Scotland and ski resorts in the summer. This would mean that the UGG chalets could be mar-keted twelve months of the year.

(4)www.uggaustralia.com

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Who are UGG’s target audience?The main aim for the project it to target the right audience to the specific concept. UGG is a well established luxury brand therefore the prices of its products are quite high. “Luxury brands have often been associated with the core competences of creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing. These product attributes give the consumers the satisfaction of not only owning ex-pensive items but the extra-added psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these pricey items.” (5)The UGG experience wants to target an exclusive audience and will target those who are at the top end of the wealth spectrum with high disposable incomes and who live a luxurious and fashionable lifestyle. The elite group can afford to spend their money on luxurious items and services and it will not phase them. This is why luxurious brands have such a strong brand loyalty. The UGG experience will target both middle- upper class men and women between the ages of 25-50. A large part of the target audience will be familes. Most of these people will be working professionals who tend to live within the city such as London and New York. However a big part of the audience would have to have an interest in the sports industry. A large amount of middle-upper class families take a break and have a family ski holiday to many resorts throughout the world, they also would not hesitate in buying an experience package for colleagues or friends whether it be for a birthday or just a kind gesture and with this in mind they would hopefully be loyal to the brand and this would be an incentive to using the UGG experience.

(5) http://www.brandchannel.com/papers_review.asp?sp_id=485

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CHAPTER 2Market Environment

UGG’S Expanding Market

Currently the UGG brand can be purchased in some of the major department stores around the globe such as Fenwicks, John Lewis, Nordstorm, Bloomingdales and many more. In addition to being in department stores they have many flagship stores in London, China, Manchester and Montreal and another five flagship stores in the U.S. UGG are normally placed in big displays near the aisles of the shoe sec-tions. They continue to expand through much press and media attention. UGG boots are now featured in some of the major fashion magaznies such as Vogue and they fea-ture on television as a lot as many celebrities are pictured or filmed wearing them. This keeps UGG’s market expanding through popularity and celebrity endorsment.

The market expanded when UGG collaborated with top fashion designer Jimmy Choo to create a limited edition selection of UGG boots. The collection was based on every high street style and celebrity, there brough out five different styles priced be-tween £495 and £695. The boots could only be purchased at Jimmy Choo and UGG Australia stores. UGG expanded their market by collaborating with Jimmy Choo as it increased the profits and also raised brand awareness.

“Other than Jimmy Choo, UGG Australia is the only other footwear I have in my wardrobe,” said Tamara Mellon, president and founder of Jimmy Choo.

With well known connections such as Jimmy Choo and UGG’s thriving sales they are currently at a strong position in the market and could make many more collabora-tions in the future for example in the tourism sector.

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UGG’S COMPETITIORSThe new UGG experience has many various competitors surrounding it, one of main competitors would be Roxy who have their own ski chalets and run events and expe-rience days such as surfing and skiing lessons. Brands such as Roxy and Quicksilver, which currently occupy a share in both the ski and beach markets, which the UGG experience would be hoping to target. Followed by more upmarket brands such as Armani who will hopefully be a future competitor as Armani have cross-branded with their own signature restaurants, hotels and bars. Eventually this is the competi-tor market in which the concept will hope to target. Competitors in the lifestyle brand sector would be brands such as Jack Wills and Abercrombie and Fitch who have created a 360 degree experience for the consumer they do not only offer a clothing line but run events and entertainment. Jack Will’s pay ski fanatics to go out to their favourite resorts and promote the brand for the season this is a concept that could work well with the new UGG experience brand.

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Chapter 3Experiential Marketing

The idea behind the proposed concept is to make brand equity of UGG. Experiential marketing can be done in many different ways; most companies use the traditional methods such as advertising and promoting in magazines. However with technology on the up the typical consumer is looking for something a little bit more unique and innovative. Brands are really trying to improve their experiential marketing to sat-isfy and capture the customer.

What exactly is experiential marketing?

Brand experience can be perceived in many different ways however the experience should get in touch with the consumers five senses making the brand a 360 degree experience. “The more powerful the experience is, the stronger the brand impres-sion”.(6) “Experiential branding is a process by which brands create and drive sensory inter-actions with consumers in all aspects of the brand experience to emotionally influ-ence their preferences and to actively shape their perceptions of the brand. Interac-tions involve communication, brand space, and product and service elements. These elements work together to affect brand equity.” (7)Brands such as UGG don’t just want to sell the product but to sell the whole lifestyle that goes with it and that is the reasoning behind the proposed concept for UGG, as a brand to reach out to the consumers five senses and to build a more emotional con-nection with the consumer through filtrating into the tourism sector and expanding the brand as a whole.

DifferentiationTo become a lifestyle brand, companies should offer a differentiation of benefits for their target audience. UGG should have the ability to stand apart from other compa-nies by having different incentives to other brands to intrigue the consumer. China is becoming one of the more experiential branding cities and many companies have cleverly placed flagship stores here to provide more consumer interaction of the companies being Gucci. Many stores have created different zones where differ-ent things will catch the eye of the consumer a good example of this is the Adidas, in their flagship store they have a chill out zone, juice bar and the rooftop is basketball court. Little things like this interact with the consumer’s senses and make the overall brand more appealing and this is what the proposed concept for UGG is hoping to achieve.

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Customer MotivationsTo motivate UGG’s customers for the new concept they should come up with some strategies. Firstly heavy marketing on Twitter and Facebook is key to interact with customers. The launch of UGG experience days and moving into the tourism industry will be a new incentive for UGG to gain new consumers and target a wider audience. A launch of a new product or experience is always appealing and motivating to the customer as it differentiates the brand from its competitors and makes it more unique.

Customer Experience InnovationAs many businesses look towards economic recovery they are looking for new ways to get their customers involved and excited on new prospects. By getting the consumer involved in the brand it makes it an all round 360-degree experience for them. By making UGG into a lifestyle brand they will be able to sell their products as well as run experi-ence packages and holidays for their customers, customers will feel more in touch with the brand as it becomes party of their lifestyle rather than just a one off purchase that they have made.

(6) http://www.labbrand.com/brand-source/experiential-branding-using-5-sens-es-build-brand-equity(7) http://www.labbrand.com/brand-source/experiential-branding-using-5-sens-es-build-brand-equity

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Chapter 4Enhancing the Brand

The first thing to do to enhance the brand fully will be to communicate a message of what the new UGG experience launch has to offer. Each brand has to remember that their consumers want to know about every new idea and be the first to be informed this can be done through social media. This will put the message across without dif-ficulty and hopefully get a lot of consumers interested in the concept. The UGG expe-rience needs to stick to its original logos, colours and advertising so that consumers will recognize it. It also means that the brand loyalty between the consumer and the brand will stay strong.

Promotion and Advertising

Promotion and Advertising is key when it comes to launching a new concept, as no one knows what it is about so this needs to be done in a clever fashion to get the proposed idea across at ease. The concept needs clever advertising so two sectors of magazines have been chosen firstly fashion, the UGG experience will feature in Vogue and Bazaar and secondly tourism magazines such as Conde Nast Traveller and Kuoni this well help to target the correct audience. Monthly newsletters will cleverly be placed in many of the well known department stores at the checkout and also up market tourism offices such as Kuoni this well help consumers read about the new ideas and also it will let them know if there are any promotions or events coming up. Advertising on Twitter and Facebook is an easy way of getting your message across to a large amount of consumers with no cost. To motivate the new customers further they will be many discounts on offer as an incentive for them to get involved. For further promotions ski reps will be placed in the resorts which the UGG ski cha-lets will be placed they will be known as UGG seasonnaires and write up blogs about their ski season working for UGG. They will run UGG seasonnaire nights, which will take place in some of the Après-ski bars where freebies will be given away and many competitions will take place where UGG snowboards and skis will be up for grabs. This will help to promote the UGG experience to each new week of guests that stay in the chalets.

Achieving the UGG experienceIronically the UGG experience needs to offer a great experience to the consumer this can be done through making sure the running and organizing of the UGG experience days and ski chalets are second to none. UGG is a luxurious brand therefore eve-rything that comes with it has to be luxurious too. Consumers will be looking for a high quality service and this is what we aim to give them by making it a comfortable, relaxing and enjoyable experience. Each consumer will be different and so it is all about making each individual feel welcome into the new idea.

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Chapter 5Proposal for the Future

There are a few industries that the UGG experience could expand into instead of just opening ski chalets in some of the main ski resorts they could branch into the hospi-tality industry and open UGG restaurants and hotels. By building a loyal and strong client base the more things UGG has to offer the more people are going to get in-volved in the brand. More UGG experience days could be thought of and eventually the UGG experience could be recognized all over the world. By looking at UGG’s sales in 2011 it is clear to see that they are in a strong stance to expand. The financial results of the third quarter of the year, which ended in Sep-tember 2011, UGG brand sales increased 47.3% to $376.7 million compared with $255.8 million in the previous year. “The sales gain was primarily attributable to higher sales in the United Kingdom and Benelux resulting from the conversion to wholesale operations in these markets, higher domestic fall wholesale sales, and an increase in sales of the fall line at com-pany-owned retail stores.” (8)

UGG has very few competitors that can keep up with their brand sales and turnover. “The UGG brand makes up the largest portion of its revenue stream and has many potential avenues for growth form: an increase in company owned retail stores, international expansion, and a planned demographic drift towards a wider seg-ment.”(9)

Location

Location plays a big factor in the new UGG experience days and holidays. The expe-rience days will be sold in all the main UGG department stores and shops and most of them will be located on the suburbs of major cities around the globe. Obviously there is going to be a diverse range of locations due to the different experience pack-ages. Consumers will be able to buy holdiays online or from luxury travel agents Kuoni or Scott Dunn. Most of the ski chalets will be placed around Europe however they will be a few others in Canada, America and taking UGG back to its routes in Australia

(8) http://www.deckers.com/investors/press-release-detail.php?releaseid=1622823(9) http://www.deckers.com/investors/press-release-detail.php?releaseid=1622823

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Collaboration

As mentioned before the UGG experience could collaborate with luxury holiday company Scott Dunn who have been creating luxury holidays and honeymoons since 1986. By collaborating with Scott Dunn who already have a well established name this enables them to gain a larger client base and also helps the UGG experience out by providing transport to many of the areas where the chalets will be placed and Scott Dunn already have contacts and clients in many of the major ski resorts to build more chalets. This will help both UGG and Scott Dunn to thrive in this indus-try. The ServiceGood customer service is key for every brand to succeed as if the customers are hap-py the brand is likely to thrive. The UGG experience will offer great customer service leaving every individual leaving satisfied. Collaboration with luxury travel company

Scott Dunn will help keep the quality and service at a high standard. By expand-ing the company into new innovative ideas the UGG experience has to live up to the

original standards of the UGG brand.

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ConclusionTo conclude the UGG experience is offering UGG’s original customers something a little bit more, making the brand become part of people’s lifestyles. The UGG ex-perience will offer many different experience days, people will be able to buy these experience days for friends/colleagues, and these may include a relaxing spa day to a more adventurous ski lesson. A wide selection will be on offer.

The second part of the new UGG experience will be the new UGG ski chalets, which will be placed in many of the major resorts around the globe. The UGG ski chalets will be the opitomy of luxury kitted out in UGG home ware and offering a second to none service.

Staff will be picked carefully to fit the criteria of the experience days and UGG ski chalets. They will be trained to a very high standard to meet customer satisfaction.

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PICTURE REFERENCES

Picture 1http://www.simply-morzine.co.uk/

Picture 2http://www.uggaustralia.co.uk/kids-ugg-uk/kids,en_GB,sc.html

Picture 3http://demandware.edgesuite.net/aaff_prd/on/demandware.static/Sites-UGG-UK-Site/Sites-UGG-UK-Library/en_GB/v1324676456324/images/worldOfUgg/uggMe-dia/fall2011kids/1.jpg

Picture 4http://demandware.edgesuite.net/aaff_prd/on/demandware.static/Sites-UGG-UK-Site/Sites-UGG-UK-Library/en_GB/v1324676456324/images/worldOfUgg/uggMe-dia/fall2011menswomens/4.jpg

Picture 5http://www.chalets-lesgets.com/images/Ski_Chalet_Logo.jpg

Picture 6http://images.wikia.com/logopedia/images/b/b5/Ugg-australia-logo.jpg

Picture 7http://www.internet-cottages.com/ski-chalets-hot-tub.jpg

Picture 8http://www.glamvalley.com/wp-content/uploads/2011/12/Gentianes-Chalet-Dinin-groom-in-Courchevel-

Picture 9http://www.butterboom.com/wp-content/uploads/2010/09/Jimmy-Choo_UGGS_Butterboom.co

Picture 10http://eatbigfish.com/wp-content/uploads/2010/06/jack-wills2.jpg

Picture 11http://www.roxy-clothes.com/

Picture 12http://newzchief.com/wp-content/uploads/2011/08/abercrombie-and-fitch.jpg

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Picture 13http://www.simplyzesty.com/wp-content/uploads/2011/12/facebook-logo.png

Picture 14http://sailornattie.files.wordpress.com/2010/04/ka-ugg_5b15d.jpg

Picture 15http://blog.paradizo.com/wp-content/uploads/2010/12/scott-dunn-

Picture 16http://demandware.edgesuite.net/aaff_prd/on/demandware.static/Sites-UGG-UK-Site/Sites/en_GB/v1325209721540/GenderLanding/women/women-main-ascot.jpg

Picture 17http://demandware.edgesuite.net/aaff_prd/on/demandware.static/Sites-UGG-UK-Site/Sites/en_GB/v1325209721540/GenderLanding/kids/kids-clovis-boots.jpg

Picture 18http://demandware.edgesuite.net/aaff_prd/on/demandware.static/Sites-UGG-UK-Site/Sites/en_GB/v1325209721540/GenderLanding/men/men-main-ascot.jpg

Picture 19http://4.bp.blogspot.com/_cGNRz9dYB4w/TSpfxG1TJlI/AAAAAAAAExU/_cRt-NuTNR7Y/s1600/

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Bibliography

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TION/ugg-media-ugg-collection,en_GB,pg.html

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http://www.deckers.com/investors/press-release-detail.php?releaseid=1622823

http://www.brandchannel.com/papers_review.asp?sp_id=485

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Sharpley, R.S., 2002. The Tourism Business: an introduction. 1st ed. Sunderland: Business Education Publishers Ltd.

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