Marketing of a Luxury Brand Bottega Veneta - Report Example

Marketing analysis on Bottega Veneta Table of Contents Introduction 4 Objectives of the Report 4 About La Bottega Veneta 4 Industry Segmentation of La Bottega Veneta 4 Consumer’s Needs 4 Product Features 5 Main Competitors 5 Key Success Factors 5 Strategic Capability Analysis of La Bottega Veneta 6 Internal Analysis 6 Strengths 6 Weakness 6 External Analysis 7 Opportunity 7 Threat 7 Construction of the SWOT Matrix 7 Summary and Prioritization of Strategic Issues 8 Formulation of Strategic Objectives based on Strategic Issues 8 Identification of Strategic Options 9 Competitive Position 9 Cost Leadership vs. Differentiation 9 Direction for the Action 9 Ansoff Matrix 9 Internal vs. External 11 Methods of Development 11 Evaluation of Key Strategic Options 11 Suitability 11 Acceptability 12 Feasibility 12 Comparison of Strategic Options with Current Strategy 12 Conclusions and Recommendations 13 Reference List 14 Introduction Objectives of the Report The objective of the report is to reflect and evaluate on the current strategic potential of the Italian luxury brand, Bottega Veneta and thereby generate essential recommendations to help in enhancing its strategic paradigm. The evaluation of the potential of the current strategies used by the brand would be made based on understanding of consumer preferences and also through conducting of a SWOT Analysis. Strategic direction would be gained through use of Ansoff Matrix to help meet the needs of the consumer market. About La Bottega Veneta La Bottega Veneta is an Italian Luxury Brand that came into form during 1966 by two designers, Michele Taddei and Renzo Zengiaro in Vicenza. The company emerged as one of the most prominent and premium luxury brand through offering to its customers extraordinarily designed leather products. Luxury products produced by La Bottega Veneta tend to reflect a sense of individuality and confidence related to the different categories like fashion wear for men and women, and also other designer categories related to jewellery and furniture. The quality of the designer products produced by the company are defined by the exceptional design and craftsmanship generated to the products, innovative styles and the contemporary functions of the different products. During February 2001, the luxury brand company was observed to be acquired by Kering which was known previously as the famous Gucci Group. In the contemporary period the product portfolio of La Bottega Veneta is observed to be potentially enhanced by other product categories like fragrances, watches, shoes, eyewear, luggage and other home accessory collections. The distribution of the premium luxury products are carried out through the incorporation of wholesalers and also in the development of departmental stores and other boutiques (Bottega Veneta SA, 2014). Industry Segmentation of La Bottega Veneta Consumer’s Needs Bottega Veneta is observed to meet the needs of its target consumer force essentially relating to men and women belonging to the age group ranging from 30 to 45 years. Consumers relating to the luxury product segment tend to reflect considerable amount of disposable income to purchase the premium quality products from the luxury company. Moreover the consumers also reflect the need for the Bottega Veneta stores to be aesthetically designed with proper lighting such that the same enhances the exquisiteness of the luxury brand. The brand also focuses on meeting the needs of its consumers through augmenting the width and assortment of the different product ranges (King, 2014). Product Features The different types of products manufactured and distributed by Bottega Veneta is observed to reflect exquisiteness in terms of craftsmanship, innovation, contemporariness and a potential to help in matching with the personality needs of its different consumer categories. The merchandises produced by the company also reflect needed sophistication that helps in meeting the fashionable needs of its consumer spheres. Similarly the product designs of the company tends to reflect increasing sensuality and highly refined quality attributes that help in addressing the personal needs of its consumers (Bottega Veneta SA, 2014). Main Competitors The main competitors of the luxury product manufacturer, Bottega Veneta are firms like Louis Vuitton and Hermes that contribute in the production of premium luxury commodities for the elite consumer segment (CPP LUXURY , 2014). Another potential competitor of Bottega Veneta is considered to be Pravda that tends to operate based along 330 different outlets. Louis Vuitton or Hermes operating as a competitor tends to operate based along 480 different outlets (Wendlandt & Denis, 2014). Other like brands that tend to compete with Bottega Veneta is like Tod’s, Loro Piana and Brunello Cucinelli. Key Success Factors The Key Success Factors that contribute in generating success for the premium luxury brand, Bottega Veneta can be underlined as follows. In the first case the company aims to generate quality fashionable products made of pure leather. The products tend to reflect original design elements to entice the target customers. Another key success factor relating to the brand pertains to its ability to blend both the retro and contemporary look relating to its apparel merchandises for both men and women. This feature tends to create a new look thereby helping in attracting the consumers. Other key success factors relate to focus of the luxury brands on development of the expertise of their staffs and distribution channels to help generate enhanced services to the customers. Finally the use of the internet is also observed as a crucial factor that helps the company in enhancing the sales of its products to remote territories (CPP LUXURY , 2014). Strategic Capability Analysis of La Bottega Veneta Internal Analysis Strengths The main strengths of the brand Bottega Veneta is that it aims to understand the needs of its effective customer force and thereby tends to operate in the needed fashion to help meet their design and quality expectations. Bottega Veneta is observed to gain the ability in generating products matching the personality and attributes of its customers. The factor to spontaneously innovate new product, style and design categories thus helps the company to earn a timeless form. Similarly the company tends to reflect a huge brand loyalty where consumers tend to go for frequent repurchases. Other strengths of the company relate to their possessing skilled and trained workforce that is developed through the generation of potential training activities to produce quality leather goods in a knitted fashion. Moreover the company also aims to generate and enhance the level of customer trust through the provision of effective after sales and replacement services without any question (her world plus, 2014). Another key strength of the brand relates to its exquisite craftsmanship that in turn reduces the need for the existence of a brand logo. The stores of Bottega Veneta tend to reflect architectural exquisiteness thereby creating a distinct image of the brand in the eyes of its consumers (Mazzoni, 2013). Weakness The luxury brand, Bottega Veneta tends to produce and offer the premium products for only a niche customer base consisting of people with high disposable income. Thus it fails to match the demands and expectations of the mass consumers. This feature of the company thus is taken to affect the business of the company in the face of economic downturn in the different regions or in the global landscape. Bottega Veneta’s focus only on the production and selling of luxury brands relegates only a small market to the company such that the luxury products fail to meet the day-to-day needs of its customers. Similarly setting a premium price for all its products relating to different categories fails to meet the need of large population set relating to young customers opting for trendy look. External Analysis Opportunity The emergence of social media platforms like Facebook, Twitter and YouTube tend to generate large scale opportunities for the luxury brand in the global market. It is observed that through the use of such viral marketing mediums the company gets the ability to connect with a larger section of customers compared with other traditional mediums. Advertising based on the use of the above mediums contributes in incorporating a sense of innovation and creativity that significantly suits the attributes of the luxury brand companies like Bottega Veneta. Through the use of Facebook and YouTube the company tends to gain significant potential in appealing to a larger community of customers such that photos and videos of new launches, new product and in-store designs and manufacturing stages can be generated to thereby attract a larger consumer mindset and thereby in generating greater traffic to visit the luxury stores (Dickins, 2014). Threat One of the main threats that tend to rock in the global luxury market affecting the business of the luxury companies like Bottega Veneta is the growth in the production and sales of counterfeit products in the emerging economies like China. It is observed that the counterfeit products marketed in such economies tend to act as a potential substitute for the luxury products such that the same is readily available to the consumers at a highly affordable price. Similarly another impeding threat that can affect the luxury business worldwide and is often debated relates to the emergence of economic recession. It is held that owing to the rise of economic recession and unemployment the income levels of luxury consumers is ought to get affected which in turn would affect their confidence and thereby the business of the luxury companies. A falling stock market owing to the economic recession is also taken to affect the business of the luxury companies worldwide (Lamb, 2014). Construction of the SWOT Matrix The SWOT Matrix for Bogetta Veneta can be effectively constructed based on the above analysis as follows. The SWOT Matrix would reflect on the scores gained by the strengths and weakness of the company in the light of the external opportunities and threats governing the luxury market. Summary and Prioritization of Strategic Issues The highest figures obtained for Bottega Veneta along the vertical and horizontal axis reflects that the strategic issues that need to be prioritized constitute of the growth or the advancement of internet and also the growth of viral marketing activities. Similarly the issue of economic recession and the growth of counterfeiting activities in the emerging economies also reflect issues that need to be treated with needed priority by the company to sustain business in the long run. Where the growth of internet and viral marketing activities reflect a positive platform for the company the growth of counterfeiting activities and the rise of economic recession negate on the external situation. Formulation of Strategic Objectives based on Strategic Issues Strategic objectives that need to be effectively developed based on the above strategic issues can be rightly underlined as under. Relating to the growth of internet and the viral marketing activities the strategic objectives signify the development of potential websites and e-commerce activities that would encourage the customers to select, order and purchase their products in an online fashion. This would contribute in generating greater accessibility of the products to the customers thereby generating comfort and convenience. Similarly the company can also focus on the development of multi-channel marketing activities through the development of marketing and promotional contents and applications for Smartphones and other digital players. Development of advertisements and promotional campaigns need to be effectively created for the social networking platforms like Facebook and YouTube such that the same contributes in generating mass appeal to a larger community base of luxury consumers (Rosenbloom, 2011). Similarly the luxury brand in order to counter the growth and impeding impacts of the rise of the global counterfeit market need to enhance the dimension of public relations. Public relation campaigns need to be organised along the different types of media like broadcasting, print and internet to help generate needed awareness among the consumers to rightly avoid the procurement of counterfeit products at cheaper prices. Relating to the issue of rise of economic recession the luxury brand company need to rightly focus on the development of product categories that can help in meeting the needs of the middle income groups. The same would help the branded company to sustain its business in the face of economic recession (Okonkwo, 2010). Identification of Strategic Options Competitive Position Cost Leadership vs. Differentiation Reflecting on the tale of the luxury brand Bottega Veneta, it is observed that the company tends to effectively depend on the differentiation strategy to help attract potential consumers in a global scale in buying the merchandises from the luxury company. The company aims to create a differentiated image in the luxury market through working on the parameters of refined product quality, exquisite craftsmanship and in creating a sense of a personal identity (Compton, 2014). Direction for the Action Ansoff Matrix The evaluation of the implementation of the differentiation strategy related to the brand can be made based on the use of Ansoff Matrix as follows. (Pringle, 2008) Reflecting on the Ansoff Matrix it can be observed that Bottega Veneta to effectively work on its differentiation strategy need to work on enhancing the parameter of product development through helping in enhancing the existing product line. The brand other than expanding its product line incorporating merchandise offerings like watches, furniture and home furnishings of exquisite quality is also observed to effectively focus on the development of digital advertising campaign tom help promote its apparel collection for male consumers. Similarly the brand is also found to largely focus on the promotion of exhibitions reflecting the high class craftsmanship generated to help render the needed quality to the luxury merchandises (Kering, 2010). Product development can also be generated by the company through incorporation of agile supply chain management strategy such that it would contribute in the development of the product portfolio through integration of the efforts of the supply chain team and company team to generate greater responsiveness in meeting of consumer needs. The company can operate based on agile supply chain strategy through the incorporation of Point-of-Sales terminals, RFID Tags and also an ERP mechanism. Use of such systems contributes in capturing and transmission of information to the needed stakeholders such that the same helps in understanding of changes in the consumer needs and thereby promoting needed alterations in the product portfolio to meet the same (Frederick Ross, 2008). Internal vs. External Methods of Development Organic In terms of organic growth, Bottega Veneta focuses on the opening up of a large number of specialised stores along different regions to help cater to the variegated needs of the consumers in a specific fashion. The organic development is carried out through the creation of a network of specialised stores that tend to reflect selected categories of merchandises to its customers. Organic stores are created with an essence of an art gallery that in turn reflects on the exquisiteness and aesthetic parameters related to the same (CPP LUXURY, 2013). Collaborative On the collaborative front the brand is observed to gain effective collaboration of a renowned watchmaker like Girard-Perregaux to help in the production of its first watch brand, BVX. Collaboration gained on the above regard contributed in the development of the watch containing a leather band and a surface without a logo embossed on it. Other collaborative and partnership ventures of the company is reflected through its partnership with the Tokyo School of Engineering to help in the designing of furniture to be showcased in the trade fair and expo in Milan (Kering, 2010). Mergers and Acquisitions In a recent move, the global fashion brand, Gucci is observed to acquire fashion brand, Bottega Veneta. The acquisition that took place during 2001 is held to help Gucci bolster its image such that, Bottega Veneta acquires a renowned place in the production of artistic and exquisitely crafted knitted leather handbags for women. Bottega Veneta on the other hand is observed to gain a firm foothold owing to such acquisition activity owing to its effective tie-up with the world famous Gucci brand (Ad Age, 2014). Evaluation of Key Strategic Options Suitability The strategic options generated in the form of advertising and marketing activity on a digital platform is observed to effectively suit the issue of viral marketing and also the potential of operating in the internet medium like use of social media platforms to promote its products to larger consumer communities. Similarly the use of social media networks like Facebook and Twitter is also observed to help to largely create social awareness for the brand in the light of growing counterfeiting activities. Further the use of agile supply chain strategy is also taken to help in creating the potential of Bottega Veneta to be larger customer responsive in meeting their needs in a recessionary environment. Acting based on an agile supply chain framework would help in reducing the inventory and sourcing cost and which in turn would help in lowering the cost of the merchandises offered. Acceptability Acting based on the above mechanism would contribute in creating a customer responsive work culture in the organization which in turn is taken to help in enhancing its profitability and market share relating to its competitors. Further the ability to work based on a social media platform would also contribute in enhancing the brand reputation of the company and in reducing the risks emanating from the counterfeit regime. Feasibility The ability of the company to rightly differentiate into newer product categories reflecting exquisite craftsmanship is made possible through the existence of skilled human resources. Further the company gains the ability to effectively collaborate with other designer experts and also the expertise to incorporate digital advertising and marketing channels to market its products. Comparison of Strategic Options with Current Strategy The current strategy of Bottega Venita is observed to focus more on the expansion of stores along the different regions reflecting exquisiteness and aesthetics that in turn build on brand reputation. Further the company also focuses to enhance its brand name and reputation through the use of potential craftsmanship in the production of logo free leather bags. The new strategy focuses more on the use of viral and multichannel marketing and promotion environment and also the use of agile supply chain framework to reduce the inventory and logistics cost for cutting down on the product prices. Conclusions and Recommendations The paper reflects on the case of an Italian premium luxury brand, Bottega Veneta that essentially focuses on the production and distribution of luxury commodities relating to both apparel and non-apparel category like perfumes, watches and leather handbags for its women customers. It reflects on the current strategies used by the company to market its products and brand name to the target customer force and also analyses its strengths and weakness based on emerging opportunities and threats. Potential recommendations are generated and also new strategies like use of viral marketing and agile supply chain to enhance the business situation. Reference List Ad Age, 2014. Gucci buys leather brand Bottega Veneta. [Online] Advertising Age Available at: HYPERLINK "http://adage.com/article/news/gucci-buys-leather-brand-bottega-veneta/15103/" http://adage.com/article/news/gucci-buys-leather-brand-bottega-veneta/15103/ [Accessed 15 August 2014]. Bottega Veneta SA, 2014. Craftsmanship. [Online] Bottega Veneta SA Available at: HYPERLINK "http://www.bottegaveneta.com/experience/us/pages/our-world/hand-of-the-artisan/" http://www.bottegaveneta.com/experience/us/pages/our-world/hand-of-the-artisan/ [Accessed 14 August 2014]. Bottega Veneta SA, 2014. Our Heritage. 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