Burberry's Strategic and Marketing Elements - Essay Example

?Running Head: BURBERRY CASE STUDY Burberry Case Study Submitted by: XXXXXXX Number: XXXXXX XXXXXX XX – XX – 2010 University of XXXXXXX Table of Contents Table of Contents 1 2.0 Environmental Factors: 2 2.1 Burberry’s PEST 2 3.0 Market Segmentation: 4 4.0 STP and Burberry: 4 5.0 Marketing Mix: 6 References 10 1.0 Introduction: Burberry has been in the industry for a few years now and has slowly yet steadily made its name within the industry. This report aims at identifying various strategic and marketing elements of the company and to discuss the company’s current position. The report will firstly include a discussion of the environmental factors impacting the company’s marketing attempts, followed by a discussion of the market segmentation and use of the STP principles within Burberry. The report will also touch upon the company’s use of digital marketing and will discuss in detail the marketing mix of the company. 2.0 Environmental Factors: One of the most effective manners of discovering the environmental factors that impact a business is to run a PEST analysis for the company. The PEST analysis details four important external factors that impact a business (Jobber, 2009). These include the political, economical, social and technological factors (Kotler, Kotler on Marketing: How to Create, Win, and Dominate Markets , 1999). Analysing these factors provide a chance to gain a clear idea of the various external factors impacting the strategies and marketing of the business. 2.1 Burberry’s PEST In terms of the political factors, it is seen that Burberry is faced with issues in terms of the overall competition and also in terms of the various industry specific rules and regulations as well as the inter country attitudes and relationships. The competitive regulations that the company faces is also high. Considering the economical factors, it is clear that the company is a luxury brand for people across the world. With the high levels of recession being faced by economies across the world, it is clear that the company’s marketing attempts are also impacted. Firstly, the company’s products like a Burberry Prorsum cropped leather aviator jacket costs anywhere between GBP 800 to GBP 2000. It is evident that the company is more of luxury fashion. With the recession being faced in the current times, the company has clearly recorded a number of losses in various countries. This clearly has a major impact on the amount that the company can invest into the marketing efforts in the markets (Kotler P. , Keller, Koshy, & Jha, 2009). In terms of the social factors, it is evident that the prices have had a major impact on the overall spending of the customers on the designer clothing. It is clear that the company has made a major impact on several people and the customer loyalty leads people to save money and sacrifice on holidays to buy the designer clothing. This clearly provides the company with a strong chance to spend on their marketing efforts to target these customers in particular (Jobber, 2009). Finally, the technological factors have had a major role in the overall success of the company’s marketing efforts. With the newer technology and better tools for marketing the company has been able to effectively utilise these tools and to target the markets more effectively. On the whole the company’s marketing is affected greatly by the economical, social and technological factors to a great extent. It is clear that the company clearly has a strong marketing strategy currently which takes into account all of these factors. 3.0 Market Segmentation: Market segmentation is a crucial part of all marketing strategies and to a great extent impacts the overall business to a great extent (Evans, Foxall, & Jamal, 2009). Market segmentation allows the company to group customers into different groups with similar needs and also groups to determine how to serve each group (Jobber, 2009). Here the main aim is to identify the needs of the customers and to effectively in a more effective and profitable manner serve all customers. In terms of Burberry, the best option for the segmentation will be to use demographics and socioeconomic characteristics. Here grouping the customers in terms of the demographics will help the company identify the customers based on the age, household income and also other factors like the social class (Evans, O’Maley, & Patterson, 2004). This will help the company gain a better view of the behaviour in relation to each group. The second segmentation of the customers can be on the basis of socio economic characteristics. Burberry being a luxury product, this is a crucial segmentation for the company. Here the lifestyle of the customers, price sensitivity and also brand preferences make a major difference to their choice of products. 4.0 STP and Burberry: Segmentation, Targeting and Positioning (STP) form a very essential three step process of the marketing process. These steps form a basis for marketing activates (USC Marshall, 2011). It is essential to gain a brief knowledge on these to be able to understand their importance in marketing process. Segmentation: This step involves researching to find out what kind of customers and consumers exist. Thus, the needs are different for different customers and a company cannot accommodate all the demands into one product. Segmentation is not a simple decision and in a number of cases it requires the companies to take extremely tough choices. Targeting: This is where the companies target one or more segments. The choice of the target markets is based on a number of factors. This includes analyzing the existing segments that are catered to by other manufacturers. Positioning: This involves the implementation of the previous section, i.e. Targeting. One of the best examples of this is of Apple Computers. The company has created a brand image for itself by high number of advertisements. It has positioned itself in the markets as computers for ‘non geeks’. It is clear that Burberry has considered all these aspects and has been able to effectively change the segmentation to meet the changing needs of the markets, and also to keep in track with the issue of recession. The company has used the concept of STP and its principles to effectively overcome the issues due to the recessionary period. The diagram below provides a clear idea of the STP process. 5.0 Marketing Mix: One of the most essential concepts of marketing is the Marketing Mix. The marketing mix, also called the marketing tactics, includes the basic elements and main components of marketing (Kotler P. , Keller, Koshy, & Jha, 2009). These include the four P’s, i.e. Price, Place, Product and Promotion. The newer version of the marketing mix however includes other elements like the people, packaging, and physical evidence. 5.1 Product Managing an effective and profitable product line is not an easy task and it requires a lot of expertise, analytical thinking and a good knowledge of customer preferences. It is also essential to effectively eliminate the issues involved in the product mix strategy (Kotler, Kotler on Marketing: How to Create, Win, and Dominate Markets , 1999). Burberry has a strong and well developed product line which the company currently provides to the customers. This variable to a great extent is the secret of the successful marketing of the company. 5.2 Price The factors influencing the customer’s price assessments have a profound effect on the pricing policy of a company. It is the most important and powerful factor. This is because it has an effect on the other external factors as well, such as the price of competitor’s products, demand and supply of goods, channels of distribution, etc. (Jobber, D and J. Fahy, 2003) As the decision making process varies depending on the problem that requires a solution, the customer attitude towards pricing will also vary based on that (Jobber, 2004). In the case of products that are very expensive, the decision making process is lengthier and various factors other than price are also taken into account. Quality and reliability are given importance. Consumers are willing to pay a high price for a product that comes with a warrantee or a guarantee for a period of time (Evans & Moutinho, 1999). Here the company deals specifically with high end products and expensive products as it is a luxury brand. 5.3 Place It has become inevitable that companies have to choose a combination and not just stick with one channel. A number of factors play an important role in the selection of channel strategy. In the case of Burberry the company is a luxury products company and hence the kind of place plays a major role in the overall business and customer experience (Kotler, Kotler on Marketing: How to Create, Win, and Dominate Markets , 1999). Burberry has used this variable to its benefit and has been able to effectively cater to the customer needs through its excellent stores. 5.4 Promotion The last element of the marketing mix is promotion. Promotion here simply refers to the activities undertaken by the company to market their products. Here it is evident that Burberry has used these elements to a great extent and the company has been able to effectively market its products to the customers across the world. 6.0 Burberry and Digital Marketing: Burberry has been one of the few companies to adopt digital marketing as a main source of promotion. The company has been able to effectively keep in track with time and has been able to not only adapt the fashion to the changing tastes but also adapt to the growing use of technology and the new media marketing as well. The company uses a number of different digital marketing tools for its promotion activities and to a great extent this has proved to be very beneficial for the company. There are numerous benefits that the company gains from the use of digital marketing tools. Firstly, the target market for Burberry are the rich and affluent and people who are focused on fashion trends. These people tend to be good users of the internet (Evans, O’Maley, & Patterson, 2004). Hence this medium of promotion proves to be the most effective in meeting the target segments of the company. Also the digital marketing tools used by the company help in better targeting to a wider range of people across the globe as well. One of the major disadvantage of this form of marketing is that it is focused more so on a niche market (Evans, Foxall, & Jamal, 2009). The company tends to lose out on a major number of customers who prefer the traditional methods of marketed products. However this is relatively a much smaller number of customers and hence the overall success of the digital marketing is much higher. 7.0 Conclusions: In conclusion it is clear that the company has been able to effectively participate in the markets and has been able to be adapting to the changing times and has been able to effectively market its products to meet the needs of the customers. Burberry is an excellent example of a company which has dealt with the recessionary period and has been able to recover well catering to the customer needs effectively. References Evans, M. M., Foxall, G., & Jamal, A. (2009). Consumer Behaviour. Wiley. Evans, M., O’Maley, L., & Patterson, M. (2004). Exploring Direct and Customer Relationship Marketing. London: Thomson Learning. Jobber, D. (2009). Principles and Practice of Marketing. McGraw Hill Higher Education. Kotler, P. (1999). Kotler on Marketing: How to Create, Win, and Dominate Markets . Free Press. Kotler, P., & Keller, K. (2008). Marketing Management. Prentice Hall. Kotler, P., Keller, K. L., Koshy, A., & Jha, M. (2009). Marketing Management. Dorling Kindersley. USC Marshall. (2011). Segmentation, Targeting, and Positoning. Retrieved January 11, 2011, from http://www.consumerpsychologist.com/cb_Segmentation.html Read More

 

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