Giorgio Armani Fashion Brand - Essay Example

?Selection of a trend and assessment of its potential as a management opportunity for the Giorgio Armani Fashion Brand Table of Contents: Heading Page No. Introduction 2 An understanding of the Armani’s Brand Values and Image 2 Who are the customers of Armani? 4 Pricing Pandemonium (Group Buying): The Trend to Enhance Sales for Armani 5 Why Pricing Pandemonium (Group Buying) Suits Armani 6 Implications for the Managers 7 Conclusion 7 Recommendations 8 References 9 Selection of a trend and assessment of its potential as a management opportunity for the Giorgio Armani Fashion Brand Introduction: Founded in the year 1975, Armani is one of the most famous Italian Fashion brands that are known all over the world for the quality of their products and innovation of their styles and designs. The Company has been named after the designer, Giorgio Armani who happens to be its founder. The success gained by Armani since its establishment in 1975 reflects in the fact that in only about 3.5 decades, the Company has over 300 stores in 36 different countries of the world with a net worth of more than 3 billion Euros (Blue X Clothing, 2011). Despite the fact that Armani accessories are extremely popular among the elite, it has little customers from the lower and lower-middle class background. This paper aims at identifying a trend employing which, Armani can increase the sale of its accessories among the people from lower and lower-middle class background. An understanding of the Armani’s Brand Values and Image: The weight of brand values maintained by Armani can be estimated from the fact that they are based on the innovative designs and charismatic persona of the founder of Armani and Giorgio Armani has been recently entitled as the “most successful designer” of the world (Blue X Clothing, 2011). “As design is the most important ingredient of fashion and luxury apparel, the individual style of these designers becomes crucial to creating and sustaining the fashion brand strategy” (Roll, 2011). The line of Armani wear is characterized by its flawless tailoring and simplicity of designs. The simplicity that reflects in the Armani designs comes from Giorgio Armani’s observation of common man on the street. The CEO and President of ACNielsen Europe, Frank Martell made a speech in which he expressed his views about the brand value of Armani in these words: Giorgio Armani and Gucci topped ACNielsen’s Global ‘Most Coveted Fashion Brands’ ranking by scoring consistently high responses from online consumers in every part of the world - a remarkable testament to the power and universal appeal of these two luxury fashion brands … Regardless of where they live, when consumers in Italy, China or UAE purchase a Gucci bag or a Giorgio Armani suit they are prepared to pay a premium because they are buying the image the brand represents. In Armani’s case, consumers know they are getting quality, sophistication and style – timeless values with global appeal. (Frank Martell cited in ACNielsen, 2006). The Armani Brand covers a total of five lines of luxury clothing with their own unique accessories including watches and colognes. The main collection of this Brand is the signature Giorgio Armani line which produces accessories for people aged between 35 and 50 years. Armani is the most profligate brand with respect to cost. It primarily caters for the needs of those people that want to buy gowns and outfits like the ones worn by the artists and celebrities of Hollywood when they walk on the red carpet. The largest of all Armani lines is Emporio Armani which produces accessories for young professionals that are somewhere from 25 to 35 years of age. Of all the lines of Armani, this one is the most popular among Armani’s clients. Accessories from the Emporio Armani line are accessible both online and at high end department stores. Needs of the high end clients are addressed by the Armani Collezioni. It includes such accessories as slim fitting outfits and handmade jumpers which are sold in extravagant Armani boutiques and famous stores that include but are not limited to David Jones, Harrods and Harvey Nichols. Armani jeans is the fourth line and happens to be the line with the cheapest accessories which can be purchased in departmental stores. The accessories produced by this line cater for the needs of people ranging from 18 to 30 years of age. Items are fashionable and valuable but obviously not as exquisite as those of the Armani signature line. Armani Exchange line makes accessories for young clients. Items are readily available at affordable prices both online and in departmental stores. It makes accessories in accordance with the seasonal trends and requirements. Items include hooded tops, jeans and jackets. Armani Jeans (Socialite Life, 2011). Who are the customers of Armani? Armani has achieved worldwide recognition and fame as a fashion brand because this company has made a consistent approach to ensure that the style of its products reflects values that far exceed the expectations of consumers of different age groups and cultures all over the world. This was very difficult to achieve in the fickle fashion industry. Consumers in UAE buy clothes made by three main fashion brands, namely Armani, Yves Saint Laurent and Dior of which, Armani is the only fashion brand that has the highest rank for purchase in the future. ACNielsen conducted a global online research in November 2005 in which, data was collected from 21000 consumers from 42 different countries in different parts of the world with a view to assessing the views and opinions of consumers about famous fashion brands. According to the statistics noted in ACNielsen (2006), results of the survey yielded that 11 per cent consumers from India purchased Armani accessories online, and another 38 per cent respondents expressed a desire to buy Armani accessories if they ever became affordable for them. Percentage of internet consumers all over the world that bought Gucci or Giorgio Armani accessories in the year 2005 was 12 while 30 per cent of the global internet consumers said that they hoped that the prices declined in the future a bit so that they would be able to buy accessories from these fashion brands. Pricing Pandemonium (Group Buying): The Trend to Enhance Sales for Armani One of the most useful trends that Armani can employ is “pricing pandemonium”. Pricing pandemonium has great potential as a management opportunity for Armani in the present age when the defaulting nations and currency wars are omnipresent. Creative brands like Armani have a lot to address the changing needs of the consumers. Pricing pandemonium is one of the prime trends that fashion brands can follow in the year 2011 particularly because of an increase in the number of consumers that are in search of special discounts and offers. This is the best time to make new deals and advertise them because news spreads far and wide like fire and with the speed of wind. This is particularly achieved with the help of social media websites like Facebook and Twitter. New deals can be advertised without any cost on social media websites. Many consumers are associated with exclusive groups or networks that are constantly in search of special deals. In addition to social media websites, mobile devices make it convenient for the consumers to carry out the comparison of prices of products of various fashion brands online or make use of dynamic deals right at the sale point. The spending habits of consumers have been altered by the always-on connectivity in many ways. “…whipping out one’s smartphone at the counter, getting the latest deal via GPS, or barcode scanning is well, smart, [a]nd therefore a source of status rather than shame” (trendwatching.com, 2011). The changed consumers’ behavior can be responded to by developing new pricing strategies and business models that are based on group buying. The collective purchasing power of the two billion online consumers is tremendous, only to be aided further by the social media websites and services hosts. Some of the examples of group buying sites that have done good business in the past are Big Lion, Daily Deal and GoNabit. “[I]n September 2010, Chinese group buying site Taobao sold 200 Smart cars in 3 1/2 hours, while in October 2010 Walmart … got the 5,000 'likes' needed to make the deal happen within 24 hours” (trendwatching.com, 2011). Why Pricing Pandemonium (Group Buying) Suits Armani: Group buying is the trend that is most conducive for increasing the number of consumers of Armani fundamentally because it fulfills their desire of getting Armani accessories at affordable rates. In the online survey conducted by ACNielsen in 2005, money was found to be the single biggest hurdle in the way of increase of sale of Armani accessories among the survey respondents. One in every three respondents said that he/she would love to buy Armani accessories if their price was lowered. “Building and sustaining a personality that is relevant and one that resonates with the customer base is one of the most difficult aspects of building a strong brand” (Roll, 2011). Group buying will helps Armani achieve this by addressing the concerns of the respondents because in this practice, accessories are offered to the consumers at rates that are significantly lower than the normal rates but upon the condition that the number of buyers is not lesser than the minimum specified limit. ACNielsen’s survey revealed that finding many people to buy Armani accessories at a low price is not a problem. Implications for the Managers: Adoption of the group buying strategy has a lot of implications for the management in Armani. Management has to play the role of a de facto monopolist when the mechanism promotes a monopolistic structure among them. The group buying operator enables the consumers to optimize on their bargaining power while the business’s nature prefers sale to one large group of consumers over isolated clients. The monopolist management’s group buying pricing strategy is influenced by a demand uncertainty. Until the finalization of price for the consumers, a lot of uncertainty and delays are experienced in the practice of group buying. The delay before consummation of trade leads to utility decay for all parties, and uncertainty coupled with risk aversion (on the part of either party to the trade) leads to further devaluation of the eventual trade. Because buyers anticipate the delay, their willingness to pay during the bidding phase is lowered, leading to a downward shift in the demand curve under the group-buy mechanism. This may well result in some adverse selection wherein the buyers who value the product least (and therefore, suffer the least utility decay) may be attracted to the group-buying market. (Anand and Aron, 2003, p. 1561). Conclusion: Armani is one of the top-most fashion brands that are established in more than 36 countries across the globe. Armani makes everything from clothes to watches and other accessories. The products address the needs of people of both genders and from all age groups. A lot of people fancy wearing Armani accessories but find them too expensive to be afforded. Armani can increase its sales and expand the horizon of consumers by adopting the group buying strategy. Armani can advertise its deals online, preferably on social media websites. Group buying can help Armani reach customers beyond the cost barriers, but it has many implications for the management. Recommendations: 1. The managers should give adequate time to pricing 2. The managers should adopt a proactive approach towards estimating the group demand 3. The managers should make their assessment of all hurdles that might be encountered while executive the plan of preparation and shipment or delivery of the accessories to the consumers should be very objective. References: ACNielsen, 2006, Breaking News: Giorgio Armani and Gucci – the “world’s most coveted” fashion brands: ACNielsen, viewed, 19 August 2011, . Anand, KS, and Aron, R 2003, Group Buying on the Web: A Comparison of Price-Discovery Mechanisms, Management Science, vol. 49, no. 11, pp. 1546-1562, viewed, 19 August 2011, . Blue X Clothing, 2011, Armani, viewed, 19 August 2011, . Roll, M 2011, Giorgio Armani - the ultimate fashion brand, viewed, 19 August 2011, . Socialite Life, 2011, Trending, viewed, 19 August 2011, . trendwatching.com 2011, 11 crucial consumer trends for 2011, viewed, 19 August 2011, . Read More