Fashion Brand Management Rizla - Essay Example

Fashion brand management: Rizla Table of Content Serial Number and Topic Heading Page Number 0 Executive Summary 02 2.0 Introduction 03 3.0 Analysis of Current Position 05 3.1 Level of Brand 07 3.2 Interbrand 07 3.3 Product Life Cycle 09 4.0 Brief 11 5.0 Conclusion 13 6.0 Bibliography 14 1.0 Executive Summary Brand, is a word synonymous of a product one comes across through advertisements. It is a brand that impresses the senses. Brand is the name or symbol used to identify a product. Ferrari is a brand that one associates with flashy cars. Similarly, Levis Strauss is the brand of popular jeans worn by young and old the world over. A brand can add significant value to a product when recognised and has a positive association in the mind of the consumer. This is what is commonly referred to as Brand equity. Brand equity stands for financial gain, brand extension, and buying attitude (NetMBA, 2006). According to David Aaker (author of BRAND PORTFOLIO STRATEGY, 2004), a pervasive lack of understanding of the role of brands in a company's success is wreaking havoc on companies' bottom lines. Subsequently, many companies fail to make the most of their brand portfolios. This trend can be reversed to revitalise brands to support growth. This brand portfolio strategy helps: 1. Recognise which brands hold the key to future business success 2. Minimise clutter by clarifying the distinct role of each brand, and differentiating them from competition 3. Anticipate trends and recognise a brand irrelevance in the marketplace 4. Learn to energise brands 5. Know when and how to extend a brand into another product category, or a premium or value market (David A. Aaker, 2004). In December, Rizla held an exclusive gig by a five piece Brazilian electro-rock band called CSS. The Rizla-inspired event also featured a special guest performance by the legendary Jarvis Cocker. The objective was to position Rizla as an innovative brand, targeting the 18-24 year olds; a strategy invoked to identify Rizla as a brand, with the music crazy younger generation. This is brand equity (Exposure, 2006). 2.0 Introduction Interbrand is a leading brand consultancy that was founded in London in 1974. Interbrand combines a rigorous brand strategy and analysis of management consulting practices with the entrepreneurial and creative spirit of branding and design. It offers a comprehensive array of consulting services that help in the creation, enhancement, maintenance and valuation of a client's most valuable asset, their brands. Unlike other brand value league tables, Interbrand relies not on just a single source for evaluating a brand, but refers to a wide array of primary and secondary sources that are applicable to each brand, such as Datamonitor, ACNielsen, Gartner, and Hall & Partners. Moreover, Interbrand engages its network of brand valuation experts from offices around the world to ensure that the league table considers the brands from a global perspective (Interbrand, 2006). Brands are tools used to project a product in the minds of the consumer. They exist mainly by virtue of a continuous process concerned with delivering a cluster of values, interpreted and internalised by customers in such a way that it enhances its existence. The feedback that an organisation receives determines the likelihood of brand success (De Chernatony, Ch.2, p.14, 2000). An important aspect in managing contemporary fashion business is supply chain management. Once an order is placed, the manufactured product needs to reach the designated store or consumer. Retail environment constantly undergoes changes, and unless the product reaches the wholesaler or retailer on time, it could have severe economic and consumer pressure. Market responsiveness and meeting the demands of the ultimate consumer are major reasons for success in fashion. The fashion industry ranks fourth largest in the UK today. The end of the world war changed the face of the textile industry in this country, and since the Industrial Revolution, manufacture, wholesale and retail of clothing has been important to Britain as a source of income. The nineteenth century saw Britain expand its textile manufacturing base to become a world leader, leading industry leaders to quote, "Britain's bread hung by Lancashire's thread" (Janet Bohdanowicz and Liz Clamp, Ch.1, p.1, 1994)1. 'Fashion is inextricably linked with social trends; it means not just clothing, but all accessories as well. The term 'Fashion' is reflected in the definition stated herewith. Fashion is a way of presentation which is temporarily adopted by a discernable proportion of members of a social group, because that chosen behaviour is perceived to be socially appropriate for the time and the situation'. (Sproles, quoted in Curran 1991) This definition highlights two of the distinguishing features of fashion its social role and its transience and both of these have important implications for marketing (Janet and Liz, Ch.1, p.4, 1994)2. 3.0 Analysis of Current Position Marketing plays an important role in the success of a business, and is equally important in the field of fashion. This can be seen in the number of fashion courses that incorporate marketing or business in their fashion retail modules. The growth of fashion in the UK has been rather sporadic and spontaneous, harbouring on individual brilliance and innovation, be they designers, such as Mary Quant of the 60s, manufacturer Laura Ashley in the 70s, or retailer like George Davies in the 80s (Janet Bohdanowicz and Liz Clamp, 1994). Factors that differentiate fashion marketing from other marketing types can be broadly classified into three areas: 1. Strong influence of environmental pressures 2. Time constraints 3. Role of buyers Two issues come to mind that affects the industry are, international business environment and the industry's structure. The momentary nature of fashion keeps marketers operate within time constraints. The fashion industry changes with the change of season: autumn/winter, and spring/summer. There are mid-seasons such as Christmas/cocktail and cruise/swimwear collections (Janet Bohdanowicz and Liz Clamp, Ch.1, p.5, 1994)3. Until the middle Ages, Europe didn't have much of a fashion trend to boast about. The emergence of royalty, cities and states, to the accompaniment of international trade, saw the distinctions between traditional and aristocratic clothing. As political and economic power moved from one region to another, the local influence began to show in the clothes worn by those who discarded outdated clothes for the current (Maria Constantino, Ch.1, p.6, 1998) An aspect of marketing that is often misunderstood and frequently overlooked is product branding. Branding is not just a name, but a powerful marketing tool that strives to reach the conscious of the consumer. Branding is a way to achieve and maintain a loyal customer base in order to achieve the highest possible returns on an investment. Branding incorporates the four 'Ps' of marketing, namely, product, price, promotion and place. The four 'Ps' attempt to persuade customers that the added values are in more than one way unique to it and thus cannot be imitated easily. Because customers recognise and appreciate this uniqueness, they are willing to pay a higher price for it. In the fashion industry, a number of popular brands have succeeded in transforming themselves from a common product to a powerful, long-lasting brand. According to Interbrand, of the world's top 50 brands, seven are from the world of fashion and fashion-related products. Chanel No.5, Levis, Estee Lauder, Marks and Spencer, Gillette, Rolex and Dunhill, are the seven top brands of the fashion world today. Interbrand reckons these brands to be strong for a number of reasons: 1. They are brand leaders in the respective categories of products 2. They are long-established brands that command consumer loyalty 3.1 Level of brand Brands encapsulate a whole range of complex and multi-faceted information to bring to consumers, through a name and logo, underpinning images. Simply put, there are five levels to the development of a brand. Primarily, a brand is an identifying mark to distinguish one product from another. This level is characterized by a simple implicit statement of a product specification, such as Diesel is a favourite among the young; Levis is made of denim, and so on. The second level goes a step further to indicate product assurance. Diesel and Levis have the stamp of quality, and is the current trend-setter and so on. The third level indicates the moment of choice; seeking passion or adventure Look no further, Diesel or Levis at your service. This is the step where the brand identifies with the user. The fourth step is the social connection between the brand and consumer. The creation of an identity is what this step is all about. A teen in a Diesel is seen as one with style or a trend-setter. The fifth and final level is the emotional involvement. This is when a brand is not just a product, but a personal identity. I am a die-hard Diesel fan. Catch me wearing anything else. If it's Diesel, it's got to be me (dobney.com, 2005). 3.2 Inter-brand Founded in 1974 in London, Interbrand has come a long way to set the standards for brand equity. The company has challenged standard brand conventions by pioneering new brand solutions that the world at large wants and needs. Their unbiased professional workforce serves clients globally with over 30 offices in over 20 countries. Working in unison with their clients, Interbrand employs strong strategy and analysis with world-class design and creativity. Interbrand's services include brand analysis and valuation, strategy, naming and verbal identity, corporate identity, packaging and retail design, integrated brand communications and digital branding tools (Interbrand Glossary, 2006)4. Among their many reputed companies are, AT & T, BMW, Cartier, eBay, Ford Motor Company, Gillette, Honda, IBM, Rizla, and so on (Interbrand, 2005). Fashion marketing differs from normal marketing by the level of internationalism that exists within the industry. Internationalism allows garments to be exported as fashionable products overseas, and in some complex cases as in the case of Benetton, a large, vertically integrated operation can be considered. International involvement exists in various forms throughout the fashion industry, as Tepstra (1987)5 defined international marketing as a marketing activity performed across international boundaries. Levis approaches international marketing through casual exports, a result of over-capacity (Janet Bohdanowicz and Liz Clamp, Ch.4, p.42, 1994)6. In the international context, social history offers an important insight into consumer buying behaviour, since the cultural background of other countries offer important inputs to style and likes. International brands such as Wrangler and Naf Naf are worn differently by an Italian or a Scot (Janet Bohdanowicz and Liz Clamp, Ch.2, p.14, 1994).7 For decades the value of a company was measured in terms of its assets. This has now changed to one of customer preference. The wave of mergers and acquisitions pushed prices way above what was anticipated. Companies were sold and bought for 3-10 times their actual cost. What the public saw was just the buying and selling of machinery and inventory, little did they realise, that companies were taking over brands. This perspective has changed. People associate purchase and sales with brands. Awareness has caught on. People see these mergers and acquisitions as purchasing positions in the mind of the consumer. Brand awareness, product image, brand trust and reputation created over years of painstaking efforts are sold for huge cash transactions. Brand has the capacity to generate such cash flows (Jean-Nol Kapferer, p.3-4, 2004). Positioning refers to the most discriminating quality or benefit a product has for the consumer in terms of competition and market share. A brand such as Nestle has a strong market presence and is known globally. So too is the case of Levis. Their market share could be anywhere between 40-50% overall. This is strategic image at its best. Levis, BMW, Nestle, Harrods, Ferrari are all brands that consumers identify with reliability, quality, and value-for-money. These brands cover the top positions in the mind of the consumer. There is no getting away from the fact, that for any company or brand to do well, they need to assess their competitor's strength and weaknesses first. What does a consumer look for in a product Reliability, quality, pricing, product stability, and image are features that consumers look for in a purchase. Any company that seeks to gain a fair share of the market must be able to assess their competitor's positives and negatives, to provide their customers with something that is unique to them alone. 3.3 Product life cycle Fashion is essentially a social phenomenon. Fashion transcends the basic human needs to provide a person(s) with a statement of his/her identity and affects how he/she relates to others both within a given group and within the society they live in. The study of consumer buying behaviour in the context of the fashion industry is synonymous to the product's life cycle. This trend needs to be understood completely by marketer to develop a successful marketing plan. While business strategy is related to a specific product, market and business, designing strategy is based on Product Lifecycle. The lifecycle follows an initial curve, growing slowly, and then hits the fast track of consumption, before making a quick exit. Most products follow a similar lifecycle, with a few having the ignominy of a shorter life cycle. Fashion is one among them. Apparel and other fashionable products, such as electronic goods, interior design, health & beauty practices, are some others. The early stage of the lifecycle is a period of testing. A handful of customers may venture (1-3 per cent of the population) to experiment or experience the innovation; this is followed by the 'also tried' category of consumers (13-15 per cent). They are the opinion leaders or trendsetters, as they are commonly referred to as. Slowly, a larger section of society takes a liking for this innovation, and the product move into the mainstream of fashion. This clan could be in the region of 30-35 per cent of the total population. The product is suddenly acceptable to the masses, when, the leading edge consumers are faced with the prospect of testing a new entrant. The earlier product begins to decline in demand and face the fate of numerous others, become obsolete. To gain extra margin, mainstream companies and followers aim to enter early in the lifecycle to achieve better results. Debenhams, the leading department store chain in the UK, moved 75 per cent of its private label merchandise, including 25 per cent contributed by designers at Debenhams, to its customer base to offer a well-designed, unique and stylish product earlier in the fashion cycle. This move gives Debenhams the advantage of quoting higher prices than most competitors. Only 25 per cent of its product range is contributed by international brands that can also be found at other department stores and on the high street at a standard market price (Imagesfashion.com, 2005). Franchise and Support: In a highly competitive world of fashion retailing, independent retailers find it difficult to compete with established local and international chain stores. The franchise proposal of fashion brand Tally-Weijl in Ireland has shifted the balance back in favour of the independent retailers, as they are offered guaranteed margins, removal of stock, minimising risks and providing ongoing merchandising support. Dermot Fadden of master franchise of Tally-Weijl says that the success to the franchise lies in its ability of the parent company to respond quickly to changes in the fashion world. He went on to say that, because the company produces eight main collections a year rather than the traditional spring/summer and autumn/winter collections, the retailer always has something fresh on the shelf for customers, who appreciate the added variety (Franchise options, 2005). 4.0 Brief The Interbrand model of brand strength, a part of its valuation methodology, is a useful framework to consider the performance of a brand. An unbiased reflection on the following seven points is an indicator of the strength and weaknesses of a brand. The seven components of brand strength in the Interbrand valuation model are: 1. Market: Valuation is about 10% of brand strength. Brands in markets where consumer preferences are more enduring would score higher. A McDonalds or a detergent like Lux would fare better than a perfume or clothing brand, as the latter are susceptible to the change in consumer preference. 2. Stability: Valuation is weighed at approximately 15% of brand strength. Long-established brands in any market would normally score higher, because of the depth of loyalty they command. Levis or Wrangler would outscore Diesel. 3. Leadership: Valuation is in the range of 25% of brand strength. A market leader is more valuable for its awareness, positioning and market share. Because it is aware of its competitor's strengths and weaknesses, it has the power to manipulate to its advantage. A simple example here would be to quote Coca-cola against PepsiCo on a global basis. 4. Profit trend: Like the market, valuation is again around 10% of brand strength. The long-term profit trend of a brand is an important measure of its ability to remain contemporary and relevant to consumers. In fashion, change is the secret to success. 5. Support: Its 10% again of brand strength. Brands that receive consistent investment and focused support usually have a much stronger franchise, but the quality of this support is as important as the quantity. We saw the effort taken by Tally-Weijl to support financial growth and minimise risks. 6. Geographic spread: Valuation is a strong 25% of brand strength. Brands that have proven international acceptance and appeal are inherently stronger than regional brands or national brands, as they are less susceptible to competitive attack and therefore are more stable assets. 7. Protection: Valuation is just around 5% of brand strength. Securing full protection for the brand under international trademark and copyright law is the final component of brand strength in the Interbrand model. With so many innovators around trying to sneak imitations into the market, international trademark and copyright laws go a long way to protect the hard work done by the original company. Interbrand does not vouch this above theory completely. Consumers have different tastes and this has great relevance in determining the success of a business. However, the above theory has made a lot of difference to business houses around the globe in establishing their brand strength (BuildingBrands, 2007). 5.0 Conclusion Fashion companies face growing challenges to attract and retain new customers in the face of the competition from new products and markets. Planning involves not only the creation of a product, but also a fool-proof system and positive strategy. Whether it is an offensive or defensive strategy depends on the product and the market. Certain points to ponder over are, who are your competitors and what potential do they have Which tools can serve your goals, how and when The demands are numerous. Exploration of market terrain, identification of the right consumer, defining or positioning the product, elaborate market strategies and implement, whew! The list could go on and on. But with proper planning and execution, business can go places (Istituto Marangoni, Master programme in Brand Management, 2006). The branding philosophy in the fashion and luxury goods industry is quite unique and personality based. Famous fashion houses like Christian Dior, Yves Saint-Laurent, Gucci, Versace, and Giorgio Armani were built on the personality of their founders. As design is the successful ingredient of fashion and luxury apparel, the individual style of these designers are crucial to creating and sustaining fashion brand strategy. It is these unique designs and patterns that reflect the personality of their creator that gives an identity to the brand and helps to differentiate it from the crowd (VentureRepublic, 2007). 6.0 Bibliography 1.0 NetMBA, Brand Equity, www.netmba.com/marketing/brand/equity/ 2.0 David A. Aaker, Brand Portfolio Strategy, creativematch: New Book by Acclaimed Branding Authority, www.creativematch.co.uk/viewnews/89417 3.0 exposure-Rizla's Inspired-By, www.exposure.net/articles/106.html 4.0 Interbrand, Best Global Brands 2006, 5.0 De Chernatony, From Brand Vision to Brand Evaluation.: strategically building and sustaining brands, 2000 6.0 Janet Bohdanowicz and Liz Clamp, Fashion Marketing, Routledge, 1994 7.0 Maria Constantino, Fashion Marketing and PR, BT Batsford Ltd, 1998 8.0 Market Strategies, About Brands, www.dobney.com/Strategies/brands.htm 9.0 Interbrand Corporation | Global Branding Consultancy | Brand... www.interbrand.com/ 10.0 Jean-Nol Kapferer, The New Strategic Brand Management: Creating and Sustaining Brand Equity Long Term, Kogan Page, 2004 11.0 Images fashion forum 07, Imagesfashion.com, lifecycle-led strategies, www.imagesfashion.com/back/strategy/lifecycle_jan05.html 2005 12.0 Franchise options, Irish Marketing & Advertising Journal Ltd, www.franchiseoptions.ie/features/guid=0ebc2fc9-7d1b-4493-ac63-25e71bfc68a2 13.0 Brand Valuation by Interbrand, BuildingBrands unlocks your potential, Did you know Brand valuation: The seven components of brand strength, www.buildingbrands.com/didyouknow/11_brand_valuation.php 2007 14.0 Istituto Marangoni, Master programme in Brand Management, www.istitutomarangoni.com/marangoni_master_29.htm 15.0 VentureRepublic, The Brand Philosophy, Giorgio Armani - the ultimate fashion brand, www.venturerepublic.com/resources/Giorgio_Armani_-_the_ultimate_fashion_brand.asp Read More