Fashion Promotion - Dior - Essay Example

?Annie Referral Fashion Promotion Executive Summary The fashion industry of UK is a very lucrative segment that contributes about ?21 billion in UK economy. Fashion has always been a great success story for the British. Moreover, London has always been regarded as the fashion and shopping hub of the world, so any brand or well-known label would be easily found in the shopping hub of UK. This study includes the analysis of the communication channels, mixes and ways the companies or brands in the perfume segment used and are using to retail their brand identity and position their products. The example of a very well-known luxurious brand has been used throughout the study to assess its communication channels. The existing communication channels used by Dior have been thoroughly studied and also additional recommendation to improve the existing channels and introduce newer ways has also been included in the study. It was found that Dior is very restrictive in selecting its communication channels, so as to maintain the luxurious brand image of the company. Conservative communication channels are utilised by all the luxury product companies, but Dior could utilise a few other channels too to increase its brand recognition without hampering its highly sophisticated and luxurious brand image. Table of Contents Executive Summary 2 Dior 5 Overview 5 Dior Story 6 Brand Identity 6 Consumer Profile 7 Target Customers 7 Positioning Strategies of Dior 7 Present Communication Channels of Dior 8 Communication Channels 8 Dior and its Communication Channels 9 Reasons for their Success 10 Competitor Analysis 11 Competitors 11 Marketing Communication Strategies 12 Relevant Communication Channels 13 Conclusion 14 Recommendation 15 References 16 Dior Overview Dior is a luxury retail brand based in France. The company is named after the founder of the company Christian Dior. Dior mainly deals in clothing, accessories, perfumes, beauty products and also timepieces. Nowadays, women buy perfume according their personality, so Christian Dior also makes perfumes to suit the different personality traits of women around the world. The company mainly targets a niche customer group, such as people from the wealthy class and also the high income groups. Since the global recession or economic depression does not really affect the purchasing power of luxury consumers, so Dior has not felt the sharp punch of economic slowdown (Yahoo Finance, 2011). The strategy of the company is to focus on their product range and infuse creativity and innovation, for offering luxury goods to the customers. The brand generates about 13 percent of its revenue from Perfume and cosmetic segment, as stated in figure 1. In this study we would be focusing on the perfumes segment of Christian Dior. Figure 1 Source: (Christian Dior Group, 2012). Dior Story As we already know Dior is named after the famous fashion designer, Christian Dior, who introduced a new trend of fashion in Europe. He focused on the curvy shape of a female figure and designed his dresses accordingly. Christian Dior had worked under several famous fashion designers and in famous fashion houses before floating his own fashion house. Dior started as a fashion house which focused mainly on clothing for women and also men. The new fashion trend was a major hit in Europe and women in Europe liked and accepted the new trend with open arms. The company then launched its first fragrance under its subsidiary company Parfums Dior in the year 1947. It was named as Miss Dior, after the name of Christian Dior’s sister Catherine. Christian Dior passed away in 1957, but the brand name Dior has become famous around the world. Dior has become a synonym for luxury, elegance, beauty, fashion, and beautiful fragrance. It is one of the oldest perfume houses in the world and has about 135 fragrance base. Dior perfumes are made using these fragrance bases. Christian Dior’s revenue tripled since 1998. The company was bought by Louis Vuitton Moet Hennessy (LVMH) Group in the year 1987. Since then the LVMH group accounts for all the revenue generated by Dior Couture segment. After the death of the owner of Dior, the company was privatised and it entered the stock market in 1991. Brand Identity The brand identity of Dior is best revealed through its communication strategies. The event when Dior launches its new products is really a show time for its consumers and also a great spectacle to see. Dior has always used celebrities like Charlize Theron, Jude Law, etc to present its brand image in front of the consumers. The idea was to create a distinct and extremely fashionable style statement. The aim statement of Dior has always been fashionable and fabulous. It not only focuses on the fragrance for women, but also men. Every collection of Dior has a specific theme, with a classy background. Along with a superb brand identity, the company must also streamline its positioning strategies. Dior has focused on the creating an attitude of self-centeredness, attitude and passion to create a luxurious and elite brand image. Dior fragrance was launched to represent the personality of bold, unique and fashionable women. So the image which the company created for its perfumes not only became the brand identity for Dior but also the identity of several women who used Dior perfumes and beauty products. Consumer Profile Christian Dior focused on the curvy figure of women and introduced new fashion clothing line for women. This focus was mainly on products such as clothes, beauty products, fragrance and accessories for women, which slowly also included men too. Now Dior provides range of men and women products around the world. Target Customers Dior has always segmented their market and accordingly targeted their customers. The company focused on the geographical segmentation of the market. Dior selected the developed countries or wealthier areas such as North America, London, and other parts of Western Europe for launching their products. As Dior was a worldwide popular product, so found recognition everywhere. Dior mainly targeted the working adult women for whom fashion, style and brand was important. Dior perfumes are something which everyone cannot afford, so it was marketed for occasional, special use as well as for regular use by the business women or professionals. Dior perfumes depicted personality and attitude. Positioning Strategies of Dior It was very important for Dior to position its perfumes in the same line with its brand image in the perfume market around the world. The motive behind formulating the positioning strategy was to build a strong, affluent, loyal and fashionable customer base. In case of perfumes, when a woman likes the fragrance of any perfume, she would probably buy it again. A perfume is a very accessible product. The company was sure of the product quality. They knew any store like perfumeries; etc in Western Europe or America would surely sell brands like J’adore. People who do not fall in the category of the target customer group would also buy perfumes in special occasions like Christmas. Moreover, perfumes are always regarded as the best gift for women. So Dior positioned perfumes as an inseparable part of any women’s identity. It has been seen that the UK fragrance market has shown signs of growth, in spite of the economic downturn. It was estimated that the value of the UK fragrance market was more than ?638 million and the average growth rate was about 5 percent (Hines, and Bruce, 2012, Marketing Strategies in a Dynamic Context). The top five companies in the perfume industry control about 62 percent of UK’s fragrance segment. Since 1980s the demands for strong perfumes have declined in UK (The fragrance Foundation, 2011). It was seen that the sales rate had decline by 14 percent in 1998, due to this reason, but the revenue of Dior increased progressively because of its excellent segmentation, right focus on its target customers and proper positioning strategies (Harris, N., 2012, p. 136). Present Communication Channels of Dior As we have already seen that Dior has an excellent brand image in the global market in the perfume industry. The company specially targets the developing countries to capture the affluent class of the society as their customers, so UK was an obvious choice for the company. London being the fashion hub of the world has always being one of the major revenue generating market for Dior. The importance of the communication channels in any company, the major communication channels used by Dior and its contribution towards the success of Dior as a brand is explained below: Communication Channels After the company frames the message to be communicated, the budget to be spent for communication, which is also called promotion, and selecting a perfect blend of communication mix, the company selects the right channel or medium through which the message is to be carried out to the market and the customers. The two most integral parts in promotional or communication activities are the elements of communication mix and the right communication channel. The elements of the communication mix consist of sales promotion, publicity, advertisements, or even personal selling (Iman, 2002, p. 347). The ideas or message of the company is delivered through the communication channels. This involves both encoding and also decoding the message. The channels of communication may be electronic, face to face, or through print media (Smith, Pulford, and Smith, 1999, p. 38). The tasks that needs to be accomplished in marketing communication channel are communication with all the members in the channel, selling the products through the intermediaries involved in the channel, shipping the products if necessary or storing them to make the product available in right time and place, and providing excellent services and products to the customers. Unlike the traditional communication channels, the function of the new channels of communication is not only delivering the message of the marketer, but also doing several other activities too (McCalley, 1996, p. 4). Dior and its Communication Channels Since Dior has been bought by Louis Vuitton, so the principles of promotional or communication mixes are also infused by the company to gain success in the market. The general approach of the companies is to go for mass advertising to increase its sales volume. Television is a very important channel of communication for perfume or beauty product companies, but Dior does not advertise its products on television. Rather the company chooses to publish its advertisement in high profile fashion magazines and newspapers. The advertisements of Dior mainly consist of images rather than aggressive sales ads because the company focuses on loyal and affluent customers. The reason why Dior did not believe in television as a communication channel was because they believed in richness rather than reach of the message and wanted their product image to do all the communication with its prospect customer rather than a sales person rattling off a jingle as advertisement. The focus of Dior was to do promotion or communicate in the same way as the other luxury brands do. They emphasised on publicity and building strong public relation through magazines. For example we can see Christian Dior advertisements on fashion magazines like Vogue, by sponsoring high profile parties and celebrity events, etc. Utilising brand icons in form of celebrity endorsement is also a communication channel used by Dior like the other companies in this industry. Mila Kunis is going to be the latest brand ambassador of Dior. Before this many eminent personalities have been chosen to represent Dior. The idea was to communicate that the famous personalities using Dior perfumes represent the certain characteristics or personality traits which those women also have who use Dior perfumes. The company is now focusing on two customer groups to channel its message, they are mainly the existing customers who either buy from the brand store directly or from the popular perfume stores in UK, and the second group is of the young, fashionable and high earning women who like to shop from major shopping houses or stores. Dior also launches additional versions of its existing perfume brands at a little reasonable price to target the second group of customers. It is going to launch Miss Dior Cherie and Addict 2 for the new segment that would probably cover a larger group of customers (Nagasawa, n. d., p. 9-10). Reasons for their Success Brands like Christian Dior focus on the products. Their policy is to create the best products, even if the price is high. The owner of the company never compromised with the quality to grab market share. The target customers for the company are rich and affluent people who can spend money to buy high quality products. It was a very intelligent approach on the part of the company because it is very well-know that the purchasing power of affluent class, especially women is not much affected by any form of recession, slow economic condition. Moreover, the channels chosen were excellent and delivered excellent results too because the target customers for Dior are mainly the affluent, who were not interested in products advertised on television for mass customers, rather they are very busy and prefer to read through fashion magazines and buy highly costly and branded products as a symbol of their status symbol. Public Relation is also a major channel of communication for customer loyalty. The customers of Dior were the upper segment of the society, so the influence of these loyal customers on the whole society was immense. The young fashionable women and ladies who aspire to use Dior products, but could not afford would always strive to be in the Dior class of females. Through its effective communication Dior created a unique class of customers for itself. Competitor Analysis Let us discuss about two major competitors of Christian Dior, so as to understand the different dimensions of communication channels used by companies in the perfume industry of UK. There are several competitors of Dior in the global perfume industry and they are also the major players in UK’s perfume markets too, such as Versace, Ralph Lauren, Chanel, Donna Karen, etc. We would select and discuss specifically about two of these competitors and about their communication channels in detail. Competitors Chanel Chanel is another French perfume company, like Dior. Chanel also specializes in haute conture and expensive gowns and ready to wear dresses, luxurious accessories, beauty products and fragrances. The founder of this company was Gabrielle Bonheur Chanel, was famous for her extremely fashionable dresses, jewellery, designs, especially the little black dress. Chanel always portrayed the image of independence and self –confidence of women through her dresses. The company also offers amazing range of perfumes and colognes, among which Chanel no. 5 is the most famous (FirstLook Reviews, 2012). Versace Versace is an Italian fashion house in Milan. It is one of the best international fashion brands in the global market. Versace offers a range of perfumes, especially Blonde, which is a luxurious fragrance recommended for romantic wear. The company is officially known as Gianni Versace S. P. A, was founded by Gianni Versace. The company came into existence in 1972. Versace has a very high profile fan following. Most of the well-recognised celebrities and eminent personalities are fans of Versace and its products due to excellent quality of the products. Versace has utilised top most celebrities for promotion and many famous faces such as Demi Moore, Madonna, Princess Diana, Britney Spears, etc had represented Versace (Versace Perfume, 2012). Marketing Communication Strategies The marketing communication of Chanel was developed according to the French luxury brand structure which included the brand image, product and the social values. Perfumes are the money makers for Chanel. Chanel developed magazines and books for its customers to provide in-depth information for the customers and enthusiasts. Advertisements in top fashion magazines such as Vogue were also an important communication channel followed by Chanel. Chanel also utilised the audio visual medium such as television for promotion. Chanel also sponsors fashion shows and famous fashion events (Constancias, n.d.). Versace has mainly focus on including very experienced and creative designers to work for their label. They have targeted the celebrities and famous public figures to sell their fragrance and the other products manufactured by the company. Like Dior, Versace’s target customers are also the high profile rich and influential people who can afford luxury items for daily and occasional usage. Celebrity endorsement was a very important form of communication channel on the part of Versace because the higher income group of UK would follow the latest fashion and fragrance through the stars and celebrities. Relevant Communication Channels It can be said that the brand image Dior has created among its customers and the positioning strategies the company has developed to retain its brand image is unmatchable. This is also a reason why Dior has reached to such a position where even Christian Dior would not have dreamt of taking his company to. Since Dior is a luxury brand, not for everyday and everyone, so the product quality, the fragrance played the major role in its success, but the promotion channels also plays an important role. Dior has utilized conservative communication channels for their promotion, as the company wanted to maintain their standards and focus on a particular class of customers. Dior was not positioned for all; it was for a niche market. High-end fashion magazines and sponsorship in high-profile fashion events or shows were the major communication channels. Internet is also being used for promotional activities, but perfume is not such a product whose effectiveness can be explained through internet advertisements, blogs or through websites. Dior should utilize the concept of integrated marketing communication and formulate strategies to develop its communication channels. The objectives of integrated marketing communication is to develop new consumer base, increase the footfalls in the store, increase the product sales and revenue, and retail the brand image, as in case of Dior, a luxury, sensuous and fashionable brand. Communication channel selection not only includes selecting a medium to transmit the message to customers, but it also includes the motives behind such decision (Easey, 2008, p. 221-224). Advertisement plays a very important role in brand recognition. If the company would not advertise in order to maintain its luxurious image, then even the wealthy and high-income group of customer segment would not be able to recognise the brand. So Dior has to increase the frequency of its advertisements by opening up its own retail stores in the most famous shopping centres and shopping malls around the world. The customers purchasing from a Dior brand shop would be having ample purchasing power to afford it, so in this way the company would increase its presence in the market. Unlike Versace or Chanel, Dior’s purpose is to infuse luxury buying in the customers. They do not strictly restrict themselves to the celebrity class only. Even a young business woman earning good money can afford a Dior perfume easily, but it may not be the case for Versace or Chanel. As we see that a new segment of young, independent, sensuous segment of business class women could be found in the market. This customer group is brand conscious and are willing buy luxury products to establish their identity among their social groups, though they might not have similar purchasing power like the affluent class. Dior can launch a product line which would focus on this women group. The fragrance would suit their lifestyle, so the fragrance has to be sweet, long-lasting, and also such that it could be worn for evening parties. The price would be little less than a usual Dior perfume. This would be a very important initiative to tap a new segment of customer group. After all Dior is a profit making organisation and this could be a way to retain a luxurious brand image, infuse luxury buying habits among more and more customers and increase profitability. Conclusion This study is regarding the communication channels utilised by a famous perfume brand called Dior. Dior is one of the most famous fashion houses from France which started its journey from making fashionable ready to wear dresses, accessories, perfumes and other luxury items for women and men. From the very beginning Dior’s target audience has been a niche group of customers, who have high purchasing power and are influential, rich and fashion conscious. That is the reason why the company avoided the communication channels used for mass marketing such as television. Dior conveyed its message through famous fashion magazines, special edition books dedicated especially for Dior, advertisements in fashion events and sponsoring in the celebrity studded events. There are various competitors of Dior in the luxury perfume market, such as Ralph Lauren, Versace, Chanel, Lomani, etc, but a comparative study of Versace and Chanel has been included in the study to show the position and communication channel utilised by the competitors of Dior. Dior has an excellent brand image and the company have to streamline its positioning to retain its fabulous identity in the luxury perfume market. Since the mission of the company was not only to sell excellent products to the wealthy class but also to infuse luxury products purchase habits in other customer segments too. Dior should also focus on those other customer groups and offer products for them. Recommendation It would be recommended that Dior must develop a strong online image too along with the physical stores. Online image though helpful for clothing and accessories, many not be fruitful in the perfume segment. Yet the brand image can be developed and information regarding new products from Dior could be transmitted through the website of Dior. Secondly, developing blogs and letting the customers write their Dior experience would also be an innovative step. The affluent class and the wealthy class nowadays are very much involved writing down their own blogs. Thirdly, Social networking such as Twitter is used by most of the celebrities, so it can be utilized as a communication channel for establishing a new generation Dior brand image. The current communication channels of Dior are mainly the fashion magazines. Even the high end business magazines can be utilized for advertisements, since Dior is approaching the new business class women. Dior can utilise its fashion events to promote its fragrances too along with other products. Fashion events are visited by celebrities and affluent people and a Dior perfume stall would do good business and also gain recognition (Jobber, and Fahy, 2008, p. 270-271). References Christian Dior Group, 2012. Combined Shareholders’ Meeting. [Online] Available at: < http://www.dior-finance.com/en/pdf/2012_ag_slides_en.pdf> [Accessed 6 August 2012]. Constancias. No date. Chanel [Online] Available at: [Accessed 6 August 2012]. Easey, M., 2008. Fashion Marketing. 3rd ed. New Jersey: John Wiley & Sons. FirstLook Reviews, 2012. Chanel Perfume – What Makes Chanel So Desirable? [Online] Available at: < http://firstlookreviews.org/chanel-perfume-what-makes-chanel-so-desirable/> [Accessed 6 August 2012]. Harris, N., 2012. Business Economics: Theory and Application. 2nd ed. London: Routledge. Hines, T., and Bruce, M., 2012. Fashion Marketing. 2nd ed. London: Routledge. Iman, A. H. M., 2002. An Introduction to Property Marketing. Kuala Lumpur: Penerbit UTM. Jobber, D., and Fahy, J., 2008. 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