Referral Fashion Promotion: Gucci - Essay Example

? Referral Fashion Promotion: Gucci Executive Summary The branded fragrance market is highly competitive and Gucci has well managed to survive in thecompetitive market by launching new products both for men and women. The launch of the product is well supported by campaigns which are endorsed by famous celebrities. The brand targets the high end customer who is willing to spend on the product, fragrance. Despite of the economic slowdown the fragrance industry shows no signs of slowing down. Gucci fragrance sector has experienced huge growth and also sees opportunity to grow not only in the developed market but also in the emerging markets. The paper deals with the promotional audit and analysis the component of promotional mix which has been used by Gucci to create a brand name in the market. Current communication channel which are used by Gucci has been identified and critically evaluated providing recommendation to Gucci for future growth and opportunity. The paper ends with a reflective statement stating the learning’s from the paper. Contents Executive Summary 2 Overview of the Brand-Gucci 4 Consumer profile 5 Outline of current communication channel 6 Review of competition 9 Critical evaluation of communication channels 11 Recommendations 13 Reflective Statement 14 Reference 17 Overview of the Brand-Gucci Gucci which was founded in 1921 in Florence, one of the leading luxury fashion brands. The brand manufactures designs and also distributes highly desirable goods like shoes, silk, timepiece, leather goods such as hand bags, luggage, small leather goods and also fine jewellery. Fragrance and the eyewear are distributed under the license of global leader in the eyewear and fragrance sector. Guccio Gucci had opened small leather good company and within few years the brand started to enjoy the success. With time Gucci became a public limited company in 1982 and was managed by son of Guccio Gucci. Gucci was re launched with a mix of innovation and tradition. The creative director of the brand infused the luxury brand with sense of provocation and daring that resonated the brand with the fashion world and also with the celebrities. Gucci received a global success and is known to be the most desirable luxury brand globally. Since 1921 to 2010, Gucci continues to strengthen the values and setting it apart from the competitors through which the brand is able to differentiate its products based on innovation, positioning, modernity, craftsmanship, and heritage along with sophistication (Gucci, n.d). The company first fragrance was launched in 1974, Gucci 1 and since then a series of fragrance has been launched including Gucci 3 and L'Arte di Gucci. The latest fragrance introduced being Flora in 20012 (Fragrantica, 2011). Gucci has different categories of fragrance both more men and women. The division of Gucci group with various other brands a have been highlighted in figure 1. Figure 1: Gucci Group Division (Source: PPR, 2012) Consumer profile Gucci is one of the well known luxury brands and among other product; the fragrance sector of Gucci is highly in demand by the customers and is one of the competitive market in the luxury sector. Gucci has targeted the fashion world along with the celebrities to purchase its perfumes. Gucci perfume ranges from both for men and women. Its latest campaign is based on Flora garden collection, a bouquet of scents which is inspired by the blooms of Gucci Flora pattern. Therefore the consumers purchasing the product are high class people belonging to the fashion world and the celebrities who can easily afford the brand’s product and create a reputation of class in the society. But with time it is not only the high class of the society who prefers the brand or are able to afford it, consumers are even ready to get little luxury. Consumers are more willing to pay a premium price on perfumes which tends to deliver luxury (Dickler, 2011). The latest campaign is a celebration of Gucci women personality. Abbey Lee Kershaw was the celebrity used to endorse the brand and it aims to explore the emotions of every woman (Gucci, 2012). Outline of current communication channel In United States, Gucci is reflected to be a brand pertaining to the category of high fashion. The brand also reflects a sense of seduction pertaining to the different types of luxury merchandises marketed by it. The company communicates with the consumers spread around the world both on an online basis through the use of the company website and similar other social networking portals. In each such reflection the high fashion image of the products is broadly reflected to sustain the high profile and luxurious brand identity of the Gucci brand (Clow and Baack, 2010, p.49-50). Operating on the basis of the social networking platform like Facebook the company focuses to communicate with a large number of people reflecting newer designs and styles brought about in the products. Moreover snapshots and videos of latest fashion and trade shows of the products are rendered by Gucci to help update the knowledge of its consumers along the global marketplace. The company gains popularity in endeavouring to conduct a pioneering activity based on conducting an online promotional campaign through the use of Facebook. The campaign helped the company to gain votes relating to its brand designs and styles rendered in the different product segments. Again the marketing communication practices of Gucci also engulf the increased use of celebrity endorsements where celebrities ranging from the category of cinema, music and pop, and fashion world help to endorse the Gucci luxury merchandises by either wearing them in fashion or celebrity shows or using other types of luxury merchandises promoted by the luxury brand. Moreover in the range of marketing and sponsorship activities the luxury branded company endeavoured to enhance its social responsibility image through the use of collective celebrity endorsement functions where celebrities performed in fund raising events wearing luxury garments rendered by Gucci. Through the above promotional and public relation activities conducted both along the online and physical sphere the company aims to enhance its social and marketing image around the world (Living on the Other Side, 2010). Such types of marketing communication tactics help the company also enhance the brand awareness parameter of the people towards its luxury product base. The entire gamut of marketing communication activities of Gucci contains of different strategies starting from integrating stylish and innovative designs into its luxury product portfolio to sustaining and enhancing on the parameters of product quality and the company’s brand image. Brand enhancement functions are carried out by the company not only relating to its communication functions but also working on to enhance its distribution networks and quality of its produces in a focused manner. On the physical level Gucci to enhance its brand awareness among different levels of consumer groups is found to work through the organising of trade and fashion shows combined with a large expanse of advertising and promotional functions carried out through the use of both broadcasting and print media. Further the company through its different stores and outlets spread along different regions in the local and global marketplace aims to reach a large consumer base. In store promotional and marketing events are carried out in the form of rendering discounts and coupons on certain special occasions and also through the conducting of events leading to sweepstakes that help in creating lot of consumer hype. Moreover, Gucci to enhance the exclusivity of the brand and differentiate it among other competitors in the fashion and luxury world also works in effectively incorporating fashion shows and public relation activities in an enhanced fashion. Organising of attractive fashion shows and other public relation ventures help the company appeal to the minds of niche and elite consumers that demand exclusivity and a differentiated outlook in their different possessions. The above set of activities help the company in repositioning its brand image amidst its competitors to gain and sustain a dominating space in the luxury goods industry. However the range of marketing, promotional and public relation activities conducted both through the physical and online sphere incorporate a sense of transparency that further helps in enhancing the loyalty and trust of its niche consumer base upon the company brand (PPR, 2005, p.24). The marketing and promotional functions carried out by Gucci whether at the physical or at the online level work to render exclusivity by means of the innovative designs and creativity rendered by its designers in the different products whether belonging to clothing or other non-apparel merchandises. Innovative and controversial advertisements continue to fill up the promotional and marketing basket of Gucci thereby calling for mass consumer attention to the products and brand. Negative publicity is also welcomed by the Gucci brand that helps in creating hype in the global market place. Moreover the product designs advertised and promoted by Gucci through both the online and physical advertisement activities involve the reflection of stylishness and uniqueness pertaining to the designs rendered. Again working at the store level attractive interiors and window displays are rendered to attract consumer attention. Coupled with unique store atmospherics in terms of design and colour used the uniform of the sales staffs are rendered in such manner as reflecting exclusivity and a high profile approach. These tactics are incorporated to help attract the minds of rich consumer bases along the global market for luxury goods. All the above facts reflect on the integrated manner of marketing and communication activities carried out by the luxury good company to address the needs of its exclusive and niche consumer base (Conor Carroll, Kate Hurley & Ann Treacy, n.d.). Review of competition The market of Gucci pertaining to the global fashion industry is found to hold a significant and commendable space in comparison to other global players like Giorgio Armani, Christian Dior, Louis Vuitton, Chanel and Versace. Gucci tends to largely dominate the minds of the consumers spread around the globe in around 48 countries where consumers are found to exclusively vote for the luxury brand. A comparison of the survey made during the periods 2006 and 2008 reflects that where during 2006 Gucci shared the first position with luxury fashion brand Giorgio Armani the latter slipped to the fourth position during the close of 2008. Gucci had been able to sustain its competitive position in the luxury brand industry owing to the spontaneous innovation and creativity rendered on to the different products pertaining to categories ranging from fashion wear to accessories. Again in respect to consumers residing in countries belonging to the Asian continent and Far East nations it is observed that a significant proportion of such are inclined on procuring products relating to the Gucci brand than other regional and international brands. Thus regarding the brand positions as reflected by the survey it is found that brands like Chanel and Calvin Klein relate to the second position while other global brands like Louis Vuitton, Versace and Christian Dior relate to the fourth position in a comparison drawn to Gucci (Forden, 2008). The same can be reflected from the following diagram. Figure 2: Positional Map of Gucci (Source: Author’s Creation, n.d.) Gucci happens to gain and sustain the first position in the competitive luxury market for luxury goods owing to the following parameters. Firstly, Gucci tends to expend around millions of dollars pertaining to advertising and promotional activities to help gain a significant place in the luxury brand industry. This considerable amount of spending on advertising and promotional activities help in reflects that the brand is meant for a niche and expensive consumer base. Secondly a differentiated image of the brand is created amongst the other competitors through the considerable amount of creativity and innovation rendered in the designs of the different products ranging from accessories to wears. These designs are subject to change with alteration of seasons and also through the incorporation of new designer houses. Thirdly, Gucci to sustain its strong brand position amongst other competitors focus on embracing a large number of other designer brands under its banner. This embracing of a large number of different brands focusing on different product categories helps the company on meeting the needs of its elite consumer base in a comprehensive fashion. Fourthly, Gucci tends to gain hold of a larger consumer space around the world in the process of opening up of a large number of retail outlets spread along different regions. This process helps the company gain a larger accessibility to more number of retail consumers pertaining to different regions. Finally in the fifth case Gucci also tends to hold larger number of fashion shows in regions like Paris and New York that tends to reflect a high patronage for trendy and fashion wears. These tactics taken into hold by Gucci help the company cultivate and sustain high brand equity for its luxury fashion brand in the competitive business market (Lynch, 2007, p.248-249). Critical evaluation of communication channels As stated above, communication channels are vital in promotion and success of brand and product. Among the six components of promotional mix which are advertising, personal selling, public relation, sales promotion, direct marketing and interactive marketing Gucci makes extensive use of advertisement, publicity, sometimes sales promotion and interactive marketing. Most of the promotional activities of Gucci are through advertisements either through television media or print media along with internet marketing. As stated above, the mindset of the consumers are changing and brand like Gucci which was once only affordable by the rich class, the fashion world and celebrities, the normal people are daring to buying the product and so Gucci can adapt to other forms of promotional mix in order to extend its target market and create an image of a luxury fragrance brand which are made available to the common man also. But saying this, Gucci has always maintained its image as one of the most popular and famous premium luxury brand targeting the high class of the society. If Gucci shifts its target audience, it might create a negative impact upon the brand and adding more customers means variation in promotional mix. Internet marketing has been the buzz word in the new era and Gucci has well adopted the new channel showing the latest campaign and launch of new fragrances for male and females. Going online has become a tread and has captivated even the big brands to use it as a platform to showcase its products and offerings. Social media sites have proved to be a new source of advertisements and brands are making extensive use of it. But it can be said that Gucci needs to improve its activities and efforts in the social networking sites. Gucci shares information about the latest design with its customers but it also needs to attract more potential customer and educate the public about concept of fashion and style. Gucci need to listen to its customers and interact more with is customers to generate awareness and create an image of a brand that listen to its customers and fulfil the needs and wants of the customers. Public relation and publicity is also a means of promotional tool which is highly used by Gucci as a part of marketing strategy. The brand makes uses celebrity to endorse its brand, the recent campaign of Gucci for its Flora fragrance has also used celebrity, Abbey Lee Kershaw. Celebrities are used to alter the decision making or influence the decision making process of the target customers. Celebrities are good for grabbing customer’s attention and a campaign become more interesting and memorable. Gucci makes use of celebrities to endorse its brand ranging from royal families to fashion world to celebrities. The use of some of the famous face helps Gucci to influence the way consumer views the product as the consumer subconsciously equates the particular product which are endorsed by a star or a celebrity. Just like use of celebrity helps to influence the customers in a positive way in some cases it might result in negative way too. The use of celebrity usually has a halo effect as it tends to carry with it both advantage of using a celebrity and also disadvantages of endorsing a brand with celebrities. The reputation of celebrity might derogate after endorsing a particular brand. Vampire effect, which means there exists no congruency between the brand and the celebrity that does not result in creating awareness about the brand (Katyal, 2011). Recommendations With rise in income level resulting in greater disposable income, the luxury market has huge opportunity in the years to come. The consumers have reacted positively towards adopting fragrance luxury product. Gucci is the perfect luxury brand and the world today has much more unprecedented level of wealth to explore the luxury industry. The number of countries which tend to exits in luxury goods are different from that was few years back. This indicates a shift in the consumer behaviour and shows a great opportunity for the luxury industry to expand into the emerging countries and attract more and more customers. Gucci has entered the emerging country, the Asian countries and has adopted the “made-in-Italy” strategy (Shah, 2007). Gucci makes extensive use of promotional activity like advertisements, print ads, online advertisements and others. Therefore it would be recommended to Gucci to continue with the components of promotional mix, advertisements as it is one of the most influential promotional tools which are used by every marketer to market the product. Gucci produces print ads showcasing its fragrance; it can also indulge more into television advertisements which tends to have higher impact over the target and the potential customers. With a shift in consumer behaviour and higher disposable income, the brand can modify the target customers and create a segment target the higher middle income level group of customers who are willing to spend on luxury products like fragrance. With social media on rise and tends to attract more people, the brand has a huge opportunity to explore the social media sites and create a buzz in the online marketing industry. Gucci has its online sites and has also involves an account in the social media like Facebook but for more effective result, it needs to interact with the target customers more frequently and actively which is lacking at the present moment with Gucci. It is recommended that Gucci fragrance sector can also modify its product line and introduce more into the portfolio so to enhance customer satisfaction and induce brand loyalty. Gucci has although a wide range of perfumes both for men and women but if the brand keeps on re inventing itself, the customers will be highly attracted and at the same time as stated above, with shift in the consumer demand and behaviour, the brand should react accordingly to attract new and potential customers. As consumers prefer more of branded products rather than unbranded ones, the demand curve is on the highest slope and to nature it, it is required to adopt differentiation and introduce a range of products which are needed by the target customers. Reflective Statement Learning is simply not just a process of accumulating information but it is about the learners encounter with something new. Reflection is an important link between the processing the information and applying it with the practical world. Reflection is a way through which experiences are examined and lessons are drawn from it. The following diagram by Kolb (1984) shows the effectiveness of reflection. Figure 3: Kolb’s ‘Lewinian Experiential Learning Model’ (Source: QIA, 2007) Reflection helps to bridge in the gap between the theories and practice and also in between on the job learning and off the job learning. Reflection also helps to deal with stress, change and ambiguity. In addition, reflection also leads to critical awareness about a particular brand or the industry working on. The essay talks about the luxury segment, particularly of the fragrance sector and the brand chosen is Gucci. The reflection statement drawn from the essay is that luxury segment has grown over the years and has huge opportunity to explore in the future to come both in the developed countries and also in the emerging countries. From this paper, it has been understood that the customers have changed with the changing environment and with higher disposable income even the customers not from the high class society are buying product from the luxury segment, the higher middle class people also prefers branded products be it fragrance or clothing or shoes anything and a brand like Gucci which is the most famous and desirable brand in the luxury segment, also attract the middle class consumers. It has been learned that Gucci’s fragrance sector is equally profitable and in demand as the other portfolio of the brand. It conducts promotional activity mainly through advertisements, print advertisements, commercials and the brand is endorsed by famous celebrities to influence the buying decision power of the customers. It has been learned that Gucci faces a stiff competition from Channel and Calvin Klein, the top two competitors of Gucci. However Gucci has managed to remain at the top despite of the stiff competition and this is because of the strategy that Gucci follows. I have also learned that the luxury sector is not just ruled by the high class people, the celebrities and the royals but with high consumer spending, consumers other then the above have also been seen purchasing Gucci fragrance. Reference Carroll, C., Hurley, K., and Treacy, A., No date. Gucci, Louis Vuitton, & Vertu – Marketing Lessons from some of the World’s Most Exclusive Brands [Doc]. Available at: http://highered.mcgraw-hill.com/sites/dl/free/007710708x/110214/GucciLouisVuitton_Vertu_CaseStudy.doc. [Accessed 6 August, 2012]. Clow, K., and Baack, D., 2010. Integrated Advertising, Promotion and Marketing Communications, 4/e. New Delhi: Pearson Education India. Dickler, J., 2011. Consumers: We want Gucci or Target. Forget the Gap. [Online]. Available at: [Accessed 4 August 2012]. Forden, S., 2008. Survey shows Gucci tops global brand competition. 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