Burberry - Successful Brand Leadership - Essay Example

?Burberry – “Successful Brand Leadership” Table of Contents Table of Contents 2 Introduction 3 Literature Review 4 Luxury Brand Management 5 Strengthening Brand Performance 5 Product Portfolio Amendment 8 Brand Positioning 8 Analysis 9 Product Line Strategies of Burberry 10 Product Portfolio of Burberry 11 Brand Positioning of Burberry 11 11 Conclusion and Recommendations 13 References 15 Introduction Burberry is a fashion company which produces and markets males’, females’ and kids’ clothing along with accessories and perfumes. The company was established in the year 1856 and at present it is regarded as one of the leading international luxury brands. As of the year 2006, Burberry ran almost 58 stores which have become 111 by 2010 (Burberry, 2010). Burberry’s products are available in several supermarkets and specialty outlets internationally. Burberry propelled the ‘Prorsum designer collection’ for reinventing its image as a luxury brand. Burberry has exploited the marketing opportunities and the brand extension strategies to promote the brand towards the young age group who are very much aware regarding fashion and style. Burberry has effectively managed the brand and maintains the leading position in international fashion industry. In present days, the Burberry brand stands for authentic British heritage, quality products and modern as well as classic fashion items. The logo of Burberry has become an internationally accepted icon for fashion. The business unit of Burberry is distinguished by capability of producing diverse category of apparel products for male, female, kids and teenagers. Its market is expanded internationally and also uses advanced marketing tools such as e-commerce and social media. In the year 2010, the revenue of Burberry for apparel products was calculated as ?1,280 million which was 1% more than 2009. The huge success of Burberry in the luxury market is due to its branding strategies (Burberry, 2010). Literature Review In the present era, the luxury brand management has created much curiosities and thoughts in both academic and commercial areas. The luxury segment has experienced exceptional development due to emergence of globalization. In the year 1985, the total worth of luxury segment was almost 20 billion USD which has become 180 billion USD in the year 2008 (Okonkwo, 2009). The advent of new markets, improvement of digital communication, cultural union and wealth making prospects among others have contributed to the massive development of luxury market. On top of that the growth of luxury customer base and successive dropping of the entry obstacles to the foreign markets have resulted in the growth in both products offerings and rivalry across all luxury groups. Luxury brands such as Burberry are broadening their horizons to access other markets of luxury. Source: (Okonkwo, 2009). Luxury Brand Management Luxury is a socio-psychological thought and it is associated with culture and lifestyle of people. When luxury is associated with a brand, it is considered as a recognizable fashion, strong uniqueness, high responsiveness, and improved expressive and symbolic relation. Luxury brand evokes individuality and inimitability, and is inferred in products by high quality, well-organized distribution and superior pricing. These basic aspects have led to the improvement of luxury business with continuous development (Cravens & Piercy, 2009). Strengthening Brand Performance To make a successful brand, there is need to gain beneficial vision about product performance. A strong product performance can make a brand powerful. The strong performance of brand is the outcome of: Good marketing talent High product quality, and Strong brand preference Source: (Cravens & Piercy, 2009). Brand equity can be regarded as a valuable asset for an organisation. The common characteristics upon which a number of durable brands emphasise are targeting and product positioning strategy. Several studies recommend that leading brands that deal with numerous product lines are 50% more profitable compared to other closest competitors. Product line activities comprise of incorporating new products, reducing prices, developing current products, modifying market strategies or cutting any products from product line. Once the need for change of existing product is identified, there are several options for organizations to improve the product performance (Cravens & Piercy, 2009). Source: (Cravens & Piercy, 2009). Adding New Product To Existing Product Line Adding new products to the existing product line can help to develop the performance of a brand. It can offer an occasion to influence brands’ strengths by accumulating new associated product line or product group in the organization. Product Portfolio Amendment The product portfolio can be amended by internal expansion or acquisition of whole organization or expansion of product line. Expanding the products in the brand portfolio is a major branding strategy for strengthening the performance of brand. It can help to: Raise the development rate of business Provide a range of products to traders and merchants Achieve marketing power and financial prudence in supply, advertising, and personal selling Influence present brand position Reduce the reliance on one product line group Source: (Cravens & Piercy, 2009). In present days, brand portfolio management has become vital as business environments are becoming much complicated due to numerous segments, products, wide-ranging competitor brands, multifaceted distribution networks; various brand extensions, and the extensive use of recognized brands and sub-brands (Cravens & Piercy, 2009). Brand Positioning In order to make a unique position in the market, differentiation of product must be made to get the attention of the customers. Brand positioning acts as a medium by which a company can represent the brand towards the customers to show what it (brand) represents. Through brand positioning, companies can form customers’ sights and beliefs about the brands. Brand positioning is a procedure of forming and handling the images, the insights, and the relations that customer uses while purchasing a brand. More the organizations can position the brand successfully, the more it delivers superior value towards the customers (Hiebing & Et. Al., 2004). Positioning is the foundation of every type of communication with customers, such as, advertising, marketing, promotion, sales force, and public relations among others. Whatever activities organizations perform from marketing point of view, there is need to emphasize on a successful brand positioning, otherwise all marketing efforts will be in vain and also it can confuse the target customers. Besides, improper brand positioning can extinguish a popular product. There are three methods for successful brand positioning which are: matching, mapping and emotional relationship. Matching signifies satisfying the product’s characteristics and unique features or competitive advantages to the requirements of the target customers. Mapping refers to drawing out visually the important qualities of the target customers’ in congruence to main product qualities of the brand. Emotional relationship focuses on the feelings of the target customers regarding the products, the company itself, and the significance of the products in the life of the customers (Hiebing & Et. Al., 2004). Analysis The strong competitive position of Burberry has sustained due to its effective brand management. Burberry has pierced efficiently in both segments, appeal industry as well as accessories business along with remaining in leading position in the luxury market. Product Line Strategies of Burberry The strong brand leadership of Burberry is because of its broad research which also aids to appeal newer consumers. The only method for appealing to new customers is to modernize the existing product line to satisfy the fashion requirements of modern customers. It is mandatory to provide a reliable look and sense across a collection of products. Burberry has not only maintained and produced new products that are expected to have a long lifecycle, but they also have made other fashion based products, intended to be reactive to fashion tendencies of present days. By updating their product line, Burberry has preserved their commercial movement with fashion progression. Endurance products, such as standard trends, ‘duffle coats’, handbags and shawls have extensive lifecycle compared to fashion based products. With respect to male wear, female wear, and accessories, every collection lets Burberry to compete with its key rivals. New collection of accessories lets Burberry to effectively compete with big accessory giants such as Coach and Gucci (Akbari & Et. Al., n.d.). Updating the product line was a significant strategy to evade old-fashioned stuffs. The products of Burberry falls under two key groups: fashion and endurance. The fashion products of Burberry are aimed to be responsive to fashion drifts developed by collection basis. The endurance products of Burberry have longer life cycles that are likely to stand for several years. As Burberry offers different products in different collections with perfect blend of fashion and endurance, its product line is excessive which helps to position the brand effectively. In 2003, Burberry’s accessory collection was 29% of its product mix. The females’ wear collections help Burberry to keep its strong impetus in fashion industry, and in males’ wear collections; Burberry continued to take advantage of the mannish tradition of the brand by expanding and escalating the product line (Investis, 2003). Product Portfolio of Burberry Burberry has also expanded its product portfolio by making numerous brands, such as Black Labels, Prorsum, Burberry London, Blue, and Thomas Burberry. The expansion of product portfolio has helped to acquire new consumers as well as preserve the existing consumers. For instance, Burberry London offers customers with inexpensive but designed products for appealing to younger fashion sensible consumers. Black Labels and Blue are available in Japan for younger customers which aim to spread the product risk. Thomas Burberry also facilitates in spreading product risk and is available in Portugal and Spain. Prorsum also strengthens the brand in the luxury industry. Burberry caters to the modern fashion segment and signifies the uppermost luxury stuffs (Akbari & Et. Al., n.d.). Brand Positioning of Burberry Generally, Burberry’s brand positioning is made for long-run. Burberry has penetrated effectively in both accessories segment as well as apparel segment and also has endured its position as a luxury brand. Unlike other competitive brands such as Coach and Gucci which concentrate on accessories sector and Polo or Armani which focuses on apparel industry, Burberry has successfully positioned its brand in both categories (Velosa, 2011). Burberry has diverse brand positioning, for instance, it can appeal to younger customer segments as well as aged customer segments. Currently, the advertisements of Burberry feature a lot from British countryside with upper-class models along with bikinis models. The advertisements are targeted towards different customer segments with one mutual theme, i.e. well-designed luxury. Burberry has emerged as a fashionable brand by providing updated brand experience. It has also advanced itself in the domain of e-commerce. In the website of Burberry, customers can upload trough coat pictures of their own and also can vote the pictures uploaded by professional snappers including magnum snappers. These activities provide brand experiences through internet and generate good prospects for the organization to create attraction of the brand towards young customers who are acquainted with digital media and have not used the Burberry brand before. With this new strategy, Burberry has used the customers themselves to advertise the brand’s products. Through effective brand positioning, Burberry has conveyed both the brand image of old-fashioned coat along with up-to-date style and offers British custom which is traditional, antiquated and fashionable, thus maintaining the brand history (Kim, 2010). In order to promote the brand, Barberry has developed quality advertisements by endorsing several celebrities and well-known professionals. With their advertisements, Burberry has made a strong position in the fashion world. By endorsing models Burberry attempts to transmit the value of the brand towards the customers. Burberry understands that there is need to play aggressively in order to make its place in the global market. Thus, it attempted to become a leader in the social media for attracting the visionary customers. In the year 2009, Burberry had made a deal to represent a popular face ‘Emma Watson’ for their autumn winter collection. These activities had helped the company to strengthen the brand’s rich tradition (Oxberry, 2009). Burberry made additional strategic development by taking over Korean merchant for the aim of monitoring the Asian luxury market. In North American region, Burberry has continued to enlarge the market presence by augmented sales in present as well as new stores. Presently, the New York City has become one of the biggest outlets of Burberry. In Europe, Burberry’s brand positioning in the national luxury market has made positive development through opening its outlet in Barcelona (Investis, 2003). As a result of Burberry’s exceptional strategies, the company had experienced tremendous growth in income by 263% and its profits had also improved by 630% from 2000 to 2003 (Moore & Birtwistle, 2004). Conclusion and Recommendations From the above discussion, it can be observed that the brand strategy of Burberry has greater impacts on the significance of efficient brand communication through popular media. Burberry’s brand strategy is focused on developing an image of contemporary trend through brand positioning. Burberry has been exceptionally successful in dealing with numerous challenges confronted with brand positioning and placing the brand in the leading position. The most significant challenge for the brand was expanding the product line. Burberry holds an image of high-class, cultured and stylish brand. The company is successful at inspiring the global fashion status. The brand Burberry has experienced several changes. While on one hand, it has renovated itself as a luxury apparel brand which signifies elegant and innovative trend; on the other hand it has also maintained its traditional theme. Burberry has applied the branding strategies, such as improving product line, developing brand portfolio and positioning the brand for placing it in the leading position. Thus, Burberry has accomplished huge gross margin due to premium prices imposed for reflecting the quality products. In order to remain in the leading position in the fashion market, Burberry needs to simultaneously update its product line so that customers always feel that they are staying ahead with respect to contemporary trend. It is recommended that underperforming brands must consider presence of competitors in the market. In present days, the young customers have become more fashion conscious, thus there is need for them to purchase items that are keeping in with their fashion desires. The underperforming organizations must utilize extensively the social media as a marketing tool which can support brand strategy. In order to stay ahead in the market, the existing product lines need to be modernized so that customers can have a sense of positive brand image towards the underperforming brands. References Akbari, S. & Et. Al., No Date. Marketing 555 Summer Session II. Marketing Case Study Example-Burberry. [Online] Available at: http://www.shakirakbari.com/pdfs/Marketing_Case_Study_Example-Burberry.pdf [Accessed November 08, 2011]. Burberry, 2010. Brand and Business. Strategy. [Online] Available at: http://annualreview2009-10.burberry.com/pdf/strategy.pdf [Accessed November 08, 2011]. Cravens, D. W. & Piercy, F., 2009. Strategic Marketing Eighth Edition. Tata McGraw-Hill Education. Hiebing, R. G. & Et. Al., 2004. The One-Day Marketing Plan: Organizing And Completing A Plan That Works. McGraw-Hill Professional. Investis, 2003. Burberry Continued To Build On Its Unique Positioning As The Authentic British Luxury Brand. Chief Executive’s Review. [Online] Available at: http://www.investis.com/gus/reports/ar03/html/pdf/cer_b.pdf [Accessed November 08, 2011]. Kim, J., 2010. Burberry's Brand Repositioning Strategy_ The Art of Trench. Korea Institute of Design Promotion. [Online] Available at: http://global.designdb.com/disko/read.asp?boardseqnum=12206 [Accessed November 08, 2011]. Moore, C. M. & Birtwistle, G., 2004. The Burberry Business Model. International Journal of Retail & Distribution Management, 32 (8), pp. 412-422. Okonkwo, U., 2009. The Luxury Brand Strategy Challenge. Journal of Brand Management, 16, pp. 287 – 289. Oxberry, 2009. Emma Watson Stars in Burberry Ad Campaign. Drapers Magazine. [Online] Available at: http://www.drapersonline.com/news/womenswear/news/emma-watson-stars-in-burberry-ad-campaign/5003405.article [Accessed November 08, 2011]. Velosa, J., 2011. Case Study: Burberry. Marketing in a Dynamic World – TB. [Online] Available at: http://www.scribd.com/doc/67597033/Burberry-Case [Accessed November 08, 2011]. Read More