Retail Marketing Strategies of Burberry - Essay Example

? RETAIL MARKETING: CASE STUDY: BURBERRY BARND Introduction to Retail Marketing Burberry is a fashion businessthat engages in international trading in most parts of the world. Apart from retail marketing in most countries, Burberry group is also involved in manufacturing, designing and sourcing their products. On top of retailing as one of the ways of distribution, Burberry team is also involved in wholesaling, and channel licensing across the globe. Burberry group has selling outlets in most parts of the world. Products sold range from clothes to fashion accessories. Apart from having physical store, Burberry is embarking on online stores where potential buyers can view products and make their orders online. Burberry success in marketing is as a result of effectiveness of management. The strategic decisions made by management have determined the success of Burberry all along. The management team develops modifications, and initiatives that make Burberry have a competitive advantage. However, this was corrected and modifications made that made the brand to gain its competitive advantage back. Evolution and change Burberry, over years, has undergone changes that have kept it performing to date. In 2004, international retail marketing rose to about 8 % annually. That was sustained up to 2008, when the Japanese economy collapsed and its market declined by up to 9%. On 2010, retail marketing resulted to 58% revenue of the total revenue received. There is long history about forming and progression of this brand. Burberry was started in 1856 with the aim of manufacturing and selling weatherproof fabric. “Gabardine” fabrics made Burberry brand to gain the trust of most clients across the world. “Gabardine” fabrics became consumer target as it was the military choice. In the 19th century, raincoats from Burberry were used as the service uniform for military. This is how first Burberry entered the retailing marketing of fashion products. In the 20th century, Burberry outlets were established in other countries. This body helped the brand in funding and offered better management of the brand. Other licenses were issued to other partners that helped in the expansion of the brand. In 1990s, Japanese economy collapsed and this enormously affected performance of Burberry. This is because; Burberry relied heavily on Japanese economy for main distribution and sales. The financial analysts predicted future performance problems of Burberry in the market place. For Burberry to undergo technological revolution; research was done to understand the tests and preferences of costumers. Burberry group enormously invested in technology in order to improve its sales. Burberry created a platform where the customers could share their photos of clothes they bought from it. This innovation has made Burberry to be outstanding in the digital world and its profits have risen (Sho?no, Fujita, & Uchiyama 2009, 30). Diane Perlman said that touch screen campaign enabled the users to be able to link social media activities with the national billboard campaign. Physical retail store owners employed digital signage to attract shoppers’ attention. Live windows have also been innovated. This technology enables Burberry brand link all retail stores in real time. This technology is managed from the central office. Benetton, a creative agency, produces films of people reactions, which is evidence of project effectiveness. Burberry stores are located in populated towns and this makes the products to be accessible to more customers. Burberry stores have good design layout which creates good attitude from potential customers. Understanding societal perception about Burberry brand has been very crucial. Therefore, Burberry has retail stores across the globe that fit society requirements. Merchandise Burberry stocks variety of products, and in the recent past, the company has expanded its product range to capture the consumer changing behavior. Fig 1 Burberry propositions made items unique. Prorsium is largely worn by celebrities. Fig 2. Another item is Burberry Brit which comprises casual clothing for weekends. Many people today would prefer to buy whole range of products from specific brand. Burberry employed ideas from different fashion companies like Gucci. In one store, children clothes, men clothes, women clothes and accessories are stocked; this strategy resulted to Burberry prosperity retail marketing internationally. In 2010, Burberry had opened over hundred retail stores in America and Asia on top of wholesale stores. This is additionally led to expansion of market coverage and customer attention has been drawn to Burberry stores worldwide (Watson & Curtis 2007, pp. 123-130). While the brand has a long history, retail marketing strategies and brand developments have kept this positive reputation alive. The customer base has grown where the existing customers are retained while attracting new ones to the firm products. These marketing strategies enable people across the world to view their products provided they open their website. This raised market compared to other marketing ways like use of billboards. In marketing and showcasing of their products, they mainly use celebrities. Burberry collection is of high standards (Curtis, 2004 pp. 202-204). Worldwide, Burberry has outlets in 48 nations, many of which are situated in populated streets in big towns. Due to the type of products stocked and their prices; the stores are situated in wealthy regions. This way, Burberry group is able to appeal the right audience. The stores are big and well furnished enabling people to get the right impression. People get to know that the products stocked are of quality and classy. Retail marketing strategies Burberry is strategically positioned in terms of competition. Some part accounting for its competitiveness is long history of this company. For many years Burberry has remained outstanding in the fashion and luxury arena. During the expansion of Burberry operations, many retail stores were closed since they were not strategically located. Ahrendts, strategized to unifying company brand and widen market. The stores were relocated to strategic places that reflected the image of the brand as being classy and high end. The customization of merchandising reflects the local store environment while ensuring the brand identity and image is maintained. Burberry group understood little about the targeted market. Again Burberry products were sold at a discount to those that bought in bulk. Bravo, in her regime, recommended that the only way to improve the performance of Burberry brand was to concentrate on producing high class products. The prices charged on those products should be consistent to ensure the customers do not doubt the quality of the products (Acholachatpinyo, B & et al. 2002, pp. 89). The garments were designed entirely for high end men. However, over time, due to demand and market pressure, Burberry has shifted its attention to incorporate women, children and youth items. At the beginning, the women products proposed were not in consideration to product expectations. Trench coats were initially for women while classy raincoats were for high-end men. This created a gap which affected the brand identity all together. Additionally, much attention was given to the Japanese markets overlooking the customers’ needs across other countries. This misunderstanding further led to the drop in performance of Burberry brand especially when the Japanese economy collapsed. Through research, Burberry needed to do much restructuring to meet the needs of consumers across the world. Additionally, it was evident that the world had become complex. For instance, it was established that Women were interested in high end Burberry brand. In improving the brand to fit the consumer needs, trust was to be established and sustained. Therefore, it was important to factor in this aspect in ensuring the brand items distributed in the stores were not outdated (Peng & Chen 2012, pp. 305-315). Creativity and innovation was therefore important in maintaining the consumer trust over a longer period of time, while innovations were to be in relation with Burberry brand identity. Therefore, Burberry brand products should enable customer easy identification. In addition, consumer’s choice of products is based on rational judgment. Therefore, it should be easy for the customers to distinguish Burberry products from those of competitors. The brand should be consistent in terms of quality and uniqueness. Through this, consumers are able to develop relationships and their identity is shaped. Burberry customers include, men, ladies and young children. Most customers targeted by Burberry are the high income earners (Peng & Chen 2012, pp. 314). In 1990s, many Burberry stores were not strategically situated. This was so because, Burberry did not understand were the respective consumers’ could be found especially in the international countries. This led to low sales as only a few of the targeted customers could access the products. Upon research on the targeted consumer behaviors, it was found out that, the rich live in specific areas. That explains why, Burberry’s retail outlets are now located in areas with wealth people. This way, the products are accessible to the targeted people (Pegler 2007, pp. 90). Fig 3 Rich consumers shop in large wholesale outlets which makes Barberry to face competition from the big shops. Most Burberry stores are purely retail, without offering discounts on those who buy in bulk. The only people that remain to buy from their retail outlets are the middle income earners. This is because; they do their shopping in small bits that cannot attract discounts from wholesalers. In addressing this issue, Burberry embarks on frequent product advertising. This way, many people resolve to buy their products from Burberry stores even without getting discounts. During recession, many of Burberry competitors reprised their products to maintain customers. Burberry in that season, it maintained that they stock greater products in their stores inside of altering prices. While Burberry trades internationally, most of the aspects at present are controlled from the central office. This strategy is disadvantageous resulting to ineffectiveness. For instance, advertising of Burberry is done from central office aimed at improving the image of the brand instead of focusing on specific brand products that are offered in the market both locally and internationally. In addition, they focus on product mix instead of promoting the products individually. To ensure effectiveness, Bravo resolved to divide the whole brand into sections and subsections. This should not only be limited to brand image, but also ensure individual products are in the market are known to the customers. Advertising, therefore, should be done to inform consumers on the existence of the products in the market and the value added. Fashion shows have made the international market to perceive Burberry as a reputable fashion brand. Fashion shows are carried out twice annually. Additionally, Burberry team prioritizes on public relations internationally. In the market place, people shop in warehouses due to discounts offered (Karise, & Barry. 2012, pp. 66). Only lower income people afford to shop in retail shops. Burberry however has a competitive advantage over all other fashion retail dealers. The organization has innovative team of workers who help in improving the retail market condition. In addition, management body focuses in advertising. This provides sustainable competitiveness even over a long period of time. The introduction of weather proof fabric shows that the Burberry team has the interests of consumers at heart. In the 1970s, the company gained a negative connotation where the brand was associated with hooligans. This notion spread because its brand was associated with football. The reason behind this was the management inability to ensure consistent brand across the world market (Jackson, Shaw & Haid, 2006, pp. 51-56). Management teams in individual countries were able to make brands items without consultation of the central management body. It is in 21st century that the check was placed again on the inner side of the clothes. In the leadership of Ms Bravo, so many adjustments were made to ensure coherency and consistency. Bravo out ruled the practice of customizing products to fit the countries tradition. The practice had contributed to low demand of the products since people could not distinguish Burberry products from others. Standard products introduced in market across nations made Burberry to get its reputation back. This brand has been further been endorsed by celebrities hence gaining its reputation back. Market Logistics Burberry underestimated marketing previously, which explains reduction in volume of sales of Burberry products. Despite diverse methods of marketing Burberry uses, it hardly uses billboards and advertisements on televisions (Haig 2004, pp. 97). This is because, it has worldwide market and it would be unrealistic to use billboards in terms of limited coverage and it is uneconomical. The new management has revised the marketing structures and made various adjustments and improvements. In marketing logistics, Burberry majorly relays on advertisement on the website. There is a large coverage without any geographical limitation. Customers can give their feedback instantly upon viewing the items displayed. Other strategies used in promotions include celebrity endorsement. Products stored in Burberry retail stores are affected by trends. To deal with this it is understood that products have a four stage lifecycle comprising of introduction, development, maturity and the decline. Craik (2009, pp. 68) proposed that, to address this decline, new cloth lines should always be introduced. By seeing new cloth lines, costumers’’ interests is revived. Advertisement and promotions are done regularly to remind costumers of existence of classy garment in Burberry stores (Moore & Birtwistle, 2004, pp. 412-422). At times, customers purchase old stock because of the wooing nature of advertising and product promotion. This makes Burberry products experience a unique decline characteristics: whereby, some products demand decline and is revitalized after some time. Pricing strategy Though Burberry products are expensive, their prices remain to be competitive across the world. This strategy of pricing makes the customers to prefer Burberry products to those of its competitors. In the past, there has not been a proper licensing strategy resulting to reduced control of the prices. Most retailers determined the prices on their own without any reference to the Burberry central management. Burberry uses competition pricing whereby they price their products like their competitors. Lowering prices would make Burberry face negative consequences since the customers may interpret that to mean low quality. Prices assigned for different products are interpreted to mean quality (Smith & Milligan 2011, pp. 65-70). Many consumers in market are after buying quality goods and use prices charged to judge the value of those items. Consumers still purchase Burberry items despite expensive prices charged. Trends In the recent past, Burberry has hired talented personnel hence enhancing the company image in terms of fashion and modernity. The companies name has been revised from Burberry’s to the present day Burberry. This was done with the aim of focusing more on the brand than the association with a person who in that case was the founder. New brandy logo was designed for Burberry brand. New approach was implemented to achieve effective management of the brand. New functional structures have been formulated that enable the company to be consistent in pricing, quality and design. Consumers value continuity in product identity. Burberry should ensure trends in its marketing to match changing lifestyle of consumers. This is because, apart from the changing lifestyle, consumers desire to identify with the brand of their choice. Burberry should engage in constant innovations to ensure they stock trendy and classy fashion design of the time. Wigley, Stephen, Nobbs & Larson (2013, pp. 56) argues that, in embracing continuity of the brand identity, it is good to consider different cultures. However, multiculturalism causes difficulty in building and sustaining a brand. This is achievable through delivery of quality products, strategic location and design of stores and accessibility of products by the targeted people. Unlike in the past, today Burberry has majored in use of social media (Phan,Thomas & Heine 2011, pp. 57). Before embracing this technology, Burberry revenues collection had dropped. This is because; social media expands the information coverage globally which would otherwise be expensive if other channels of communication are used. Additionally, Burberry should keep up with the trend in fashion market (De kare-Silver 2011, pp. 20). This is essential for Burberry to remain competitive even when the world is changing in so many aspects. Development of website has aided Burberry in marketing, where, the products’ pictures are displayed online for customers’ view. Celebrities have facilitated this largely since through their endorsement, a product gains international trust and popularity. This online marketing and shopping has majorly replaced the physical display of clothes and other fashion accessories (Bou 2006, pp. 324). Burberry has embraced diversification items that satisfy the consumer needs. The products that Burberry offers include clothes, fashion accessories, shoes and perfumes among others. Since people of all ages regardless of gender, shop; Burberry saw a market niche in this. By seizing the opportunity, Burberry has broadened its marketing customer base. People of all ages can find suitable accessories in these shops. In order to be relevant, Burberry has embarked in attracting the youngsters through modern designs. In the future, Burberry should focus in even diversifying its products more than now. It should include alcoholic drinks, and home goods (Mignon et al 2011, pp. 53-57). Keeping up with the trends has immensely contributed to the success of Burberry brand worldwide. In order to be at par with the current market trends, however, a lot of market research needs to be carried out frequently. This is to find out operation systems that should be implemented for it to succeed and remain competitive in the market. Burberry group still possesses great potential of expansion (Brand 2008, pp. 34-39). This potential can be exploited through introducing technology that avails possibility of reaching customers throughout the globe. SWOT analysis Burberry remains to be most liked brand across the globe. When a face book page was opened by this company, there were thousands of likes over a very short period of time. This was an indication that people had positive perception about this brand (Mclaren, Tyler, & Jones. 2002, pp. 24-26). The brand has got distinctive checks which makes the products to be recognizable. Brand drawbacks in marketing of its items in international market led to huge reduction in profits. This was when the brand was perceived to be associated with violence and hooligans. High prices for the products make the brand to be for a few who are rich in the society. Opportunities for the brand include; expansion of store sizes since most of them are small sized. Additionally, Burberry can sponsor more events to gain more recognition worldwide. Increase in Burberry shows conducted can promote brand items (Wigley 2011, pp. 7). Threats facing the organization include competition from within and from external environment of the fashion industry. At some point the organization underwent reduction in sales and profits thereof. Burberry perceived to be associated with hooligans attributed to this situation. Hence, other brands gained popularity over it this time (Vejlgaard, 2008, pp. 66). In 2004, Bailey, mentioned that Burberry brand appeal people of different classes. He was not pleased with this allegation that Burberry was being associated with hooliganism. References Acholachatpinyo, B & et al. (2002). A conceptual model of the fashion process – part 1: The fashion transformation process model. Journal of Fashion Marketing and Management. 6, 11-23. Bou, L. (2006). Windows of the world store windows that dazzle: Louis Bou. New York, Collins Design, An imprint of HarperCollins Publishers Brand, J. (2008). Fashion & Accessories. 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