Marketing Environment of Burberry - Essay Example

? Submit a marketing report on BURBERRY for a colleague who has just been promoted into the position of Marketing Manager within your organization, or an organization with which you are familiar. The note should advise your colleague on the most effective analytical, planning and management processes to be used to introduce a successful marketing plan into your organization and why. Contents Introduction 3 Performance 3 General Definition of Marketing 3 Marketing 3 Marketing Environment 4 Techniques 5 Strategy 7 Marketing Plan 8 Implementation of Marketing Mix: 8 Conclusion 10 References 10 Introduction Burberry is a famous fashion house in London. It was established by Tomas Burberry in 1856 as a luxury fashion house. Burberry is in the business of manufacturing clothing, fashion accessories and fragrances. Burberry has turned into an iconic brand by continuously reinventing itself as an exclusive luxury garments line. Burberry has four sub brands under the name- Burberry Brit, Burberry, London, Burberry Prorsum and Burberry Sport. It also has two regional brands namely Burberry Blue label and Burberry Black Label. Burberry is established as a high end, gentlemanly and classic fashion house. Performance The category of women’s wear accounts for 28.6% of the total revenue of the brand followed by the accessories. The introduction of digital marketing increased the sales of the company by 24% across the globe. 64% of the total revenue is generated from its Retail segment which includes more than 174 stores across the world. 29% of the revenue is generated from the wholesale channel and 7% revenue is generated from licensing. General Definition of Marketing Marketing is defined as the management process used to identify, anticipate and satisfy the requirements of the customers thereby generating revenues for the business (Brannon, 1998, p.14). Marketing involves all the aspects of pricing, selling, advertising and brand building. Marketing Burberry markets its product range to the target market through three channels: Retail, wholesale and licensing. Burberry sources and markets its apparel and accessories worldwide with huge markets in America, Spain and Asia pacific which brings around 90% of the revenue. The customers are the young millennial group of people who are loyal towards the British luxury brand. Marketing Environment The PEST Analysis of Burberry is done to analyze the macro environmental factors influencing the business. Political: Burberry should pay critical attention to the taxation policies and trade regulations when marketing their product lines outside Europe. The company sources its materials from Europe and thus is not affected by the Yuan-Dollar pegging. Economic: Burberry needs to closely monitor the inflation rates because changes in inflation rate directly impacts on the buying capacity. Social: To invest in the low penetrated markets, Burberry needs to explore the cultural factors in the potential markets (Doyle, 2006, p.15). The brand is established as highly British authentic brand suitable for the European culture. Technological: Burberry has to adopt the new innovative technologies dominating the market like social media marketing and electronic commerce. Burberry was the first luxury fashion house to launch a 3D fashion show. Environmental: Burberry has taken care of proper disposal of manufacturing waste in keeping with the environmental protection laws. The company also uses the recycling technology to benefit the environment. Legal: Burberry tries to be compliant with the legal laws though it faces a continuous problem of counterfeit products which infringes its trademarks. Techniques A SWOT analysis of the company is done to evaluate the internal and external factors affecting the business and its marketing strategies (Kotler, 2008, p.46). Strengths: The strengths of the brand include Strong celebrity endorsements to enhance the brand value. High desirability caused by high price points. A very strong brand reputation. The unique check pattern which is distinctly associated with the brand. Weaknesses: Inaccessible for working class people. The name of the brand was negatively impacted after its association with football hooliganism. Opportunities: Sponsorship of more events in the background of increasing popularity of fashion shows and events all across the globe. Can sell more range of accessible products like their fragrances line. Opening more number of stores across different parts of the world. Increasing the number of celebrity endorsement considering the hype around iconic celebrities. Increasing the number and frequency of Burberry shows across different cities. Threats: Counterfeit products. A high level of competition in the market by brands like Luis Vuitton, Armani, Gucci etc. Threat of being perceived to be still associated with violence may cause a negative image of the brand. Porter’s five forces model is used to identify the main competitive and market forces. The threat of substitutes: The threat of substitutes is high as there are a huge number of established luxury brands in the fashion houses industry. The threat of new entrants: The threat of new entry is also high as the market is a potential growing market. The power of suppliers: The Company needs to maintain a range of dependable suppliers as timely delivery of raw materials is critical for the business. The power of buyers: The disposable income of the buyers is increasing as is their desire for purchasing designer labels. Competitive rivalry: There is intense competition in the market with strong players like Mulberry, Louis Vuitton, and Gucci etc. Product Life Cycle for Burberry: In general, the product life cycle shows four stages- introduction, growth, maturity and then decline. But in the case of Burberry, the product life cycle differs from the traditional PLC curve. The brand does not allow it to reach the decline stage and to ensure that people never lose interest in their products; the brand implements continuous innovation in their product line. The brand constantly adds new ranges of products for each season and change the face of their celebrity endorsement to keep hold of the interest of the people. This is implemented in the development stage of the product life cycle and is a critical factor for driving the success of Burberry as a brand. People have come to associate the brand with exclusivity and high end fashion. As the brand has a niche designer fashion house, the craze for owning designer label garments make people buy even old Burberry goods thus ensuring that the brand does not reach the decline stage like any ordinary product. Strategy Burberry has ensured the production of excellent high end products and services which are the results of combining heritage with high craftsmanship skills and service standards. The company has also implemented healthy business alliances maintaining high ethical standards and shared value creation. The company has also shown excellence in management skills, operational efficiency and contribution to the society. The main product lines of Burberry are aimed at the niche market composed of mainly celebrities and very wealthy clients (BBC News, 2002). In contrast, the fragrances range is more affordable which helps to widen the target segment for the brand (Adcock, 2001, p.34). Despite being outrageously expensive, Burberry accessories like bags and shoes are more accessible compared to other brands in the market. The brand also has a children wear range which is aimed at the niche customers. Marketing Plan The marketing plan is done by following the Segmentation-targeting and Positioning model (Brassington, 2012, p.132). Segmentation: The original customers are retained as a critical customer base and the young fashion conscious group is acknowledged as a potential target group. Targeting: Burberry targets both the genders in the society as well as has a children wear range. Burberry stocks different products for high end customers of both genders. Positioning: The brand is positioned as a combination of functionality and luxury targeted at the high-end retail market where quality and exclusivity are more important factors than pricing (Forbes, 2000). Implementation of Marketing Mix: Burberry implements a clever mix of the 4P’s of marketing in their strategies. Product Strategies: The products of Burberry are high quality, distinctive and classy. The brand caters to menswear, women wear, children wear and accessories. The garments are aimed at the wealthy customers with high disposable income (Armstrong, 2012, p.63-64). The main garment line of the brand includes coats and dresses which are exclusively designed for the niche market. The product line of Burberry has great range and depth. Pricing Strategies: Burberry implements competition pricing in its product range. The company prices its goods as to make them competitive to the rival players in the market. A high pricing strategy is followed so that the customers can associate the price with high quality of the products. The price range is kept similar to the other big fashion houses so as to have a psychological effect on the mindset of the customers that the range is priced high due to its superior quality (Rafiq, 1995, p.4). The high pricing suggests exclusivity, niche feeling and desirability for the customers. Placing Strategies: The brand opens its stores in cities like London, where the major part of the population can fall into the target segment of Burberry. The business also receives huge customs from the populated countries. The brand also opens stores in wealthy places which attract tourists as it increases the scope to have more margins and reach the target customers easily. The distribution of the stores is done in a way to maintain the high end impression of the brand. Promotional Strategies: The brand uses celebrity endorsements as a major promotional strategy. Burberry is regular in its appearance in the fashion week shows throughout the globe. The company also hosts its own shows in different cities to showcase their new products launched in every new season. Burberry advertises through the common modes like television and billboards. Instead the brand uses an approach of viral marketing where the brand has extensive coverage in fashion magazines and blogs. The company also uses the strategy of advertising with Burberry banners on fashion websites as a niche marketing strategy. The brand has also gone digital with the introduction of Burberry.com and Artofthetrench.com (Financial Times, 2004). Conclusion Burberry should invest in new and emerging markets to create more brand value and reduce risks for the business. The move to digital marketing has been a beneficial strategy in this era of global e-commerce. The company can produce a mobile application for Android and iOS platforms which will help the brand to capture the young fashion following customers easily. The seasonal launch of new product ranges is an effective strategy for the company to capture potential markets and retain their existing customer base in the face of high competition from other niche market brands. References Adcock, d. 2001. Marketing strategies for Competitive Advantage. [Print]. Chicester: John Wiley. Armstrong, G. 2012. An Introduction to Marketing, Global Edition. New Jersey: Prentice Hall. BBC News. 2002. Business: Burberry’s journey through fashion. [Online]. Available at http://news.bbc.co.uk/1/hi/business/2015039.stm [Accessed on 30 November, 2013]. Brannon, T.1998. A practical guide to Integrated Marketing Communications. London: Kogan Page. Brassington, F. 2012. Principles of Marketing. New Jersey: Prentice Hall. Doyle, P. 2006. Marketing Management & Strategy, 4th Edition. New Jersey: Prentice Hall. Financial Times. 2004. Rose Marie Bravo Chief Executive, Burberry. [Online]. Available at http://www.ft.com/cms/s/0/831be07c-1348-11d9-b869-00000e2511c8.html#axzz1c55heSJw. [Accessed on 30 November, 2013]. Forbes. 2000. A British Gucci. [Online]. Available at http://www.forbes.com/forbes/2000/0403/6508084a.html. [Accessed on 30 November, 2013]. Kotler, P. 2008. Principles of Marketing. London: Pearson Prentice Hall. Rafiq, M. 1995. Using the 7Ps as a generic marketing mix: an exploratory survey of UJ and European Market academies. The Journal of Market Intelligence and planning. Vol. 13(9). pp 4-15. Read More