Critical Evaluation of Two Luxury Brand Stores - Hermes International and Chanel - Essay Example

? Critical evaluation of two luxury brand stores Contents Introduction 3 Discussion 3 Hermes International 3 Chanel 7 Critical Analysis 14 Conclusionand Recommendation 15 Reference 16 Introduction Luxury brands have always fascinated many peoples around the world. It has created its own space among the elite customers who prefers to buy them. Such types of goods and services are not essential for common peoples and are associated with rich and affluent people. They appeal to people living in higher strata of the society. Such kinds of people have high purchasing power and hence they go for such kinds of products. When one buys something of luxury brand one can genuinely feel the difference. Luxury brands grow and expand even when the economy goes down. People spend thousands of dollars to buy such kind of products. In this paper two luxury brands Hermes and Chanel will be considered. Hermes is a French manufacturer of luxury goods with its headquartered in Paris, France. Similarly Chanel is also a high fashion house headquartered in Paris, France. The each has their own touch points across the world where they reflect their individuality with the customers. Such brands need to take care of their marketing strategy in such a way that their brand value does not get affected. Discussion In this section of the essay, the detailed discussion about each of the two chosen brands will be conducted. The discussion of each brand includes overview and analysis of the brand; and brand message and communication across brand touch points. In overview and analysis of the brand the key focus will be on brand position and heritage, and brand DNA. In brand message and communication, the key focus will be on the concept stores and other communication tools. Analysis of the two brands in above mentioned perspectives has been conducted separately for each of the two brands below. Hermes International Figure 1: Logo of Hermes International It was founded by Thierry Hermes in 1837. In 1920, the company launched gloves, clothing and watches in their retail stores. They opened their 225th store in 1990 and in 1993 went public. Their revenue was US $1 billion by the end of 1999. They slowly started to improve their operation with years to come and achieved a successful position in the luxury retail segment. Hermes International S.A. has around 304 exclusive stores including 180 branches, 21 retail outlets and 124 concessionaries (Tran, 2012, p. 3). It employees only 9081 persons, but their revenues keeps increasing rapidly in many years. Their revenue in 2011 was 2,841 million euros. The prices of their products are sky high but still their sales keeps on increasing every year. For example on an average Hermes handbag cost $ 3000 -$ 5000, but people still prefer to buy them (Hermes, 2013, p. 1). Hermes targets teenagers and young adults who love fashion. Their customer wants high quality merchandise with good features and wonderful after sale service. Their customers earn high incomes and do not bother about how expensive the prices are. They basically look for limited edition leather watches. Such customers want to own something which other common people can’t afford to buy. United States is an important market for Hermes. They target high income customers who are mostly males. Hence they focus more on male accessories than female counterparts (Ritson, 2010, p. 1). Likewise their target customers are different across different countries, depending on the demography of the economy. Like Hermes is now trying to target the Mainland China. According to a study in China, male consumer s purchase more luxury products online as compared to female counterparts. So there also they sell the male accessories. Figure 2: Hermes International Store in London Hermes basically gives two powerful messages thorough their stores. One is the craftsmanship displayed by their artisans in creating their products. Another message is the quality and commitment to service delivery which is displayed by the service received by the customers who visits their stores. The objective of Hermes is to achieve their sales and profit target and providing quality fashion brands to their consumers. Their mission is to become a leading company in the quality fashion brand industry. Hence the company is spending a lot of money on their research and development activities to explore the latest fashion trends among the consumers (White, 2012, p. 1). The company is trying to create an effective awareness of fashion brands among the consumers and also focusing on improving their positive image among the consumers. In 2012, Hermes launched an exhibition Leather Forever, to celebrate the heritage of the French luxury leather. This displays the commitment they have in their leather goods. The exhibition highlighted a giant neon Kelly bag sculpture. Figure 3: The Satyr-winged saddle bag Such fantastic work displayed above shows why they train their artisans so long. They make the young people and the teenagers realise what true fashion is and how it can be different from other stores. The products offered by them in the stores satisfy the demand of high quality luxury items. Figure 4: Kelly Handbag Chanel Channel S.A. is an independent, unlisted company. Channel is a French private company. This company specialises in high fashion house garments like ready-to wear clothes, haute couture, luxury goods and fashion accessories (Nagasawa, 2011, pp. 47-50). It had it’s headquarter in Paris, France. Many people think that the Channel family runs the Channel S.A. Channel S.A. is actually managed by a manufacturing or a technology company. Such management have no relation to a luxury brand. The company is into “fashion” industry and its business is beyond clothing (Kapferer, 2008, p. 432). Their scope of business can be divided into three categories. The first is Fashion where they manufacture merchandise like Luxury ladies wear, handbags, shoes and accessories. These include products like iconic Chanel Suit and little black dress that revolutionized the fashion world. These products were regarded as Chanel’s Ford. Figure 5: The Little Black Dress of Chanel It also included Handbags and shoes along with the accessories like purses, leather items, earnings, necklace, belts etc. The second category is the Fragrance. Though this brand is primarily a women’s brand but it the fragrance was made for both the women and men. Then Chanel also manufactures watches and jewellery. These are sold not only through their owned retail store but also through independent outlets like upscale department stores. Karl Lagerfields now carries the legacy of Chanel brands. He achieved success since he wants to keep Coco’s spirit alive by innovating the fashion industry and keeping their brand as the latest one (Nagasawa, S. 2011, pp. 31-37). Channel is positioned as brand for wealthy aristocrats, people who have their family name embedded. Chanel as a brand reflects prestige in the society. The character of Chanel is romantic and feminine though the clothes that is makes is inspired by the strength of men. It connects to their target audience through advertising Chanel society in places where the people will automatically reach out to for the product to be a part of the Coco Chanel legacy. Everyone has some opinion about Chanel. Many people would say that it is classy and stands out as a brand in spite of being like a minimalistic. The colours it uses sticks to reflect the true style of elegance. Figure 6: The Chanel logo The Chanel logo was designed by Coco Chanel herself in 1925 and has remained the same ever since. It is one of the most recognizable symbols in the fashion world. The two overlapping double C stands for Coco Channel (Chanel, 2013, p. 1). This symbol represents an icon of elegance, elitism, wealth and sets a standard for luxury international fashion. Again the Website of Chanel is very interactive touch point. Through their website they try to display the Chanel culture. Figure 7: Evanescent Metamorphoses - an extension of the website The above picture displays the ambiguity between the feminine and masculine. Figure 8: Catwalk in Paris The above picture is of a catwalk in Paris where Coco first began her work. Each of the above collection represents Coco’s legacy. The website is classy and has a modern edge to it. This represents the perfect fusion for Chanel to keep Coco alive with the help of her brand. The Website reflects the culture of the company. Figure 9: Channel Girls Through the Chanel girls Coco Chanel wants to convey the message that Simplicity is important for true elegance. Figure 10: Chanel Fragrance This Touch point can be best described by a statement given by Marilyn Monroe in 1954. When she was asked what she wore when she went to bed, she replied that she wore Five drops of Chanel N. ? 5. Through this product Chanel shocked the perfume industry in 1920. Through this product Chanel displayed the sensuality attribute of women who longs for it without realising it. Figure 11: Channel Suit The Channel Suit is a classic symbol of the French elegance (Scholz, 2012, p. 62). It wants its wear to embrace the Suit with ritualistic reverence and hence succumbing to the charm. Critical Analysis Chanel by far communicates more powerful message than Hermes International. Chanel not only created products but it redefined the categories in which it operates. No. 5 perfume, the little black dress, the cashmere cardigan, the total look, costume jewellery all speaks of Chanel’s inventions and all are now fashion legend. To a Brand Lover, Chanel carriers a powerful inspirational message so that he can learn from them. Chanel now wants to extend itself into other luxury products like furniture like manufacturing sophisticated sofas which is in line with their brand values like authentic, classy and fabulous. Chanel’s brand value reflects the Timelessness. For example they do not try to come out with products every minute like their competitors. They make people understand what to expect from them. Hence people of all ages keeps coming back to their stores and don’t leave them. The level of customer service offered by Hermes is one of the best in the industry. Anyone who visits their stores is at first greeted in a friendly and helpful manner by their sales employees. The sales employees will help the customers in finding the products which he needs. Their stores also offer many options to the customers (Chevalier and Mazzalovo, 2012, p. 282). The customers can tell the employees to customize the items so that it meets their desires. Their after sales service is also good. The most popular handbag of Hermes is named Kelly, with a lifetime warranty. A customer can send the hand back to any Hermes workshop situated in Paris anytime and they will make it return to the customer as if it is new. This kind of service prompts the customers to keep coming back at their stores to buy their products even though their products are extremely expensive as compared to other brands. Conclusion and Recommendation In this report Hermes and Chanel as a brand has been discussed and how they communicate their culture across different touch points have been taken under consideration in the discussion process. The other points of discussion included how different they are and who among them is better able to communicate their message across to the customers. Other Luxury brands must learn the elegance and simplicity yet powerful message carried by Chanel across all of its touch points. Product excellence is not enough nowadays. The luxury brand must try to experiment and bring out new ideas new to the industry. Luxury consumers are evolving and hence the luxury brands need to find points of differentiation which would justify the premium pricing of these products. Luxury brands must strive to maintain the exclusivity of their brand. Along with that the brand must concentrate on the paucity and placement factor across all their touch points. They need to generate dynamism through PR, persona and public-figure factor. At the core of Hermes products is powerful message which is their commitment to quality and refinement of the products. They don’t believe in mass production, but rather on one artisan fabricating one item. This tradition is followed by them since its inception. Their main product is leather, which inspired by the power and dynamism characterizing a horse. They were able to master the strong saddle stitch. This soon caught the eye of European royal family. It is not possible for every company to build such handcrafted products at large scale, in spite of keeping their commitment to quality of the product and service. Such commitment to leather was displayed in their store in London. Reference Chanel. 2013. Fashion. Retrieved from: http://www.chanel.com/en_US/fashion.html. [Accessed on: 6 December 2013]. Chevalier, M. and Mazzalovo, G. 2012. Luxury Brand Management: A World of Privilege. New Jersey: John Wiley and Sons. Hermes. 2013. Fashion. Retrieved from: http://lesailes.hermes.com/gb/en/. [Accessed on: 6 December 2013]. Kapferer, N.J. 2008. The New Strategic Brand Management: Creating and Sustaining Brand Equity Long Term. Philadelphia: Kogan Page Publishers. Nagasawa, S. 2011. Managing Organization of Chanel S.A. Waseda Business & Economic Studies, Vol. 47(3). pp. 47-49. Nagasawa, S. 2011. Relationship between Designer and Company: Coco Chanel and Chanel S.A. Waseda Business & Economic Studies, Vol. 47(3). pp. 31-37. Ritson, M. 2010. Chanel's luxury dream is turning to dust. Retrieved from: http://www.marketingweek.co.uk/chanels-luxury-dream-is-turning-to-dust/3016913.article. [Accessed on: 6 December 2013]. Scholz, L. 2012. Brand management and marketing of luxury goods: From the historical development of luxury to our present-day perception. Nordstrom: GRIN Verlag. Tran, P. 2012. Hermes International. Retrieved from: http://mds.marshall.edu/cgi/viewcontent.cgi?article=1421&context=etd. [Accessed on: 6 December 2013]. White, B. 2012. The house of Hermes goes on show in London. Retrieved from: http://fashion.telegraph.co.uk/news-features/TMG9256834/The-house-of-Hermes-goes-on-show-in-London.html. [Accessed on: 6 December 2013]. Read More