Showing the Customer Who's Boss - Assignment Example

Showing the Who's Boss The German retail company, Hugo Boss, has for years been a powerful in upscale men's clothing. The main reason that the Hugo Boss company has been successful is because of the rare combination of quality products, brand integrity and efficient marketing. Efficient marketing plays an important role in the success of any retail company - as can be seen through Hugo Boss' history. In 1997 Walter Baldessarini turned the company into a major player on an international scale by broadening the Hugo Boss name to appeal to a wider variety of clients. Under Badessarini's direction, Hugo Boss focused on penetrating key market segments which included several new lines - one for women, one for young professionals and even an athletic line. The launching of "Boss," which targeted young professionals with a full line of more casual clothes as well as sporting accessories, allowed the company access to a much wider range of clientele than it had previously enjoyed. It is this segmentation of the Hugo Boss brand helped the company immensely with its growth and profitablility. According to Diamond and Pintel (1980) "there is generally a limit to the amount of sales that a given article can produce, company growth may depend on the introduction of new products for an increase in sales" (p.166). Which is exactly the idea that Hugo Boss had as they expanded their product lines and thereby expanded their client base. The next foray into new territory brought them into the world of women's apparel. Since Hugo Boss was not well known in this market, they had to work hard to extend the popularity and the image of their brand. They already had a great advantage because their name has always been associated with quality clothing, this strong brand name and store image played a very important role in their new product lines. "Store image is a very important factor for effective retail marketing because it can exert a major influence on consumer patronage patterns" (Rosenbloom 1981 p. 127). A strong store image can help not only attain new patronage but also ensures retaining the clientele they already have. However, Hugo Boss needed to ensure that their popularity would be transferable to the women's market. Hugo Boss faced a challenge in marketing the women's line "unlike most types of goods, merchandise with fashion orientation requires anlysis that is often different" (Diamond and Pintel 1980 p.192). Hugo Boss needed to generate ideas quickly and analyse their information and designs in a different manner when dealing with women's fashions. "Fashion, with its rapid changes, dictates the need for the continuous introduction of new styles" (Diamond and Pintel 1980 p.192). Hugo Boss also employed various ways to communicate with their audience, such as media outlets, fashion shows, and major layouts within popular fashion magazines. Hugo Boss' goal was to have their popular brand name become associated with high quality women's clothing. The obstacles were difficult to overcome, the costs for advertising were high and fashion is risky, the clientele's needs and wants are in constant flux. According to Diamond and Pintel (1980) "an error would be enormously costly, since wrong styles have almost no value," (p.193) yet are still costly to produce and promote. Hugo Boss experienced difficulties with their new women's line early on, as is seen in the net losses they sustained when it was first launched. Extending an existing brand into a new, but related market, is challenging for several reasons. First, the audience needs to accept the change, and secondly, they need to believe that the brand will retain its integrity and quality when producing new products outside their original market. The danger is that the brand name will be diluted by being over eager and attempting to go into markets beyond their core competency. Yet, by 2002, Hugo Boss had figured out how to leverage their name across new markets and had finally become synonymous with both men's and women's upscale quality clothing. As mentioned previously, a brand's name plays an important role in the overall product and as well as the clientele's self image. As Dyson stated (2002) "A sophisticated connoisseur, discerning and international That's exactly how this expensive German fashion brand is hoping to make you feel." This is how Hugo Boss wants their clients to feel as they wear their clothes, it is this self image that people should associate to the Hugo Boss name, which is why a brand's name plays an important role. Finally, Hugo Boss' brand name and image had successfully carried over to their new women's line. The women's line added immensely to the overall profits of the company as can be seen in the following years as sales were "expected to top 1 billion in 2001" (Brassinger & Pettitt p. 38). Through the strength of their brand's integrity as seen here, it allowed Hugo Boss to make a successful expansion into other markets. With this success Hugo Boss turned their attention to a different sort of expansion. Hugo Boss then went on to open a new flagship store in the heart of New York City. This was an important move because it opened up a whole new world for this international company. Although the brand was already well established in Europe, it was still relatively new in the United States. Having a presence in New York allowed for the young professionals there to be exposed to brand and to build up a new clientele. Diamond and Pnitel (1980) state: When the domestic market of a highly industrializad nationbecomes saturated through execcsive competition, its producers must turn to foregin markets to ensure their continued survival and growth. Since World War II the world market has increased enormously in terms of population and gross national product, which has had the effect of greatly increasing the importance of foreign markets as a source of sales volume and profits for domestic producers (p.165). Hugo Boss used effective marketing techniques to continue togrow the brand by entering new markets and extending the line to meet increasing consumer demands. As Roesenbloom status (1981) "knowledge of consumer behavior is vital for the retailer as a basis for developing effective retail marketing strategy" (p.77). The company management was keenly aware of emerging and changing buying patterns and they were able to adapt in order to benefit from those trends. They have consistently demonstrated the flexibility to grow and expand according to the needs of their customers, such as adding casual lines of clothing and launching a women's line. It is through their marketing strategy that they have become, and remain, so successful through the years. Their strong brand name and quality products have taken them a long way and it is through constant marketing, media attention and word of mouth that they are able to keep their popular brand strong and profitable. Citations Brassington, Frances & Pettitt, Stephen. Principles of Marketing 3rd ed. Prentice Hall: Englewood Cliffs NJ. Diamond, Jay., & Pintel, Gerald. (1980). Principles of Marketing. Prentice Hall: Englewood Cliffs NJ. Dyson, Charlotte Jane. (2002). Hugo Boss - Loading 08/23/06 www.brandchannel.com Cateora, Phillip R. (1990) International Marketing. Irwin: Homewood IL. Rosenblum, Bert. (1981) Retail Marketing. Random House: New York. Samli, A. Coskun. (1989) Retail Marketing Strategy. Greenwood Press: Westport CT. Read More