The Luxury Products of Gucci - Coursework Example

360° Report of Guccio Gucci in China Marketing Section The luxury products of Gucci offered to its target audience inlcude: shoes, leather goods (bags), wathes, fine jewelry, accessories (belts, sunglasses, etc.), and prêt -à-porter or ready-to-were (GroupM and CIC 2011). Gucci, the same as other luxury brands such as Dior, Cartier and Rolex have combined several promoting strategies to develop and establish their brands. Marketing strategies for luxury brands, such as Gucci are frequently based on the brand-name associations that appeal to the psychological and social motivations and aspirational needs of the target audiences (Marketing Mentor, n.d.). These strategies include: advertising, craftsmanship, public relations, a touch of mythology, and word of mouth (Marketing Mentor, n.d.). In order to develop effective marketing campaing in China, it is vital to understand the luxry market in China and consumers’ behavior. The luxury market in China The Chinese luxury market is huge and is projected to grow by 18% annually from 2010 to 2015, exceeding 20% of the global luxury market (GroupM and CIC 2011). Luxury buyers in China value the status they gain by wearing luxury goods. Chinese consumers like to show their off their shopping achievements and purchasing power. That is why sharing of shopping experience is common in the luxury segment (GroupM and CIC 2011). By developing a business expansion strategy in China, Gucci’s marketers have to focus on the top domestic markets by RMB 10 million-plus population. These cities inlcude: 1) Beijing, 2) Guangdong, 3) Shanghai, 4) Zhejiang, 5) Jiangsu, 6) Fujian, 7) Shandong, 8) Liaoning, 9) Sichuan, and 10) Henan (GroupM and CIC 2011). See the map below. (Source: GroupM and CIC 2011, 2). Chinese luxury consumers Segments and purchase drivers Fast growing luxury market in China captures consumers with different motivations and behaviors. In order to develop effective marketing strategy for this Asian market, Gucci has to consider the purchase drivers common for Chinese luxury consumers. There are indentified four major segments of Chinese luxury consumers: aspirational buyers; quality pursuers; status seekers; trend setters (GroupM & CIC, 2011). Aspirational buyers are mainly white-collars and college students who are very sensitive to price and tend to purchase accessories of famous luxury brands. The purchase drivers include: brand awareness, style and design, and price (GroupM & CIC, 2011). For Qaulity pursuers quality and fine workmanship are the major criteria while purchasing the luxury brands. The purchase drivers include: quality, price, style and design (GroupM & CIC, 2011). The third category of Status seekers implies consumers who purchase famous brands with striking logos in order to demonstrate their status. The purchase drivers include: brand awareness; style; and quality (GroupM & CIC, 2011). The category of Trend Setters is comprised of younger people, who seek to buy low-awareness but trendy luxury brands in oder to demonstrate their individuality and identity. The purchase drivers for trend setters are style, exclusivity, price, and quality (GroupM & CIC, 2011). The growth of "Generation AAA" One of the segments that Gucci should definitely target in the Chinese market is so called “the AAA generation”, which is a new generation of “aspirational, ambitious, and affluent young Asians” (Chow 2013, 3). Generation AAA tend to work hard and then reward themselves by purchasing luxury goods. About 25% of this cateogry tend to buy luxury goods worth over US $1,000 (Chow 2013). Generation AAA views luxury goods as a reflection of their status and achievements; associate premium brand with quality; buy it as a gift for themselves for certain achievements (Chow 2013). This category offer huge opportunities for Gucci as it is the target audience of the Italian-based fashion retailer. Gucci marketing team operating in Chinese market could adjust their marketing campaign to the local culture and mentality, thus stressign in their advertising message of self-rewarding and recognition of own achievements. Online marketing While tradiitonal print media is the dominating marketing tool used in luxury sector, the digital media marketing is pretenfing for replacing print marketing instruments due to its unique connection with target audience. As Samuel-Camps and Haldan-Jones (2013, 2) explain, “a strong digital strategy is now absolutely fundamental for luxury brands to position themselves as leaders in the industry, while giving them a platofrm to display heritage and brand character”. Internet and online marketing offer great opportunities for luxury brands, as these are the tools that enable luxury consumers to talk about and engage with luxury brands. The major activities vary from receiving information from brands, researching and sourcing brands to communicating with others and showing off new luxury purchases to online communities (Warc Exclusive, 2010). As it has been already disccussed, it is common for China’s luxury and fashion communities to show off a product (“shai”). Taking into consideration this feature of the Chinese luxury market, it is possible to develop an effective online marketing campaign with a help of luxury “efluencers” – people who will interact with luxury fans (GroupM and CIC 2011). Therefore, Gucci should focus on online promotion activity, posting news about seasonal new products launches, parties, fashion shows, etc (GroupM and CIC 2011). It is also important to take into consideration, that the above discussed “Generation AAA” offers huge opportunities for Gucci as this segment is extremely keen on technology and is comprised of active users of new gadgets. Taking into consideration this fact, Gucci has to develop strong online marketing platform for engaging and interacting with this segment of “Generation AAA” (Chow 2013). Social Media Strategies Gucci as a luxury brand could adopt offline-to-online campaign in order to connect with consumers and increase brand awareness. The cycle of offlin-to-online is graphically illustrated below: Source: GroupM and CIC 2011, 8). For increasing brand awareness, Gucci could use video sites and popular Microblogs such as Weibo and Youku. By using these platforms for mass awareness distribution, Gucci would be able to target Aspirational consumers. For brand appreciation, Gucci should use Fashion sites and Premium SNS, such as Liba, Yoka, and P1.cn.(GroupM and CIC 2011). These sources will help the company to access more relevant target groups and more sophisiticated luxury consumers. For emotional attachement, Gucci could use Brand Fans Club, such as Douban fans group and Weibo brand account. This will enable the company to reach very focused target group of brand users and fans (GroupM and CIC 2011). References: Chow L, (2013). Meeting the needs of affluent Asian consumers. Event Reports, ad:tech Singapore, June 2013. GroupM & CIC, (2011). Luxury and Chinas netizens: the market and the audience. Warc Exclusive. GroupM & CIC, (2011). Luxury and Chinas netizens: social marketing strategies. Warc Exclusive. GroupM & CIC, (2011). Luxury and Chinas netizens: analysing consumer buzz. Warc Exclusive. Marketingmentor.net, (n.d.). Luxury brands - a viewpoint. [online] Available at: http://www.marketingmentor.net/wp/?wpid=1486 [Accessed 19 Jul. 2014]. Samuel-Camps E and Haldan-Jones M, 2013. Luxury brand marketing: The seamless consumer journey. Available at: http://www.warc.com Warc Exclusive, (2010). Warc Briefing: Luxury Marketing. November 2010. Available at: http://www.warc.com Read More