Marketing Planning and Promotion at the Luxury Fashion Businesses - Case Study Example

Burberry Clothing Name Instructor Course Executive Summary The luxury fashion business has increasingly become dominant in the global markets. This has resulted in high competition levels in these types of businesses. The apparel industry has become highly competitive with new companies steadily coming up. Burberry is a firm which is in the apparel industry which is an expensive brand that offers clothing, footwear as well as accessories. To address the high competition levels, Burberry clothing product line has decided to develop new scarves and trench coats to concentrate on the specific local needs of the various markets that the firm operates in. The report has given a detailed industry, market, and competitive analysis of the Burberry clothing product line, and discussed the various growth opportunities for this particular product line. The report has also discussed the marketing opportunities for the new products and has recommended the marketing strategies which address segmentation, positioning, target markets as well as those that detail the marketing mix variables. The report has incorporated a proposal for the promotional plan and promotional mix. Some of the contingency considerations that Burberry will have to develop will include the cost contingency plan and the inspection contingency plan. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 5 Industry Analysis 5 Competitive Analysis 6 Growth Opportunities 7 Product-Clothing 7 Retail 7 Process 8 Justification of the Launch 8 Marketing Opportunities for the New Product Launch 9 Social Media 9 Revolution 10 Recommended Marketing Strategies 10 Segmentation 10 Behavioral Segmentation 10 Psychographic Segmentation 11 Geographic Segmentation 11 Market Targeting 11 Product Positioning 12 Marketing Strategy Detailing the Marketing Mix Variables 12 Clothing Product 13 Pricing of the new clothing products 13 Product’s Position 13 Promotion of the Clothing Product 14 Proposal for the Promotional Mix and Promotional Plan 14 Personal selling 14 Advertising 14 Direct Marketing 15 Sales Promotion 15 Public Relations 15 Promotional Plan 16 Budget 17 Financial Contribution of the New products 18 Demand Forecasts 18 Contingency Considerations 19 Cost contingency 19 Inspection contingency 19 Conclusion 20 References 21 Introduction The luxury fashion businesses have become global companies which are worth more than about 220 billion pounds (Peng and Chen, 2012). Following the continuous emergence of the new luxury players and markets, it becomes imperative for these brands always to be ahead and stay ahead when it comes to their strategy and style. Burberry, which is categorized as a luxury business strives to do this. Burberry is a company which is widely known for producing functional outerwear and has a brand value which has reached 2.5 billion pounds (Peng and Chen, 2012). For Burberry to get to where it is currently, marketing and promotion have played a central role in it. This company is categorized in the apparel industry and produces various products ranging from accessories, footwear, as well as clothing. Burberry has experienced numerous challenges in its marketing and promotion strategies for the different products that it produces (Peng and Chen, 2012). Following this, the report will establish a marketing and promotion plan specifically for the Burberry clothing. Industry Analysis As documented above, Burberry clothing is categorized in the apparel industry since it is a firm which undertakes to design as well as sell accessories, footwear, and clothing (Robinson and Hsieh, 2016). Just like the other companies in this industry, the Burberry clothing product line has both the retailers and wholesalers operations. This industry is highly competitive and fragmented. Additionally, in this clothing industry, various major players exist, but still, numerous private companies and niche stores are present which aim at catering to the particular demographics (Robinson and Hsieh, 2016). In this industry, the various foreign businesses and the general merchandisers result in even more competition in this industry. Following this, the businesses that exist in this sector, Burberry being one of them, are required to be highly efficient and nimble so that they could ensure that they thrive in the industry (Robinson and Hsieh, 2016). Having the correct product is also considered to be highly essential more so because the fashion trends tend to change very frequently which means that the companies will need to adapt to the highly varying and changing consumer tastes fast (Robinson and Hsieh, 2016). Following this, Burberry has decided to map out a marketing and promotion plan which it will use to address all of these issues that exist in the apparel industry for it to remain competitive and profitable in the long run. Competitive Analysis As described above, the apparel industry, and more so the market of the luxury goods which Burberry clothing belongs to, experiences intense competition from various other established clothing brands (Ananda, Hernández-García and Lamberti, 2016). This is especially the case if these clothing brands have not yet won the loyalty and the trust of their clients which means that they will implement creative and robust marketing and promotion strategies to achieve this objective. However, the Burberry clothing product line experiences just little to the lack of any competition from the young and new clothing brands. This is because these young companies do not have the necessary vast amount of capital which they will need to pose such competition to Burberry (Ananda, Hernández-García and Lamberti, 2016). On the other hand, Burberry is experiencing high competition from the large clothing line brands like the Mulberry Company, among others which are also categorized in the luxury brands apparel sector. Therefore, to tackle this competition, Burberry is focusing on product differentiation which will take to creating different and a vast market for the clothing product brand. In doing this, Burberry aims at exploring its growth opportunities regarding its clothing product, through enhancing its process and retail for the same (Ananda, Hernández-García and Lamberti, 2016). Growth Opportunities Product-Clothing Burberry considers having great clothing products, which includes the men, women, and women’s clothing as the foundation of the company’s productivity and growth goals. Burberry has always had significant strength in both fashion and heritage, across age groups and genders. However, its clothing assortment is regarded to be wide as compared to that of its competitors and peers. This then presents the opportunity for Burberry to simplify its clothing products further so that it could offer a greater visibility to the newness and fashion while at the same time tailor these clothing products to become effective even for the local needs. Following this, Burberry’s clothing line will launch the Burberry heritage cashmere scarves and trench coat whereby it will implement the end-to-end category management for these products. This new clothing product launch is intended to be implemented by the end of the year 2017. Retail With the introduction of this new clothing product, Burberry aims at driving its retail productivity both offline and online. Burberry clothing product line has established that there are significant opportunities for improving its end-to-end disciplines in retail which will be a part of the large push towards the omnichannel excellence which will be representing a new evolution stage for the company’s product line. In doing this, the firm will have a significant focus on the local customers which will, in turn, drive loyalty through leveraging the customer insight capabilities as well as their investment in the cities that they have prioritized. The primary success measures that Burberry clothing product line will use include the client retention, and the improvement of the sales conversion and densities. Process One of the Burberry’s clothing opportunities regarding its process is to enhance its efficiency through the firm changing the ways in which it works or operates. Following the opportunities that have been discussed above, Burberry could capitalize on them through the company altering its cost base, processes, as well as the ways in which they work. In achieving this objective, Burberry will seek to reduce the inefficiency and complexities through the simplification of its processes, prioritizing the investments which are behind these growth opportunities, and improving both the local and global insight. Justification of the Launch Burberry clothing line has continuously been addressing the ways in which it could optimize its future revenue through exploiting its growth opportunities and the resulting plans of investment (Payne and Frow, 2005). This firm’s clothing brand is strong and is always drive by a combination of innovation and heritage which will be expressed through the fashion newness that it will develop as well as the iconic clothing products. Therefore, looking into the future, Burberry clothing line has explored an opportunity which will enable it to improve its current brand strength by the clarity and high consistency levels across the customer markets and groups (Payne and Frow, 2005). However, some challenges have driven the firm to explore these new growth opportunities is because its retail reported a decline of about 5% in sales in the previous year which was because of market generalization which represented a decline in sales. This necessitated the company to focus on the specific clothing needs of the customers of a particular market which will, in turn, boost its sales and productivity (Payne and Frow, 2005). In addition to this, the company will need to change its marketing and promotion plan to ensure that this product gets to the correct market, achieves the publicity that it deserves, and address the needs of its target consumers. Marketing Opportunities for the New Product Launch The new clothing products that Burberry has sort to develop are the Burberry’s heritage scarves and trench coat which will seek to address the specific needs of the local consumer in the various local markets. Following this, various marketing opportunities are available which will be discussed below. Social Media Burberry will launch a marketing campaign which will be undertaken for 24 hours. This campaign will entail photography by professional and prominent photographers who will undertake some photo shoots for the new Burberry clothing product. It will then take part in picture messaging applications which the company has discovered to be among mobile applications which are growing very fast in that market. This campaign, which will be used for the first time by Burberry, will display these photographic images on a 24-hour basis in the numerous Snapchat users, who are about 100 million of them and most of whom are just under 35 years of age. This particular marketing ingenuity that Burberry will utilize will represent the firm’s commitment to the adaption of the various social and technological advancements which will, in turn, create the appeal for the Generation Y on its new clothing brand. Additionally, the firm will incorporate this particular marketing campaign into its marketing strategy which will further enhance the recognition for its clothing brand. This will prove to a significant differentiation source which is highly needed in this clothing sector. Revolution Burberry is willing to make use of the social media palate with the aim of pushing boundaries and targeting a bigger consumer base. One of the marketing strategies that Burberry has found to be potentially helpful for these new clothing products is reducing the fashion shows that is carried out by having four of them to having two. In doing this, it intends to make these fashion shows to become gender-neutral alongside the seasonal-neutral clothing products. Therefore, Burberry plans to make these clothing products instantly available to its target consumers, as well as respond to the unwillingness of the clients to have to wait until these clothing items become released in their stores. This marketing strategy is regarded as unique from the others which the other luxury brands utilize and could probably lead to the perception of the consumer of Burberry to being akin with the ‘high-street fashion’ as opposed to the ‘high-end fashion.’ Recommended Marketing Strategies Positioning, targeting, and segmentation are often considered as important marketing tricks more so because the customer preferences and populations are becoming wider while there are various competitive options that are increasingly becoming available in the market. Segmentation Three different types of marketing strategies exist regarding segmentation that would work for the new clothing products of Burberry. Behavioral Segmentation Regarding this type of segmentation, Burberry could divide its target population by their decision-making patterns, usage, and behavior. For example, design specific scarves and trench coats that could suit the young people and different types of designs for the older generation. After doing this, they could market these products on the basis of their individual behaviors and preferences. Psychographic Segmentation This type of segmentation makes use of the opinions, interests, activities, and lifestyles of the consumers when defining the market segment (Fill, 2005). This marketing strategy will consider the various psychological aspects of the behavior of the consumers when it comes to their buying accounts. Some of the psychological aspects that Burberry clothing line may take into account are the social standings and the lifestyles of their consumers. For example, regarding lifestyle, Burberry may segment the customers who usually need the differential and latest clothing from those who just need the premium lifestyle and just shop for any kinds of scarves or coats as long as they are sharp. This strategy will enable the company to address these different needs differently and therefore ensure their customers are satisfied. Geographic Segmentation This marketing strategy divides the consumers by their geographical location (Fill, 2005). One of the reasons that have resulted in Burberry to develop these new products is to avoid market generalization. Its aim is to focus on the different local markets and address their needs differently. This is because consumers have different needs following their geographical location. Therefore, for example, different types of scarves and trench coats will be designed in different fabrics depending on the dominant climatic conditions of an area. Market Targeting In market targeting, Burberry clothing product line will strive to identify and operate in markets which are large enough for it to be segmented. In these various segments, the firm will need to oversee that measurable differences exist between them to ensure that they will be efficient and productive. Regarding the profitability of the segments, Burberry will make sure that the anticipated profits surpass the costs which will be incurred in the additional marketing strategies as well as other changes. Each of the established market segments will need to be readily available by the firm’s teams, and these segments need to be able to receive all the marketing messages. Finally, the various segments will need to focus on the different benefits which will be obtained from the different segments. Product Positioning The Burberry firm will require positioning its clothing product in a particular place in the market. In doing this, a product position map will be helpful to ensure that the various products in the different segments are positioned in a particular place in the market. If one product, for example, in one segment there are no a specific type of trench coat, then there is an opportunity that is present and the firm would consider to explore it. Thus, the product positioning strategy will be helpful to help the business know which market’s needs are not addressed and which ones are addressed so that they could take the necessary actions regarding that. Marketing Strategy Detailing the Marketing Mix Variables There are four distinct groups in the marketing mix which include the product, price, place, as well as the promotion. The product deals with the goods which a company provides, and the price addresses the quantity of money that a client pays for them to acquire the product (Peng and Chen, 2012). The place refers to the different activities which will enable a product to be available to their consumers while promotion is the activities that concern the communication of the product’s benefits and features with the aim of persuading customers to buy this product (Peng and Chen, 2012). Therefore, regarding the marketing mix, the most efficient marketing strategy will be that which oversees the combination of all the various groups in the mix as well as ensuring that they are related so that they could establish a product’s position within the target markets. The following will be the marketing strategy; Clothing Product The product that is being offered is Burberry’s heritage scarves as well as trench coats. These products will use the conventional Burberry brand and packaging styles. Approximately 20% of the revenues and sales have usually been dependent of the men’s clothing, but the majority is usually concentrated on the women’s clothing. Following this, these new clothing products will focus more on the designing women’s and children’s scarves and trench coats which according to the market analysis reports. Pricing of the new clothing products Pricing is evidently a critical part of the marketing mix. This firm being among the luxury brands in the market, the design of the trench coat and scarves will be based on innovative designs and craftsmanship. Therefore, the pricing of these clothing products will have to be premium so that it would cater for the high-class and elite zones whom to them money does not really matter but instead quality does. Additionally, in its pricing mechanisms, the prices allocated in these new clothing products will need to be consistent all over the world since if there will be price discrimination, their brand image will be diluted. Therefore, the Burberry’s global marketing team will be allocated with the responsibility of setting these pricing strategies after an intense evaluation of the competitor’s prices, market research, and product demand. Product’s Position The Burberry stores have physical locations in about 500 places globally in its 50 countries where it operates. Following this, these new clothing products will be sold through the branded stores and the global franchises by the third party dealers. These products will also be displayed in various premium departmental outlets and stores not leaving behind the different online organizations. The company will also make use of its various official websites where the new products are displayed alongside some detailed information about them. The interested customers will then be able to make their orders which will then be dispatched as soon as possible. The distribution channels will be very efficient and fast to minimize any risks of mistakes in the process. Promotion of the Clothing Product The promotion will be concerned with the attraction of the right customers and people in the business. In doing this, Burberry clothing product line will utilize the high-class magazines first to launch their new products and then for the continuous highlighting of these new products as well. Campaigns will also be used to market these products by using some celebrity models like Max Rendell, Edie Campbell, and Charlotte Wiggins, who the firm had previously had endorsements with. Proposal for the Promotional Mix and Promotional Plan The promotional mix of the new clothing product of Burberry will entail the following; Personal selling In the various physical stores that the company operates in, there will be some one-on-one communication between the potential customer and the seller when they physically visit these stores. This will generate some direct contacts with the customers and prospects. Other means that the firm will use regarding this personal selling will include correspondence, e-mails, telemarketing, as well as some personal meetings. Advertising Burberry will make use of this type of non-personal communication where the firm will pay various media outlets to promote these new clothing products that it has developed. By using advertising, Burberry will take part in a one-way communication to the potential consumers. Some examples of advertising that Burberry can make use of include the websites, television, newspapers, and magazines. Direct Marketing Burberry clothing product line could also make use of direct marketing which could be directed towards the potential customers. Precisely, the company will make use of printed mail so that it could generate its sales for the new products. This marketing strategy will enable the firm to communicate on a one-way basis to the potential clients regarding order confirmations, address the customer inquiries, offer them bulletins, as well as the special promotions. Sales Promotion The Burberry Company will utilize sales promotion to represent all the other marketing activities aside from advertising, direct marketing, and personal selling. The firm will make use of the sales promotion strategy so that it could stimulate the sales and purchasing levels with the intention of informing the clients regarding the new products, as well as increase the business sales. The various sales promotion strategies that Burberry will implement include the use of coupons and the displays of point-of-purchase. Public Relations Public relations is another promotional mix marketing strategy that Burberry could use in promoting its new clothing products. This strategy will oversee the company managing to have a significant influence on its target audience. Precisely, the Burberry’s clothing product line will allow the firm to establish a rather good image for the products that it is publicizing. For example, the company will give various news releases so that it could announce the new products and distribution channels that the company has. Publicity is also another method of public relations which in turn gives the business the opportunity to accord the newsworthy public information about the new clothing products. Promotional Plan In the promotional plan, the Burberry clothing product line will review all the financial information including its operating costs, and sales revenues. After doing this, the marketing team will assess the amount of money that it can afford for the marketing costs. Additionally, the marketing analysis team will need to ensure that the revenue that will be generated from marketing these new products will rise following the promotional campaign. After the financial analysis, the marketing team will need to establish a given timeline to achieve these marketing goals. The firm will set goals that last for 12 months but will have some short-term objectives for every quarter. In doing this, it will be critical to ensure that there is enough amount of capital which will cover all the marketing costs during the timeline. The next thing in the promotional plan would be the identification of the target customers which will entail a detailed description of the ideal customer base in the promotional plan. These new products are targeted towards the wealthy customers who are why the prices are rather high because the clients can afford following that their focus in on quality and not on the prices. Identification of this type or category of consumers will enable the firm to identify the customers where the promotion will concentrate in. The next entity of the plan would be to make a decision on the particular place where the new products and the advertisements will be held. Since the aim of the company would be to sell these new products to customers in different regions, then the plan will entail the promotional strategies which will ensure the products are promoted using these various platforms. Examples of the ways that these products will be promoted include the use of posters, campaigns, TV commercials, as well as other adverts. The promotional plan will include setting a goal which is both sales-based and revenue-based for the given promotion on the basis of the percentage increase in the revenue that is earned. Some of the investors who will be included in developing these products may even refer to these goals when the implementation of these plans comes to an end. The last aspect of the promotional plan would be documenting the individual responsibilities which every department will have to play in implementing the promotional plan. This given responsibilities list will entail a precise list of the specific budgets which will be assigned to every of the enlisted departments. After this promotional program has been completed, it will be distributed to all the relevant parties for proper communication of the marketing strategies for the new products. Budget Budget Category Current Programs Cost (pounds) New Programs Cost (pounds) Advertising 5000 3800 Packaging and Design services 3400 2200 Consulting services 2800 1000 Customer visits 1080 876 Web site design 500 320 Web site maintenance 150 78 Printing 1000 890 Creative services 680 500 Endorsements 1500 1200 Event support 1000 764 Merchandising 970 650 Branding support 2000 1500 Other marketing expenditures and services 1500 1000 TOTAL 21,580 14,478 Financial Contribution of the New products The new products that have been developed by the Burberry Clothing products will oversee the firm outperforming in the industry which is anticipated to depict a growth of in the approximately 200 billion pounds worth international luxury market. This will then result in growth in the shareholder value for the Burberry Company which is estimated to depict a growth of about 130 million dollars in sales for the first year of implementing these new products. Additionally, the Burberry Company will also strive to identify other cost savings programs when undertaking the delivering of the new products which are expected to oversee about 200 million pounds of the annual savings by the year 2019. Assuming the achievement of these ambitious growth targets is realized, then the firm will manage to establish new pays that are performance-related which is estimated to be at the cost of 20 million pounds. Therefore, it is evident that these new products will not only oversee the company increase its revenue, but it will also enable it to develop new projects and products that enable it to achieve high levels of success. Demand Forecasts Looking forward, after Burberry develops these new clothing products which are Burberry’s heritage scarves and trench coats there will be an increase in the demand which will enable it to outperform in the more than about 200 billion pounds luxury market. The current demand which is reflected by a number of sales stands at about 100 million pounds only in the clothing business. Following this change, the demand is estimated to increase by about 30% of the initial demand which will stand at 130 million pounds in the next year. It is projected to increase at about more of the same rates for each year. Contingency Considerations The two contingency considerations for this marketing and promotion plan include the cost contingency and the standard contingency. Cost contingency It will be essential for Burberry develop a cost contingency plan which may be financially costly in the beginning, it will be beneficial in the end more so given that there are many risks which are involved when the plan is not involved (Robinson and Hsieh, 2016). Therefore, the cost contingency plan will enable Burberry to avoid a total operations’ shutdown which will, in turn, threaten the firm’s viability in the market. Thus, it anything would pose a threat to disrupt Burberry’s operations, then the cost contingency plan would be essential when it comes to saving costs as a result of these threats. Inspection contingency It would be critical to the Burberry to develop an inspection contingency plan which would enable the potential clients to back out from purchasing the property. This will take place in instances where an external and neutral professional inspection has established that the products have significant problems which maybe the seller did not realize or decide to hide from them (Robinson and Hsieh, 2016). This plan will be essential to protect the consumers from purchasing goods with certain problems and in the same light increase the consumers’ confidence in the new products. On the other hand, the Burberry will be protected where the suppliers may offer problematic supplies to the firm. Conclusion Burberry is a firm which is in the apparel industry and deals with luxurious products. Some of the products that Burberry offers include clothing for the men, women, and children, footwear, and accessories. The apparel industry and market are highly competitive which has necessitated the companies in this industry to input mechanisms that will oversee their continuous competitiveness. The company has decided to launch new clothing products which Burberry’s Heritage scarves and trench coats. These new products will be designed for the high-class consumers. Some of the marketing opportunities that exist for the new products are the use of social media and a new marketing revolution. The marketing strategy detailing the marketing mix variables has been discussed in the report as well some of which include advertising, sales promotion, public relations, among others. The proposal for the promotional plan and the promotional mix has also been included in the report. The demand forecast following the introduction of the new products has been projected to increase by 30% in the first year and an increase in the same rate in the subsequent years. Finally, regarding contingencies, it will be essential to develop the cost contingency plan and the inspection contingency plan. References Ananda, A.S., Hernández-García, Á. and Lamberti, L 2016, N-REL: A comprehensive framework of social media marketing strategic actions for marketing organizations. Journal of Innovation & Knowledge, 1(3), pp.170-180. Fill, C 2005, Marketing communications: engagements, strategies and practice. Pearson Education, London.  Payne, A and Frow, P 2005, A strategic framework for customer relationship management. Journal of marketing, 69(4), pp.167-176. Peng, N and Chen, A.H 2012, Consumer perspectives of cultural branding: The case of Burberry in Taiwan. Journal of Brand Management, 19(4), pp.318-330. Robinson, P.K and Hsieh, L 2016, Reshoring: a strategic renewal of luxury clothing supply chains. Operations Management Research, 9(3-4), pp.89-101. Read More