3. 2. 1Brand Equity Earning the royal seal of approval and outfitting the Royal Army placed Burberry on the map as “the original British luxury brand” but somewhere along the line, it became the raincoat brand known more for outfitting stuffy elder statesmen than the cloth of choice for the glamorous rich and famous. Burberry revamped its brand image, hiring new designers who took the signature plaid from raincoats to bikinis. Recent ads featuring British fashion icons like Kate Moss and Stella Tennant embody the essence of the new Burberry, depicting a modern edginess merged with a classic British elitism.
Though they faced alienating loyal customers, Burberry balanced innovation with tradition to create an authentic, yet altogether more contemporary luxury offering. Since its reinvention, Burberry’s equity has only increased, both in awareness and in meaning, that meaning now being relevant to a much broader audience. 3. 2. 2Brand Position Burberry under Bravo repositioned as a distinctive luxury brand with a clear corporate strategy aiming to broaden its appeal to new customers while retaining its traditional clientele. The reposition included •A highly distinctive advertising campaign.
•A change of name from Burberrys to Burberry •A strong in house design team and the launch of Prorsum •Closure of unprofitable and non-core retail stores in Europe •Opening a new flagship store in London- New Bond street •Elimination of inappropriate wholesale accounts including the termination of distribution to known parallel traders; •Upgrading of the international Burberry London product range, including the restructuring of its sourcing and pricing, and the elimination of unnecessary product variation. 3. 2. 3Competition Burberry competitors are primarily in the Apparel & Accessories Retail industry.
Burberry also competes in the Cosmetics, Beauty Supply & Perfume Retail, and Apparel sectors. Challenges facing Burberry today include increasing competition in the luxury goods sector. Companies such as Barbour are making progress in areas dominant by Burberry. As time continues the new companies of today are becoming brands of tomorrow and the luxury market is becoming highly competitive. Principal Competitors: In competition with Burberry there are a lot of companies like House of Fraser plc; Polo Ralph Lauren Corporation, Coach, Gucci. Burberry is wedged between lifestyle represented by Ralph Lauren and fashion represented by Gucci.
Burrberry has effectively addressed competition by placing itself carefully so as to avoid direct competition but complicating the issue was the fact that burberry’s brand positioning placed it in indirect competition with both lifestyle brands and fashion brands. 3. 2. 4integrated market channels People use different channels for different reasons. Internet users bought products from a retailer’s offline store after viewing them on the seller’s Website. ” Additionally, experience shows that television support for a direct marketing campaign can improve direct marketing response rates significantly.
Each channel influences the others. Burberry operates e-commerce and other channels in the United States and across 26 European countries. Multiple channels converge into a unified user experience, if channels fail to offer a unified voice, look, and feel, Burberry may disappoint or frustrate customers. A multichannel user expects an integrated experience across all touch points with a brand or information source, and delivering on this expectation is the challenge for Burberry. This situation is more complicated by the presence of Burberry all around the globe. Till now Burberry effectively addressed integrated market channels.
3. 2. 5Price strategy Prices had been raised to reflect the Burberry’s new brand positioning. Serving a niche market sandwiched between labels like Polo Ralph Lauren and Giorgio Armani in apparels, and between Coach and Gucci in accessories. Burberry offered lower-priced labels for younger and fashion-conscious customer. At high end, Burberry offered the label Prorsum as a way to reinforce Burberrys positioning in the luxury brand. 3. 2. 6Retailing Burberry’s retail distribution is through DOS (comprising flagship and regular price stores), concession, designer outlets and factory shops.
The flagship store are important since they act as a showcase for the brand creating a sense of theater through Burberry can promote a lifestyle and its product ranges . The store are also used to trial new products and concepts, and they carry exclusive lines. Burberry flagship stores are normally require upwards of 10,000 square feet of space and are specifically located in exclusive areas of key cities around the world like London, Tokyo , Barcelona , new York etc. A part of its repositioning a number of stores were closed , renovated or relocated according to image and performance.
Burberry continues to move from a relatively static, traditional, wholesale structure to a more dynamic, retail culture and mindset. Burberry became more consumer-centric, responsive organization. This move positively impacted on directly operated stores, franchise partners, wholesale customers and licensing partners worldwide. 3. 2. 7Wholesaling The Wholesale channel includes independent retailers. The wholesale customer include leading department stores and specialty store , including duty free retailers and free standing Burberry store operated by wholesale customers.
Burberry selects wholesale customer on the basis of reputation and market positioning. It also works with wholesale customers on a store by store basis to ensure the right product mix. Burberry effectively came out of parallel trading and deteriorated quality in wholesaling under the leadership of Bravo. 3. 2. 8Logistics Through concentration on operational activities, such as replenishment, planning, merchandising, fixturing and visual, Burberry continues to drive store productivity. In addition, Burberry has developed and piloted a sales and service programme which will be implemented globally in retail stores.
3. 2. 9Advertising Burberry believes that its active marketing and management of the brand has been critical to its success. Marketing initiative like advertising and fashion shows and editorial placements are intended to generate editorial coverage and achieve a high profile and consistent visibility in in domestic and international markets. The advertising has articulate the brand values through innovative visuals that have helped formulate a merchandise strategy and provided inspiration for what Burberry could stand for in a contemporary market.
In common with most luxury brands where average advertising spend is as high as 10 percentage of sale, Burberry sees advertising as key in strengthening its brand and image. In 1998 the company began its successful advertising strategy to re-launch and reposition its brand. It hired advertising agency Baron & Baron and celebrity photographer Mario Testino, whose work had appeared in Vogue, The face, and Vanity Fair, using model Kate moss and Stella Tennant, among others, to inject contemporary sophistication and excitement into what had become a tired traditional brand.
Mario Testino helped to visualize the brand. Kate moss has arguably been the most high profile face associated with the campaign, although other celebrities have been involved in the publicity. The powerful black and white images of Moss in bikini were key in capturing the attention and imagination of public. 3. 2. 10Direct marketing Burberry uses the following direct marketing channels. 1. Burberry collects certain personal information from customer for example, name, postal address, phone numbers, e-mail addresses.
They use this information to manage customer’s account with them and to provide you with information about our products. Burberry sometimes ask for other details, for example product size and category preferences, age and any special dates (such as birthday and anniversary) which will be used to enhance our service. 2. Email updates and news on Burberry collections and on-line exclusives 3. Wishlist creation for Burberry products. Burberry is effectively utilizing above channales but they can expand more in this are using catalogue, telemarketing and directTV. 3. 2.
11Product strategy From a simple raincoat to a global brand, Burberry has become one of the world’s most successful luxury brands today for men, women, and children, encompassing not only outerwear, but clothing, fragrances, accessories and items for the home. Today Burberry has become an icon. It is a brand with a distinctive British sensibility, strong international recognition and differentiating brand values that resonate across a multi-generational and dual-gender audience. Burberry revitalized its brand by developing the long term effective product strategy.
The steps Burberry took to revitalize itself are •Consistent projection of Burberry’s distinctive luxury message across all mediums is a core objective. •Celebrity Endorsement •Effective Advertising •More Selective Distribution •Placement of Advertisement in Exclusive Channels e. g. Fashion show •Market penetration and invest in product development •Flow frequency: Increasing the frequency of flow of new products to Burberry’s stores. •Replenishment: Developing a more extensive and responsive replenishment programme in all product divisions, while evolving in-store visual merchandising and processes to support.
•Continue to represent British culture, history and tradition 3. 2. 12International marketing Asia represents significant growth opportunities for Burberry as it does for other luxary brands. Japan is the Burberry’s most advance consumer market in asia and its initial point of entry into the region having been there operating there since 1920 brands. The core Burberry men’s and women’s lines have been extended to more fashion forward youth oriented collections – Blue label for women and Black Label for men – both aimed at the under-25 age group. This group has proved particularly receptive to the Prorsum international runway collection.
Outside the japan, Burberry has consolidated its distribution in Hong Kong, Singapore and korea. It has new childrens wear business in korea, has opened new prestige stores in hong-kong and undertaken new market initiatives in Singapore Upgrading store image. The Group continues to renovate high profile locations worldwide with a brighter, modern aesthetic and more efficient and productive design concept. In 2008/09, Burberry achieved a 50% increase in revenue from key emerging economies including China, the Middle East, Russia and India. These markets now contribute 9% of sales, up from 6% in 2007/08.
Historically, Burberry has operated in these markets through local partners who possess the specific knowledge and resources required to develop the brand in their respective regions. In September 2008, Burberry entered a joint venture with its main partner in the Middle East to manage retail and wholesale operations in certain key markets. Since inception, Burberry Middle East has opened four stores, including two standalone childrenswear stores. Burberry continues to open stores with franchise partners in other markets, with a net eight stores opening last year, including a net two in China and the first significant stores in India.