Name: Elaine Li Student no. 17510400 Fashion Audit report Burberry
EXCULSIVE SUMMARY (350-500)
Objective Main finding Conclusion
Organisation background Established in 1856, Burberry is a global luxury brand, with outwear at its core. Burberry is currently valued at £1,739.00. It is the biggest luxury brand with largest UK export share. Burberry was founded by Thomas Burberry in Hampshire, England and has its headquarters in London, UK. Its main competitors are Chanel, Gucci, Prada and Louis Vuitton. Burberry’s business is structured by channel, region and product division, supported by corporate functions as set out in the diagram below. The Group prioritises its activities based on its key strategies, which are executed by a global team of over 10,000 employees.
PRODUCT
Product is a key area of strategic activity and the development of the product offering is an ongoing process for Burberry. The Unique Selling Proposition for Burberry is to deliver British culture and innovative design product.
Burberry has a diversified offer across appeal categories, Accessories and beauty. For 2016/17, Accessories represented 38% of retail/ whole sale revenue, Women’s 29%, Men’s 22%, Children’s 4% and Beauty 7%.
Accessories 2% underlying revenue growth Strong growth in womens handbags, an area of strategic focus Small leather goods also outperformed Womens Revenue declined by 4% underlying Fashion outperformed replenishment as customers responded positively to newness Good initial customer responded to newly launched positively to newness Mens 1% underlying revenue growth Introduced an expanded lightweight cashmere trench programme which delivered good early result Children 5% underlying revenue growth Helped by the transition of European children’s wear to direct operation following license expiry Beauty Revenue declined by 18% underlying, reflecting brand elevation actions Building pillar fragrance of My Burberry with brand extensions, including My Burberry Black Successful launch of new male fragrance pillar, Mr. Burberry in April 2016 Burberry has entered into a strategic partnership with Coty for its Beauty business to commence from October 2017
“Marketing management is really crucial in all retail marketing plans as it's only through the marketing strategies that the retail image can be sold� (Joshi, 2005), hence Burberry has a Key strategy and aims for next year.
SWOT
Strengths
Opportunities
STRONG PRODUCT QUALITY HUGE AMOUNT OF CULTURE
AWARENESS ABOUT THE BRAND STRONG SOCIAL MEDIA PLATFORM WELL KNOWN BRAND LEADING LUXURY BRAND COMMITMENT TO BRAND VALUE CUSTOMER LOYAOLTY
Weaknesses SEEN BORING AND TOO CLASSY FOR
TARGETED CONCUMER FASHION SLOW TO MEET TREND WEAK ONLINE INTERACT WITH
CONSUMER LOW TURN OVER WEAK EFFICIENTCY
GROWING COSTOMER DEMAND STRONG GROWTH IN MENSWEAR CHINA OFFER GOOD OPPORTUNITIES IN
LUXURY TRAVEL GOODS PEOPLE’S ECONOMIC STATUS IS GETTING STRONG, THEREFORE GROWING DEMAND FOR AFFORABLE LUXURY
Threats
ECONMIC SLOWDOWN IN CHINA AND
RUSSIA FAST DEVELOPING YOUNG
LUXURYBRNADS COPY PRODUCT BY ANOTHER BRAND
AND SELL IN MUCH CHEAPER PRICE HAVE PLANS TO BRING BACK MANUFACTORING INDUSTRY TO UK
PEST
Political
Economics
Employment law (minimum wage,
working conditions and hours) Retail tax (VAT) Trade restrictions Manufacturing restrictions (CSR)
Social
Current global economic climate Economic cycle Reduced disposable income of consumer
(less consumer capacity) CPI for target country Import and export rate
Technological Demographic Geographic Low disposable income Various culture and value British acceptability
Porters 5 forces
Personal situation too complex Environment had changed Economic crisis Globalisation and competitors Technology developed (internet shopping)
Competitors analysis with positioning map
Social media E-commerce Website Online promotions Digital market
3 Target Audience
Demographic
Gender: Women/Male Age: 30+ Generation: Baby boomers/
Generation X Ethnicity: The UK Marital status: married Life stage: economically comfortable Occupation: CEO/ manager Education: high educated Income: over 50 thousand Social grade classification:
Geographic
Region: west London Urban/suburban/rural: suburban Residential location: Holland park Housing type: Size of city or town Climate
middle/higher class
USAGE AND BENEFIT
Benefits sought from products:
investment to the quality product Usage rates: always Volume of purchases: Price sensitivity Brand loyalty: End-use of product
PHYCHOGRAPHIC AND BEHAVIOURAL
Lifestyle: expensive Social aspirations Self-image: wants the best of
everything / profession image Value perceptions: quality Purchasing motives and behaviour: Interests and hobbies: golf, high tea Attitude and opinions : They buy it because of the brand
4 Market Needs Research what the current clients want and need. Research what the current prospects want and need.
6. Marketing Mix Review Product Burberry is one of the leading luxury fashion brands in the world. All the products have its own distinctive designs and made by exquisite materials. Its Tartan pattern is unique in its design and is associated with Burberry. The core product segments of Burberry are women,
men, kids, accessories and beauty. There are a wide range of collections, the main three collections include Burberry Prorsum, Burberry London and Burberry Brit. The fragrance collection includes Burberry, Burberry Touch, Burberry Weekend and Burberry London. Trench coat is the best-selling and significant item. It has 60% of its market share. It is designed by the founder itself and it uses the Gabardine which is water resistance and breathable fabric to make. Therefore, the quality and the durability of the product along with its intricate designs make Burberry the best products in the international market. Nearly 20% of the sales and revenues are dependent on Menswear whereas the majority is concentrated towards women. Women wear is definitely their main section as half of the revenues are generated from it. The outerwear for children is equally popular amongst the customers. By developing sportswear range, Burberry will also strengthen the brand heritage factor by recreating the product from which the brand has started in its early days. In essence, the major factors for the success of product in the marketing mix of Burberry is its style, design and quality which makes it a long term successful brand. Price The marketing team is responsible for the pricing strategies, they have to do a heavy evaluation about the product demand, market research and competitor’s prices in order to set the price of its product. The marketing team will also consider the product design, durability and perception. One of the pricing strategy is competitive pricing strategy, as most of the luxury brand, they will price the product similar to its competitor. Also, by considering the costumer desirability, the price will change. For instance, the trench coat is always priced at a high price point, and it was selling at the price £600, and now it increased to around £900. Changing their prices may cause the customers to go away from the brand and hence the pricing strategy for Burberry remains more or less the same. As all the products are luxurious items with excellent material and innovative designs, the pricing has to be premium, and their product is selling to high-class elite zone where money does not matter. What matters is that the quality that cannot be compromised at any cost. Burberry is both a luxury brand and a global company and hence its prices have to be consistent around the world everywhere because price discrimination will result in diluting its brand image. Place
Burberry has 475 stores in 50 countries, all of the stores are mainly located in highly populated areas which guarantee a definite revenue to the firm as its target costumers residing around these areas. Also, the Burberry stores coming up are more digitally influenced and innovative in terms of customer service, an equal number of people buy online form burberry.com. Burberry has their own official websites where all the products are displayed and detailed information is provided about them. Moreover, not only stores in high street, Burberry also have shops in a store, for example Selfridges. People who walk in to Selfridges has a different spending level than high status people. They feel less stressful than walking in an official store in high street.
Promotion Burberry is positioning in market leader, therefore expanding the current market share is crucial. It had to spend on advertising heavily in order to do so. Promotion become the most important part. First, Burberry uses marketing communication, it means when costumer once enter the store, the sales will soon come up and start to inform, persuade and remind about the product and the brand they sell. Second, it always uses above-the-line promotion strategy, as they had enough profit to advertise on television and newspaper. For example, the advertisements are chosen to be placed in high class magazines to target the specific audience. Last, investments in digital marketing helped Burberry communicate their brand message easily to customers. Additionally, they heavily rely on celebrity endorsements. Top tier influencers can make a direct effect to their followers.
People People are the most important element of any service or experience. It is related to who is directly and indirectly influence the perceived value of the product or service. Every worker in Burberry are well-trained and knowledgeable. It has after sales support, like advice, refund, exchange, etc.
Physical evidence
There is a classic logo on store front, the environment is very clean and modern. It has a brand standard layout across all retail avenues. The customer will actually receive luxury packaging box, ribbon and bag when they purchase the product. The fitting room is big and the lighting in room is warm, there is a chair in every single room. Process Burberry has an efficient standardise sales process with a high-quality customer service.