Group 2 Li-Hsuan Tsai Chen-Wei Chiu Wei Liu Professor Donald Levy
"LUXURY IS A POINT OF VIEW THAT IS MORE ABOUT WHAT YOU HIDE THAN WHAT YOU SHOW. " Tomas Maier, the creative director of Bottega Veneta.
This is the key value of Bottega Veneta, which aimed at being a brand items speak for themselves, but never on behalf of those wearing them, allowing their confidence and individuality to shine through. Bottega Veneta is famous for Intrecciato products, which is the reason why Bottega Veneta’s products have high durability and quality. Hence, this technique is the most competitive advantages in Bottega Veneta, and it makes the brand can be distinguished from other competitors. Furthermore, Bottega Veneta will continue to build the strategies of retailing worldwide and strengthen its retailing decoration to guarantee their customer can have best luxurious experience. However, they still have a lot space to improve of their marketing strategies on social media. And also they need to figure out a way tackling the counterfeit and knockoffs problems.
01
COMPANY SUMMARY
02
MARKET ANALYSIS
03
TARGET CONSUMER
04
5PS FOR EXTENTION
05
CONCLUSION
01
COMPANY SUMMARY Description
Bottega Veneta is an Italian Luxury brand which is well known for its leather goods and their products are sold in 248 countries around the world. Their most products are made in intrecciato, weaving leather technique, in their product design. In 2001, Bottega Veneta is purchased by Kering group which is second big luxury group in the world.
History Line
Founded in 1966, in the Veneto the region of northeastern of Italy. In 1980, Bottega Veneta became one of the favorite brands of regal. In the 1990’s, the glory of brand was no longer existed. The reason was that the brand chose to abandon its low-key style, instead of choosing to follow the crowd. In February 2001, Bottega Veneta was acquired by Kering Group. The group hired Tomas Maier to rescue the Bottega Veneta. He highlighted the intrecciato weaving products and returns the company’s focus on artisanal products.
Vision and Values State
The signature of Bottega Veneta is their intrecciato design. The refined quality of raw material and the Italian craftsmanship is their core value. They put much emphasis on their product design and material instead of massive marketing strategies. Their mission is to glory the luxury artisan spirit again.
CURRENT PRODUCT AND SERVICE In product part, the leather goods are still play vital role in their business. Bag category can be divided into clutches, cross body bag, duffle bag, shoulder and hobo bag, top handle bag, tote bag, trolley and carry on bags. The bag series are more profitable than small leather bag. Bottega Veneta also provides men and women ready-to-wear series. They are good at using knitted and weaving design in their products. Footwear is the most significant growth product line that is occupied 6% of total sales in 2015 revenue. The most iconic footwear product in F/W 2016 is ankle boots and Mary Jane’s stilettos that properly use the weaving design on shoes. Moreover, Bottega Veneta has Homes line and perfume and home line is very potential product line because there are few luxury brands developing the furniture line. On the contray, perfume is nothing very special in the scene and appearance. In service part, Bottega Veneta like other luxury brands supply their customer customized product that can sew your name abbreviation on the bag. According this experience, you could deeply feel the artisan spirit, just like Tom Maier once said: “Witnessed these craftsmen into the working process of leather goods, it is impossible not to be touched by their enthusiasm and skills. Bottega Veneta has always cherished the uniqueness of individuals, and the name acronym sewing service allows our customers the opportunity to share this touch, so that they can participate in the production process, to create their own unique personalized products.”
Current revenue
The brand sales revenue of 2015 is stagnant. Compared with first-half 2015, Bottega Veneta contracts 9.2% in 2016. According to continuous slower tourism, the revenue is still down to 10.3% in quarter 3. The Bottega Veneta notably involve in renewing the Leather Goods offering and improving the in-store visibility of all new products. Hopefully, the 2017 spring/summer collection with uniqueness and heritage will make sure the future growth of Bottega Veneta.
Current target market and customer profile The target market of Bottega Veneta is very obvious. They focus on high social status and metropolitan women who are 30-40 years old. Their purchasing behavior is usually functional, raising the personal status, professional image, and durability of a product. Their attitude toward fashion is
Environmental factors affecting business
In geographic part, distribution channel of Bottega Veneta is around the world. The Bottega Veneta still have distribution in department store. Their store numbers especially grow faster in Asia Pacific country. However, according to China government’s anti-corruption policy, the luxury goods markets are being affected and China’s market is the main market of Bottega Veneta. Thus, their sales revenue is greatly affected. Bottega Veneta is very hi-end luxury brand; therefore, the Bottega Veneta is really affected by global economic. In sociographic part, Bottega Veneta customers are from high salary class and Bottega Veneta are very popular for the group who love professional and exquisite style luxury goods.
Future growth plan
In the future, Bottega Veneta will continue to build the strategies of retailing worldwide. In US and European countries, further investments will be made to reinforce the existing retail network. In Asia Pacific, especially the China, the investment will focus on strengthening the retiling network in order to make their product categories more completed. In product, their goal is to make such as shoes, ready-to-wear, jewel and other accessories, which have in the past been seen as merely complementing the Bottega Veneta the same standing as the core leather goods business. Furthermore, Bottega Veneta continues to strengthen its retailing decoration to guarantee their customer can have best luxurious experience.
Protential brand line
Footwear Bottega Veneta continued to develop its Shoes category, which registered very robust sales growth for 7.0% of the brand's total sales. In2016, Bottega Veneta pursuing its strategy of developing shoes and Ready to wear. The brand has launched a refurbishment program of 48 stores in order to better showcase this product category.
Jwewls Bottega Veneta jewelry is fully using woven design in their product. However, the jewel is not fitted with their ready-to-wear style. If they can combine their jewels with the women ready-to-wear line, the collection will be more attractive. In the other hand, they can release some lower price product of accessories in order to attract young people to build their loyalty in the furture.
*Source: The Bling Dynasty On Bag Basis
Distribution
Hermes-$10000 up
Retailer only
Chanel-$5000 up
Wholesalers, retailers, distributors and internet
Bottega Veneta-$2500 up
Retailer and internet
Gucci-$1000 up
Wholesalers, retailers, distributors and internet
Dior-$11800 up
Retailer only
Louis Vuitton-$4000 up
Retailer
Celine-$3000 up
Retailer, distributors
Prada-$15000 up
Wholesaler, retailers, distributors and internet
Miu Miu-$2000 up
Retailer and internet
Current positioning in the market Perceptual map
CURRENT PLACEMENT
Channel for distribution
Bottega Veneta prefers directly-operated store (brick-and-mortar). Bottega Veneta has 247 directly-operated stores, including 108 in emerging market. Moreover, the Bottega Veneta still actively developed their Online Shop.
Bottega Veneta Online Website
Current promotional activities Promotional activities
Nowadays, every luxury brand focuses on using digital strategy to promote their business. Bottega Veneta manage many social media platform such Instagram, Facebook, etc. However, they still have a lot space to improve of their marketing strategies on social media. The path of change needs to be accelerated and the advertisement could be bolder. Although the art of collaboration is really attractive, the photo can’t satisfy today’s customer. For instance, Kenzo release the microfilm that invites Laura Harrier featuring performance immediately causing boom on social media. Moreover, Bottega Veneta usually post advertisement on the advertisement. The traditional advertisement spends too much budget and even can’t reach the goal of promoting products. Therefore, Bottega Veneta must take actions to improve the marketing strategy to catch people’s eyes.
02
MARKET ANALYSIS
•Retail Sales Volume
Bottega Veneta's preferred distribution channel is its directly-operated stores. In the first six months of 2016, this distribution channel accounted for 81.9% of the brand's total sales, but revenue generated in directly-operated stores retreated 10.1% year on year based on comparable data. As of June 30, 2016, Bottega Veneta had 247 directly-operated stores. However, there were four net store closures during the period. The revenue decreasing of Bottega Veneta was affected by the change in customer profile. In Western Europe, direct retail sales fell 21.8% because of lower tourist numbers, but local customer rose. In Japan, due to a decrease in purchases by Chinese tourists, direct retail sales were down 13.2% for the full six months. In emerging markets (which accounted for 45.3% of the brand's total revenue for first-half 2016), Bottega Veneta's direct sales rose 3.2%. The rising of business was mainly attributable to Chinese customers purchase in the domestic market and certain regional Asia-Pacific markets instead of mature markets. This led to solid growth in South Korea and Mainland China.
Size of the market Therefore, we consider that Bottega Veneta should develop their retail stores in emerging markets, and enhance local consumers to purchase their products because less and less tourists buy Bottega Veneta on foreign countries, but more local consumers buy their merchandise can supplement their loss. They need to build the brand loyalty with local consumers.
•Core competencies and competitive advantages Bottega Veneta is famous for Intrecciato products. Intrecciato is the technique of weaving the leather, and it’s also the feature of Bottega Veneta. The technique was created by Bottega Veneta in the late 1960’s. The leather they used was then woven into the intrecciato pattern to make the material stronger and more durable for accessories. It is the reason why Bottega Veneta’s products have high durability and quality. Intrecciato is used across most Bottega Veneta categories. This technique is the most competitive advantages in Bottega Veneta, and it makes the brand can be distinguished from other competitors.
•PEST analysis In the past, most fashion brands focus on traditional marketing such as television commercial or advertisement. However, Internet marketing becomes the mainstream because it has more advantages than traditional marketing including clear segmentation of target market, strengthen interactivity, positioning and feedback, and strengthen brand image. In addition, social media is one of the important tools that fashion brands use to promote themselves and connect to the customers. Bottega Veneta has a variety of social medias including Facebook, Twitter, tumblr, Pinterest, Youtube, Google + and Instagram. However, comparing their competitors such as Chanel and Hermès on social medias management, Bottega Veneta needs to develop their social medias harder. For example, total like numbers on Facebook of Bottega Veneta are 602,371, and there are only 172 people follow their fan page. On the other hand, Chanel’s total like numbers are 17,625,290, and their followers are 2,360 people! In other words, Bottega Veneta has to put more efforts on developing their social media tools. The brand also starts to follow the trend of sustainable fashion by researching sustainable technology to produce their leather goods. Leather is one of the biggest raw material contributors to greenhouse gas emissions in the Kering supply chain the E P&L revealed. In part, this is down to conventional leather tanning methods during processing. Therefore, Bottega Veneta develops innovative metal-free and chrome-free tanning methods. The brand has purchased more than 54,000 square meters of chrome-free leather to create its leather goods collection, significantly reducing water and energy use in the process. They also try to produce more eco-friendly fashion items for customers who wanted sophisticated, handcrafted bags that are non-leather and earth-friendly.
• Opportunities:
Development of social medias, Innovative technology of sustainable fashion, Diversity of merchandise, Expansion of other business
• Weaknesses:
Retail stores' over expansion, Fluctuation of leather prices and its effect, Lack of high exposure advertisement and promotion
• Threats:
Competitive environment, Growth estimate decrease, Rising costs and scarcity of raw material, Counterfeit and knockoffs problems because of no specific logo
•SWOT Analysis
• Strengths: Growth rate and profitability, Reduce labor costs, Recognition in Asia markets, Product's high quality, Brand's heritage
Key players Today, handbags market is very competitive. There are many brands are key players of making luxury designer handbags such as Louis Viuitton, Gucci, Chanel, Prada, Hermès, Balenciaga, Miu Miu, Marc Jacobs, Burberry, and Christian Dior. Most of them are also very expensive and famous around the world, so how Bottega Veneta competes with these brands is very important.
Comparing the price and style, we choose Chanel and Hermès for Bottega Veneta’s main competitors. They are more traditional fashion brands and their merchandises have more exclusivity. Competitive landscape analysis
01 Main competitor
• Common points: price range $1,500-$10,000, target group is women and white-collar class, exclusivity, elegance and heritage. • Differences 1. Target age: Chanel has more younger buyers, but Hermès and Bottega Veneta are most young people can’t afford. They are too expensive. 2. Style & Feature: Their feature items are different. For example, Hermès is famous for Birkin bag, Bottega Veneta is intrecciato, and Chanel is handbag. 3. Marketing Strategy: Chanel often invites celebrities to promote their products, but Bottega Veneta seldom uses celebrity strategy. Their advertisements only focus on “product”.
02 Main competitor
According to analysis, we consider that Bottega Veneta should develop some products that can attract more young buyers such as lower price or younger design, and they can still keep their main competitive advantage of intrecciato. In addition, they should develop digital promotion strategy in order to enhance their brand image to appeal more consumers.
03
TARGET CONSUMER
Lifestyle/psychographic/behavioral segmentations
Demographic segmentation Gender Age Ethnicity Size of Family Occupation Education Disposable Income Social Grade Classification
Male and Female; Mostly Females 30+ Multicultural (Global brand) Small Mostly business class Secondary level of education High income; $5,00,000+ High Social
Lifestyle Social Aspirations Self-image Purchasing Motives & Behavior Interests & Hobbies Attitude & Opinions
Metropolitan High Social Status Businesswomen/men, Simply Socialites Professional, Functional, Raise the personal status image, Durability of a product Fashion, Highly using technology product, Notice new information Feel classy and elegant, Simplicity, High quality
• Customer profile The Bottega Veneta customer is knowledgeable about the product and appreciates craftsmanship. They have high brand loyalty and expect an outstanding service. Therefore, we consider that Bottega Veneta is a brand for people from high social class or wealthy environment want to use simply but high quality products. The products show their professional and status image, understated and luxury lifestyle.
04
5PS FOR EXTENTION
$45
$29
Limited Shiny Lipstick and Lasting Full Color Lipshine embossed with the intrecciato pattern and expertly hand-finished
$55
$ 35
Velvet Lipcolor Composition: IN NERO INTRECCIATO NAPPA
$29
5 Shadow Palette Metalware: the iconic knot-shaped engraved closure Composition: IN ATLANTIC INTRECCIATO NAPPA
Longwear Mascara Composition: IN ESPRESSO INTRECCIATO NAPPA
$49
$50
Long-Wear Multi-Tasking Powder Composition: IN NERO INTRECCIATO NAPPA
Comfortable & Longwear SPF 15 Foundation Metalware: the iconic knot-shaped engraved closure Frosted glass and metal
Comparing with other cosmatics brands, our price range is $29-55. Because the intrecciato design and raw material are in high-qualty, and the effact of concealer and long-lasting also.
Pricing Strategy
Placement Strategy
The Bottega Veneta’s placement strategy will refer other luxury brand cosmetics distribution strategy.There are many good models of luxury brands entering cosmetic markets such as Burberry,Chanel and Tom Ford.Cross-cutting results are mixed. Successful examples such as the aforementioned brands, beauty products and perfume pricing more affordable than the boutique, but to meet the consumers have the desire to fashion brand products. In addition, through exclusive sales channels and price positioning to limit the sale, but also to maintain the image of luxury commonly used means.
There are usually two common ways of luxury brands selling their cosmetic products:First,the brand opens their directly-operated store in the department store.Opening flagship store or directly-operated store is much easier to control the quality of products and maintain the brand image.However,this methods will decrease the opportunities to enter large cosmetic store such as Ulta Beauty In our opinion,we believe Bottega Veneta should just open their directly-operated cosmetic store in department store or airport because Bottega Veneta’s core spirit is uniqueness and high-class.We don’t want any possibility to damage the long-term establishment of brand image.The advantages of directly-operated store in department are supplying excellent shopping environment ,best selling place for luxury brand,extension of brand image, rising reputation.However,in the other hand,the disadvantages are rent of counter and personal costs.In airport,Bottega Veneta brand image is definitely welcomed by businessmen.We hope this distribution strategy that will help Bottega Veneta attract more young people and build the brand loyalty since they bought their first cosmetic product from Bottega Veneta.Bottega Veneta can also use their own website shop to promote their products.
Promotion Strategy
Tom Hiddleson
Emma Watson
We consider that Bottega Veneta can use celebrities to promote their products. Actually, there are many celebrities using Bottega Veneta’s bags including Amanda Seyfried, Charlize Theron, Cameron Diaz, RenÊe Zellweger, even Jason Statham also use Bottega Veneta Nero Intrecciato VN Large Duffel bag. Obviously, Bottega Veneta is appealing to many High Status people, but they never use them into their marketing strategy and enhance their brand image. Therefore, if Bottega Veneta wants to develop their cosmetic’s products line, we will suggest them invite some young, beautiful and independent female or male celebrities to support the brand and get involved to their advertisement or other activities. For example, Emma Watson is a suitable person for Bottega Veneta because she is a young, intelligent, and independent actress. She is also an ambassador of UN Women Global Goodwill and one of the celebrities who support eco-friendly fashion brands. Emma Watson has strong positive image and influence. If Bottega Veneta can invite her to become the brand representative, we think it will improve their brand image and push the sales.
Celebrity Endorsement
COSMETICS EXTENTION Product Line:
Intrecciato Pattern Paste
Intrecciato Pattern Glass
Metal
Silver
Intrecciato Pattern Glass
Nero
Metal
Nero
Nero
Ferrous Metal
Atlantic Intrecciato Nappa
Intrecciato Pattern Leather
Nero Nero Intrecciato Nappa
Ferrous Metal
Intrecciato Pattern Powder
Glass
Mood Board:
Placement:
Advertising Poster:
BV should invite some young, beautiful and independent female or male celebrities to support the brand and get involved to their advertisement or other activities. For example, Emma Watson is a suitable person for Bottega Veneta because she is a young, intelligent, and independent actress. Emma Watson has strong positive image and influence. Also, Tom Hiddleson is perfect male icon for BV because he is also professional and high-educated celebrity.This is suit for brand’s exclusive and elegant image.
Bottega Veneta should open their directly-operated cosmetic store in department store or airport because Bottega Veneta’score spirit is uniqueness and high-class.
Presentation Board
05
CONCLUSION
Bottega Veneta should develop new market such as Southeast Asia or India.These country’s economic grow very steadily and the numbers of middle class increase.Therefore,purchasing power of luxury goods definitely increase in the future and it is necessary to build brand image and loyalty in these countries. Due to decline of tourist numbers,the government also plays very important role in fashion industry.The government can use strategies such as exchange rate and no tax to attract more people shopping in the Europe. In brand extension part,we recommend brand can release more affordable products such as cosmetics products.The main reason is that Bottega Veneta is short of young customer.The pricing strategy can attract more young customer and build the brand loyalty since the young age.It is very obvious to discover chasm of purchasing about Bottega Veneta and the cosmetic products seems to be the best solution to this problem. In marketing part,Bottega Veneta should be bolder and more creative on their strategy because their campaigns are too conservative to attract young customer. The shoes category is very potential product line in the future .Bottega Veneta can promote more actively on the shoes products.
Works Cited
http://www.purseblog.com/bottega-veneta/history-of-intrecciato-from-bottega-veneta/ http://www.kering.com/en/finance/group/brands-key-figures#anchor2 http://www.businessinsider.com/pyramid-of-luxury-brands-2015-3 http://www.ecouterre.com/bottega-veneta-goes-vegan-with-purses-made-from-japanese-washi-paper/