valentino strategic plan rebecca harris
ontents
1-2 Marketing Objectives 3-4 Consumer Segmentation 5- Targeting 6-7 Positioning 8-9 Brand Identity 10- New Brand Architecture Models 11- New Brand Prism 12- Marketing Mix 13-17 Product Strategy 18-19 Price Strategy 20- New Price Architecture 21-24 Distribution Strategy 25-30 Promotion Strategy 31- Customer Service & Internal Marketing 32- Marketing Program Timeline 33- Financial Forecast 34- Valentino Black Range Plan Figures 35- Promotional Budget 36-37 Implementation & Control 38-39 Bibliography
Appendix 40- Appendix 1: CBBE Cycle 41-44- Appendix 2: Consumer Segmentation Table 45-47- Appendix 3: Competitors Comparison Table 48- Appendix 4: Aaker’s Brand Identity Model & Analysis 49- Appendix 5: Elaboration Likelihood Model 50- Appendix 6: Schmitt’s 5 Brand Experience Dimensions
MARKETING OBJECTIVES
1
Refine and strengthen the brand identity to differentiate from competition, increase brand preference among consumers and sustain long-term financial growth. Ensure the identity is consistent across all channels.
2
Extend the brand to build loyalty, increase longevity of each customer’s relationship with Valentino, and to leverage the potential financial value of each consumer. Increase acquisition and market share of 16-24 year old consumer segment through re-positioning of Valentino Red label.
EGMENTATION
There are three consumer segments in the market that hold great financial opportunities for Valentino. The core traits of each segment are exhibited in this table, a more detailed table is provided in appendix 2. Consumer A
Consumer B
Consumer C
• Aged 25-45 • Working professionals and potentially parents • Spending reflects busy lifestyle- purchase frequently but less in a transaction • Purchase for fashion, practicality and as a reward for their work
• Aged 16-24 • Studying or starting careers • Early adopters of trends • Buy statement luxury pieces to mix with lower market level clothing • Has few financial outgoings- less sensitive to price when they have the money
• Aged 45+ • Senior or retired professionals • Want to be fashionable but sophisticated- doesn’t want to wear the same thing as young consumer • Purchases more in one transaction but less frequently (schedules are more organised)
3
Consumer A grew up without austerity therefore is accustomed to spending, however they are the most difficult to build loyalty with as they have a plethora of choices. Consumer C is a more recently identified segment not being targeted by many brands currently, so offers huge potential for Valentino in terms of market share. “The sheer size of the over 50, and average segment, the predicted growth of this group, as well as their increasing amount of disposable income, provide opportunities for apparel manufacturers, and retailers. And yet, according to Halliwell (2007), although older women have “lots of money to spend, babyboomer women complain they are being spurned by a fashion industry obsessed with Generations X and Y.� Peters, A, Shelton, J & Thomas, J (2011) 4
targeting Valentino Targets Consumer A • Contemporary fashion built on foundational aspects of deep colours and elegant materials, developed with innovative new cuts and plays on these materials e.g. lace in plastic • Luxury pricing • Offers luxury brand experience online through new web layout but maintains exclusivity through limited promotion over social media and readyto-wear only available in stores • Limited edition collection to be launched annually online
Red Valentino Targets Consumer B • Romantic, innovative and more trend-led fashion with edgier styles and quirkier prints • Lower starting price point to target new luxury consumer with entry-level prices • Fragrance to also be promoted and new men’s fragrance to acquire new young male consumers • Entire collection available online and promotion to expand over social media and video content to raise brand recall in market segment. Promotional efforts to be based around acquiring customers and starting new loyal relationships.
Valentino Black Targets Consumer C • Collection based on contemporary aesthetic of mainline but offers more investment, classic pieces in sophisticated and flattering styles and shapes • Pricing to be more luxury- starts higher than Red to distinguish from younger consumer but does not reach as high as main line • Range to be available online through page on Valentino website and small boutiques to be opened in major cities, to maintain exclusivity of line and make consumer feel valued. • Promotion to be subtle and intellectual with print advertising in key publications and banners on news websites e.g. New York Times
positioning As shown in appendix 3, Valentino’s positioning is weak compared to luxury competition. The brand history is smaller and now less relevant to the modern consumer, being based on glamorous eveningwear for royalty.
with development of the Rockstud accessories and a few core dress styles to form a foundation of iconic products.
Becoming more contemporary has led to the daytime dresses becoming shorter and inappropriate The competitors have a for a 50+ customer. The greatly defined position launch of the Black label built on iconic products will provide a solution. The (e.g. Chanel’s black jacket) positioning of Black will be or brand symbols (Dior, concentrated to begin with Prada). Therefore, Valentino as it is only targeting a small will build on a luxury con- international scale of the temporary position to be segment, which combines differentiated in the market similar values and desires.
red re-positioning High
Valentino Red re-positioning model
It currently seems outdated to competitors
New Position
Trend-led, edgy, contemporary
such as Miu Miu or Marc by Marc Jacobs. Positioning of Red will be differentiated determined by international location; for example, having a slightly more accessible appeal to undeveloped markets e.g. South America.
Old Position
Low
To appeal to Consumer B, Red will be repositioned as edgier with more trend-led styles to attract customers who currently might save to buy a Rockstud purse from Valentino.
Low
Romantic & feminine
High
7
brand identity Brand Resonance (loyalty, attachment, engagement)
Consumer Judgements (quality, credibility, consideration & superiority)
Brand Performance (including product, style, price, design, service)
Consumer Feelings (warmth, fun, excitement, security, social approval, self-respect)
Brand Imagery (personality, values, history, experiences, user profiles)
Brand Salience- Identity, deep brand awareness 8
This DNA pyramid highlights most likely to embrace? Invariwhere the brand is not salient ably it is those with a personality enough to build loyalty and which closely resembles how compete long-term. The prodthey perceive themselves. For uct (performance) and imagery instance, outgoing individuals aspects are confusing, with too would feel more drawn towards many directions. similarly-inclined brands. Choice of brand is therefore not driven A consumer cannot relate to solely by its functional qualities the brand if they are unsure of but also because it offers the whether it really matches their user scope to express his or her personality, as further evidenced self-image.” in Strategic Direction (2013); “It is usual for consumers to ascribe The creative directors mencertain brands with human chartioned, “We don’t believe that acteristics relating to honesty, women have to choose one way competence, excitement, sophisor another. They can choose tication and ruggedness. Their many ways…” Zhang, J (2013) tendency to develop stronger however, when a consumer is affinity to some of these brands spending a lot of money, the is widely acknowledged as well. luxury aspect means it should not be every woman’s product. But which brands are consumers
The new brand architecexpensive goods as their ture presents concise disincome and wealth intinction between the labels crease. (McIntosh and Valeand provides a sustainable rio, 2005).� Kim, H (2012) structure to incite brand Extending the brand into loyalty. The model encouran undeveloped market ages the young consumer with the new label is risky, to grow with the brand, however advertising costs and will therefore increase for Black will be low and their financial value, brand Valentino benefit from recognition and preferhaving a solid supply chain ence. and existing customers to cross over. The diagrams “Attracted to entry-level overleaf illustrate the fit for luxury items, these conBlack and the new brand sumers trade-up to more structure.
9
evaluation for extension model
brand architecture
(Taken from Kapferer, 2009)
Master Brand of Valentino Kernel facets of identity: Contemporary, Feminine, Italian and Luxurious
Brand Resources
Concept
Valentino
Fit
Haute Couture
12
12
10
10
8
8
6
6
4
4
2
2
0
Extension
C
F
I
L
0 C
Red Valentino Relevance
Sustainable advantage
10
Competition
I
L
Valentino Black
10
12
8
10 8
6
Consumers’ needs
F
6
4
4
2
2
0 C
F
I
L
0 C
F
I
L
rand prism Physique: Quality leather, rock studs, sophisticated to statement colour range
Personality: Calm, clever, curious and graceful
Relationship: Exclusive, elegant and Culture: Sicilian effortlessness, luxury, contemporary, independent. modern and chic.
Reflection: Independent and of means and class
Self-image: I am fashionable and modern. I am independent and elegant.
11
MARKETING mix 12
product strategy Objectives
• Refine and edit ready-to-wear to be consistent and contribute to a stronger brand identity • Develop Rockstud accessories range seasonally to build iconic core product and increase frequency of purchase per consumer • Start to include some organic cottons in materials where possible to subtly develop company’s corporate social responsibility The S/S 14 collection consisted of double the amount of pieces than A/W 13. There was some product consistency, but there were also a few anomalies which look as though they could be from another brand. As stated by Ambler. T (2003) “The Product must fit with end-user requirements, however hard they are to predict ahead of time. Competing successfully requires the product to be differentiated from that of competitors…” this is what Valentino needs to take into account when considering product choice. The product range will keep to subtle foundations of the brand through core colours, lace and embellishment, but will pursue a greater contemporary edge
through the Rock studs, new cuts, shapes and inclusion of innovate materials, e.g. perforated plastic. Using accessories to experiment with new prints means Valentino can add new design ideas but not make them the overall image, for example, applying the new camouflage print to Rockstud accessories, as is done for S/S 14. Consumers are more likely to purchase a trend-led print if it is as a statement accessory, rather than a top which would only be able to be worn a couple of times. The benefits and features are highlighted in the Total Product Concept diagrams for two current products which will continue to be developed.
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total product concept core product: luxury statement accessory
Actual/ Expected Features • High starting price point • Made in Italy • Superior quality of materials and craftsmanship in making product • A sense of investment • Fashionable, contemporary design 14
total/ augmented benefits • Iconic piece of the Valentino brand • Kudos from fashion followers and members of industry • A luxury statement which will go with many looks and add an element of expense to a lower price outfit • Status-enhancing & boost to self-esteem
potential product • Seasonal additions to range which are more trend-led/ daring e.g. recent neon camouflage prints • More expensive, exclusive versions of the bag perhaps with luxurious materials used for rock studs e.g. (ethically sourced) rare stones, to cater to higher-wealth luxury consumers • Adding technology features, such as pocket for smart device, tablet-specific bags, and looking slightly further forward- google glass bags or pockets
total product concept Actual/ expected features • High-quality materials • High price point • Fashionable and luxurious style • Gorgeous lasting deep colour • Flattering and chic shape • Made in Italy
core product: Contemporary luxurious yet functional clothing total/ augmented benefits • A higher level of confidence • Admiration from peers • Self-identification with style • Chic yet practical • Made in Italy, luxury status, easily identified as Valentino through lace and colour yet obviously most recent collection through the style
potential product • New colours • Variations on stylesstraps added, back pockets on trousers, sheer sleeved tops to go underneath for older consumer and evening wear take • Using new organic materials for more sustainable aspect to clothing • Innovative materials for lace e.g. perforated plastic, to bring modern aspect forward
15
valentino red objective: Re-align product offering to include more trend-led, edgier pieces and of better perceived quality (accessories) to increase market share of the young luxury consumer
16
The S/S 14 Red collection is a slight step forward in terms of using unique prints however many pieces are still irrelevant to a fashion-conscious young consumer, for example, black tutus.
The new product offering will still hint to the brand origins, with some more classic dress styles included, however it will be much more fashion-forward and modern.
Red is currently described as “Valentino’s romantic little sister” (my-wardobe.com) and is meant to provide investment pieces of the original Valentino aesthetic; however this does not really cater to the target consumer’s preferences. Many of the pieces also lack perceived quality.
One piece in the A/W 13 range- a tartan chiffon dress with lace panelling- was trend led and still hinted to Valentino’s classic elegance. This is the kind of style the brand should continue with. Quirky and individual print designs and materials such as leather panelling and lace will be incorporated.
valentino black objective: Provide collections that reflect aesthetic of the mainline but are adapted to suit the tastes and shape of the older, sophisticated consumer. The collection will consist of of chic, flattering designs each season. wearable pieces for a senior professional. Shapes will be cleaner-cut and flattering to the figure, lengths will The range will be seasonal and be longer and there will be a lot of stick to the Valentino colour palette fine tailoring. The quantity of looks of deep red and navy, blacks and will start limited and grow with the creams, yet will also introduce a consumer adoption. few trend-led adaptations of classic
rice strategy Objectives: • Raise price of accessories and launch limited range of higher-priced options to enforce luxury status and cater to higher- spending consumer • Launch Valentino Black with price architecture that will present higher luxury status than Red line
The Valentino pricing strategy will remain marketing-orientated and after comparing prices with competition- including lower market level, Gucci- evidence shows that Valentino’s prices can be raised. Additionally, introducing a higher priced Brand Valentino Chanel Prada Chloe Gucci
Old Price £1,170 £2,650 £1,200 £2,210 £1,250
The price architecture of Valentino Black is positioned specifically between Red and Valentino, to target the consumer effectively. The Black consumer may cross over from the mainline so the status of Black must be higher than Red, which targets an entry-level consumer.
range of £4-8k will target the higher-spending consumer who wants to feel more valued than a consumer who purchases a lower-priced bag from the same line. This strategy will increase profit margins and maintain luxury status. New Price £1,400 £2,650 £1,200 £2,210 £1,250
The limit of £4,000 means Black is still a sub-brand and the mainline status is not decreased. The variation in starting price points of each sub-brand is so that there is a clear hierarchy in terms of level of luxury, and that the brand value is not diluted. 19
Valentino
Red Valentino
Valentino Black
12,000+ Evening gowns and haute couture 2000-12,000 Ready-to-wear, coats and dresses
£475- £1,250 Dresses and coats
£1500- £4,000 Dresses, jackets and coats
£600-£2000 Accessories and some ready-to-wear
£285-£455 Tops, skirts, knits, trousers and entry-level dresses
£800-£1200 Some skirts, trousers, entry dresses and a jacket
£100-£600 Entry level products including fragrance, purses, belts and some shoes
£55-£265 Accessories
£400-£750 Tops, some skirts and trousers
brand price architecture 20
distribution strategy valentino
Valentino’s supply chain is well-organised and the distribution network is solid. The main objective for Valentino is to integrate the brand and separate transactional websites to offer an engaging brand experience that is consistent and convenient for a time-spare consumer. Sensory elements will be enhanced through 360 degree product views and music to increase the luxury nature of the brand online.
available online to increase demand and drive footfall to the new stores. Instead, a limited collection of pieces will be released online each season to heighten the luxury status whilst increasing sales: “Another contradiction that luxury brands face online is the task of increasing sales and the risk of over-exposure whilst maintaining a fragile perception of limited supply.� Okonkwo, U (2009)
Ready-to-wear will no longer be 21
Red Valentino
22
The entire range will be available in the flagships and online, which will continue to be optimised for m-commerce-; an important channel particularly for young consumers, with the Millennial generation being described as “the most active mobile users and consumers in the world‌â€? Renton, C (2013).
In addition to allocating classic pieces to Harrods and fashionable pieces to Net-a-porter, wholesaling a small allocation of edgier pieces to Browns Focus will be an option, in line with the re-positioning of the brand being more fashion-forward, to reach new potential customers and spread awareness.
As e-commerce is developing to be more social with personally edited discovery platforms- such as Lystthere will be a new feature on the Red website of a personal lookbook. Users can add any products to this page, after which other pieces will be suggested based on this choice. The customer can then go to this specially personalised page and put together outfits, create mood boards and share on social media.
This adds extra consumer interaction and engagement, and has potential to become its own online community. As stated in Luxury Daily’s Luxury Marketing Outlook 2013, “Marketers have realised the potential for social media to build a strong brand community of loyalists, frequent customers and aspirational fans. What some are also realising is the social medium’s influence on sales.”
23
Valentino black
24
Black will be available online via the Valentino website to launch, as existing customers can easily access the range from there. Coinciding with the online launch will be the opening of four boutique-style Black stores in the major fashion capitals. This provides a low-cost network and consumers are already accustomed to spending on high fashion and the Valentino brand.
promotion strategy
25
In aim of developing international appeal, the promotion through print and online advertising will be adjusted slightly depending on the market and region. Europe and North America advertising will be fairly standardized to have a chic, serious overtone.
26
However, individual regions of developing markets such as Asia- e.g. Japan and China- will be more localised, with China’s advertising theme being light-hearted and happy. This is a new way of targeting as globalisation increases, adopting a “glocal” approach. The overall brand image will be consistent; it is just the execution which will differ.
“MNCs will not necessarily alienate targeted foreign markets with a standardized strategy provided they can distinguish advertising creative strategy from execution when developing their international advertising campaigns. That is, MNCs should focus on developing a global theme that unifies the company’s products under a single umbrella brand. Then, they can be flexible in executing the theme in light of different local conditions to effectively launch advertising campaigns in an increasing number of culturally diverse foreign markets.” Strategic Direction (2013)
men’s fragrance objective:
Objective: Re-launch Uomo campaign to achieve considerable brand recall and increase awareness among men’s market. Valentino Uomo will be re-launched Likelihood Model (appendix 5) the in February 2014 to coincide with promotional campaign will initiate the product release, with Ryan with a more peripheral focus, using Gosling as the brand ambassador, Ryan Gosling to induce persuasion rather than French actor Louis as the audience will have a relaGarrelm (relatively unknown outtively low involvement with the side of France). Although Kapferer. product. However this can progress J and Bastien. V (2009) state, “Using to a central focus once awareness stars to promote luxury products is of the product and values is raised extremely dangerous… through the campaign and event. Calling on the services of a star is tantamount to saying that the brand needs some of this star’s status just to survive, and admitting that it has none of its own.” the benefits of using an easily recognisable face for Valentino’s first entry-level fragrance product for men would be a larger recall of the campaign and brand among the wider target market. When considering the Elaboration
The launch will be supported by an exclusive event for some inspirational male celebrities, press, industry and influencers among the men’s market, who can Instagram and Tweet about it to spread the news via social media. Valentino not communicating this directly keeps a non-detrimental level of distance between the brand and the consumer, which reinforces luxury status. 27
red valentino objective:
Objective: Increase online presence and acquisition of new customers in memorable way.
Pop up theme to be consistent with previous Red pop-ups but to include a luxurious gelato bar to mark the end of summer and add an extra indulgence for the customer.
Promotion will have a focus on developing behavioural and relational dimensions of the brand (Schmitt 1999 5 Experience Dimensions appendix 6) to achieve the objective. Facebook, Twitter and Pinterest accounts will be updated more regularly than the mainline to connect on a deeper level with the target consumer. The brand re-positioning
will be promoted through pop-up stores in high-density areas during S/S 15 fashion week to acquire new customers in a memorable and intimate way, and engage with existing ones. Collaborations with young film directors such as Gia Coppola on video content will add to the brand personality and increase engagement.
Valentino black
Objective: Begin personal connection with target consumer whilst maintaining high level of luxury. Valentino Black will use a small amount of print advertising in key publications to the consumer, including Harper’s Bazaar, Vogue and New York Times. The launch of the label will begin at Milan fashion week A/W 2015 (to easily link to the Italian origins of Valentino), with a catwalk featuring older celebrities and models, to immediately connect with the target consumer and provide a great talking point for publicity.
29
Valentino
Objective: Develop relationships with existing customers to increase their value through personalised promotion. Limited direct mail will be used to gain additional purchases from the most regular customers, to target them more personally than a mail shoot would. A small amount of miniature lookbooks will be created based around new products or a holiday event. This material will be placed with online deliveries of over a certain value e.g. £1,500, from the most regular customers, and posted to those on books in key stores. The lookbooks will include a letter addressed to the customer, emphasising their individual value to Valentino.
30
Not focussing on Twitter or venturing into other social networks will help to maintain brand exclusivity,
however Valentino will reach existing a consistent, personal brand image; customers through Facebook. As Kim “In many ways, social media are Jeyoung, A. & Ko, E. (2012) state: best suited to the creation of such brand image that is consistent with “With the growing interest of luxury users’ self or personal identity, due fashion brands in providing luxurito their power of self-presentation ous value to customers in every way or self-disclosure (Lee et al., 2008; possible, using social media appears Kaplan and Haenlein, 2010). to be appropriate for retaining old customers and attracting cross-shop- While there are significant conpers… The importance of managing straints in tailoring executions in customers as valuable assets cannot traditional media such as television be emphasized more. As such, more due to the need to film additional luxury brands should engage in ads, social media is much more social media marketing activities to nimble and well suited to reinforcing anticipate a positive contribution to a strategy while tailoring an executhe brands by providing new luxury tion to the local market. The ability value to customers.” to combine visual and textual or even verbal components is a central In addition, Okazaki, S & Taylor, element of this process.” C (2013) highlight the benefits in using social media to contribute to
ustomer service & internal marketing Valentino are making efforts to provide excellent staff knowledge and service through the academy program, however internal marketing will be important in emphasising the re-positioning of identity and the importance of being committed
to the brand’s ethical and sustainable efforts. The issues of the environment will continue to be addressed through researching and developing new production methods and materials. 31
marketing program timeline Feb 2015- Launch Valentino Black at Milan FW. Release print ads and online. Do 1st brand equity report. Do year report for Uomo.
Sept 2015- Red yearly report. Add more options to Black range.
Oct 2014- Measure 1st month sales new Red collection year-on-year, pop-up success report & send out new direct mail lookbooks for Christmas products at end of month August 2014- launch Red online lookbook, 2nd 2 Red videos & release new print campaigns for A/W 14
Feb- Mar 2014 Re-launch Uomo campaign. Event to be the day before product release.
32
April 2014- measure 1st quarter Uomo sales & campaign recall
April 2015- Product team to start researching into new organic fabrics which can be used in collections. Consider price increase (if in line with demand and sales, etc.)
Dec 2014- Release Red Christmas video
Sept 2014- New Red collection unveiled at fashion week, pop-up stores open for month & last video released July 2014- Announce Red online pop-up stores & new ecommerce feature Feb 2014 Internal- start Launch 2 video collaboratrend researching & designtions ing new Red range
March 2015- Open 4 Black boutiques. Communicate to potential existing customers from mainline database. Monitor sales from Black range monthly from now on.
Jan 2015- Announce new range coming soon. Invite press & buyers to Black show. 6 monthly report for Red.
financial forecast
Valentino must remember that the realistic for 2014, with the refining 25% year-on-year increase in reve- of womenswear product and release nue in 2013 is not likely to continue of men’s fragrance and new men’s at such a rate. The dramatic geostores. There is an aim to increase graphical expansion contributed spend per existing customer for Valto this growth and investment in entino and to achieve an increase in communications to sustain this ap- profits. The range plan and forecast peal in new markets must be made. for Valentino Black is presented in A target of 20%+ will be more the next table.
33
valentino black range plan It will begin with a limited amount of core pieces and a modest budget of £1m in order for it to be trialled and tested, and if successful can be extended for the next collection.
34
Product Top 1 Top 2 Top 3 Top 4 Top 5 Skirt 1 Skirt 2 Skirt 3 Skirt 4 Trousers 1
RRP £400 £450 £500 £550 £650 £650 £750 £900 £1,000 £600
Cost Price £61 £65 £74 £82 £95 £92 £102 £120 £128 £88
Mark Up 6.5 6.5 6.7 6.7 6.8 7 7.3 7.5 7.8 6.8
Margin 84% 85% 85% 85% 85% 85% 86% 86% 87% 85%
Unit Buy 220 210 210 200 190 200 200 180 180 220
Total £13,420 £13,650 £15,540 £16,400 £18,050 £18,400 £20,400 £21,600 £23,076 £19,360
Trousers 2 Trousers 3 Trousers 4 Trousers 5 Dress 1 Dress 2 Dress 3 Dress 4 Dress 5
£700 £800 £1,000 £1,200 £800 £800 £990 £1,010 £1,250
£100 £108 £130 £150 £106 £106 £123 £126 £156
7 7.4 7.7 8 7.5 7.5 8 8 8
85% 86% 87% 87% 86% 86% 87% 87% 87%
201 200 180 140 240 240 220 220 190
£20,100 £21,600 £23,400 £21,000 £25,440 £25,440 £27,060 £27,720 £31,200
Dress 6 Dress 7 Dress 8 Dress 9 Dress 10 Jacket 1 Jacket 2 Jacket 3 Jacket 4 Jacket 5 Coat 1 Coat 2 Coat 3
£1,750 £2,700 £2,900 £3,300 £4,000 £900 £1,200 £1,500 £2,000 £2,500 £2,020 £3,000 £4,000
£218.75 £337.50 £362.50 £412.50 £512.82 £120 £150 £187.50 £250 £312.50 £252.50 £375 £512.82
8 8 8 8 7.8 7.5 8 8 8 8 8 8 7.8
87% 87% 87% 87% 87% 86% 87% 87% 87% 87% 87% 87% 87%
190 190 160 141 120 220 200 180 150 130 180 130 100
£41,563 £64,125 £58,000 £58,163 £61,538 £26,400 £30,000 £33,750 £37,500 £40,625 £45,450 £48,750 £51,282 £1,000,001
promotional budget Promotion Fragrance Campaign 5000 cards printed Red social media agency costs Red video collaborations Red pop-ups x4 Red personalised lookbook ecommerce from agency 10,000 Direct Mail lookbooks Christmas Red video commission
Cost (Euros) 10,000,000 1,691 (Based on quote for 250 for ÂŁ70 converted) 20,000 10,000 (5 collaborator commissions) 200,000 (Based on 1 month rent, salaries & interiors converted) 35,000 12,269 (Based on quote for 350 for ÂŁ254 converted) 10,000 10,288,960
The promotional budget will form 10% of yearly revenue, making 2014’s 50m euros. The remainder of the budget is for internationally localised print and online advertising, as well as costs for all fashion weeks and any other events.
35
implementation & control As the overall marketing objectives for this strategy are majorly brand identity/ equity-based, the main performance indicators “need to be closer to customer and competitor and therefore have to be non-financial such as behavioural (e.g. loyalty,
Valentino Uomo • No. of fragrance sales • No. of new customers • Menswear sales revenue • Brand recall rate from new campaign • % of 2014 revenue from fragrance
36
Valentino • Profit per customer • Average order volume • Re-purchase rate • Brand recall/ preference rate • Quarterly sales
penetration) or what people have in their heads (“intermediate”, e.g. awareness and attitudes).” Ambler, T (2003) However, loyalty and even awareness is reflected in financials, particularly the number of sales and transaction spend per customer.
Red Valentino • No. of new customers • Sales per product category • No. of new customers/ new visits to pop-up locations • % of revenue from new collection • No. of social media users • No. of users of new look book page
Valentino Black • No. of existing customer purchases (from mainline) • No. of new customers • Monthly sales in first year • Re-purchase rate • Average order value • Customer referral rate • % of 2015 revenue
brand metrics Brand loyalty • Expenditure per customer • Purchase frequency per customer • Customer referral rate • Consumer engagement rate and level of engagement (commitment, engagement or emotional bonding) • Operating costs (these should be slightly reduced as company and customer become more familiar with each other)
Brand equity (Measured every 6 months) • Brand knowledge • Degree of familiarity • Brand personality and image • Market presence/ share • Customer retention rate • Distribution availability ( Weighted percentage of retail outlets/ channels carrying brand) • Brand preference as percentage of brands in consumers’ consideration set
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ibliography References Peters, C, Shelton, A & Thomas, B (2011) Self-concept and the fashion behaviour of women over 50, Journal of Fashion Marketing & Management, Vol. 15 (3) p291-305 Review (2013) Loyalty and luxury brands: The role of self-congruity constructs, Strategic Direction, Vol. 29 (2) p31-33 Zhang, J (2013) South China Morning Post. China. Available from: http://www.scmp. com/lifestyle/fashion-watches/article/1362082/valentino-adopts-red-theme-fashionshow-launch-shanghai [Accessed: 25/11/2013] Kim, H (2012) The dimensionality of the fashion brand experience, Journal of Fashion Marketing & Management, Vol. 16 (4) p418-441 Ambler, T (2003) Marketing and the Bottom Line. 2nd edition. London. Pearson Education. Okonkwo, U (2009) Sustaining the luxury brand on the Internet, Journal of Brand Management, Vol. 16 (5/6) p302-310 Renton, C (2013) J2 Global. Available from: http://investor.j2global.com/releasedetail.cfm?releaseid=794069 [Accessed: 02/01/2014] Staff (2013) Luxury Daily. USA. Available from: http://www.luxurydaily.com/luxury-dailys-luxury-marketing-outlook-2013/ [Accessed: 27/11/2013] Review (2013) Understanding the contemporary advertising environment: Is glocal the most effective strategy? Strategic Direction, Vol 29 (2) p10-12 Kapferer, J & Bastien, V (2009) The Luxury Strategy. 2nd edition. London. Kogan Page Kim Jeyoung, A. & Ko, E. (2012) Impacts of Luxury Fashion Brands’ Social Media Marketing on Customer Relationship and Purchase Intention. Journal of Global Fashion Marketing Vol. 1 (3) 164-171 Okazaki, S & Taylor, R (2013) Social Media and International Advertising: theoretical challenges and future directions, International Marketing Review, Vol. 30 (1) p56-71
resources
Books Ambler, T (2003) Marketing and the Bottom Line, 2nd edition. London. Pearson Education. Kapferer, J & Bastien, V (2009) The Luxury Strategy, 2nd edition. London. Kogan Page. Kapferer, J (2008) The New Strategic Brand Management: Creating and sustaining brand equity long-term. 3rd edition. London. Kogan Page. Egan, C & Thomas, M (1998) The Cim Handbook of Strategic Marketing. UK. Butterworth-Heinemann Gilligan, C & Wilson, R (2005) Strategic Marketing Management: Planning, Implementation & Control. 3rd edition. UK. Butterworth-Heinemann Hines, T & Bruce, M (2012) Fashion Marketing: Contemporary Issues. 2nd edition. London. Routledge. Posner, H (2011) Marketing Fashion. London. Laurence King. Hameide, K (2011) Fashion Branding Unraveled. USA. Fairchild Books. E-journals Journal of Fashion Marketing & Management Journal of Brand Management International Marketing Review Strategic Direction Journal of Product & Brand Management Journal of Global Fashion Marketing Websites www.wgsn.com www.stylesight.com www.valentino.com www.businessoffashion.com www.luxurydaily.com www.ft.com www.vogue.co.uk Journals Marketing Week Drapers
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APPENDIX 1
Consumer Based Brand Equity model adapted to a cycle which highlights what the brand ultimately want to achieve from the strategic objectives.
Consumer’s experience with brand is bettered
Brand equity adds to appeal of brand among consumers
Brand value to consumer heightens Consumer value to brand equity cycle
Brand loyalty adds to equity
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Brand loyalty is created
appendix 2: consumer segmentation table Segmentation Variable Demographic Gender Age Generation Life stage
Consumer A
Consumer B
Consumer C
Male/ female 25-45 Generation Y/ X Working professionals, possible starting families, some still without kids and moving into first homes/ renting with partners
Female 16-24 Millennials/ Generation Y Still studying or beginning careers
Occupation
Professionals working up career ladder in successful jobs e.g. media, publishing, fashion, some in senior managerial positions, older ones may be entrepreneurs Highly educated to degree level or have learnt through business Roughly £29k at younger end of scale up to £100k
Students or in entry-level/ grad jobs starting new careers
Female 45+ Baby boomers/ Generation X Senior professionals who have paid off mortgages, may have multiple no. of properties, kids are grown up, some starting retirement Senior professionals or retired
Education Income
Highly educated with curious minds due to internet Students who may have loans/ part-time jobs/ parents funding, those in entry level on roughly £21k-£29k A-C
Social grade classification Geographic Urban/ suburban/ rural
A-C
Housing type
Renting nice apartment or first property
Renting
Size of city/ town Behavioural Lifestyle
Large city
Fair-sized town or city
Lives in urban areas, those starting families Urban areas or in university cities may be moving to suburbs
Very busy lifestyle juggling work, social life Student with a bit more time to shop/ look & family. for clothes online, may have part-time job, very social lifestyle. Some may be working longer hours to move up in careers and lead busy lifestyles.
Highly educated and well-read £50k+ or retired with income from property A-B More likely to live in suburbs and some have rural second homes or live in country and visit the city Have nearly or fully paid off mortgage on larger house. May have more than one home. Smaller town Calmer lifestyle, has either earned rights for shorter hours in the office or works from home, or if retired enjoys life more, travels to visit family, goes on holidays.
Social aspirations
To be successful in careers and potentially have family/ move to larger home.
Self-image
See themselves as working towards success, having a balanced lifestyle between work and social activities. Smart and aware of trends, fashionable yet not a slave to trends. Purchase pieces which can be mixed with other market levels, and clothes which can fit into multiple aspects of lifestyle, e.g. going from work to drinks in the evening. Want functionality and to feel like they are getting the ultimate value out of what they spend. Used to spending more on cheaper items, however will spend a higher amount on quality product, which will last for years in terms of both style and fabric.
Purchasing motives & behaviour
Interests & hobbies
Attitudes & opinions
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Eating out, socialising, maintaining fitness by going to the gym or running, some spending time with family. Has grown up in a time when spending has been at a high and austerity was not really known. Used to having fast fashion and other products at finger tips, however sees value in other things such as maintaining friendships and family relationships, rather than just material objects.
To achieve a good well-paid job in a career Majority feel they have achieved a lot in they enjoy, have more money to spend on their lives and careers and now may be clothes and holidays. wanting to spend more time on themselves and family. Wants to be fashion-forward and unique, Is completely comfortable in own skin but trendy. Buys latest pieces to impress and doesn’t care too much whether other others, particularly social circles and colpeople like their image, wants to wear leagues. things which are fashionable but that they feel good in. Purchases to remain on-trend and as far Purchases from brands they truly believe ahead of others as they can. Is an early in and trust for quality and being style adopter of trends and so will shop mainly investment pieces. May have built loyalty to from high street/ mid-market brands such certain brands for certain functional pieces as ASOS. Will purchases accessories such as e.g. Barbour for weather-proof jacket, shoes and bags from luxury brands, as they Burberry for a smart trench. Wants pieccan be worn with less expensive items and es that can work well with their existing work as statement pieces. wardrobe and that they feel comfortable in, is less likely to buy into fads and will only do so if the style sits well with their own personal style. Socialising, shopping, sports activities Visiting exhibitions, theatre, cinema, travor gym, social networking, blogging and elling, seeing family, shopping, decorating travelling. and gardening. Is again used to having money available to Has seen parents work hard for money spend from parents’ funding. Has grown and still appreciates more items as luxury, up with rise of technology and is cone.g. tablet devices. Has adjusted to smart text-hungry and bored-easily. Wants suctechnology yet does not prioritise this over cess however is aware now that it will not books, television or theatre, and seeing be given as soon as university ends, and is people face-to-face. Has more to spend yet prepared to intern or work their way up. wants to save some for family members Has a curious mind and wants to travel and and invest in property, not necessarily see more of the world. Is perhaps more frivolously spend it on clothing, cars and aware of climate change and sustaiholidays.
nability than older groups however cannot afford to purchase all luxury/ premium product. Usage & benefits Benefits sought
Usage rates
Volume of purchases
Price sensitivity
Functionality, practicality, style and versatility in clothing. When buying luxury product does not necessarily want to wear it a couple of times on special occasions, is seeking more regular use.
Regular use of most pieces- whether going out or for work.
Trend- led and innovative styles which help to set them apart from peers as being fashion-forward. Wants a low price for most pieces, however expects that for luxury products you must pay more. Wants luxury pieces to make a statement and show that they are aware of these brands and status. Regular use, mixed with lower market level pieces.
Want timeless investment pieces, some truly special ones in luxury market to wear to theatre or to dinner parties. Wants clothing which is stylish but still sophisticated and appropriate for age and body shape.
Less regular, some pieces only used for special occasions. Does not go out as much during the week and so for staying at home will not make such an effort, as they don’t see the need to. Purchase less in single transaction, but Purchases most regularly from fast-fashion, Purchase items every few months, and may more regularly as will find occasions in high street brands in order to keep up with buy a couple of pieces from a brand in one which they feel the need for something, or trends, however will purchase much less transaction, if they find stuff which links to for new season wardrobe. Will purchase frequently in terms of luxury. Perhaps once items, e.g. trousers with a belt. across variety of brands. or twice a year they will save for or receive a luxury accessory. Less price sensitive to luxury market as More price sensitive- will only purchase Slightly more price sensitive than before as expectations are already set at certain price luxury if they know they can afford it/ have recession has still left a trail of worry bepoint level, so consumers are prepared for saved for piece. Has student loans, low hind it, even if the individual may not need a higher price when seeking clothing from income and rent to consider in budgeting to worry. As they are investing for family’s these brands. of income, and so has to consider prices future after them they may not purchase sometimes more carefully. However, if something if the quality does not match there is something the consumer really up to their expectations when considering wants, they may ask parents for it or get on price. However if they truly love the prodcredit card. uct and it fits with their ideas and lifestyle they will buy it.
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Brand loyalty
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Not very brand loyal as is so much choice, and one mediocre experience with a brand is enough to put a customer off for life, as there are plenty of other options available.
Again not very brand loyal as they consider most fashion as more disposable, however brands are building loyalty well through discount promotions and social media. E.g. ASOS, Burberry
More brand loyal but again a bad experience is more likely to now put the customer off, it is just not acceptable today. As consumer gets older (above 70, they are more likely to stay to brands they know and trust), however with internet access and a more active lifestyle the younger end of this group are still not very brand loyal. A truly luxury experience and great service will bring the customer back however.
appendix 3: competitors comparison table Brand Background story
Valentino Founded in 1960 by Valentino Garavani, provided haute couture pieces to royalty and celebrities. Expanded to RTW, accessories and fragrance over the years, however the RTW & haute couture are the 2 things which have standed this space of time. Company has been sold twice in space of 5 years up to 2013.
Chanel Founded in 1909 by Gabrielle “Coco” Chanel. Chanel defined innovation with everything- re-designing haute couture and ready-to-wear, fragrance with No.5, and being one of the first brands to achieve globalization unconsciously. Was taken over by Karl Lagerfeld in 70’s after Chanel’s death.
Dior Founded in 1947 by Christian Dior, with his “New Look” collection. From the beginning was associated with glamorous Hollywood actresses. Has recently changed hands of creative direction from John Galliano to Raf Simons.
Hermes Founded in 1837, family owned French manufacturer specialising in luxury goods, originally equestrian gear. Has kept exclusivity, probably most over all other luxury brands, with notorious customer waiting list for Birkin bags.
Price point
Starts £105 for a bracelet up to £30,000+ for haute couture dress. Fragrance starts approx. £35.
Starting around £25 for lipstick to £30,000+ for haute couture pieces.
Roughly £18 for nail £100 for fragrance to varnish to £30,000+ for £100,000+ for Birkin haute couture. bag.
Core products
Ready-to-wear and accessories.
Accessories, fragrance & jackets.
Portfolio
Made up of the haute couture, ready-to-wear mainline, sister line Valentino Red, Menswear, Fragrance & most recently Shanghai collection.
Haute couture, ready-towear, cosmetics, skincare, fragrance, menswear, fine jewellery.
SLP Founded in 1961 by Yves Saint Laurent with haute couture, and from 1966 focused on popularising Ready-towear, with his iconic Le Smoking tuxedo jacket for women. Haute couture ceased production in 2002. The brand has more recently undergone drastic changes, not only replacing creative director Stefano Pilati with Hedi Slimane, but by re-naming the brand to Saint Laurent Paris. £20 roughly for cosmetic product to roughly £7,000 for ready-towear.
Prada Founded in 1913 by Mario Prada as a leather goods shop, has been kept in the family since origins and is now headed by Miuccia Prada.
Fragrance starts £35 and sunglasses around £150 for Miu Miu, up to £10,000 for Ready to wear. Accessories, fragrance & Bags, leather goods & Jackets, accessories & Shoes, accessories, cosmetics. scarves. cosmetics. fragrance and eyewear. Haute couture, readyReady-to-wear, equestri- Ready-to-wear, mens Prada ready-to-wear, to-wear, cosmetics, an, fragrance, accesso- wear, accessories, Miu Miu, menswear, fragrance, baby clothes ries, home, jewellery, jewellery, fragrance and fragrances, accessoand jewellery. watches & menswear. cosmetics. ries & a book.
Target market
Stylish individuals with high incomes or means to purchase luxury and quality products. Each product range is targeted at a slightly different consumer segment. E.g. haute couture is now moving towards Russia and Middle East consumers who invest in these unique pieces of art, as well as older existing couture customers from Europe and USA. RTW is targeted at 25-40 age band, with the younger group more prominent in developed regions of China. Younger group of 18-25 are also becoming more significant, purchasing Rockstud accessories.
Quality
High quality product made with Superior quality associated finest materials and in Italy. with Parisian atelier and intricate details, e.g. hidden chain inside jacket. Currently mixed- new creative Completely steeped in heridirectors are trying to keep the tage of brand and association heritage aspect whilst adding with Coco Chanel’s legacy. a more contemporary edge. Identity hasn’t changed over Although the designers are years however as it is timetalented, the product mix is less it is always relevant, and becoming very diverse, with adapted to modern trends in bright neon colours added and terms of show productmi-
Brand identity/ personality
Elegant high-worth individuals who appreciate true luxury and classic style of Chanel. Ranging from 2550+ depending on productyounger individuals will now buy the same tweed jacket as a 60 year old but will style it completely differently. The common ground is that they have a high level of wealth and live a fine lifestyle. Younger consumers 18-25 will purchase/ request Chanel bags e.g. 2.55/ Boy chain bag for gifts to add an iconic luxurious piece to their outfit.
Targeting young consumer demographic with fragrance- Miss Dior in particular, 14-20 year olds. Haute couture still targets a very exclusive clientele however the style of these clients may be different in relation to new artistic direction. It is very contrasting to the dramatic extravagance of John Galliano, and this must now target a more classic type of consumer. Accessories cater to 25-40 demographic who want a touch of elegance/ glamour to their outfit.
Exclusive luxury Edgier consumer influconsumer- HNWI’s, enced by fashion and celebrities, royalty. music. Aged 22-35. An older more classic demographic of 30+, who appreciate the quality and exclusivity of the Hermes brand, and the subtle status of the Birkin.
Prada mainline targets a sophisticated, stylish individual taste. Aged roughly 30-50 years. Accessories appeal to younger consumer again because of deep range and some smaller, chain style bags, as well as the Prada logo. Miu Miu targets 18-30 consumers with trend-led styles and unique, quirky prints. It has the same sort of intelligent and unique artsy personality as Prada mainline, yet is given a youthful edge.
Luxury quality products Luxury quality products Good quality products associated with being associated with being associated with Yves Made in Paris. Made in Paris. Saint Laurent label.
High quality with Made in Italy line.
Brand is seen as elegant and glamorous as it continues its association with Hollywood stars such as Natalie Portman, Marion Cotillard, Charlize Theron and Jennifer Lawrence.
Clever and cultured, sophisticated and stylish. An identity associated with art and creativity.
Perhaps the most exclusive luxury brand catering to the HNWI’s and VIP’s of the world. Classic yet creative with scarf design and new material versions of Birkin.
Recently undergone significant re-brand, changing name to Saint Laurent Paris, reflecting the “French superbrand” it is wanting to portray. Associations with YSL are still
Symbols
Philanthropy
nimal, Celine-style shapes. Red line seems to be targeted at a young consumer however seems like a cheaper, more toned down version of mainline product- asides from a few prints. It’s not relevant to current young consumer.
ion and stores. Gabrielle’s vision for the brand and Chanel woman was so innovative for her time that it is now more relevant to the modern woman to this day.
Brand’s main symbol is the deep red colour it is associated with. The roots in Italy and haute couture presence are also significant symbols. Has recently made new efforts to educate and train staff properly on product knowledge, brand values and client management. Also committed to environmental initiatives using non-hazardous chemicals and avoiding deforestation.
Double C logo, No.5 perfume, little black dress, tweed jacket, Coco Chanel, and now Karl Lagerfeld. Chanel Corporate Foundation was created in 2011 to help empower and support women in gaining their independence, in underprivileged situations.
Since departure of John Galliano, the design of RTW and haute couture has taken a dramatic turn back to more of the original New Look style silhouettes and Raf Simons’ minimal, sleek aesthetic. Dior logo, stars, the magical and mystical.
there and his original ties with the rock n roll era of the seventies and late 60s, which are now being taken to higher levels. Image is now very rock n roll, dark and edgy. Birkin bag, horse and carriage logo, orange colour, silk scarves.
YSL logo, tuxedo jacket. Prada logo, pattern and bold colours.
Has auctioned exclusive items to raise money for charities e.g. Cancer charity.
In 2008 launched the Hermes foundation for enterprise, which supports people and companies wanting to perfect and promote traditional craftsmanship.
Pierre Berge – Yves Saint Laurent foundation was launched in 2002 to preserve the haute couture archives after production ceased, and to support art and culture.
Has a Prada foundation which is dedicated to providing exhibition spaces and exhibition support to artists.
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appendix 4 aaker’s brand identity Aaaker’s brand identity planning model can be used to highlight the issues Valentino are currently facing, which are detrimental to sustainability of the overall brand identity. Aaker’s model highlights 4 key areas: Brand as product, Brand as organisation, Brand personality and Brand as a symbol. Brand as a product is currently facing inconsistencies and this is also related to the personality. When the creative directors state that the Valentino woman can be any kind of woman and doesn’t have to choose, this is subtly conveying that the brand does not have a strong personality enough to differentiate it from the rest. What is even the point in being a brand if they are going to try to be everything? It doesn’t work. The attempt at being “every kind of woman” is presented in the extensive S/S 14 collection, where there is a vast mix of styles, colours and prints, that do not necessarily complement each other. In addition, some of the product, i.e. the camouflage printed
tops and trousers, serve to cheapen the look and quality of the overall brand, they do not look like luxury products. As shown in Aaker’s model, the product is vital for presenting the brand’s value proposition, and the personality contributes to the relationship consumers have with the brand. Valentino will not build brand loyalty or depth of connection with its customers if the personality is not there for the consumer to see or find a relation to. At the moment, Valentino is trying to connect with every woman possible, which will only turn around to decrease the value of the brand in the long-term. It is more worthwhile to sustain profits and longevity of consumer relationships by connecting to a certain type of luxury consumer, who can really feel a true relation to the brand and won’t therefore choose another competitor.
appendix 5 elaboration likelihood model Elaboration Likelihood Model (ELM) Theory and Involvement (Taken from: “How to influence the brand attitude of the audience by micro-films�- Journal of Promotion Management, vol 19, issue 5, p674-686, 2013) Elaboration Likelihood Model (ELM) originated by Petty and Cacioppo is an attitude change theory in psychology (Petty, Cacioppo, & Goldman,1981; Petty & Cacioppo,1986). The basic belief of the theory statesthat different methods of inducing persuasion may work best depending on how likely the elaboration of the communication is (Petty etal.,1983). It posits that there are two ways to induce persuasion. One called central route, which focuses on the information that is central to the message receiver; and the other way, on the contrary, takes the peripher-
al route that is irrelevant to the focal issue but various cues in the communication context. This dual-process theory of persuasion is frequently adopted to explain situations under which some audiences may be more influenced by one route than another (Bhattacherjee & Sanford, 2006; Angst & Agarwal, 2009). The central route of the persuasion process assumes that an individual carefully considers and evaluates the information important to him or her to form an attitude. In other words, when an individual has high involvement in the cognitive processing of information, the best way to influence that person is through a strong argument with relevant points regarding the issue or product. Taking a central route strategy in this study, for example, the audience of micro-films may ponder over the story told in the film
and evaluate how much the film matches the brand represented by the film. For the peripheral route strategy of persuasion using micro-film, on the other hand, a celebrity is usually used as an endorser to induce persuasion as the audience with low involvement is not motivated to devote cognitive effort to evaluate product-related attributes but simply link the cues to form attitudes in the communication environment (Tang, Jang, & Morrison, 2012).
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appendix 6 schmitt’s 5 experience dimensions (1999) Experience Sense Experience Feel Experience Think Experience Act Experience Relate Experience
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Including aesthetics quality and sounds Moods and emotions Convergent analytical thinking Behavioural dimension Refers to social activity and engagement