Moschino 7 P's Marketing Report

Brand report Reshma Muralitharan 024856 Total words: 2154

This report will cover in detail the aspects of the 7 P’s of the marketing mix (excluding process) for Moschino, with particular focus on the marketing communication strategies used and will be providing a critical analysis. This report will also be providing objective recommendations based on the findings of this report.

Primary research in the form of store observation and secondary research derived from academic sources have been used.

Introduction THE 7 P’S -

Product Price Place Physical evidence People Promotion

Recommendations Bibliography

Founded by Franco Moschino in 1983, Moschino is an Italian luxury brand focusing on ready-to-wear and accessories. It is known for its outlandish designs and unique concepts. It is also known for its parody of high fashion and was founded on the idea of ‘anti-fashion’.

In 2013, Jeremy Scott was appointed as the creative director of the brand.

Moschino’s target market lies within male and female from the ages of 18-45, of the mid to upper-class. The Moschino consumer can be described as someone who is loud and bold, and has the desire to stand out in a crowd and make a statement (Psychographic segmentation).

Moschino operates within the luxury sector amongst competitors such as Gucci, Louis Vuitton, and Prada.

Moschino’s main line provides a product portfolio of 5 categories for women: clothing and apparel, bags, shoes, accessories, and other products such as fragrances; and for men, 4 categories: clothing and apparel, shoes, accessories and ‘other’ products like fragrances.

Women: Clothing and apparel Outerwear Dresses

Bags

Shoes

Accessories

Other

Shoulder bags Bucket bags

Sandals Heels

Fragrances

Knitwear

Handbags

Sneakers

Fleece-wear Shirts T-shirts Trousers Skirts Beachwear

Clutches Backpacks

I-phone cases Belts Small leather goods Jewelry Hats Scarves Sunglasses Umbrellas Keyrings

Men: Clothing and apparel Outerwear Knitwear Fleece-wear Shirts T-shirts Trousers Beachwear Underwear

Shoes Sandals Sneakers Boots

Accessories I-phone cases Belts

Other Fragrances

Product sales

 Product lifecycle

Fad --Fashion --Basic product --Introduction

Growth

Maturity

Decline

The effect of the product lifecycle on product: Stages Description Introduction

Growth

‘Introduction is a period of slow sales growth as the product is introduced in the market.’

‘Growth is a period of rapid market acceptance and increasing profit.’

The goal of this stage is to increase market share.

Example The most recently introduced collection from Moschino, S/S 2017 collection.

The S/S 2017 pre-collection released some time before the main collection is currently in its growth stage.

Maturity

‘Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. ‘.

Moschino’s slogan print tshirt from S/S 2014. Though this product has not been around for a very long time, it is a newly established classic.

Decline

‘Decline is the period when sales fall off and profits drop.’

Here Moschino can choose to either extend their products

Items from the F/W 2016 collection have been put on clearance, at 70-50% off.

lifecycle by implementing extension strategies, or allow it to decline in order to take it off the market.

(Source: Kotler et al, 2012) An average product lifecycle for a Moschino collection lasts for roughly 6 months, until the next collection is released.

In a year, Moschino releases 8 collections: the main seasonal collections for Spring/Summer and Fall/Winter, 2 capsule collections and 2 precollections. It is often that the product lifecycles for each of these collections intersect.

It is important to note however, that not all products follow all 5 stages of the product lifecycle.

The effect of the product lifecycle on the rest of the 4P’s: Stages Price Place Promotion Moschino would opt Aim is to create for a more selective awareness of their Prices here are often distribution, products amongst at their highest due maintaining their the innovators and Introduction to the high demand luxury brand image, early adopters. amongst innovators but still making (Through mainly and early adopters. collections advertising, PR, and accessible enough to personal selling) the consumer.

Often stays the same to maintain growth, Continued use of Moschino may also Stays the same – advertising, PR and Growth reduce prices slightly maintaining growth. personal selling to to appeal to the maintain growth. majority.

Prices may be Moving towards an Moschino aims in this Maturity lowered to compete intensive distribution stage to remind and with competitors. strategy. persuade consumers

to purchase. This could be done by sales promotion and direct marketing.

Decline

Reduced prices to clear stock.

Moschino would use a more intensive distribution to make products more available to a wider range of consumers

Focuses on sales promotions to attract the late majority.

As Moschino produces premium ready-wear for an upper-class customer, they price their products accordingly.  Pricing strategies Type of pricing strategy

Description

How does `this work for Moschino?

Premium/Prestige pricing

High prices are used to indicate that the product is premium, and in this case, a luxury product.

Moschino uses this pricing strategy to indicate that they are a luxury brand.

Skimming pricing

The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market.

Product line pricing

Pricing different products within the same product range at different price points

When collections are first released, they are sold at their highest prices, however as time passes and the collection loses popularity, Moschino drives the prices lower to attract more and a wider range of consumers to purchase.

Moschino uses this strategy to make their products available a wider range of consumers.

Within their product portfolio, Moschino also provides different prices, for different products – this is an example of product line pricing.

The difference in prices for each product accounts for the fact that each product has a varying level of product benefits. For example, the cheapest product in the product line are usually basics, whereas the most expensive products have added style benefits and are more complex in design.

An example of this using dresses and jackets: Entry level Mid-level

High level

Short dress £215

Short dress £396

Short dress £875

Jacket £396

Blazer £842

Blazer £2,118



Competitor pricing:

In this example we will be comparing Moschino’s pricing of their most expensive handbag, to the price of the most expensive from Gucci, Louis Vuitton and Prada.

Moschino

Shoulder bag £1350

Prada

Gucci

Louis Vuitton

Quilt bag £1460

Dionysus GG Supreme shoulder bag £4040

CAPUCINES MM £4050

Here we can see that Moschino is positioned as the least premium brand according to price. It could be said that Moschino is more accessible in comparison to its competitors.

Moschino makes use of a dual distribution system, selling directly to consumers through their flagship stores and online store, and selling indirectly to consumers through intermediaries such as wholesalers and retailers.

Direct distribution channel (B2C) Moschino (store/online store)

Consumers

Indirect distribution channel (B2B ďƒ B2C)

Moschino (manufacturer)

Retailers

Wholesalers

Consumers

Figure 1: The dual distribution model.

Moschino benefits from a dual distribution system as it allows them to reach a wider range of consumers, however the use of intermediaries could also lead to loss of revenues, loss of communication and control, and induce channel conflicts.

Retail outlets (UK only): Offline Moschino flagship store (London) Harvey Nichols House of Fraser (Oxford Street) House of Fraser (Westfield)

Online Moschino online store Stylebop Net-a-porter Harvey Nichols Yoox The Outnet Farfetch Harrods House of Fraser

Through the table above we can see that Moschino adopts a selective approach to their distribution, allowing for a fair amount of luxury department stores and online retailers to stock their products. However, Moschino uses a wider approach with their online outlets, this could provide them with a competitive advantage due to the large reach of online retailing.

A selective distribution allows for more flexibility when it comes to accessing a broader range of customers and also allows for Moschino to maintain their image as a luxury brand without dilution of their brand value.

Strategy

Selective

Advantages Disadvantages  Allows for Moschino to reach a wider audience, while still maintaining a fair amount of exclusivity  This strategy may inhibit  Maintains aspirational the amount of new value of products customers they reach  Justifies Moschino’s high  May be difficult to achieve prices brand recognition in  The use of intermediary emerging markets knowledge and contacts that Moschino wouldn’t otherwise have

Effect of product, price and promotion on place: Product

Price

Promotion

As Moschino provides luxury products this limits the channels that it is able to distribute through as their distribution has to be in line with the perception of the product.

Moschino products are relatively high priced, because of this, they have to select an approach to distribution that justifies this pricing strategy.

Another point to consider is the effect of an intermediary on the price.

Intermediaries will also add their own margins, affecting the final price of the product.

As Moschino provides luxury goods, this requires a specialist channel in order to provide adequate promotions for the brand. For example, luxury brands require well-trained sales staff to interact with consumers, and also effective point-of-purchase promotions in the stores.

As of 2017, Moschino’s latest capsule collection debuted as a see-now, buy-now collection, making it available in stores almost immediately after the fashion show. This strategy could bring some great changes in the future to the way Moschino currently operates its distribution.

The importance of physical evidence is that this influences the customer experience through influencing their perceived quality of the service they have received, and as a result, the perception of the brand.

It is important that the physical evidence aspect of the marketing mix is in line with the image that Moschino offers to its customers in order to prevent conflicting brand messages. This is done through the use of consistent visual cues which help reinforce the brand image.

A key aspect of physical evidence is branding. This could be demonstrated through Moschino’s use of logos in all of their physical spaces.  Retail store: As a pose to its brand image, Moschino’s store space in London is presented as a minimalistic space. This could work to draw the consumer’s attention to the products, and stop the store space from feeling cluttered and overwhelming. This makes for an enjoyable shopping experience.

The store is laid out in a manner that makes accessing certain products very easy, as products are arranged by collection in different sections of the store, and clothing and accessories are kept separate from each other.

Moschino is also known to use their window display as a promotional tool to promote new collections in order to grab the attention of consumers and entice them into entering the store The overall ambience of the store is contradictory to what one would expect from Moschino, however this works in their favor due to effective visual merchandising that allows the consumer to navigate the store space easily.  Website: The website is very easy to navigate, and the homepage provides access to all the pages one could visit on the site. The design of the website is also quite minimalistic, which makes the online experience more pleasant.

The layout of the website also makes it easy for consumers to seek extra information on the latest news, social media, etc. and also allows for users to easily get in contact with staff for any queries.

Figure 2: Moschino's main website. (Source: Moschino.com)

Moschino’s employees and staff culture play a crucial role in the consumer journey as interactions between the staff and the consumer will dictate and shape their perceptions of the brand. Essentially, the reputation of the brand lies in the hands of the staff, and it is up to them to provide customers with a satisfactory experience in order to encourage a purchase in the short term, and prolonged brand loyalty in the long term.

It is apparent that within its flagship and concessions, Moschino maintains a high standard of service culture in-store. Staff are polite and well-articulated, showing an in-depth knowledge of the brand values, collections and possess a fair amount of skills in styling.

 Media strategy (planning, selection and scheduling): The media selection deals with which vehicles Moschino uses for their promotions.

Moschino mainly uses online and print media and their print vehicles focus on SIMS (Special interest magazines) such as Vogue, Harper Bazaar and W Magazine. For online media, Moschino uses blogs and online magazines as some of their media vehicles.

Message scheduling: Creating awareness less frequently over a longer period of time To generate publicity To increase sales in the short term, and long term through prolonged brand awareness The optimum amount of promotion per cycle is 3.

Through Moschino’s constant use of advertising and public relations, we can say that this is well within or above the optimum level.

Luxury products are high involvement, due to this the promotion should be less frequent as the message is more cognitive.

Mainly focuses men and women from the ages of 18 to 45.

-

Objectives

Purchasing cycle

Level of involvement Target audience

The effectiveness of message planning should ensure there is adequate reach and duplication of the advert across media vehicles so that this increases the consumer’s opportunity to see (OTS) the advert - all this is to ensure the 3 hit-theory takes place.

The 3-hit theory is ‘a theory, which proposes that the optimum number of exposures to an advertisement to induce learning is three: one to gain consumers’ awareness, a second to show the relevance of the product, and a third to show its benefits.’ (Du Plessis, 1988)

 The 3P’s (Push, Pull, Profile): ‘A push strategy is when an organization promotes a service or product to retailers and distributors in order to encourage them to ‘push’ or promote the product to the end-user’ Push

Pull

Profile

This strategy primarily makes use of direct marketing and B2B personal selling techniques in order to promote Moschino’s products to a business, and in turn, customer. A push strategy can also be used to maintain good relations between Moschino and their intermediaries.

‘A pull strategy involves communicating directly with the end customer or consumer to attract them (or ‘pull’ them) to the retailer and distributor in order to purchase the product.’

Each aspect of the marketing mix is used in order to successfully attract consumers to the brand, and generate interest, awareness and prompt a purchase.

‘A Profile strategy is used to satisfy an organization’s corporate promotional goals in order to satisfy stakeholders’ requirements.

Moschino makes use of advertising and public relations techniques such as corporate PR and sponsorships to achieve a favorable perception and reputation of itself.

(Source: Bax et al, 2013)

 Above and Below the line mix Marketing mix

Above, below or through?

Advertising

Above-the-line

Public relations

Above-the-line

Direct marketing

Below-the-line

Personal selling

Below-the-line

Sales promotion

Through-the-line

Why? Moschino’s advertising is directed at a mass audience in order to generate as much awareness as possible.

Moschino uses public relations is a tool to increase interest and awareness in the brand.

Direct marketing is used as a tool to interact on a one-toone level with consumers.

Personal selling involves one-to-one contact between a brand and a consumer. This could involve B2C or B2B personal selling.

Sales promotions are available to a mass audience online through Moschino’s website, and also through direct marketing to targeted individuals.

Due to developments in technology and consumer behavior, the line between above-the-line promotions and below-the-line promotions are blurring and becoming more integrated with each other to form through the line promotions. Aspects of the promotional mix can now be used to target both a mass and singular audience.

 The USP/ESP: USP (Unique Selling Point) What sets Moschino apart from other brands in the fashion industry is its outlandish and unconventional take on luxury read-to-wear.

The use of its brand logo, colors, silhouettes and motifs from popular culture and society particularly is something that is unique to them.

Overall, Moschino also uses its clothing as a statement of pop culture, society and particularly the inner-workings of fashion as it was founded on the idea of parody of the luxury fashion industry and is notoriously ‘anti-fashion’.

ESP (Emotional Selling Point) As a brand, Moschino communicates to its consumers a life of creativity, originality and a need to stand out, which may appeal to certain aspects of their life.

Moschino products aims to induce joy and positivity through its use of humor in its clothing.

These factors allow Moschino to form an intimate and unique connection with their consumers based on the presentation of the brand and its core messages.

 Advertising:

‘…A big idea is the driving, unifying force behind a brand’s marketing efforts.” (Brown, 2012)

Moschino’s ‘Big Idea’ is based on the premise of eccentricity and is known for their bright colors and outlandish, quirky visuals. Moschino uses these ideas to convey their core message, which is to challenge the perceptions of luxury fashion.

Moschino’s advertising usually also corresponds to a specific theme and bases their advertisements around this. An example of this would be their S/S 2016 campaign which was inspired by automobiles and construction.

Figure 3: The S/S 2016, F/W 2016 and S/S 2017 campaigns for Moschino (Source: Moschino.com)

- Message formulation (Message balance, structure, presentation): Message balance: Message balance ‘should reflect a balance between the need for information and the need for pleasure or enjoyment in consuming the message.’ (Fill, 2009)

For consumers of Moschino’s products, there is a lack of need for information through advertising, instead they look towards the emotional benefits that its products provide them – and these should be communicated clearly through advertising.

Pleasure and enjoyment is derived from viewing and consuming the advertising message.

Message structure: Elements

Description

‘Should the message draw a firm conclusion for the audience or should people be Conclusion drawing allowed to draw their own conclusions from the content?’

One and two sided messages

How does Moschino use this?

Moschino leaves audiences to draw a conclusion for themselves. A situation is presented in the advert, how it is interpreted is up to the consumer to interpret it how they see fit.

High involvement products (i.e.: luxury goods) allow consumers to draw conclusions for themselves. ‘…To present the case for and Moschino’s advertisements against an issue – a two sided often present itself in a way message. Alternatively just the that allows its audience to case in favor of an issue can interpret and project meaning be presented – a one sided into the photos, often inciting message.’ conversation and interaction.

Through this we can say the message is two-sided.

Order of presentation

‘At what point in a message should the argument be placed for maximum influence?’

Primacy vs. Recency effects.

‘Advertisers can challenge individuals by presenting questions and visual stimuli that demand attention and cognitive response.’

We can say that Moschino uses recency in their ad campaigns, particularly in their videos. This allows for the campaign to lead up to a climax, and provides something for the consumer to remember once they have finished interacting with the ad. The climax of a Moschino advert is the use of their logo as a closing.

(Source: Chris Fill, 2009) Message presentation: Moschino makes use of an emotional appeal in their message.

Creative appeals/needs Humor appeal

Brand appeal Need for attention

How does this work for Moschino?

Moschino’s quirky and unusual visuals create a subtle sense of humor in their campaigns, contrasting high fashion with something unexpected. This grabs attention and stimulates interest in the brand, and can also increase Moschino’s likability.

The adverts encompass the essence of Moschino’s identity: Loud, bold and quirky.

Creates a desire to want to attract attention to oneself due to the visual presentation of the campaign.

Moschino advertisements also make use of the salience framework.

The salience framework is ‘based upon the premise that advertising works by standing out, by being different from all other advertisements in the product class.’ (Fill, 2006) This executional framework applies to Moschino as it differs from the advertisements of its competitors within the luxury sector.

- AIDA model: Attention Interest Desire Action

Grabs attention through the use of a bold logo, and eye-catching visuals.

The unique scenarios played out in the campaigns and the unconventional imagery in contrast to other luxury brands generates interest.

Creates desire from wanting to interact with this brand and induces an affective response in the audience. The advertising provides aspirational value to the consumer.

Through effective persuasion, a consumer may be enticed by the advertising message and choose to take action in the form of a purchase.

 Public relations (PR):

‘Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories and events.’

(Kotler et al, 2009)

Moschino has a very extensive public relations approach, and this is often seen as their primary focus of their marketing communications mix.

The importance of public relations is that it generates publicity, increases credibility and also increases consumer confidence. PR is also less harsh in comparison to advertising as it presents a softer sell of the product and/or brand.

A downside to PR, however, is a lack of control of the message amongst the public.

PR tools: Tools

Media relations

Sponsorship

Corporate advertising

Crisis management

Examples Moschino maintains relationships with the press and media through the use of press releases, interviews and events to name a few methods.

An example of this would be how creative director Jeremy Scott maintains very close, often personal relationships with several well-known celebrities.

Moschino sponsors several celebrities by providing them with clothes for events for example.

Through this, consumers can associate Moschino with several famous celebrities, they uses the interest of these celebrities’ fanbases as a way to access a wider market.

Another method of sponsorship is corporate sponsorship, an example of this would be when Moschino sponsored painter Ross Bleckner’s art exhibition in collaboration with the UN. Managing corporate, community and press relations in order to generate positive publicity and goodwill for Moschino as a brand.

Moschino will respond to negative publicity in order to amend the situation or provide clarification in order to save face and maintain a positive image amongst stakeholders.

An example of this would be the recent S/S 2017 capsule collection featuring drug themed clothing, which received widespread outrage amongst the general public for its offensive theme. In response to this, Moschino spokesperson said this was not the intent of the collection, however creative director

Jeremy Scott brushed off allegations, causing more outrage claiming him to be irresponsible and apathetic.

Moschino unfortunately have several instances of failed crisis management due to the often controversial nature of their brand (i.e.: use of another brands name and logo for their collection), which can arouse misunderstandings between Moschino and their publics. Instead of admitting to fault, they may attempt to justify themselves in inappropriate circumstances.

Another interesting aspect of Moschino’s public relations is their use of other brands in their designs and promotions. Moschino has collaborated with several well-known brands such as Mattel (Barbie), Nintendo (Mario) and more.

Such collaborations are mutually beneficial for Moschino and the collaborating organization, and helps generate widespread publicity and public interest, mostly amongst an audience that otherwise wouldn’t interact with Moschino.

It can be said through the use of sponsorship, media relations and collaboration that Moschino effectively uses public relations to gain awareness through associations with other brands and names.  Direct marketing: Direct marketing is the ‘direct connections with carefully targeted individual consumers both to obtain an immediate response and to cultivate lasting customer relationships.’ (Kotler et al., 2009)

Moschino uses several direct marketing strategies (mainly addressable) in order to engage and communicate on a more intimate level with their consumers.

Direct marketing strategies used: Strategy

Direct mail marketing

Online marketing

Face to face selling

How is this used?

Here, Moschino sends emails or letters to those subscribed to their newsletter detailing things such as new collections, sales promotions and other special announcements.

An email is sent roughly 3 times a week.

Through the use of direct response on social media, personalized ads and personalized search results, Moschino can interact with consumers online without a consumer directly providing their personal information.

This is another aspect of personal selling that involves sales staff building a relationship with consumers with the intention of securing brand loyalty.

Another aspect of Moschino’s direct marketing is their use of customer relationship management (CRM). This is used in order to foster a long term relationship with customers in order to encourage brand loyalty.

Though direct marketing provides several benefits such as encouraging brand loyalty and repeat purchases, its reach is limited. ďƒ˜ Personal selling: It was observed that the Moschino staff were very knowledgeable about the brand history and its collections, this was translated into the selling of the physical product.

Products were presented to the consumer in a real life situation to provide a context for when it could be used. (i.e.: parties, lunch, etc.) The

sales staff also used subtle upselling when presenting more than one product, stressing the benefits of the more expensive product to the consumer.

Another method of personal selling Moschino uses is B2B personal selling. This is done through selling collections to buyers of department stores such as Harvey Nichols and Harrods for example.

The tasks of personal selling are not only limited to the act of selling but also include gathering customer information, allocating products and maintaining customer relationships to name a few. ďƒ˜ Sales promotion: Sales promotion is an important tool in the marketing mix as it provides an incentive for consumers to take action towards purchasing a product immediately rather than later or not at all.

Moschino mainly uses sales promotions in conjunction with direct marketing and personal selling to inform the consumer.

Types of sales promotion offered: Types Discounted prices

Description Moschino offers 50%-75% off of previous collections Moschino includes this promotion exclusively through Shipping codes their direct marketing (emails and mail).

Aim To clear inventory and meet short term sales objectives To provide incentive to make a purchase online

Moschino makes use of sales promotions primarily to get rid of excess stock from previous collections and to meet short term sales objectives.

This is due to the fact that if used any other way, this could harm their reputation as a luxury brand.

The negative implications include the dilution of the brands aspirational value and weakening of Moschino’s brand image.

Though often negative for a luxury brand, a positive outcome of sales promotions could be the potential to reach new customers. It may also allow for the late majority, who wouldn’t normally buy luxury goods, to be given the opportunity to purchase them as the price is lower.

Moschino may also make use of sales promotions for B2B transactions.

An example of this would be selling at lower prices to retailers and wholesalers.

 Improve crisis management: Though Moschino has an effective public relations strategies, their crisis management could be further improved.

It is apparent that because of the outlandish nature of the brand and the products it creates, this can incite negative publicity due to multiple reasons, this has generated a negative perception of Moschino amongst some. Effective crisis management can help reverse these negative perceptions of the brand and generate more positive publicity.

A way this could be done is to admit to fault where a mistake was made and show to the public that the brand is effectively trying to rectify the situation. This is a much better approach as opposed to trying to justify itself.

Another way Moschino can avoid conflict with its publics is through clear articulation of the creative ideas in order to prevent misunderstandings and misinterpretations.

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