BRAND AUDIT

Current Marketing Environment

Diesel’s founder Renzo Rosso has explained in an interview with Forbes that Diesel does not have a focused target market.

“In fashion, it is about staying cool. Everyone wants to be cool, look cool. In Europe and the U.S. the age gap between the young and the old is not much.

Now consumer groups are not fixed by age as much as they are by lifestyle. It is not uncommon to find couples with an age difference of 20-30 years. The young and not-so-young want to look and feel the same. Both of them want to look cool and fashionable. They want to wear similar kinds of clothes and accessories that are considered in fashion. So, there is no target group and the real focus is on lifestyle.” - Renzo Rosso, Forbes.

While Diesel does not have a specific target market, they do belong to the luxury retail sector more specifically, the premium lifestyle market. Bain & Company states this sector has seen major growth over the past decade, through the economic downturn in 2007 which lasted until 2009 - a growth of 8% forecasted in 2011.

Diesel’s parent company OTB understands that luxury retail brands in todays market must establish a network of mono-brand stores in order to differentiate the retail experience in which they provide and increase consumers time within the brands store.

Diesel focuses heavily on the location and the interior aesthetic of their stores because they have a deep understanding of their market and what their consumers expect.

A brands aesthetic is the ground work of communication and a personal relationship with their customers. It allows them to be consumed by the brand and triggers one’s emotions, desires, fantasies and passions.

For Diesel, it is vital that they ‘stay true to the source of their expertise’ (Profiling Customer Types in Luxury Retailing, Tisovski, M, 2014) which is their iconic denim jeans, this because that will be what allows Diesel’s brand identity to remain a dominant feature of their lifestyle brand.

Luxury products often create a desire for social approval within the consumer because they represent status and power. (cf. McKinney et al, 2004).

There are two types of purchases in the luxury market; for oneself and for others.

Consumers will often be influenced to make a purchase on a personal basis. This is supported by the Cognitive Dissonance Theory that if a brand can connect with a consumer on an emotional level they will be more likely to make a purchase.

Diesel has been extremely successful in its venture to connect with their consumers on a personal basis by offering a Diesel lifestyle. This subconsciously allows consumers to understand that they can trust in the quality and service provided because Diesel has their consumers at the heart of everything they do.

The luxury retail sector in the UK was forcasted to double in its size from £6.6 billionto £12.2 billion between 2012 and 2017 (Ledbury Research and Walpole, 2013).

Growth in this market is likely to be driven by the following factors;

- The desire on behalf of the consumer to more responsibly invest in their purchases.

- Renewed interest in the creative capacities of experimental retail spaces.

- Luxury brands are using geographical variation as an organisational growth strategy; this is does not only have positive implications on the brand but is drving luxury consumption.

- Growing global deman for luxury products, particularly in emerging markets such as China, India and Brazil.

- Geographic expansion, especially where it concerns the emerging market in China.

(Bourdieu, 1984; Capegemini 2013) (McKinsey & Co, 2013, Shukla, 2012; Tynan et al., 2010)

Brands Growth Engines

In the past, Diesel has used the paid growth engine through their controversial and memorable advertisements which they are most famous for.

Diesel have also been using the sticky growth engine; this is where Diesel will focus on maintaining loyal customers through the excellent quality of products and innovative designs.

Diesel has been predominantly affected in the past after their ‘90s heyday’ because they made the mistake of targeting consumers who were too young and unable to afford the premium prices the brand offers (refer to appendices 4&5). This led Diesel to fall into decline as they struggled to compete with cheaper, emerging, fast-fashion retailers.

However this issue has been resolved in 2013 when Diesel’s Scott Morrison had introduced the FMCG approach into the company. ‘You have to be looking at where the business is moving to in the next three to five years. We need to deliver long-term growth that is both profitable and sustainable, rather than a short term gain with a (retailer) that might then sell out of the brand the following season,’ Says Morrison. ‘With a lifestyle brand such as Diesel, it’s so important that you maintain and grow the customers that you have.’ (Barnes, 2013)

This has been a major achievement for Diesel; working to grow back their customer base and give the brand structure and objectives to aim towards making it the third most popular jean brand in the world.

While the focus on advertisement and maintaining loyalty is key to Diesel’s success, if they were to also focus heavily on the viral growth engine; although this can be a difficult task, if Diesel were to develop their social media presence and become a very influential brand through direct communication with their current and potential customers, they would successfully attract positive attention to their brand through word of mouth.

To do this Diesel must engage their followers and create a virtual Diesel world that people can’t help but want to be apart of. It is recommended that they stop posting unnecessary content and ensure that their products and ‘lifestyle’ brand reputation are at the forefront of their social media platforms. (Refer to appendix 8)

With the growing popularity of Youtube as a successful marketing tool. Diesel has a huge opportunity to develop their channel and potentially gain an audience of millions of people.

An example of a successful business using this technique is Kylie Cosmetics. It is proposed that Diesel begins to create and upload styling videos featuring a famous celebrity or model, not only will this attract positive attention to the brand but it will make their products wearable and desirable for the consumer.

Diesel could also partner up with celebrities or social influencers such as Cara Delevinge, Chiara Ferrangi and David Beckham who fit the brands essence.

Partnering with such celebrities and social influencers will mean that Diesel will become more talked about, spreading to a larger volume of people because their fans will get involved with the brand through them, potentially becoming a loyal customer.

However, there are many barriers to the viral growth engine because it is very difficult to build intentionally.

Diesel cannot rely on the viral growth engine alone because it is too risky. In order for the viral growth engine to be a success Diesel must ensure that all of their products are at a standard which is better than that of their competitors and fits their target market flawlessly. Without this, Diesel will fail to attract new customers from the word of mouth of their current ones.

Brand Positioning

In order to build a strong brand, you must shape how your consumers think and feel about your products.

Therefore, Diesel must create positive experiences for their consumers so that they have positive thoughts, feelings, opinions, beliefs and perceptions.

In comparison to their competitors, Diesel has a strong brand positioning through powerful brand identity and a strategy to differentiate themselves from competitors. Whereas Levi’s relies on their brand history and iconic brand image.

Diesel differs from their main competitors in that they stray away from fashion norms and always make sure that their collections are unique and dynamic. Diesel communicates an unconventional image to their free spirited and independent consumers unlike most brands.

On the other hand, Levi’s conveys the image of being an authentic brand who designs are inspired by their older collections and have opted for stability and continuity within their brand positioning.