Marketing Brand Report Rizky Satyoko
CONTENTS 1.0. Executive Summary............................................................ 4 2.0. Introduction to the Brand................................................... 5 3.0. Macro-Economic Analysis.................................................. 6
3.1. Introduction..................................................................................................................... 6 3.2. Political............................................................................................................................ 6 3.3. Economic......................................................................................................................... 6 3.4. Social.............................................................................................................................. 6 3.5. Technology....................................................................................................................... 7 3.6. Legal............................................................................................................................... 7 3.7. Environmental................................................................. .................................................7
4.0. Brand Marketing Proposition.............................................. 8 4.1. Strength........................................................................................................................... 8 4.2. Weakness........................................................................................................................ 8 4.3. Opportunity..................................................................................................................... 9 4.4. Threats........................................................................... .................................................9
5.0. Competitors.................................................................... 10 6.0. Consumer Demographic................................................. 14 7.0. Product Selection............................................................. 18
7.1. Psychology Behind Luxury................................................................................................ 18 7.2. Products Chosen............................................................................................................ 18 7.3. Price Range & Competitors............................................................................................. 18
8.0. Social Media & Influencers.............................................. 20
8.1. Social Media Activities.................................................................................................... 20 8.2. Social Media Activities of Dolce & Gabbana..................................................................... 21 8.3. Influencers..................................................................................................................... 21
9.0. Marketing Mix................................................................. 24
9.1. Product.......................................................................................................................... 24 9.2. Price.............................................................................................................................. 24 9.3. Place............................................................................................................................. 24 9.4. Promotion...................................................................................................................... 24
10.0. Proposed Strategy.......................................................... 26 10.1. Proposed Brand Market Position and Competitors.......................................................... 26 10.2. Proposed Consumer Demographic............................................................................... 28 10.3. Proposed Social Media/Influencers and Marketing Mix................................................... 30
11.0. Bibliography.................................................................. 32 12.0. Appendices................................................................... 34 3
1.0. Executive Summary This report provides a detailed analysis and evaluation of the current marketing position of the fashion brand Dolce & Gabbana and which future strategy would work best for the brand. Methods of analysis would consist of primary research such as surveys, interviews and covert observation on the specific target. Due to my results answered by Millennial and Gen Z, this led to a future strategy of changing Dolce & Gabbana to target to the newer generation as Mintel sources suggest that a 78% of 16 to 24-year olds shops for designer fashion (August 2017). Our work has led to some recommendations for future actions for the brand. The report from people’s opinion and the media suggest that the brand’s image could possibly create a negative marketing position. Recommendations include: ● Improving the brand image and recover from controversies ● Appeal more towards the next generation ● Creating a sub-brand, increasing inventory Despite the research, the analysis has its limitations. This would include: brand figures fluctuate and inconsistent as the recent China incident created a negative impact on their mass market.
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2.0. Introduction to the Brand Dolce & Gabbana is a renowned luxury brand and is well-known around the world. They were founded in Legnano, Italy in 1985, however, are now based in Milan, Italy. Dolce and Gabbana designs and manufacture high-end garments for men and women and this consists of handbags, clothing, and footwear as well as accessories and perfumes. The business of Fashion connotes that they currently have 222 monoband stores across 41 countries. Dolce & Gabbana has also collaborated with many celebrities such as; Tom Cruise, Madonna, and Nicole Kidman. They have created many pieces which figure hugging and promiscuous dresses for women, as this appeals to those who desire glamour.
The problem we are wanting to overcome is figuring a way to improve and expand Dolce & Gabbana’s target market as they have been very conservative for the past few years. Despite always having the creative energy to their products, they should implement trends instead of sticking with what they know as this will always entice a fresh mind. The problem also lies within their designers as Domenico Dolce and Stefano Gabbana does not share the same value as the younger generation as Washington Post imply that they have a “unspool politically incorrect opinions with little more shrug�. Because of this, they encourage rage and emotions on social media and has been throughout their history.
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3.0. Macro-Economic Analysis
3.1. Introduction Dolce & Gabbana vision is to allow customers to experience something great about themselves through selling their garments. Their customers tend to be females as most of the merchandise which are being sold are perfumes and handbags. The business of Fashion suggested that Dolce and Gabbana achieve this through storytelling. According to Consodata, from 2016 to 2017, their revenue decreased from £998 million to £991 million. 3.2. Political Dolce & Gabbana has had its controversies and the most recent one is the Chinese marketing. This has caused a political impact on the Chinese government as well as their Chinese market as the advertisement has affected Dolce & Gabbana to sell in the biggest fashion market. 3.3. Economic As the recent economic downturn has plagued the economy, Dolce & Gabbana have to restructure their sales and their manufacturing factories. This also leads to a lower quality of products but they have always kept that premium price range. In addition, Dolce & Gabbana has managed to do is to change that around as their revenue has increased from £331.8 million in 2011 to £877.7 million by the end of 2012. 3.4. Social Social change is both a threat and opportunity for Dolce & Gabbana as the next generation are more connected with the world and are more materialistic. This is due to younger people rely on status and impression from social media. What makes this a threat is the recent controversy, as brand image is important in order to connect with the current market.
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3.5. Technology With the modern era being the technological age, Dolce & Gabbana has made some use of this. In February 2018, they use the drones instead of models for their runway to promote their handbags. However, they haven’t been on top of things with social media. Their Instagram has very low engagement and compared to their competitors such as Gucci and Versace. 3.6. Legal The legal issue is primarily with the counterfeit brands trying to imitate the intellectual design of the company. This can affect the market and their profit margin since it will entice people to buy something cheaper. 3.7. Environment The environmental issues have only been of recent. In November 2018 after the incident, the Chinese government burned $27,500 worth of Dolce & Gabbana. This further alters the profit generation as also a loss of sales.
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4.2. Weakness 4.1. Strength
4.0. Brand Marketing Proposition
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The quality of the product and the history of the brand is what makes Dolce and Gabbana recognisable. The name of the brand will lead to customer loyalty and it is possible for it to transfers to the future generation. Customers are far more likely to buy from a recognisable brand giving Dolce & Gabbana a competitive advantage amongst others. This is done by having a loyalty program service to entice their customers to conduct repeat business.
One of the major weakness is that it sells its products at a premium price range. Although customers will buy the garments despite the price range, the new wave of target market would show an interest in buying, however not being able to fund for the brand. This will lead to an increase in counterfeit goods which will impact Dolce & Gabbana’s profits.
4.4 Threats 4.3 Opportunity
The technological change will further provide many opportunities for Dolce & Gabbana. Back in February 2018, they showcased handbags with drones instead of models, taking a step in the right direction. Technology is also a contribution to engage with their customers through social media as it is a cheap and effective way of a marketing strategy, with a big impact possible from a minimal investment.
The threats that Dolce and Gabbana must be aware of is their competition. This is because the demand for high-end fashion is strict and competitors offer similar designs, some at a lower price point due to the constant change of trends. Furthermore, there is also an increase in counterfeit goods because of customers not being able to afford the garments by Dolce and Gabbana.
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5.0. Competitors High Price
Mass Market
Exclusivity
Low Price
Dolce and Gabbana would consider themselves as a “High Price and Exclusiveâ€? brand. This is because of the price for Dolce and Gabbana ranges from ÂŁ250 for a t-shirt up to over a grand for a jacket (according to their main website). Their competitors Versace and Armani are placed low as we took into consideration their sub-brand/affordable line, in which Dolce and Gabbana should propose into doing to increase sales as well as broaden the target market. Dolce and Gabbana should imply a sub-brand or bring back D&G as this would help achieve and appeal more towards the niche market and the new audience.
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MARKET POSITION
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N & COMPETITORS
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6.0. Consumer Demographic
Customers (and potential customers) can be categorised according to an almost endless number of variables. Dolce and Gabbana is a high-end brand and their consumer demographics is affluent individuals. According to Mintel, Designer Fashion Report 2017, 78% of 16-24 year-olds (Appendix 1) buy into designer fashion and this links into the category of Dolce and Gabbana. It is also implied that parents are those who pay for the garments, connoting that the disposable income will likely be from high earning parents. Mintel also implies, “Millennial consumers continue to drive the market and as a result, they are more engaged, showing the highest levels of interest in innovations and designer fashion provenance.� which connotes that generational difference is the driving force for sales. As a consumer who is more aware, garment quality is an important factor to Dolce & Gabbana’s demographic as they are paying for a product which is expected to be of high quality. Consumers for high-end fashion are still more likely to shop in-store, given by the perception of in-store experience being more superior. However, Mintel suggests that 50% of luxury fashion enthusiast also purchase online due to convenience (Appendix 2).
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CURRENT CONSUM
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MER DEMOGRAPHIC
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7.0. Product Selection
7.1. Psychology Behind Luxury According to Wiedmann and Hennigs (2007), this theory of luxury shows individual values and social related values that influence purchasing intentions toward global luxury brands. Buying to impress others is an internal personal value that drives a motive for luxury fashion brands consumptions. Consumers get affected easily by this internal drive to create a favourable image in society. This is shown in the Hypebeast community as these are the subculutures which boast their wealth. 7.2. Products Chosen Luxury is very selective and exclusive which there is almost the only brand in its product category. The sense of being sophisticated and having good taste is based on this definition. Therefore for Dolce & Gabbana, the brand would showcase their more assertive pieces. This is to show that the product which is selected in stores have a unique design which will catch the eye of their target audience. Product selection is a key factor for luxury brands such as Dolce & Gabbana as certain designs will not be trendy for the following season leading to fewer sales further considering the price range at where Dolce & Gabbana wants to sell as well as designs which will differ from their competitors. 7.3. Price Range & Competitors Their latest product showcase a more streetwear look as it is the latest trend in menswear fashion. The price range for a t-shirt is in between £300-£500 as this is the competitive price on the current market. As Dolce & Gabban categorise themselve as a “High Price and Exclusive” brand, they currently are competing with the luxury brands such as Gucci, Prada and Fendi.
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Dolce & Gabbana SS19
Gucci SS19
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8.0. Social Media and Influencer
8.1. Social Media Activities Social media are online applications, platforms and media which aim to facilitate interactions, collaborations and the sharing of content. They take a variety of forms, including weblogs, social blogs, microblogging, wikis, podcasts, pictures, video, rating and social bookmarking. As their use increases exponentially, not only existing social networkers but even business firms and governmental organizations are joining and using them as communication tools. Unlike individual social networkers, these entities actively make use of the media for advertising and marketing. While commercial messages and interactions with consumers partner with media, events, entertainment, retailers, and digital services through social media, it is possible to perform integrated marketing activities with much less effort and cost than before. Social media can have a dramatic impact on a brand’s reputation. One-third of survey participants posted opinions about products and brands on the brand’s blog, and 36% thought more positively about companies that have blogs. A recent study by DEI Worldwide (2008) provides the following statistics: 70% of consumers have visited social media sites to get information; 49% of these consumers have made a purchase decision based on the information they found through social media sites; 60% said they were likely to use social media sites to pass along information to others online; and 45% of those who searched for information via social media sites engaged in word-of-mouth. Experiment states that companies not engaging in social media as part of their online marketing strategy are missing an opportunity to reach consumers. With a significant percentage of people passing along information to others through social media, the value of one customer is worth far more than what he or she initially spend. Thus, firms and brands now need to factor in the value of customers and also the influence of social media on them.
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8.2. Social Media Activities of Dolce & Gabbana Technology development benefits the world of fashion by attracting customers to interact with the brands. Fashion brands’ involvement in such things as tweeting, blogging, and networking has led luxury brands to participate in the current trend. At first, most of the brands were somewhat reluctant to use technology; however, the industry has come to consider technology as an opportunity rather than a threat. Social media do not act against the positive reputation of brands. Interaction with customers via social media sites such as Facebook and Instagram actually builds up friendly attention, even affection, toward brands and stimulates customers’ desire for luxury. Dolce & Gabbana uses social media in order to get direct feedback from its customers. Dolce & Gabbana invites fashion bloggers to the front seats of its fashion shows, and the bloggers instantly upload feedback from the show on Facebook and Instagram. In that way, customers get to see their favourite brand modelled directly without the involvement of fashion editors or merchandisers, and the company builds purchase intentions right away. They also use social media such as YouTube as a platform to apologise for their recent controversy with the Chinese advertisement. As of February 2019, Dolce & Gabbana has amassed over 19 million followers on their Instagram page. 8.3. Influencers January 2016, for its menswear show, the brand recruited a small army of young influencers and celebrities to walk on the runway in the place of traditional models. Everyone from Youtube maverick Jim Chapman to the young creative entrepreneur Luka Sabbat, plus Cameron Dallas and Immy Waterhouse took part in the show, generating thousands of clicks and likes from their respective followings and renewed attention to the brand. In February of the same year, Dolce doubled on the trend putting on an even bigger spectacle for its women’s show: Pyper America Smith, Scarlett Johansson, Kristina Bazan, Aimee Song, Harley Viera Newton, Pixie Lott and Oliver Cheshire, these were just some of the influencers, celebrity scions and socialites who walked the runway clad in signature leopard minis, Sicilian-inspired floral dresses and gold crowns.
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SOCIAL MEDIA AN
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ND INFLUENCERS
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9.0. Marketing Mix
9.1. Products Dolce & Gabbana is known as one of the most famous fashion brands and caters the needs for women, men and children by its eccentric design. The brand specialised in luxury garments, which includes, apparel - underwear, shirts, trousers, footwear, bags - handbags, totes, cross body bag, make up - perfume, foundation, concealer. 9.2. Price Dolce & Gabbana has targetted the distinguished, privileged and wealthy customers. These types of product appeal to the current audience because of the elegant and classy style. In addition, Dolce & Gabbana is a designer brand, thus people will wear it as a status symbol, connoting the premium price range Dolce & Gabbana chooses. The brand has ties with many celebrities/influencers such as Jennifer Lopez and Luka Sabbat, and hence, further developing an exclusive brand image (Dolce & Gabbana). 9.3. Place Dolce & Gabbana host their headquarters in Milan, Italy. The brand launched its very first collection in 1985 in Milan; a year later opened their very first outlet. The brand soon exported its products in the international markets. The first international market was Japan, and then to different countries such as China and the United States. The production factories are set up in Legnano and Incisa and having a limited number of stores maintains the exclusivity (MBA Skool, 2018). 9.4. Promotion Dolce & Gabanna has always been compelling with ad campaigns, from telling an innovative story, fashion shows and billboards. The brand also uses technology as a way of promoting their product, such as using drones to showcase their handbags, and Instagram to promote the upcoming seasons.
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Greek Vogue, August 2012, Sophie Vlaming in Dolce & Gabbana
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10.0. Proposed Strategy 10.1. Proposed Brand Market Position and Competitors A possible proposal brand market position would be to become a “Mass Market and High Price� by bringing back D&G sub-brand and range their products at an inexpensive price range. This is because of their competitors Versace with their affordable line Versace Jeans, and Armani with Emporio Armani. The change in marketing position is because of the market shift. The contemporary generation is more into their fashion, therefore, are aware of Dolce & Gabbana as a brand and their aims/objective. They should do this by creating high end streetwear/sportswear and collab with local Italian brands which does not link with fashion i.e. Vetements and DHL. The luxury agenda for Dolce and Gabbana is driven by the brand DNA that is based on prestige and image. Despite the agenda, luxury fashion is increasingly commodified and general (Moore et al. 2010). Therefore having an affiliate sub-brand will allow new customers to purchase D&G to get the luxury look without paying the luxury price. For Dolce & Gabbana, this will not sacrifice their loyalty to current customers as for an affiliate, D&G will compete with the other affiliate brands such as Versace Jeans.
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10.2. Proposed Consumer Demographic We conducted a survey via SurveyMonkey, the results show that the majority of youth (100% of participants age ranged from 13-24) defer from buying high-end brands due to price range (Appendix 3). Furthermore, if investing in a designer product, quality and design are to be considered (Appendix 4). This proposed into bringing back D&G as an affordable affiliate brand to attract the new generation of buyers. From the survey we conducted, the majority of the consumer would buy from Gucci for various factors (Appendix 5). One of the factors is that Gucci is very well renowned in the fashion industry and it amasses over 32 million Instagram followers compared to Dolce & Gabbana’s 19 million. The other factor is that Since 2015, Gucci has had a bold new creative director Alessandro Michele, who has created what has become widely known as “new Gucci”. His designs are known as “maximalism” in which appeals more towards millennials.
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10.3. Proposed Social Media/Influencers and Marketing Mix Consumers are involved in a variety of activities, ranging from consuming content to participating in discussions, sharing knowledge with other consumers, and contributing to other consumers’ activities. With the enormous interest in social media sites, mainly Instagram, consumers are assumed to be actively contributing to marketing content. As for Dolce & Gabbana, it will be ideal if they engage with their audience frequently. This is another way to provide exceptional customer service, as engaging online is the generation that Dolce & Gabbana has to adapt to. The generational difference also has an impact because people have freedom of speech and will use consumer power to criticise for inadequate customer service leading to a negative image for the brand. Dolce & Gabbana has had its fair share of endorsement with celebrities, however, to improve this would be to endorse celebrities which will entice customers to buy. This would include, the Jenners, the Hadids and other A-List stars in which the younger generation look up to. Linking back to the affiliate brand, this can also increase sales because of the garments being more within the price range of these new audiences. The marketing mix for Dolce & Gabbana is to be more aware of society. The fact that Generation Z is the generation which gets offended easily, advertising should be taken into more consideration as the China incident back in November 2018 has had a negative impact on the brand’s sales in the Chinese market.
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11.0 Bibliography Baker RK, White KM. (2010) ‘In Their Own Words: Why Teenagers Don’t Use Social Networking Sites. Cyberpsychology, Behavior and Social Networking’ Berehzna, Victoria (27 February 2018) ‘Bits & Bytes | Dolce & Gabbana Sends Drones Down the Runway, JD.com’s Blockchain Accelerator’, The Business of Fashion https://www.businessoffashion.com/articles/bits-bytes/bits-bytes-dolce-gabbana-sends-drones-down-therunway-jd-coms-blockchain-accelerator Brinded, Lianna (26 February 2016) ‘Luxury fashion houses are starting to crack the secret to attracting millennials’, Business Insider https://www.businessinsider.com/luxury-fashion-good-millennial-consumers-kanye-west-2016-2?r=US&IR=T CNA Lifestyle (24 November 2018) ‘Crash and burn: Racism and arrogance has imperilled Dolce & Gabbana’ https://cnalifestyle.channelnewsasia.com/style/the-crash-and-burn-of-dolce-gabbana-racism-and-arrogance-10964748 Consodata (2017) Dolce & Gabbana Trademark https://www.reportaziende.it/dolce_gabbana_trademarks_srl?anno1=2017&anno2=2017 DEI Worldwide (2008) The impact of social media on purchasing behavior. Engaging Consumers Online Dolce & Gabbana https://www.dolcegabbana.com/corporate/en/group/company.html Dover, Samantha (2017) Mintel ‘Designer Fashion - UK - November 2017’ http://academic.mintel.com.hallam.idm.oclc.org/display/793889/ Ferrier, Morwenna (21 November 2018) ‘Dolce & Gabbana Postpones Shanghai Show amid Racism Row’ https://www.theguardian.com/fashion/2018/nov/21/dolce-gabbana-cancels-catwalk-show-amid-ad-row-racist Instagram (2019) Dolce & Gabbana https://www.instagram.com/dolcegabbana/ Instagram (2019) Gucci https://www.instagram.com/gucci/ Jones, Sarah (26 November 2014) ‘How much influence do fashionbloggers have?’ https://www.luxurydaily.com/wp-content/uploads/pdf_cache/1/1/9/3/4/0/119340.pdf Lindig, Sarah (15 January 2017) ‘Dolce & Gabbana Continues Its Love Affair with Millennials at the Fall 2017 Men’s Show’ https://www.elle.com/fashion/news/a42120/dolce-gabbana-fall-2017-mens-show-millennials/ 32
MBA Skool (2018) https://www.mbaskool.com/marketing-mix/products/17417-dolce-n-gabbana.html Moore et al. (2010) ‘Flagship Stores as a Market Entry Method: The Prespective of Fashion Retailing.’ Ong Thuy (26 February 2018) ‘Dolce & Gabbana used Drones to Carry Handbags Down the Runway’ The Verge https://www.theverge.com/tldr/2018/2/26/17052896/dolce-gabbana-drones-handbags Shin, Gerry (23 November 2018) The Washington Post https://www.washingtonpost.com/gdpr-consent/?destination=%2fworld%2fchinese-campaign-to-boycott-dolce-and-gabbana-mounts-as-co-founders-issue-apology%2f2018%2f11%2f23%2f2ff1e69e-ef07-11e89236-bb94154151d2_story.html%3fnoredirect%3don&noredirect=on Turnover of the Italian luxury fashion company Dolce & Gabbana between 2011 and 2017 (in million euros) 2017. https://www.statista.com/statistics/675280/turnover-of-italian-company-dolce-and-gabbana/ Wiedmann K.P., Hennigs N. & Siebels, A. (2007). Measuring Consumers Luxury Value Perception: A Cross-Cultural Framework Youtube (23 November 2018) Dolce&Gabbana apologizes. https://www.youtube.com/watch?v=7Ih62lTKicg
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12.0 Appendices
Appendix 1
Appendix 2
Price point: Appendix 3 73.17%
Controversy: 12.20%
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Garment Designs: 12.20% Other: 2.44%
Appendix 4
Appendix 5
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