Gucci brand portfolio

Name: Priya Hingu Degree Title: MSc fashion business creation Module Title: MMN523656 - Global fashion branding and marketing communications

Table of Contents 1.0 INTRODUCTION

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2.0 GUCCI OVERVIEW

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3.0 GUCCI BRAND STP ANALYSIS

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3.1 MARKET SEGMENTATION

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3.2 TARGETING

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3.3 POSITIONING

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4.0 PESTLE ANALYSIS

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5.0 INTERNAL FACTORS

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5.1. LEADERSHIP

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5.2 COMPANY CULTURE

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6.0 CONCLUSION

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REFERENCES

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Figure Content Figure: 1.0

Gucci’s brand positioning as per Interbrand world’s most valuable brands ranking 2019

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Figure: 2.0

STP model

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Figure: 3.0

Showing Gucci’s stores various countries in world’s map

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Figure: 4.0

Gucci’s brand positioning map indicating its place in luxury fashion industry

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Figure: 5.0

Gucci’s brand positioning map indicating its accessibility and price points compared to core competitors from luxury fashion industry

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Figure: 6.0

Gucci’s famous GG logo with its updated version

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1.0 INTRODUCTION: This report Contains a detailed brand analysis of GUCCI, including its customer segmentation, targeting, positioning as well as external and internal factor driving change from the past five years till now.

2.0 GUCCI OVERVIEW: Gucci is a luxury Italian brand of apparel and leather merchandises, established by Guccio Gucci in Florence, Italy in 1921. This brand is subsidiaries of the French luxury group KERING. Currently, the company generates $9.8 billion world-wide (Forbes, 2019 ranking) it is in 30 th position as per Forbes 2019 ranking for world’s most valuable brands and 33 rd as per Interbrand2019.

(Figure: 1.0 Gucci’s brand positioning as per INTERBRAND world’s most valuable brands ranking 2019) Guccio Gucci, who established Gucci as one of most high-status brands, started with manufacturing of luxury leather goods, clothing and accessories in classic elegant style in 1960s. Now it’s in the hands of Kering Group. In 2015 Alessandro Michele (present) replaced 3

Frida Giannini as a Creative director of the group (Pinchera, 2009). Under Michele and Macro Bizzarri’s (current CEO) Gucci Repositioned - Michele’s contemporary aesthetics, Gucci’s new customer segment includes 50% millennial clients (Pamela N, Forbes 2017) , Revitalized -Michele’s Distinctive designs have caused substantial buzz, women’s ready-towear sales of Gucci has been increased to 66% in 2016 as well as the brans has been named one of the “hottest” luxury brand as per a report by Exane BNP Paribas ( Limei H, BOF, 2016) and Rebranded/Reinvented: Gucci’s brand image was transformed dramatically from glossy, peculiar and sexual to geeky, sensual, idealistic, broadminded and raw (Megda A, Brandstruck 2019).

3.0 GUCCI BRAND STP ANALYSIS: Marketing becomes easier and successful if segmentation = who can I sell my product to?

Targeting the right group, at the same time position means how I’m going to sell my product or services? are clearly defined (Davis Tarantino, 2003).

(Figure: 2.0 STP model) Source: Amended from Dibb, S. et al. (1997 p.205)

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3.1 MARKET SEGMENTATION: There are several stores involved into consumer market segmentation, see below variables in terms of Gucci’s consumer market. (Singh J,2013). 

Geographic Segmentation: Gucci’s geographic market segmentation embodies people dwelling in urban cities, due to their high purchasing power and high standard of living. Any high-end products are bought to be shown in public as their status and that can be done best in metropolitan areas. Firstly, Gucci expanded to metropolitan cities in USA then in Europe, China, Japan, Middle East and finally in Asia (Casey H, BoF 2020).

Figure: 3.0 Showing Gucci’s stores various countries in world’s map (Source: Store locater, Gucci.com)

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Demographic segmentation: Gucci’s product ranges are positioned toward both men and women fashionistas age of 25-55 who have the aspiration to influence others and of course from the sophisticated income groups. They have added infant and children’s line from Spring / Summer 2011 collection (independent.co.uk-2010).

Psychographic segmentation: Gucci brand strictly concentrate on lifestyle. From the beginning they have targeted consumers mainly celebrities who can influenced the high-end group. Moreover, Gucci has been termed as one of the “hottest luxury brand” according to a article by Exane BNP Paribas (Limei H, BoF,2016).

Behavioural segmentation: Behavioural segmentation = Brand loyalty (Kotler P. et al,2008). Gucci as a brand has proved to be of great quality and very long-lasting therefore it has a very high-pitched proportion of devoted purchaser group. For them high prices are not a difficulty because of its exceptional stylishness, characteristic and design. The Company doesn’t compromise on quality thus key cost cutting is impossible for Gucci. (Bhasin, 2016). Gucci can upsurge its consumer rate by controlling its prices a bit.

3.2 TARGETING: Gucci is targeting around age of 20-50 years of high-class clients, mostly millennials eyeing for Italian luxurious fashion and aimless pieces. Since they have launched children’s line, millennial parents want their children to look cool, like an extension of themselves and which is why Gucci’s target to millennials is accurate (Grace C, BOF 2017)

3.3 POSITIONING: Gucci positioning fits under Luxury designer brand. Associated with affluent and fashion insomniac people. Under new creative director Alessandro Michele, its position grew functionally as well as with its competitors like LVMH, Dior or channel. Please see figure 4.0 & 5.0 for Gucci’s positioning map indicating Gucci’s current position in current luxury fashion industry and as per its price point compared to main competitors. As means of execution, Gucci now communicates via numerous social media platforms as well, especially instagram to share their campaigns and new products.

(Figure: 4.0 Gucci’s brand positioning map indicating its place in luxury fashion industry)

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(Figure: 5.0 Gucci’s brand positioning map indicating its accessibility and price points compared to core competitors from luxury fashion industry)

4.0 PESTLE ANALYSIS: Socio-political factor: Gucci joined the movement for gun control, pledging $500,000 to for Our Lives rally in Washington, DC in 2018 as well as brand has previously also supported gender equality movements in 2013. Since now Gucci is targeting millennials and as per recent study by the Economist demonstrates especially millennial consumers prefer to purchase products from companies that operates with social purpose. Gucci’s position on such issues also affiliates with the values of its millennial-heavy customer base. (Chantal F, BOF 2018).

Economical factor: Gucci’s expansion into Asian countries under leadership of the new CEO Marco Bizzarri. Asia has been Gucci’s leading and fastest cultivating region and it represents 37% of total sales of Gucci in 2018 (Casey H and Zoe S, BOF 2019).

Technological: Gucci has overcome millennials with their luxury code. In a recent interview with CEO & chairman of kering group (Gucci parent company) with CNBC, he mentioned that Gucci rely on millennials (age group of 25-35) for 50% of sales. In capturing this success with millennials, several of analysts feature Gucci’s achievement to its business dominating internet tactics and digital relationship and the in-store capability to demonstrate true omnichannel shopper experience. Gucci’s accomplishment in digital space, and millennials native channel are extraordinary.as per L2 Research Gucci has spotted on best performing digital fashion brands in 2016 as well as in 2017 outranking its competitors like Michele Kors, Louis Vuitton, Burberry and Fendi as well as Britton, who is a strategical and marketing company 7

has depicted in Gucci case study as the brand has woven social media, e-commerce, mobile apps and digital marketing in to the tapestry of its legacy age-old offline business which resulted in long-time clients and new converts alike. (Pamela N, Forbes 2017). And as per latest on the lyst index, Gucci was a number one brand that consumers engage with once more, it even mentions over 6 million shoppers has browsed for a Gucci bag, belt or shoes in month of October to December 2018. And two hottest accessories of all were the famous Gucci logo belt and the Soho disco bag (Alice N, Vogue 2019) Environmental factor: Gucci is very conscious about environmental issues and sustainability as Gucci becomes the first luxury brand to take initiative about carbon neutrality. This Italian brand is in focus in a 10 year plan to decrease its emission in half by 2025, signalling the seriousness of the current climate challenge (Sarah K,BOF 2019) Moreover, the brand has prohibited the use of Fur despite of the reputation of their fur-lined loafers (Sarah S, BOF 2017)

5.0 INTERNAL FACTORS: 5.1. LEADERSHIP: In 2014, when Marco Bizzarri took over the mantle of the company and who is central to the company’s rebound took first strategic decision to appoint Alessandro Michele as a creative director to establish more contemporary aesthetics to the business (Imran Amed, BOF 2018). Amazing pairing CEO Macro Bizzarri and Creative director Alessandro makes not only great management team but also with the cultural time and spirit. They tend to be a reflection of Gucci’s position from 51 to 33 (Sarah S, BOF 2018).  

Firstly, in the reinvention of Gucci, Michele plays a big role, himself and Bizzarri knew they want to take away traditional philosophies and now they dress contemporary icons like Rhianna, Rachel McAdams, Selma Hayek which resonate with millennials.

Secondly, while former Di Marco and Giannini panel de-emphasized the Gucci’s legendary GG logo, Bizzarri and Michele resurrected with re-branding well-known GG logo to feature it significantly on handbags and other accessories and footwear (Pamela N Danziger, Forbes 2017) Please see figure: 6.0 for Gucci’s old and new logo.

(Figure: 6.0 Gucci’s famous GG logo with its updated version) 8

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Gucci has re-launched its make-up collection under direction of Michele. Michele has been a crucial part of the group to revive both analytical and marketable acclaim. With the extension of the make-up brand is to receive its Midas touch (Naomi P, Vogue 2019).

5.2 COMPANY CULTURE: Gucci’s reins on Marco Bizzarri makes it more purposeful,

he quoted “Gucci is dedicated to culture of determination keeping environmental and social impact at the heart of the brand”. As per Bizzarri a company can still lose if the culture doesn’t withstand strategy (BOF team, 2018). 

Female empowerment: As their CSR drive, Gucci has joined hands with UNICEF’s Women’s empowerment initiative to supply teenage education and health drives.

The brand also has gender diversity within the company, and they have 60 percent of potion are held by women (Sarah H, BOF 2017).

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Equilibrium: Gucci has designed this online platform to connect” people, planet and purpose” launch of equilibrium is part of Gucci’s ten years sustainability plan and main pillars of the plan are “the environment, people and innovation”. They have “scrap-less” program connected with its tanneries. Which decreases quantity of leather throughout manufacturing process for lesser wastage.

6.0 CONCLUSION: In my perception, Gucci updated its iconic GG logo in different style under new creative director of the brand Alessandro Michele in 2015 but there is no official announcement. Though Gucci’s all new product line has the updated GG logo on them.

Possibly as their new marketing strategy!

In my opinion, under the new leadership Gucci received contemporary status i.e., their recent Psychedelic collection with multicolours. This is not just with Millennials but with a world trending status. Gucci’s new prestigious ranges are now the new “Cool” with our new era of shoppers for a Luxury brand such as Gucci. But facts always remain that the brand is Luxury and most luxury brands are paid for with a higher than average price. Gucci could change their whole business strategy by lowering prices to meet the audience comfort zone along with their recent changes for higher sales rate.

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