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What’s Gucci?
What’s Gucci? “What’s Gucci” by Becca Rebequi
BFM - Basic Marketing
IFA - Paris, France 2020
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Brief introduction It all started inside Guccio Gucci’s imagination while working as an elevator operator at the Savoy in London. He would see the luxurious luggage and desire to make his own. Guccio managed the brand himself until his death. After his death, his sons took over for a limited period of time.
One of the marketing strategy applied since the beginning was promoting the products among Hollywood celebrities. It worked very well and it still does. A lot of the desire created in consumers heart comes from the many celebrities that wears/uses their products and posts about it all over the internet. With that strategy somehow the brand managed to become a pop culture and it is very unlikely that this will go away anytime soon. Of course a huge challenge is to keep innovating and not being trapped in a bubble of inescapable style change but to also keep the brand identity as some of their current product (and even the current branding) are already considered “the face” of Gucci and in the future if the products stops being sold and the branding changes radically many of the current fans might miss it and end up rejecting the then “new” Gucci.
Many Gucci admires holds the opinion that Gucci is indeed loosing the original brand identity, but others thinks the new branding is actually brilliant. Gucci as a brand has had a lot going on over the 90+ years of existence including: Successes, scandals and reinvention.
In this project/assignment I do my utmost best to bring all the important things to your attention and I aim to finish it having brought a clear understanding of the brands branding, marketing strategy and with some of my personal advices to the brand.
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Content 5-8. HISTORY OF THE BRAND
9-12.THE BRAND TODAY
13-16. INTERNAL ANALYSIS 17-19.MIXED STRATEGY 20-22.CUSTOMER ANALYSIS 23-25.COMPETITORS ANALYSIS 26-29.EXTERNAL ANALYSIS 30-35.RECOMMENDATIONS 35.BIBLIOGRAPHY
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The History
Basic Timeline
1920-1921 Gucci founded
By Guccio Gucci
In Florence, Italy. First store is opened
1951-1953
Green and Red becomes official colours. Guccio dies and his sons takes over the business. Gucci goes international opening first store in NY
1936-1948 First signature invented.
Bamboo Bag created.
1966-1981
1990-1994
Flora print scarf designed for Grace of Monaco.
First fragrance.
Ready to wear focusing a lot on the flora print scarf.
Tom Ford is
Hired and appointed as Creative Director. Maurizio Gucci ends family
relationship with
the
brand by
passing the remaining
shares to Investcorp.
1985-1989 The famous loafer becomes part of the permanent collection. 50% of Gucci is bought by Investcorp
1955-1963 Intertwined G’s become new Logo.
First pieces of clothes are created and the Fifties Florence is renamed “The Jackie” after it is seen being used by Jaqueline Kennedy.
2000-2004 LVMH tries to buy Gucci. De Sole and Tom Ford leaves the brand behind. A couple of new names appears, including Frida Giannini.
2005-2008
2009-2011
2015 Michele
Is the new
Creative
Director
Di Marco is the new CEO. Doors opened to the Indian retail market.
90th anniversary on the corner.
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Giannini is the new Creative Director. Gucci signs with P&G for fragrance production and distribution.
First TV ad directed by David Lynch.
Giannini and Madona hosts an UNICEF event.
1994 - 2004
Gucci becomes sexy.
Maybe too sexy.
But who cares, right?
Ford proved that
sex sells.
Tom Ford
Sells boosts.
Gucci is saved from
Bankruptcy.
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2005 - 2014 Frida Giannini
For the strong and
Independent woman
Who dresses for herself!
Looked at the past but wasn’t stuck there.
Glamorous but nothing too extraordinary in the design.
Gucci gets involved
With a lot of Charity projects.
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The Present
Since 2015 Marco Bizzarri,CEO
Current Chief Executive OďŹƒcer of Gucci. His career includes roles such as: Chief Executive of the Luxury-Couture and Leather Goods Division at Kering in Italy, Chief Executive of Bottega Veneta in Italy. But has also worked for other brands like Stella McCartney.
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Since 2015 Alessandro Michele
Alessandro Michele joined Gucci in 2002. His previous house was Fendi where he was a Senior Accessories Designer.
The Gucci of Michele is gender blurring, lighter-pastel coloured and romantic. He is highly creative and forward thinking. His imagination is out of this world.
Michele is strengthening the “pop culture” position that Gucci conquered since the beginning. Michele divides the opinion of the costumers between “genius” and “Brand Identity Lost” but in the bigger picture he is being very well accepted and the numbers shows that is it being quite successful.
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Internal Analysis
BrandAnalysis
IDENTITY Very strong and iconic brand identity with the GG logo and all the prints and signature products. A very strong Italian heritage and vibes. The brand has changed the look throughout time according to the creative direction, however, these things has always remained.
VALUES AND ESSENCE Tradition, heritage and Italian Craftsmanship.
Sophistication. Contemporary and modern glamour. Socially responsible and building a way into being ecologically responsible.
MISSION STATEMENT According to the company this is the mission statement “The company’s mission is to become the leader in luxury market at worldwide level”. Gucci has shown that the company also cares a lot about Corporate Social Responsibility, Sustainability and Business Ethics as they state in their website.
TAGLINE Quality is remembered long after the price is forgotten
THE ORGANISATION The most valuable Italian brand in the world with its value being of approximately 12 billion euros.
In 2017 a huge increase of 47% occurred. It is a publicly traded and global brand.
POSITION The brand fits into the luxury position and can be associated with the fashion conscious and the wealthy.
TARGET AUDIENCE Aged 25 to 50, fashion conscious, wealthy and socially active individuals. Modern and open minded.
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Opportunities 1.Scandals and polemics throughout history. 2.Branding changing radically many times. 3.Huge amount of money spent on advertising to maintain the brand image.
Threats
Strengths Weaknesses
1.Strong brand image. 2.Excellent Marketing, Advertising and Social Medias. 3.Association with other big companies like Ford, General Motors and Fiat. 4.One of the favourite brands of millennials and Gen Z 5.Good sense of environmental responsibility. 6.Direct operated stores. 7.Luxury market opportunity in Asia.
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1.Find its way back into the brand identity without losing the new consumers 2.Maintain the millennials as faithful costumers by keep on innovating. 3.The Asian (specially the Chinese) market.
1.Strong competition 2.Political issues and changes in the world (specially in Europe) 3.Problems with reputation concerning where products are made (Made in Italy?) 4.Fake products being sold around the world.
Mixed Strategy
Mixed Strategy
Product Gucci produces high quality products that goes with impeccable packaging. It never fails to meet the costumers high standards. The company always delivers new ideas, always innovating but never forgetting the products that took the company to where it is now. The products are ready-to-wear, handbags, shoes, jewellery watches, accessories and etc… It is a very diverse portfolio. There is a women’s line, men’s line, children’s and even a pet’s line. Throughout history Gucci has also been involved with collaborating with vehicles companies and chances are that the variety of the brand’s products will only get bigger with time.
Price The market that Gucci targets is a niche one. The main focus is the high class customers. The pricing is in general high as they sell premium products. The cheapest product can cost around 150€ while the most expensive surpasses 5K €. It is a very competitive/ balanced price comparing to the competitors prices. Prices vary from country to country according to the exporting taxes. For example, prices are way higher in South America, specially Brazil as the imported goods taxes are surreal.
Mixed Strategy
Place Gucci is present worldwide and the tendency is for the brand to keep on expanding in terms of places. Gucci had 540 stores around the world in 2018. That being 116 in Europe, 115 in North America, 80 in Japan and 229 in emerging countries. One of the strategies is to have more stores instead of relying too much in wholesales.
Promotion Even with though the brands name is big and known worldwide, it still invests heavily on creative marketing campaigns. Their ads can be seen everywhere from billboards to magazines and specially on social medias. A big way of promotion for Gucci is via social platforms. They also have unpaid promotion via the consumers sharing the products and using hashtags. Another thing that helps an easier promotion is the online store and app that the company has.
Customer Analysis
Costumer Analysis
THE ASPIRING INFLUENCER Lucca. 24 years old, wants to be a digital influencer, likes to travel the world. Comes from a middle to upperclass family. Doesn’t really understand much about fashion but knows the names of the brands that are trending and he goes after them to maintain an image and to try and show his “social status”. Buys the cheaper products like the belt and the jumpers that has GUCCI written in very big letters as he wants to be equal to the real celebrities and influencers that he admires.
THE YOUNG BUSINESS MAN Ahmed, 35 years old. Works in the family business. Has grown up in the UK or US. Likes to party 3 to 4 nights a week (maybe more) as a relief from his “stressful” business lifestyle. Can be seen often in the Londoner Night Clubs. Buys Gucci products for himself and for his girlfriends. He understands a little bit about fashion (way more than Lucca at least) and buys Gucci products for the quality instead of for maintaining status only. Buys the more expensive products even if there’s nothing written “Gucci” on it.
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Costumer Analysis
THE FASHION STUDENT Corina, around 20. Studies fashion and loves Alessandro Michele’s vision. Wants to work with him one day. Loves everything about art. Has an expensive taste but only because she understands very well about quality and values it. She cannot buy everything but she works a lot to be able to buy her favourite (affordable) pieces. There is also the Corina 2.0 version, in this version this costumer comes from a high income family and is a very active consumer and might have a shopping addiction.
THE ORIGINAL GUCCI COSTUMER Mary, 65 years old (she might be older but that’s a secret). Has been a fan of the brand since a long time ago. She used to work in fashion but somehow left the career a couple of years after she got married. Loves the brand. She is not very much into the new collection but she keeps an eye always. Buys mostly the handbags and travel bags. Has a very good taste and values craftsmanship. Probably the mother or very similar to the mother of Ahmed (The young business man). She passed her good taste to her sons and daughters.
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ompetitors Analysi
BrandCompetition Analysis
The competitors list is huge, however, on the positioning we can observe that the biggest competitors are Fendi, Prada, Balenciaga, Versace, Chanel, Dior, Saint Laurent, Dolce and Gabbana, Louis Vuitton and Burberry. These competitors were found and placed there according to similar targeting, branding and prices (all references on the last page)
Even with all the competitors being equally good on what they do, Gucci had a successful 2019 and was even called the most popular brand in 2019 by Vogue. Gucci offers products with excellent quality, it’s great marketing via social platforms and it’s influence among millennials are guaranteeing Gucci the throne and if the company keep on investing on the right things as it is doing, this popularity and success won’t go away anytime soon.
The great difference between Gucci and the competitors can be found on the marketing strategy. Gucci understood very well what works while it seems like some of the competitors are still experimenting.
In Brazilian Portuguese one would say Eles que lutem (May them/let them fight) and this is exactly what Gucci success is telling to the competitors.
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External Analysis
Pestle Analysis
POLITICAL The main political issue that aects Gucci is laws regarding import and export taxes. It used to be a problem almost exclusive to the market in countries like China and Russia but with BREXIT on the corner it will be something that will definitely aect the UK market for Gucci too. Gucci will have to have a strategy for this event that will definitely reshape Europe somehow.
ECONOMICAL Gucci definitely faced challenges because of economic factors these past years due to some critical situations in some of the most economically important countries around the world. But the brand managed to keep on growing and contributed a lot to the economy growth globally. Gucci had a very strong quarter with a 10.7% Growth (October 2019) according to Kering.com
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Pestle Analysis
SOCIAL Like many other luxury brands, Gucci produced a lot of leather and fur products and it can make the brand an easy target of activists. However, the brand has shown that they are willing to be ecologically responsible and change their ways regarding this matter. In 2018 they have stopped producing products that uses fur and together with Kering they have a plan of eliminating all hazardous elements by this year (2020). The company has made a great social impact with the above mentioned decisions and with the many charitable events and campaigns that the company is involved with.
TECHNOLOGICAL Gucci succeeded in understanding well the importance of keeping up with technology in all ways. The company is present in all the major social platforms and their marketing via those platforms is very strong making customers heavily aware of the brands image via the internet, therefore in the whole world.
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Pestle Analysis
LEGAL Gucci takes care to abide strictly according to laws. In all factors, in the production and deliverance of their products, in the equal opportunity hiring of their employees also in the working hours and treatment of the employees. Some of the challenges Gucci faces from time to time are the lawsuits the company has to fill against other companies that copies the brands products.
ENVIRONMENTAL This decade is looking very good and promising for Gucci. With the fur products production ending in 2018 and Kering’s promise of ending with hazardous elements in production by this year (2020). The brand is vowing to being more responsible and caring towards the environment as many luxury brands are but Gucci has already taken a few steps and it has already created a good impact. Of course it is still not enough and there is still a lot of question marks concerning the subject “Fashion x Environment” throughout the whole industry/.
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Recommendations
Conclusions
Overall, Gucci is doing very well and is reaching the targeted consumer. Has grown globally not only in numbers but also in fame. The Tom Ford era was too remarkable and even though Frida Giannini brought an interesting image to the brand it was not quite as successful as of her predecessor that didn’t leave the company because of lack of success but because of an internal misunderstanding that lead to a bit of bad blood. For years Gucci was on the edge of being forgotten and Alessandro Michele brought the brand back to life. His style is completely different compared to Ford and Giannini. Michele somehow brought Gucci closer to the masses instead of leaving it untouched in the upperclass. He is transforming Gucci into a modern brand that adapts well to the new mentality that is spreading in the world and is also causing a very good impact with that and with the promises of being a more ecologically responsible brand.
The marketing strategy of the brand is considered one of the most successful ones nowadays and even though the brand is very famous already, it is still growing and becoming more and more influential.
The fact that Gucci is focusing a lot in opening more stores will increase considerably the brand power and revenue. The brand doesn’t lose an opportunity to join promising new markets as we can see what’s going on in China.
A dangerous factor is that just as Ford, Michele also has a strong impact that will be very hard to surpass or even to be equal… Just like Giannini couldn’t do very well after Ford, the next CD after Michele might encounter such difficulties.
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Recommendations
1st RECOMMENDATION The creation of a line with less “artistic” and more commercial pieces. In real life it is extremely difficult to bring together an outfit composed only by Gucci products without ending up wearing all the colours of the rainbow, 350 forests and at least 3 different animals/insects on the prints. Exaggerations aside, it would be interesting to have a balance … Not all Gucci admires are happy with pieces like that. Of course artistic pieces are very important, however something very good would be to focus on the idea of having things that the old Gucci customers would be happy to buy too. I strongly believe that the urge to create something so different was what lead to the creation of the infamous “blackface” sweater and if the brand was focused on having a balance instead of being too up in the clouds this could have been prevented.
2nd RECOMMENDATION Act faster on the implementation of a new and “ecological” responsible Gucci, biodegradable soles and not using Fur is great but simply not enough. This is extremely serious and the lack of efforts towards this matter of some other brands is ugly. Gucci has the opportunity to lead by example and help create a better fashion world. Of course we love new things and to create them. But we need to wake up and stop pretending that nothing is happening and that we have time to waste while destroying the planet. It would be interesting to implement recycling in the products. It would be cool and good for the environment. Create strong campaigns to bring awareness not only to other brands but also to costumers.
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Recommendations
4th RECOMMENDATION Invest in finding new talents. Many brands are left almost hopeless when a successful Creative Director leaves and they have to find someone else to fill in the position and the new Director is not half as good as the other. Michele is a great director, but so was Ford. After Ford left Giannini didn’t do the greatest job in the world… It was average and Gucci is not an average brand. Gucci’s “Ecole de L’amour” is a great project to form new artisans, however, it could be expanded into various departments of the fashion world like forming new designers, marketers, managers and etc… It would be incredible if Gucci partners up with Fashion Colleges around the world to develop Fashion courses to produce new talents. Gucci already have some partnerships like the one with CFD in Dubai, but nothing too solid. Just like the Football clubs like to find their own young talent via the junior clubs they create around the world, this project would make a huge impact in the company. It would not only help Gucci to find new talents but it would also help talented students to be placed in the industry without having to first be a “fashion slave” and be explored by other brands like many are.
3rd RECOMMENDATION Investing in opening new stores in South America, especially in countries like Brazil, Argentina and Mexico (there is currently a total of zero stores in Mexico and Argentina). And in Brazil there are only a few stores at the moment. It is a promising market. In Brazil, for example, there are a very small number of Directly operated Gucci Stores and the department stores that sells Gucci but is much more expensive and the upperclass actually prefers flying to other countries to buy Gucci goods. They would buy even more if they had more stores available to them. Also there is the problem of illegal reselling which is when people (particulars or companies) go to other countries to buy certain goods to then sell them in their countries (the product become more expensive them what they bought for but still cheaper than the price the products are being sold in their country of origin and that encourages people to buy the product from these people or illegal companies). Another great point in the investment of opening new stores in South America is not only the company growth but also that the company will create a huge positive impact by creating new jobs in these countries that really needs them.
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Recommendations
5th RECOMMENDATION Decide which market the brand is really interested in. Does it still wants to be exclusive? Does it want to migrate to the masses? Compared to some of the major competitors Gucci’s prices are very low. Assuming that Gucci wants to remain considered as a Luxury brand with premium products I advice that the prices of the products raises at least 10% in the next 5 years.
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Thank You!
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References / Bibliography
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