Prada Strategic Brand Report by Rose Forrester

NAME: Rose Forrester STUDENT ID: 20008140

BA Hons (Fashion Marketing) Year 3 Fashion Marketing Strategy Unit Leader: Dr. Shahpar Abdollahi

Strategic Brand Report

Word Count: 3108 words

“I, Rose Forrester, certify that this is an original piece of work. I have acknowledged all sources and citations. No section of this essay has been plagiarised.”

Table of Contents Question 1: Competition Analysis Question 4: Branding Strategy Appendices Bibliography

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Question 1: Competition Analysis Prada is a luxury fashion house based in Italy. It focuses on ready-to-wear leather and fashion accessories, footwear, luggage, fragrances, watches, eyewear. The fashion powerhouse exists in a highly competitive and oversaturated market. However, Prada efficiently differentiates itself strongly from its competitors as analysed below through various frameworks to consider its competitive environment. “Modern competition calls for two essential tools of brand management: ‘brand identity’, specifying the facets of brands’ uniqueness and value, and ‘brand positioning’, the main difference creating preference in a specific market at a specific time for its products” (Kapferer J.-N., Bastien V., 2012). Below is a brand positioning map representing how Prada differentiates itself from its competitors depending on the product style and the affordability/exclusivity.

High Exclusivity

Classic

Modern

Low Exclusivity Brand Positional Map for Prada (Author, 2023)

Prada has been described as classic and distinctively unique notably with its ambiguous retro and techno look. Prada's style is modern, relying on Italian traditions of subtle elegance and exceptional tailoring, while presenting accessible costs for the luxury fashion sector. According to the Brand Positional Map, Prada is a strong competitor in an extremely saturated market. The Blue Ocean Strategy aids in distinguishing brands like Prada in order to increase client awareness and demand in a new market. Using the Blue Ocean method, luxury fashion firms such as Prada are capable of reestablishing market boundaries through their techniques and operational activities. By doing so, Prada has been able to generate more demand rather than fighting for and intruding on present competitive space. As a result, Prada has seen substantial growth as well as increasing profitability. 5

While Prada pursues the Red Ocean Plan fiercely in its existing markets, it also follows the Blue Ocean Approach. The strategy adopted is determined by the product's kind as well as the brand's aims and industry development. Below is a table examining how Prada’s use of the Red and Blue Ocean Strategies differs:

RED OCEAN STRATEGY

BLUE OCEAN STRATEGY

In current market areas, Prada competes with established brands, and industry boundaries have been created.

By introducing their perfume 'Candy' with the first digital model of the same name, they create uncontested market space.

Prada distinguishes itself from the competition via product and brand uniqueness.

Prada eliminates competition via high brand visibility and awareness (marketing channels)

Prada capitalises on current demand by supplying products that rivals provide (ready-to-wear, accessories).

Prada generates new and inventive demand (new Paradoxe fragrance, could possibly see a cosmetics line in the future)

Prada decides the value-cost trade-off.

Prada breaks the make-cost value

Prada creates a distinct differentiation strategy based either on low cost and value.

Prada's pursuit of distinctiveness continues to rely on low-cost tactics while incorporating high value.

Red and Blue Ocean Strategy Framework for Prada (Author, 2023)

Despite the fact that no emotional commitment is required, consumers regularly acquire goods for the pleasure and prestige they provide. Prada does this through upscale marketing initiatives such as the well-known and recognisable triangle logo present in most of their products whether ready-to-wear, leather goods eyewear, or accessories.: “Today it is the brand that endows the owner with its aura, and communicates widely to be recognized by all those who will never buy it. In the streets, everyone can now recognize it and this creates value for the owner (...). To be a luxury product needs a preciousness (intrinsic luxury), it needs to deliver high quality and pleasure and there must be symbolic power attached to the brand” (Kapferer J.-N., Bastien V., 2012). Prada assures that the prices are fair in relation to the nature and attributes of the products. This price strategy is maintained not just to capture new clients and extend into its existing clientèle , but also to captivate and attract to the potential unrelated customers. (such as the viral Prada Re-Edition 2005 Re-Nylon small bag for £950). To retain the brand's identity and tradition, the price point is remained high. Prada use the ERRC model to locate and identify features that have long been used to compete in a certain field but may now be discarded. These challenges include archaic styles, a limitation of human resources, and outdated technologies (such as updated websites, use of trending social media applications). Prada is capable of identifying the traits that will enable it to outperform the industry and activities in order to expand in accordance with the 'Raise' factor. These characteristics will provide Prada with a competitive advantage and is currently working to improve these qualities in the long run. 6

These elements include its technology innovation (first AI muse), and market research skills such as putting an emphasis on sustainability which is an important purchase decision factor for today's consumer. Prada is able to produce and discover strategic capacities that are unique and new to the industry by creating new demand based on the latest trends (the rise of Y2K style, sequins, preppy and streetwear styles). With these skills, the brand can keep costs under control while still giving additional value to buyers. Prada will be able to create an advantageous lead such as seen with their use as seen of their iconic material with the partnership with Aquafil to create Re-Nylon made of ECONYL®, a regenerated-nylon yarn that can be recycled an indefinite number of times without affecting the quality of the material (Prada, 2019). Prada analyses and assesses a particular industry, finding faults and qualities that could be eliminated in its growth plans to maximise benefit from untapped markets and associated opportunities. In compared to industry norms, these characteristics are significantly decreased such as putting an importance on their best-selling items, leathergoods, instead of ready-to-wear.

ERRC Model from Blue Ocean Strategy (C.Kim & R. Mauborgne , 2004)

The following Porter’s Five Forces model will be analysed in order to successfully identify Prada's business strategy and potential future opportunities and determine the industry’s strengths and weaknesses. The number of suppliers in the fashion luxury business far outnumbers the number of brand needs. As a result, buyer bargaining power has less influence in the business. Product differentiation is considerable in the industry, which indicates that buyers will be unable to discover other brands that provide a certain product. Customers' negotiating leverage inside the industry is diminished because switching is difficult as well as cost and time efficient. Customers prioritise product quality and buy frequently, meaning that industrial purchasers are less price sensitive. To attract more customers in the future, Prada will need to focus even more on its singularity and distinctiveness. Additionally, the risk of overexposure of the brand may lead to less exclusivity reducing the prestige of a brand. Product distinctiveness and quality are vital to buyers, and by focusing on them, Prada may be able to attract a substantial number of clients. Because buyer bargaining power is limited, Italy's fashion powerhouse must cultivate a diversified client base. This might be accomplished by marketing activities targeted at increasing brand loyalty.Improving client loyalty may be achieved by engagement with them via publications (magazines, posts on social media), customer support, one-of-a-kind subscriptions, and content marketing. Prada would profit from the creation of a loyalty programme (for example, a frequency programme (FP) such as club cards or discount vouchers, or a membership programme) for its regular purchasers. Furthermore, by utilising its economies of scale, Prada may be able to develop a cost advantage and provide low-priced products to the industry's low-income consumers. As a result, it will be able to attract a larger number of clients not part of the high-wealth clientèle but trying to portray a certain status through the purchase of a renowed fashion brand. 7

Economies of scale are difficult to achieve in the luxury apparel sector. This makes it easier for large-scale manufacturers to obtain a cost advantage, while raising the cost of manufacturing for newcomers. Product uniqueness is important, with each brand supplying customised rather than conventional items coupled with outstanding quality and high craftsmanship explaining the high prices.Customers are also willing to spend a higher price for items that stand out and are personalised. Product diversity is significant across the industry, with businesses selling unique things rather than standardised ones. Prada places a high focus on marketing and after-purchase customer service, with a 24/7 online chat and numerous contact points in the countries they operate in. Its robust online presence that engages its consumers with regular Tweets, Instagram posts, and TikToks. Prada's digital marketing initiatives are unquestionably successful, with a following of more than 31 million (Instagram, 2023).strong. Additionally, the access to the vast existing distribution network is likewise difficult, but newcomers can build new exclusive outlets for them. This makes new entrants pose little risk to such an established brand. Prada may compete with new rivals by spending in marketing to strengthen its brand identity. This will help it keep customers rather than losing them to new competitors who may provide comparable items at a lower price, such as fast fashion marketplaces (ie: Boohoo, Ego, etc). It will have to play a large investment on its name and how the quality cannot be duplicated. Prada's suppliers may supply low-cost raw materials. If Prada's costs or quality are inadequate, the brand may swap suppliers because the switching costs are low. Although Prada possesses its own factory in Italy (the Prada Scandicci Factory), “about 20% of Prada's collections—which range from bags and shoes to clothes for men and women—are made in China” (The Wall Street Journal, 2019). The goods of these providers are generally standardised, less distinctive, and have low switching costs. This makes it easier for buyers like Prada to transfer suppliers. Therefore the bargaining power of suppliers is reduced. Suppliers in this business do not compete with other goods. This indicates that the product has no alternatives other than those given by the sellers. Prada's future inclusion into the sector is not jeopardised by the suppliers. Prada's suppliers are heavily dependant on the industry in which the company operates which signifies that the profitability of the industry is closely linked to that of its suppliers. As a result, suppliers will have to compete on price as to provide the most low-cost option. Prada may benefit from strong links with its suppliers since the industry is a significant consumer for both of them, and such connections may benefit them both in the future. Below is a Strategic Group comparison model analysing the brand reputation based on Instagram followings and the price points for the following brands. Although at a low price point compared to its competitors, Prada has a strong brand reputation with more than 31 million followers. Prada’s main competitor would be Gucci as its offers a similar price point however has a higher brand awareness and reputation.

Price Point

High

Low 55

Brand Reputation (based on Instagram followers) (in millions) Strategic Group Comparison for Prada (Author, 2023)

Question 4: Branding Strategy Prada is a prominent Italian fashion house with distinctive designs and a bold, daring spirit. It is also one of the few maison de haute-couture that has chosen to establish and maintain its own strategy based on distinction and management consistency by avoiding to merge with international conglomerates such as Kering or LVMH. It is also what made the change from a family owned brand to a fashion powerhouse owning multiple brands. Its particular brand identity signifies exceptional tailoring with innovative but timeless silhouettes. “A brand is not the name of a product. It is the vision that drives the creation of products and services under that name. That vision, the key belief of the brands and its core values is called identity. It drives vibrant brands able to create advocates, a real cult and loyalty.” (Kapferer, 2012) Throughout its history of prestige, Prada’s strong brand relevance can be distinguished in pop-culture, notably with the famous book and film of the same name: ‘The Devil Wears Prada’ starring the great Meryl Streep, denotes a wealthy woman in a high position of power in the fashion world who wears Prada. Culturally, this portrays the brand to the general public as solely prestigious and authoritative. The Prada example highlights how worldwide recognition of a luxury brand may be achieved by a combination of constant distinctiveness and strong business decisions that assure stability and resistance through time. Prada has evolved into one of the most ambitious and forward-thinking global luxury companies of the modern period thanks to their direct retail control and the merging of different words such as art and technology in its constant aesthetic quest, and a focus on consumer dialogue through retail experience as Prada states as its brand mission: "Through an innovative approach, which draws inspiration from an unconventional analysis of society, Prada elaborates codes that transcend trends" (Prada, 2022).

Brand awareness Name Recognisable logo

Resonance Eccentricity Different Overpriced Exclusive

Judgements High-quality products Sustainable materials Customer focused

Performance Italian haute-couture Uncovential aesthetic Exquisite tailoring

Powerful Experimentalist Fashionable Differentiation

Feelings The Devil Wears Prada Strong identity Prestige

Imagery

Eye-catching prints Classic silhouettes Milanese luxury

Salience

Minimalist Modernity Timeless pieces

Brand Equity Model for Prada (Author, 2023)

According to the Brand equity model, Prada's success can be directly traced to its continued investment in Customer Equity Drivers, which link value equity, brand equity, and relationship equity. Prada has become a well-known emblem of elegance and the essence of fashion. It distinguishes itself via timeless uniqueness. International target groups that anticipate and value craftsmanship may easily identify the style and recognise the brand. Prada is well-known for its concept of "concealed luxury," which means that they do not utilise highly showy trademarks on their items; Prada's understated elegance is intended to be recognised only by those who are "in the know." 9

The labelling is the iconic upside down triangle logo, which speaks for individuals who are attempting to elude some type of status they do not belong to, attracting a large section of luxury consumers. In its product design, branding, and advertising, Prada chose simplicity and utilitarianism. Prada's luxury products provide consumers with the satisfaction of not only the hedonistic lifestyle of owning expensive items, but also some additional intangible benefits, such as psychological values of feeling different from others, being seen as daring and experimental, and in some ways sets them apart from the general public as 'better,' which inspires and persuades consumers to choose this particular. These values and assets are extremely valuable for customer awareness creating Prada’s success. Prada has grown from its early roots as an intimate family company to become a global fashion brand. The Fashion House has undergone significant product development and expansion. It also has its own jewellery collection. Prada also offers a sports and leisure range called Linea Rossi with the famous red logo. Prada has also explored in the past a relationship with LG Electronics in the mobile phone business, although now discontinued. The Prada Group's perfume categories include Olfactories and Les Infusions as well as, Prada Candy, Prada Amber, La Femme Prada and recently Prada Paradoxe for women. As for men they released Prada Luna Rossa, Amber Pour Homme and L’Homme Prada. Due to their luxury product range, Prada's marketing mix includes premium pricing. They may charge a high price since they have a strong brand value and quality, and people will not be hesitant to purchase these costly products. Prada bags cost between £600 and £3000, apparel between £350 and £4000, shoes between £300 and £900, sunglasses between £200 and £500, fragrance between £75 and £250, and accessories such as gloves, hats, belts and wallets between £50 and £500. The prices differ based on the country. Prada costs are much more than Gucci and Louis Vuitton, however they still have a consequent market share. Prada's yearly income exceeds £4 billion. Prada's distribution strategy ensures that its brand visibility aligns to the company's essence. Prada has commissioned globally renowned architects Rem Koolhaas and Herzog & de Meuron to develop "Prada Epicentres" in numerous localities.These locations were created to provide clients a one-of-a-kind Prada in-store retail brand experience to the consumer. The first centre launched in New York and has since gone on to become the most successful contemporary shop in the world with its iconic pastel green decor and dame flooring. Europe, North America, Australia, Asia , the United Arab Emirates, also have flagship stores. They offer their products in a variety of boutiques located in luxury department stores, shopping malls and multi-purpose buildings across the world. Additionally, they have made wholesale agreements with large luxury department stores such as Harrods and Selfridges in London. Online, apart from their website they also sell from indirect retailers such as FarFetch, Net-à-Porter, Flannels, Vestiaire Collective, Mytheresa, Lyst amongst others making their products accessible to all consumers as well as including certain discounts code depending on the retailer. Prada has always stressed creativity and uniqueness by always creating new ways to sell their brand and create brand awareness and visibility. They have always employed an aggressive marketing mix advertising technique to promote their businesses. Prada has its own website that presents each of their goods in great detail, ensuring that consumers obtain accurate product information. Prada hosts fashion shows, which have shown to be extremely effective and convincing, particularly in the fashion sector with a huge number of viewers (reaching approximately more than 500,000 views on YouTube). They hosted a series of runway events with music written by a well-known French composer, as well as a large number of Prada models and actresses who eventually participated in their commercial campaigns, generating a stronger impression on customers. In 2004, they released a famous permanent art installation entitled ‘Prada Marfa’ in the middle of the Texan desert which is their iconic store open 24 hours to visit. They also placed vast adverts in fashion magazines like Vogue and Elle. The Prada Group is dedicated to environmental responsibility notably with its extensive use of renylon as well as promoting the importance of sustainability in its collections, as well as dedicating a page on its website. Additionally, they collaborated with important brands with its most famous ones being Prada x Adidas, Prada x Raf Simons, Prada x Cass and Prada x Christopher Chemin. Prada also collaborated with multiple emerging artists to create concepts.

Prada also associates itself with celebrities and different influencers to attract a larger type of consumer base interested in different worlds (ie: Tom Holland, Leonie Hanne, Bella Hadid, Kenza Boutrif, Cai Xukun, Kun). The choice of those influencers and celebrities also express a variety of inclusive models, making the all types of consumer feel represented by the brand. Prada also showcased their art in various art galleries such as Therefore, Prada has created an incredibly big global footprint with all of these promotional campaigns explaining Prada's efficient marketing strategy and marketing mix. .

Pre-Purchase

CUSTOMER EXPERIENCE

Social Media

Word of Mouth

Campaigns

Influencer Marketing

Promos

Online

Display

Invoice & Billing

Product Quality

Purchase Sales Person

Packaging

Store

Post-Purchase

Newsletter

Customer Service

Website

Brand Touchpoints for Prada (Author, 2023)

For future recommendations Prada might take in order to boost their branding and profitability, the brand should investigate a brand extension in cosmetics as they have previously extended Prada Beauty yet only released fragrances. As a result, Prada has the option to extend into makeup such as lips, eyes, and foundation, and if this launch is successful, Prada may expand into a skincare line. Prada has also been a pioneer in experimenting with technological innovations, thus a prospective digital fashion collection may be an intriguing foray into the metaverse, establishing Prada as the first luxury fashion house to do so. Furthermore, this might offer an intriguing brand awareness for unconnected customers (ie: technophiles) and identify Prada as an indisputable competitor in the market.

Appendices

Prada Candy Fragrance

Prada Candy AI Muse called 'Candy'

Renylon sustainable material used by Prada

Prada Re-Nylon Re-Ediition 2005

Rrada's official Instagram page

Prada inspired bag by EGO

Appendices

Prada's discontinued collaboration with LG Electronics

The Devil Wears Prada official film poster

Prada Paradoxe and L'Homme Prada fragrances

Miuccia Prada campaign in Vogue

Prada's earring campaign for its jewellery brand extension

Prada Marfa installation in Texan desert

Prada's iconic store displays

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