Balenciaga vs topshop

The Marketing Mix Report Anna Savchenko 20120116758600 Word count: 2547

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Contents Abstract 3 Introduction 4 Literature review 5 Methodology 6 Results: Balenciaga 7 Product 8 Price 9 Place 10 Promotion 11 Topshop 12 Product 13 Price 14 Place 15 Promotion 16 Conclusion 17 Appendixes 18 References List 19

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Abstract The report’s topic is to assess marketing mix of the two different brands (Balenciaga and Topshop) from the different market levels with relation to the two similar pairs of sneakers.

The results would be given from the research which apprise the brands’ marketing strategy considering 4Ps and by analyzing the results, the recommendations will be made for each brand in order to improve the brand image.

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Introduction In order to increase each brands revenue and uniqueness, the recommendations would be given which would be confirmed with the results from primary and secondary researches.

Besides, the article represents the comparison of the two-similar footwear with application of the marketing strategies between Balenciaga and Topshop, which are considered to be from two different market levels.

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Literature Review Nowadays the availability of the marketing strategy in business is an essential thing to consider in order to achieve success on the market. “A marketing strategy outlines how a business intends to market its brand, products and services existing and potential customer” (Posner, 2017). It helps to identify consumer’s needs and wants and satisfy them in a way of improving products and services in order to create profitable relations between business and consumer.

Moreover, the impact of the marketing mix on the company would be mentioned, which is an important component of a marketing strategy that includes certain marketing methods to figure out the advantageous ideas within the company’s target market. Where the four different factors product, price, place and promotion which “…should be considered and blended effectively to achieve the marketing and strategic goals of a company” (Posner, 2017).

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Methodology

For the primary research with the help of observational studies in Leeds based Topshop store and department store Harvey Nichols, the needed information was carried out. It took place on Monday, 9 May 2018. The observational studies helped in the results writing in a way of presenting a deeper insight of the two chosen brands. Another method for primary research was used, which involved the interview with the managers and consultants of the stores and online survey among the consumers. Considering secondary research, the information from books, reports, news portals and fashion blogs were used in order to found out the marketing strategy of the two chosen brands.

Balenciaga is a Paris based fashion house which was established by a Spanish designer Cristóbal Balenciaga in 1914. Brand Balenciaga has a unique kind of style which stands for avant-garde garments and the prediction of the fashion of future. Nowadays, “The House of Balenciaga is now owned by the French multinational company Kering” (BOF, 2018).

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Results Product The main aim for the brand Balenciaga is to create a luxury, unique and trendy items for their consumers. In their collections Demna Gvasalia, tries to use fashion as a tool of communication but interpret it in a strange way.

For the last couple of years, Balenciaga, was the brand which stands for the trends establishing. The same happened with the “Triple S” sneakers, which became “the oversized anoraks copied on every high street” (Hannah Marriott, 2018), cost £ 545 which represent the materials and production quality of the product since 60% Polyester, 25% Calfskin and 15% Lambskin. “Triple S” trainers were named as an “ugly chic”, but still were sold out on every retailer website and in every physical store around the world. The remarkable pair of shoes of the season, come in EU 35-47. The uniqueness to the trainers adds triple stacked sole, worn – in look and the printed size of the pair on the toe of the shoe.

The strategy that was chosen by Demna Gvasalia, when he came to Balenciaga in 2015, is instead of creating the new brand image, there were used a powerful and apparently recognisable brand’s style which improves with each season and thus educating the brand’s consumers to identify what to anticipate from the brand. Gvasalia’s “engorged silhouettes and couture sensibility towards streetwear” (BOF, 2017), was adapted very quickly throughout consumers.

The actual product range of the brand contain the high – quality products for womenswear, menswear and from the last year children.

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Price Before establishing the particular product on the market and adding the price on it, firstly brand is interested in creating a good quality product which will be interesting for their consumers. For all its goods, Balenciaga uses cost – based pricing, with the combination of the competition based pricing strategy.

For both womenswear and menswear, the prices for the product range starting from £ 75 and the highest price stands for £ 3,500. The reason of establishing high prices is because of using expensive fabrics and craftsmanship. To consider the cost price which as a result will be higher and the brand will still have a higher prices and profit margins.

The brand’s target consumers are price sensitive, because of the high income that consumers have, which gives to them the possibility not to limit themselves in expenses.

So, if the prices for the Balenciaga goods will rise, they will continue to purchase brand’s garment. As for the Kotler’s Annual Financial Report (2017), displayed the revenue which was € 6,211 million and in recurring operating income € 2,124 million. With each year Balenciaga grow in its sales and revenue. But it still does not need another volume of sales because brand still have a gross profit to make the profit from. An important part to consider, the use of cost – based pricing strategy, makes the products premium value for their consumers and creates a luxury brand image.

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Place Balenciaga has 43 physical store worldwide (Balenciaga, 2018). All of the stores located on the luxury shopping arears of the particular cities. In United States, Balenciaga established 8 exclusive store. The uniqueness to the stores adds the use of the different art displays and the “use of the architectural concept based on climate and landscape, and fiction and abstraction” (Purple diary, 2012). Each of the Balenciaga stores adapted to the city in which its located, by considering the country’s history and traditions. Every year the store changes its design in order to make a connection with the collection which was produced in a particular season. Boutiques are designed in the style of the avant-garde with “white panelling, marble, and glass work as well as black leather seats and light green, black and navy carpets or white tiles” (Purple diary, 2012).

Not only that, Balenciaga also have an online store which sells its products worldwide. In March 2017, there were launched a new Balenciaga website with the new simple design and an ability to use it much easier. The Balenciaga garments could be also find in online retailers, such as Net a Porter, Net Porter, Farfetch, etc.

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Promotion

Balenciaga has a strong and huge marketing promotion strategy. By having their own manufacture where production of garments is taking place, it minimalizes their spending on other fabrications.

The designing process depends on the in – house designers. The brand has a strong connection with the charity organizations, for example the fall/winter 2018 collection was designed in a collaboration with the “World Food Programme”, by creating the collection of the colorful logo t-shirts, caps and bum bags, in the style of the brand. Gvasalia is very interested in helping and solving world’s problems. Demna Gvasalia said that: “If I can do something that actually engages and makes some difference...”. The brand had donated $250,000 and after the collection will arrive to the stores, the 10% of the revenue will be donated to the UN charity. “For the first time I thought that fashion could be useful in a different way than just covering the body,” Gvasalia mentioned in his interview (Hannah Marriott, 2018). When it comes to advertising, Balenciaga use all ways of promoting its products.

Each season fashion shows are hold in Paris within the Paris Fashion Week. The visitors start from the fashion bloggers and finish with magazine’s editors. And fashion influencers by giving their opinions considering the collection they create a promotion for the brand. Balenciaga’s campaigns could be also appeared on the first pages of the fashion magazines like Vogue, Harpers Bazar.

In nowadays life, the use of social media in a business aims, is an important part of marketing. As for Kotler’s Annual Report, “on social media, as of December 2017, Balenciaga had more than 1.2 million fans on Facebook and is increasingly popular on Instagram with over 4.6 million followers.”.

Recently, Balenciaga have launched the SS18 campaign which will affect brand’s consumers on emotional level and create customer attachment. The collection was designed towards the young generation style in order to engage this target market even more. By using the 80s-family photography style, the customers could be transferred in that decade of the last century. The usage of the important material values in advertising campaigns, creates a strong impact on the consumer that could be profitable for the brand.

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Topshop is an Arcadia group brand which was established in 1960’s in London. The variation of the brand shows in the range of different collections (Tall, Petite, Maternity) and styles across the trendy clothing. Topshop is also having some premium lines, Topshop Boutique and Topshop Unique.

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Results Product Topshop main aim is to create trendy garments in a good quality and affordable prices. The product to discuss is Ciara Chunky trainers cost £ 39, which is made from the leather cow, polyurethane and textile materials and sole the synthetic materials were used. Unlike the Balenciaga shoes, it does not have the printed size of the pair on the toe of the shoe and the brand name on the side. The brand offer the sizes between EU 36 and 41.

Topshop also specialized in production trendy clothing, accessories, bags and beauty in which updates are made every week. The display of the brand’s variety is shown in a range of different sizes like tall and petit, also the presence of the maternity collections.

As for the premium lines of the brand, Topshop include Boutique “a contemporary and luxurious wardrobe” and Topshop Unique “the only collection designed by a high-street retailer to be shown on-schedule at London Fashion Week”. The use of the chemical materials on production of the garments makes it look cheap and therefor Topshop is a mass market brand. Considering packaging, Topshop use a simple paper bag with the brand’s name on the side. Most improved services in Topshop is a possibility to use a free shipping and free return policy which rise consumer’s awareness within the service of the brand.

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Price As for pricing strategy, Topshop apply different combination. This is because of featuring of their own brands and also other brands. Topshop has a large influence from others high street brands such as Urban Outfitters, Zara and H&M. Thus, the brand applied the competitor based pricing method.

In order to instil new product on the garments range of the brand, Topshop use the price skimming strategy so the brand can increase the profits.

As I mentioned earlier due to having different kinds of lines (Main collection, Boutique, Topshop Unique), the different quality materials are used in production and therefore prices may differ between these collections.

For example, the prices for the Topshop Unique collection may range from £50 to £1000 when for main collection the price will be from £2 for socks or tights and £290 for leather jacket. An important thing to consider that in a mid-season time, Topshop proposals a sale, where the highest discount can lead to 80%. In comparison with Balenciaga trainers, the price for Ciara Chunky trainers is much more affordable and it can be reasonable to purchase Topshop version of ugly sneakers, in order to be in trend.

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Place

Topshop is a part of the Arcadia Group and appear to be a key brand of the company. From the time the brand was established in 1964, it already has 300 stores in UK and 140 stores crossways 37 countries.

The largest Topshop store located in the motherland of the brand, in London on Oxford Circus. Topshop also have their own departments in the shopping malls and online retailers such as Selfridges, John Lewis and Net a Porter. Topshop also use the online distribution method and ship to more than 100 countries around the world.

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Promotion

Topshop use a digital marketing strategy in order to communicate with their consumers.

Social media platforms are an important part of each business marketing and as for Retail Gazette (2017), Topshop is fashion’s the most social brand. As a Balenciaga, Topshop also has a connection to the charity organizations, such as Fashion Targets Breast Cancer, Lady Garden, Young Fashion Talent and Key to Freedom, by making collaborations with them and creating the work possibilities for the young talents.

Topshop is well known for the organization of the large amount of the seminars, which could be also named as PR events, considering the educational aspects. Moreover, in every Topshop store the service of the personal shopper could be used, with the pre-booked reservations. Stylist will help with finding the right garments for the consumer and also the new collection of the brand will be introduced.

Last but not least, its became very popular through the fashion market to collaborate with other brands, celebrities or even artists. Topshop was not exception to this. The most successful brand’s collaborations were with Cristopher Kane, Alexander McQueen, Kate Moss and Beyoncé, whose collections became a part of the main collections of the brand and could by found in every Topshop store.

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Conclusion To summaries, the main topic of the report was to examine the use of the four constituents of the marketing mix regarding to fashion brands from different market levels. With critical point of view on the research that I have done, I can conclude that the pricing strategies which are applied to each brand and levels it achieved, can totally reflect the excellence of the garments and brand’s market position. For example, Topshop, the highstreet retailer, with the use of the dissimilar pricing strategies for different products, produces goods which quality corresponds to the price. Moreover, Balenciaga adheres to the exact same method. Moving on to the promotion part, each of the retailer have their own strategies of appealing at the fashion market, however, both of the brands have a strong promotional level through social media platforms, which is appear to be an important aspect of the digital marketing, nowadays. Last but not least, the distribution methods of the two brands, I found that its depends on the market level of the brand on the way how it will be controlled and how the high quality of the materials and final product will be regulated. For my reccomendations and PESTEL and SWOT analises, see appendix.

To conclude with, it is very important for the 21st century brand to research, improve and look on the new innovations and to meet thigh standards of the fast-moving world. Also, in all businesses of our time, a large impact on marketing mix comes from the consumers and the level in which brand is located. The success of the brand lies on understanding consumer’s needs and wants in order to create an emotional connection between them.

Brand should also set new goals for itself and achieve them, which will give to it a competitive benefit.

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Appendix

SWOT Analysis: Balenciaga

PESTEL Analysis

SWOT Analysis: Topshop

Brand Positioning

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References

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