Brand Report: Chanel

Chanel SARAH WILKINS B4010224

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Contents EXECUTIVE SUMMARY

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KARL LAGERFELD

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BRAND IDENTITY

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BRAND CONSUMERS

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BRAND POSITIONING

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HAVANA CUBA

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MARKETING MIX

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BIBLIOGRAPHY

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Executive Summary Chanel is known as one of the most luxurious brands (ChanelOverview, 2016).

Chanel is a global luxury fashion, fragrance, beauty and jewellery brand which was founded by Gabrielle Bonheur Chanel in 1909 (INSIDE Chanel, Oct 2010). The brand is now in the hands of Karl Lagerfeld who became the creative director in 1983 and is now carrying on the legacy of ‘Coco’ Chanel (Biography, 2016). Chanel is an elegant, stylish and classic brand with a fashion-forward edge, and is seen within the luxury goods sector as a market leader.

Chanel can charge premium prices, because they have a strong brand identity. The target market is affluent women, from women in China buying Chanel’s luxurious handbags, to London where ladies go to Mayfair to find the latest

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trend. One thing is for certain, Chanel has set a benchmark and is a brand that everyone knows.

“ Dress shabbily and they remember the dress; dress impeccably and they remember the woman ” Chanel

This report will explore Chanel (a privately held company owned by the Wertheimer family) as a brand.

In detail it will outline the brand’s target customers, positioning, identity and communication’s strategy. This will be information collated through primary and secondary research. The primary research will include observations of Chanel boutiques and concessions within department stores, and information from Chanel staff. The secondary research will include references from websites, books, journals, and magazines.

iNTRODUCTION Chanel is a worldwide established brand, which produces and sells fashion garments, accessories and beauty products. The brand has more than 120 boutiques and features in many department stores (Vault, 2016). According to Forbes, Chanel is within the world’s top 100 most valuable brands, with the brand being valued at $7.2 billion and having recorded sales of $5.2 billion (Hossenally, 2016). Chanel also has a huge online following on social media, with 15.9 million followers on Instagram and 12.4 million on Twitter. The rise of social media has boosted e-commerce not only for Chanel, but for other designers (Patel, 2016).

The individual who established this high end brand was Gabrielle

Bonheur Chanel. Born in France on the 19th of August 1883, she is known for introducing a new age style for women which was unheard of at the time. This change is still being felt in today’s society. The year 1910 marked the opening of her first shop at 21 Rue Cambon in Paris, where her hats were popular amongst the rich (INSIDE Chanel, Oct 2010). Whether it’s the collarless jacket, the two tonal shoes or the little black dress, Chanel has changed the way people interpret fashion. She was always known for her daring and fearless collections and to this day Chanel is the leading brand in the luxury goods market (A&E Television Networks, Aug 2016). The person now responsible for the success of Chanel is head designer and

creative director Karl Lagerfeld (A&E Television Networks, 2016).

Mr. Lagerfeld is known for being controversial. He has brought the brand to life again with his bold, daring ideas and electric mindset.

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K A R L L A G E R F E L D 8

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Brand Identity “To be the Ultimate House of Luxury, defining style and creating desire, now and forever.�

Chanel The brand identity is the way in which the customer perceives your brand (Dillion, 2011). Throughout the years the Chanel brand has been a leader within the industry. Not only because of the unique designs, but also through the customer service and services available. This has enabled Chanel to gain such a high market share and brand reputation (Forbes, 2016). From data provided by Q2 in 2016, Chanel scored a 100% in general visibility and growth. Also a survey completed by affluent women shows that they rank Chanel to be one of two fashion companies that are worth their premium prices (LUXURY, 2016). This suggests that Chanel has created a glorious and elegant brand which is still as beautiful to this day.

It suggests that consumers are lured into the brilliance no matter what the price.

This would suggest that the brand is price inelastic and Chanel are able to do this as they are known as a premium company (Investopedia, 2006).

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Brand iNDENTITY The brand identity is also a process used to enhance consumer awareness and boost loyalty amongst customers (Wheeler, 2003).

Coco Chanel’s brand follows on from the founder herself. She was an innovator in the fashion industry right from the beginning.

This can be demonstrated when she designed her first line of sportswear, including the jersey jumper which could be bought in the Deauville store, France. This changed the way people perceived

women’s bodies (INSIDE CHANEL, 2010). She allowed women to dress in a more casual manor which the consumers loved.

The brands logo is iconic and has not been changed since it was created. This logo represents “Coco Chanel’s” name interlocked with two C’s (Design and history of Chanel logo, 2012). As well as the logo being iconic, the way in which they wrap their products is unique.

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Brand Consumers A brand consumer is known as a wellknown brand, which is bought by consumers rather than other companies (Cambridge Dictionary, 2016). When observing the Chanel boutique’s, it was clear there is a certain type of customer who shops this luxurious brands fashion garments. The typical Chanel customer loves to shop at all the most premium designer brands and has a high disposable income, money is no object. The Chanel in Harrods is laid out in a beautiful way. With luxurious suede couches, black marble floors and a grand stone fireplace, it’s no wonder people love to shop at Chanel, as the experience is like no other.

In contrary, Chanel’s beauty and fragrance line have a slightly different consumer. This is because of Chanel’s pricing strategy (Richards, 2016). In 1921 Chanel’s first beauty fragrance was unveiled (Sem, 2013). Chanel No5 is still popular to this day and is sold in many department stores and boutiques around the UK, for example in Debenhams. Debenhams is a well established department store where many consumers shop where there are reasonable prices. A Chanel No5 100ml bottle of Eau de Parfum spray can be purchased for £96 (Debenhams, 2001). Even though this is a premium price within the fragrance market, consumers will spend this money, because of the brand name, which is established through a strong brand identity and loyalty (King, 2016).

Chanel’s fragrance and beauty line hits the mass market, therefore more sales will be made.

Chanel this year has launched a new beauty fragrance to copy the popular Chanel No5, it is called No.5 L’eau (FashionN, 2016).

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Brand positioning A brand has to be dynamic to work (Martinez, 2012). Brand positioning can be described as a conceptual mapping of a product of service within a particular market (Chandler, 2011). Chanel competes with other premium brands such as: Louis Vuitton, Burberry, Dior and Gucci (Bhasin, 2016). Therefore, this means that Chanel have to work hard to stop consumers from switching to other brands (Zigu, 2008). Chanel differs from other designer brands by having special USPs. As mentioned previously, Chanel prides themselves on their luxurious brand image. One example of Chanel’s USP is the camellia which is associated with the Chanel brand. The camellia

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has been used since the twenties and a flower which was loved by Chanel (Evans, 2015).

Chanel’s position in the market is strong. It lies in the luxury goods market with other brands such a Louis Vuitton but also other luxury non fashion brands such as Rolls-Royce and Aston Martin (E.B, 2016). Chanel also has iconic pieces of clothing which is known for Chanel herself creating them, for instance: the little black dress and the tweed jacket (Limited, 2013). Chanel has a good brand reputation and also is top within the market segment, however the segment is niche because of the premium pricing (King, 2016).

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HAVANA 18

CUBA

Chanel’s catwalks are truly spectacular.

At the start of this year Chanel hit the streets of communist ruled Cuba for the first time ever. From glittery ball gowns to cocktail dresses, Chanel had it all (WGSN Insider, 2016).

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Marketing MIX

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THE MARKETING MIX The marketing mix can be described as elements in which affect the way a product can perform within the market. This includes; product, price, promotion and place (Capon, 2009).

PR Chanel is a high quality brand which thrives with celebrity endorsements. Chanel has used famous faces such as Blake Lively in the past and now Keira Knightley is a big part of the brand (Development, 2015). Keira Knightley has recently featured in this year’s March edition of Harper’s Bazaar modelling the new Rouge lipstick by Chanel (Chanel, 2016). Celebrity endorsements have massively impacted Chanel’s sales and will impact any luxury brands sales if you pick the correct celebrity. As mentioned previously, according to Forbes Chanel is rated within the top 100 brands in the world, therefore this proves that Chanel’s beauty sales with have a great impact on this (Forbes, 2016). Other celebrities such as the Kardashian’s have a close connection with the brand, as well as model GiGi Hadid who has modelled for Chanel (Crawley, 2016).

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Other famous celebrity endorsements include Kristen Stewart. Stewart has been an ambassador since 2013. Her most famous campaign to date was the ‘Paris to Rome’ video where she actually undresses herself and some viewers would describe as ‘racy’. Having an iconic sex symbol such as Kristen Stewart represent the brand is key, as she expresses the brands new upcoming image (Instyle, 2016).

AdveRtising When it comes to branding, Chanel knows exactly how to do it. With advertising and appearing in the biggest fashion magazines and having the best slots on the runways, such as Paris Fashion Week where Karl Lagerfeld debuted his new ‘intimate technology’ SS17 range (Mower, 2016). Chanel is featured in many high end fashion magazines such as: ELLE, Harper’s Bazaar, Vogue, Marie Claire and Cosmopolitan which appears to a mass market audience who all aspire to be the lady who wears Chanel (Bhasin, 2016). Not only do Chanel advertise in magazines, but they also appear on television adverts, radio, billboards and on social media platforms. As previously mentioned Chanel has a large

social media following and engage with their followers on many different social media platforms reaching over 80 countries worldwide (Wightman-Stone, 2016). Chanel actually dominates luxury goods market and has moved to the number one spot of the top 45 luxury brands according to NetBase report (Nguyen, 2016).

One of the most famous television campaigns was modelled by super model Giselle Bündchen called ‘Chanel No.5 – The One That I Want’ in 2014 which was directed

by Baz Luhrmann (Louise, 2014). It was a very popular piece, because it included an iconic song which featured in the musical Grease (TVAdSongs, 2015) and was a very simple advert which was classic and elegant.

Personal Selling From collecting primary research, it was easy to see how Chanel differentiated from other luxurious brands. After speaking to a Chanel specialist, she explained how each Chanel purchase differs depending on the size and type of product. This is a very unique selling point for Chanel, as they want every customer to experience the ‘Chanel journey’. The Chanel journey can only be described as a magical experience.Through more thorough primary research it was clear that each Chanel boutique had a unique point of sale. This would be a one to one experience, with the customer and an experienced sales advisor.

Through more extensive research it was apparent that Chanel use personal selling techniques to engage with their luxurious market.

For example, in a department store such as House of Fraser they sell Chanel fragrance’s and beauty stock to their consumers. From primary research collected it’s clear that every employee employed by Chanel has a good understanding of the brand and it’s customer’s.

Many customers in the Chanel beauty range would get advice from the advisors or even get them to test the products, therefore this shows how Chanel has connected well with their target audience.

Direct Marketing Chanel uses many other advertising techniques within their marketing mix. This also includes direct marketing such as emails and mailshots.

This can be seen on Chanel’s official website where you’re able to subscribe to receive their newsletter for their: fashion, fragrance and beauty and jewellery collection. This advertises to consumers by sending them out weekly newsletters on the latest collections and trends which you’re able to purchase (Chanel, 2016). This directly targets the consumer’s which are interested within the brand.

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FashionN. (2016, August 29). Luxury spending slump hit Chanel’s 2015 profit and sales. Retrieved November 6, 2016, from http://uk.fashionnetwork.com/news/Luxury-spending-slump-hit-Chanel-s-2015-profit-and-sales,726456. html#.WB-R1-GLTVr Ltd, S. Z. Definition: Brand positioning. Retrieved November 6, 2016, from https://www.aqr.org.uk/glossary/ brand-positioning Bhasin, H. (2016, August 6). Marketing mix of Chanel - Chanel marketing mix. Retrieved November 6, 2016, from MARKETING MIX’S, http://www.marketing91.com/marketing-mix-chanel/ Zigu. (2008). Chanel | SWOT analysis | USP & competitors | BrandGuide | MBA Skool-Study.Learn.Share. Retrieved November 6, 2016, from http://www.mbaskool.com/brandguide/lifestyle-and-retail/2576-chanel.html Evans, M. (2015, October 19). Coco Chanel’s relationship with the camellia. The Telegraph. Retrieved from http:// www.telegraph.co.uk/gardening/how-to-grow/chanel-s-favourite-flower-the-camellia/ *, E. B. (2016, March 5). The European business review. Retrieved November 6, 2016, from http://www.europeanbusinessreview.com/designing-luxury-experience/ Development, D. (2015). Keira Knightley, actress - celebrity endorsements, celebrity advertisements, celebrity endorsed products. Retrieved November 7, 2016, from http://www.celebrityendorsementads.com/celebrity-endorsements/celebrities/keira-knightley/ Rouge coco - WHO DO YOU LOVE? (2016). Retrieved November 7, 2016, from http://www.chanel.com/en_US/ fragrance-beauty/rouge-coco-139271 Bhasin H. (2016, August). Marketing mix of Chanel – Chanel marketing mix. Retrieved November 7, 2016 from MARKETING MIX’S, http://www.marketing91.com/marketing-mix-chanel/

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