Business work: Chanel and Gucci

In a social media driven society, evidence of traditional marketing techniques are becoming more and more scarce as companies try to find new and innovative ways to stay relevant and profitable. The once conventional tri-media method of marketing (radio, television and print ads) is slowly being replaced with tweets, facebook updates and other computer driven mediums. While these methods do yield results, they are not proven to be more effective than the traditional marketing and advertising techniques. The key is to integrate both social mediaand traditional efforts to maximize true marketing potential.

31 rue Cambon Magazine - Photo by Olivier Zahm

 Luckily, Chanel seems to have figured this out and has been ableto stay relevant and turn a profit in a retail, economic downturn. With many print publications experiencing threats of extinction, Chanel has taken it upon themselves to create their own magazine, 31 rue Cambon. By producing their own editorial content, they are able to ensure there is not only current information about their brand in circulation, but are also able to showcase their own print ads and promote other ventures.  For example, Chanel has started several digital initiatives featuringoriginal content like silent films, runway videos, behind the scenes documentaries and a unique collection of footage called “Métiers d’Art,” inspired by Chanel’s loyalty to Parisian ateliers the firm gained in 2002.

Chanel’s 2010 Coco Cocoon Ad Campaign featuring Vanessa Paradis

Through these new ventures, Chanel has become a leading example of longevity by mastering the art of product, price, place and

promotion. They seamlessly work these four Ps of marketing simultaneously by building a reputation centered on elegance, quality and exclusivity. Evidence of this can be seen in the strategic placement of their products in the world’s top retailers (such as Harrods) and the calculated promotion of theirproducts by celebrity endorsements (like French actress and singer,Vanessa Paradis).

Chanel print ad - copyright, Vogue November 2010 issue

It’s hard to point to one traditional marketing technique Chanel utilizes because the brand continues to use them all. They have found a way to combine what has been proven to work and couple itwith current technology and social media. By launching their own television/digital mediums, publishing their own editorial content and continuing to support major fashion magazines by

placing print ads, Chanel has found a way to keep people talking about the brand, which is one of the most traditional forms of marketing: word of mouth.

As I’ve mentioned before, Chanel sets the perfect example of how to successfully advertise a retail luxury brand by continuing to use traditional marketing. But, what has kept them at the forefront of retail sales is how they have combined what has beenproven to work with new marketing techniques, current technology and social media.

One example is Chanel’s integration into mobile technology through the introduction of their iPhone application. Users can get the latest news and updates on the brand, find store locations and view Chanel’s current line. Creating this mobile application gives Chanel a way to connect with their customers 24/7 and provides automatic updates for convenience.

http://chanel-news.chanel.com

In addition to their new electronic marketing techniques, Chanel has also started producing video footage that highlights a distinctive collection they design called “Métiers d’Art.” As I mentioned two weeks ago, this annual collection (and its corresponding video) is inspired by their affinity to Parisian ateliers they acquired in 2002. Each Parisian studio bears their own specialty that maintains the traditional artistry of their craft and consists of the following: Lesage (embroidery), Goossens (goldsmith), Desrues (metal-crafts),Guillet (flower-maker), Lemarié (feather-maker), Massaro (cobbler), and Michel(milliner).

Chanel Paris-Shanghai Métiers d’Art 2010 collection: Looks 7, 23 & 28

What’s unique and unconventional about the “Métiers d’Art” project is that it showcases Chanel’s commitment to creating the highest quality of clothing and highlights their support of true craftsmanship. Creating video footage to document this venture only helps market Chanel as a brand synonymous with elegance and luxury. Each year the “Métiers d’Art” collection comes out there is much anticipation about the theme, the designs, the craftsmanship of the garments and the video documentary; and the minute Chanel makes the information available articles are written, blogs are posted and photographs are circulated. In my mind it’s not only a brilliant marketing tactic but great public relations as well.

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HOW SEGMENTS CAN BE DEFINED,TARGETED AND MAINTAINED

Guccio Gucci popularly known as Gucci is an Italian brand and was established in 1921 for the production of leather luggage. Its brand was inspired by the aesthetic of London nobility and class. Gucci was innovated with class sensitivity as a major focal point. Over the years its customers have been aristocrats, song stars, super models and those that want to associate with the noble (Gucci.com, 2010)

Gucci operates in the fashion luxury market, their brands are of high quality, it has a strong reputation; its collections are exclusive and expensive, and it has a history of brand loyalty. Gucci has diverse collections which include bags, shoes, belts, fine jewellery, fragrance, hats and gloves, scarves, sunglasses, wallet and wristwatches (Gucci.com, 2010)

Over the years, Gucci has focus on strengthening the values upon which it was founded and it is on these values of class that its segmentation is based (Gucci.com, 2010).

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INTRODUCTIONThis article aim to analyse the different segment of Gucci brand, how it is targeted and maintained over time. It also suggest other possible segment which the brand could consider, target and position so as to increase their sales, improve their brand loyalty and move in the direction of the global trend in the fashion luxury market.

MARKET SEGMENTATION, TARGETING ANDPOSITIONINGThe need and purchasing habits in the market varies, thus a product cannotsatisfy the needs of all the consumers in the markets as they have diversetaste and preference. This gave rise to market segmentation (Fletcher .k, 1995).

Keller K.L, (2009) perspective was a more elaborate one, as he views the marketing environment as one changing dramatically with technological advancement, improvement in world interaction and good communication means, increased awareness and customers’ high knowledge of diversity of brand in the market. He suggested that as a result of these factors, companies devised a strategy of customizing its brands and sales programmes to suit different needs of consumers thus the emergence of market segmentation.

Segmentation of brand is an aspect of advertising planning. Most marketersuse segmentation, targeting and position to achieve success in their business. With segmentation, large heterogeneous markets are divided into smaller units that can be effectively and efficiently reached with products that satisfy their special taste. After segmenting the market, you select the segment to enter. Selecting segment(s) is called targeting (Kotler.P. et al, 2008).

Kotler et al also suggested that in evaluating a firm’s segment to choose its target market, three factors are considered:

The size of the segment and its growth.

The structural attractiveness of the segments.

The objective and resources of the company.

It is these strategy that companies use in positioning its brand for competitive advantage.

GUCCI SEGMENTATIONSegmentation involves splitting the market into diverse segment based on some criteria that reflects different purchasing needs (Procter.T, 1992)

Every consumer can have a segment, since it is impossible to cater for individual needs or wants, thus the need to classify buyers who have slight different in product requirement together in a segment.

Segmentation of Gucci brand will be analysed based on Fletcher

.K, (2005) basis for segmentation:

Demographic Segmentation.

Geographical Segmentation.

Psychological Segmentation.

Behavioural Segmentation.

DEMOGRAPHIC SEGMENTATIONDemographically, Gucci brand are segmented using sex and age as a criteria. Gucci produces brands for male and female, children and adults respectively. Their brands are for the category of male and female who love the desire to impress others, have a high social class and strong financial base. Those who love the brand are driven by the kind of lifestyle they live and the need to maintain that lifestyle (Gucci.com, 2010)

Gucci brand does not consider the economy class or the middle class; thus an inefficient utilization of the market population, as the market lies inthis category of consumer.

GEOGRAPHICAL SEGMENTATIONGucci is very conscious of the countries it locate its brands considering the fact that they are exclusive and of great quality.

Gucci operates in very few countries in America and Europe whose consumer behaviour is unique in terms of quality. For example,France populace are willing to pay more for quality. In recent times, Gucci has spread to France, Germany and Belgium (Gucci.com 2010).

Gucci geographical segmentation is poorly structured as it tends to ignoredeveloping countries and emerging markets.

PSYCHOLOGICAL SEGMENTATIONGucci brand focus is majorly on this segmentation with strict concentration on life style. Over the years, they have targeted the lifestyle of their customers who are mainly songsters, film stars, and

aristocrats, whose buying decision are mainly influenced by the group theybelong to (Gucci.com, 2010).

Gucci focuses on lifestyle because it satisfies them best and most profitable considering the fact that their brands are expensive and of great quality.

The factors driving the psychological aspect of Gucci’s segmentation over the years are increasing disposable income, lower unemployment globally, increasing female employment, growing wealthy class in emerging countries and the desire to emulate the lifestyle of others and social influence to purchase luxury goods (Hine T and Quin L,2005).

DEMERITS OF GUCCI PSYCHOLOGICAL SEGMENTATIONAs a result of the recent global recession, people are more cautious of their spending on luxury goods, emphasis on quality has reduced and emphasis on price (reduction) has increased as consumers tries to avoid orreduce impulse buying (Beverland M, 2005)

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Also, with increase purchase of counterfeit luxury goods, the brand is losing its value as most people see the counterfeit and real brands as thesame; this could lead to reduction of loyal customers’ base, and could affect sales and returns on brand negatively (Eugene M. et al, 2010).

BEHAVIOURAL SEGMENTATIONBehavioural segmentation could be viewed from the aspect of brand loyalty,user rate and market responsiveness towards product (Kotler P. et al, 2008). Gucci as a brand has proved over the years to be of great quality and very durable, thus it has a high percentage of consumers’ loyalty.

Gucci brand comes with great experience in different dimensions. Most of the loyal customers may have experience its great quality and the respect the brand commands.

Gucci can increase its user rate and the attitude of the market towards its product by moderating its price as its prices are usually on the high side.

GUCCI SEGMENTATION ADVANTAGESGucci concentration on lifestyle has helped to improve their loyal customers’ base over the years.

It has also helped the company to maximize competitive advantage that serves the target market in the most efficient way (Wilson .W, 2005)

LIMITATION OF GUCCI SEGMENTATIONGucci segmentation is too narrow, and a narrow segmentation means fewer customers, and less sales leading to less returns (Blythe.J, 2008).

Also great concentration on life styles could constraint them from diversifying to diverse sectors of the economy, and they have a discriminatory approach of segmenting their brands when viewed from the societal perspective.

CROSS NATIONAL AND CROSS CULTURAL SEGMENTATIONWith the rapid homogenization of global consumption which is as a result of the emergence of global culture facilitated by the globalization of international market, companies should consider a cross national, cross cultural approach to market segmentation (Agarwal.J. et al, 2010).

Agarwal J. et al opinion reflected the fact that openness to change as a result of the global culture are steadily sweeping the global market as gap between diverse cultures, nations, regions, values, are getting closer. There is now commonality of demands among different nation of the world.

Also, most investors tend to invest in the stock of these emerging marketsthus boosting the nation’s revenue by taxation of foreign investors’ dividends. For example in 1999, 29% of Mexico stocks were owned by US (Domiwitz I. et al, 1999).This also means more capital for company, expansion of company, increased employment and thus increased disposable income, to spend on luxury brands like Gucci.

Gucci as a brand should embrace the cross cultural and cross national segmentation by producing diverse brands that meet diverse class of peoplein the society, and also open branches in different countries and regions of the world as opposed their massive concentration in Europe and America (Hofstede et al, 1999). They should realise that countries such as India are emerging markets in the international scene. They should explore developing countries of the world as developing countries are now having global identity; having sense of belonging to global values, beliefs, lifestyle and consumption behaviour (Sener.T and Mandaci P.E, 2010)

SUMMARYThis paper work analyse Gucci segmentation with great emphasis on its Psychological (Life style) segmentation and also suggest that the brand should embrace and explore recent segmentation like cross cultural and cross national segmentation, so as to improves its brand quality, increaseits sales and returns.

IMPLICATIONSA number of implications arise from this paper work which includes:

Gucci should consider other market segmentation options.

They should match the options to maximise their strength.

Globalization plays a very important role in segmenting, targeting and positioning, so the brand should embrace it (Keller K, 2009)

LIMITATION OF THIS STUDY

This study had its own limitations. The limitation includes; time and wordconstraints, sourcing of the six peer previewed journals and four other marketing journals used in this study from the library was tedious as mostmarketing students were also doing their paper work, getting information on the brand from the internet was quite exhaustive and most of the research materials used was of secondary data which are not always reliable.

AVENUE FOR FUTURE RESEARCHGucci is well known as a strong brand with loyal customer base, the fact they concentrate more on lifestyle as a result of competitive advantage isquite reasonable.

With the trend of development in the economies of the world, they should consider other avenues like the cross cultural and cross national segmentation discussed in this study, target it and position their brands in the selected segment(s)

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Marketing Research: Concept, Objective, Advantages and Limitationsby Smriti Chand Marketing

Marketing Research: Concept, Objective, Advantages and Limitations!The marketing concept states that the character of the marketing orientated organisation, whether product or service based, profit or non-profit

based, is the identification and true delivery of consumers’ needs and wants, more effectively and efficiently than the competition.

Hence, in a broad sense, marketing management needs to understand the minds of their target markets, their attitudes, feelings, beliefs and value systems. They require a formalised, managerial approach to this most important job. And this entirejob is the basic role and purpose of formal marketing research. Marketing research is the systematic, objective and exhaustive search for study of the facts relating to any problem in the field of marketing. It is systematic problem analysis, model building and fact-finding for the purpose of decision-making and control in the marketing of goods and services.

According to American Marketing Association “marketing research is the systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services.” According to Green and Tull, “marketing research is the systematic and objective search for and analysisof information relevant to the identification and solution of any problem in the field of marketing”. Professor Philip Kotler defines marketing research as “Systematic problem analysis, model-building and fact-finding for the purpose of improved decision

making and control in the marketing of goods and services.”

The features of marketing research are:1. Search for data:It is a search for data which are relevant to marketing problems – problems in different functional areas of marketing consumer behaviour, product, sales, distribution channel, pricing, ad and physical distribution.

2. It is systematic:It has to be carried out in a systematic manner rather than haphazard way. The whole process should be planned with a clear objective.

3. It should be objective:Objectivity is more important in any result. It means that the research is neither carried on to establish an opinion nor is intentionally slanted towards pre-determined results.

4. It is a process:It involves various steps for gathering, recording and analysing of data.

Objectives of Marketing Research:Marketing research may be conducted for different purposes. The main objectives or purposes of marketing research are:

i) To estimate the potential market for a new product to be introduced in the market.

ii) To know the reactions of the consumers to a product already existing in the market.

iii) To find out the general market conditions and tendencies.

iv) To know the reasons for failure of a product already in the market.

v) To find out the better methods of distributing the products to consumers.

vi) To know the types of consumers buying a product and their buying motives to know their opinions about the product and to get their suggestion improvement of a product.

vii) To assess the strength and weakness of the competitors.

viii) To know the dimensions of the marketing problems.

ix) To ascertain the distribution methods suited to the product and the

x) To estimate the market share of a firm.

xi) To assess the probable sales volume of a firm.

xii) To assess the reaction of the consumers to the packaging of the firm and to make packaging as attractive as possible.

Advantages of Marketing Research:i. Marketing research helps the management of a firmin planning by providing accurate and up- to-date information about the demands, their changing tastes, attitudes, preferences, buying

ii. It helps the manufacturer to adjust his production according to the conditions of demand.

iii. It helps to establish correlative relationship between the product brand and consumers’ needs and preferences.

iv. It helps the manufacturer to secure economies inthe distribution о his products.

v. It makes the marketing of goods efficient and economical by eliminating all type of wastage.

vi. It helps the manufacturer and dealers to find out the best way of approaching the potential

vii. It helps the manufacturer to find out the defects in the existing product and take the required corrective steps to improve the product.

viii. It helps the manufacturer in finding out the effectiveness of the existing channels of distribution and in finding out the best way of distributing the goods to the ultimate consumers.

ix. It guides the manufacturer in planning his advertising and sales promotion efforts.

x. It is helpful in assessing the effectiveness of advertising programmes.

xi. It is helpful in evaluating the relative efficiency of the different advertising media.

xii. It is helpful in evaluating selling methods.

xiii. It reveals the causes of consumer resistance.

xiv. It minimises the risks of uncertainties and helps in taking sound decisions.

xv. It reveals the nature of demand for the firm’s product. That is, it indicates whether the demand for the product is constant or seasonal.

xvi. It is helpful in ascertaining the reputation ofthe firm and its products.

xvii. It helps the firm in determining the range within which its products are to be offered to the consumers. That is, it is helpful in determining the

sizes, colours, designs, prices, etc., of the products of the firm.

xviii. It would help the management to know how patents, licensing agreements and other legal restrictions affect the manufacture and sale of the firm’s products.

xix. It is helpful to the management in determining the actual prices and the price ranges.

xx. It is helpful to the management in determining the discount rates.

xxi. It is helpful to the management in ascertainingthe price elasticity for its products.

xxii. It helps the firm in knowing the marketing andpricing strategy of competitors.

xxiii. It is helpful in knowing the general conditions prevailing in the mark

xxiv. It is helpful to the management in finding outthe size of the market for its products.

xxv. It helps the firm in knowing its market share over various time periods

xxvi. It is quite helpful to a firm in launching a new product.

xxvii. It helps the firm in knowing the transportation, storage and supply requirements of its products.

xxviii. It helps the firm in exploring new uses for its existing products and thereby, increasing the demand for its products.

xxix. It is helpful to a firm in making sales forecasts for its products and thereby, establishingharmonious adjustment between demand and supply of its products.

xxx. It helps the firm in exploring new markets for its products.

Limitations of Marketing Research:1. It is not a Panacea:Marketing Research is not the ultimate solution to all marketing problems. Rather it offers accurate information, which can arrive at suitable decisions to solve problem.

2. Not an exact science:It deals with human behaviour and as such cannot be examined in a controlled environment. There are various and uncontrollable factors which influence marketing forces. This gives scope for wrong conclusions. Hence this leads to marketing research as not being an exact science.

3. Limitation of time:Its process is lengthy and needs long time to complete it. During the period between starting the research and implementation of decisions, the situation and assumptions may have changed drastically which reduces the utility of research report. Decisions based on such report prove to be obsolete and result in false conclusions.

4. Erroneous findings:The complicated problems may not be comprehensively studied and their impact properly analysed by the researcher on account of insufficient fund, time andtechnique. This leads to erroneous findings, which disappoint the management.

5. Not an exact tool of forecasting:It cannot be used as a foolproof tool of forecastingbecause there are number of intervening factors between the findings of the research and marketing complex. The forces act and react and interact to give a complex state, which is difficult to be studied.

6. In experienced research staff:It needs great expertise and well-trained and experienced researcher, interviewer and investigator.

7. Narrow Conception:

Marketing research is a fact-finding exercise. It isnot problem oriented. It is of low and questionable validity.

8. Involves high cost:It is considered as a luxury for the management as it involves high cost.

9. Limitations of tools and techniques:The validity of marketing research is also limited by the limitation of tools and techniques involved.

10. It is passive:Its use and effectiveness largely depends upon the ability of executives to get the most value of it.

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Benefits and limitations of SWOT analysisPrint this page

In this guide:1. SWOT analysis 2. Uses of SWOT analysis 3. Benefits and limitations of SWOT analysis4. Tips for a successful SWOT analysis 5. Conducting a SWOT analysis 6. Example SWOT analysis Print entire guide

A SWOT (strengths, weaknesses, opportunities and threats) analysis canhelp you identify and understand key issues affecting your business, but it does not necessarily offer solutions. You should be aware of the limitations as well as the benefits of a SWOT analysis before you decide to conduct one. Knowing what you can reasonably expect to

achieve will make the SWOT analysis more useful for your business, andwill save you time. Ultimately, you must be prepared to spend the timeto review your SWOT analysis and use it to determine the best way forward in your business.

Benefits of SWOT analysisThe main advantages of conducting a SWOT analysis is that it has little or no cost - anyone who understands your business can perform aSWOT analysis. You can also use a SWOT analysis when you don't have much time to address a complex situation. This means that you can takesteps towards improving your business without the expense of an external consultant or business adviser.Another advantage of a SWOT analysis is that it concentrates on the most important factors affecting your business. Using a SWOT, you can:

understand your business better address weaknesses deter threats capitalise on opportunities take advantage of your strengths develop business goals and strategies for achieving them.

Limitations of SWOT analysisWhen you are conducting a SWOT analysis, you should keep in mind that it is only one stage of the business planning process. For complex issues, you will usually need to conduct more in-depth research and analysis to make decisions.

Keep in mind that a SWOT analysis only covers issues that can definitely be considered a strength, weakness, opportunity or threat. Because of this, it's difficult to address uncertain or two-sided factors, such as factors that could either be a strength or a weaknessor both, with a SWOT analysis (e.g. you might have a prominent location, but the lease may be expensive).

A SWOT analysis may be limited because it:

doesn't prioritise issues doesn't provide solutions or offer alternative decisions can generate too many ideas but not help you choose which one is

best

can produce a lot of information, but not all of it is useful.https://www.business.qld.gov.au/business/starting/market-customer-research/swot-analysis/benefits-limitations-swot-analysis