burberry harvard case
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GROUP 2ABurberry Case
The story so far…1856: Thomas Burberry in Basingstoke, UK
1914-18: Supplied trench coats to British Army1920s: Burberry check pattern introduced
1955: Great Universal Stores bought Burberry1970s-80s: Licensing agreements across
categories1990s: Company starts facing strategic issues
1997 : Rose Marie Bravo steps in as CEO
The Rose Marie Bravo Effect
Transform Burberry from outwear manufacturer to luxury brand
Recruitment of people with hands-on experience
Change of name, logo and packaging
Immediate Measures
Positioned the brand between cutting-edge fashion and classics
Aspirational as well as functional Represent accessible luxury
Repositioning The Brand
New product line - bandanas, miniskirts and spike heeled boots
Three Primary Collections
Revamping the Brand
► Outerwear, casualwear, tailored garments, swimwear and underwearWomen’s wear
► Tailored suits, raincoats, trousers and shirtsMen’s wear
► Soft accessories - scarves, shawls, ties► Hard accesso scarves, shawls, ties ries :leather
bags, umbrellas, timepieces, eyegear, women’s shoes
Accessories
PORTFOLIO EXPANSION
Low price segment:Thomas Burberry etc.
► Thomas Burberry available in Spain and Portugal
► Burberry Blue and Black in Japan
High price segment: Burberry Prorsum
► Hand tailored products from innovative fabrics
► Positioned as a luxury brand for fashion conscious people
► Promoted at major fashion weeks
Issues to Tackle
Product Categories Popularity of brand among Non-target
Consumers◦ Promotion Strategies
Role of the “Check” Sustainability of the Brand Positioning
◦ Existing vs New Strategy (proposed)
Product Categories
Mn pound % Mn pound % Mn pound % Mn pound %By product CategoryWomenswear 63.4 28.1 17.8 134.7 31.5 42.4 165.2 33.1 54.7 197.9 33.3 65.9 269.9Menswear 73.8 32.7 24.1 142.4 33.3 47.4 149.4 29.9 44.7 162.8 27.4 44.6 84.8Accessories 50.2 22.2 11.1 98.0 22.9 22.4 125.8 25.2 31.7 169.5 28.6 48.5 335.0Other 7.5 3.3 0.2 6.9 1.6 0.1 5.3 1.1 0.1 5.1 0.9 0.0 -81.5License 30.8 13.7 4.2 45.8 10.7 4.9 53.5 10.7 5.7 58.3 9.8 5.7 35.4
% change over 20012000 2001 2002 2003
Product Categories- The Numbers
Major focus on (in order of priority)◦ Accessories
Max. % increase in sales coupled with Max. margin
◦ Women’s Wear◦ Men’s Wear
Phasing out the licenses◦ Removes issue of counterfeiting◦ Focus on the core areas
Complete disbanding of the products in other category (fabrics and misc.)
Analysis of the Numbers
Womenswear Menswear Accessories Licensed Products ChildrenswearOuterwear Outerwear Handbags Fragnance OuterwearKnitwear Knitwear Hats Eyewear KnitwearCasualwear Tailored garments Shoes Time Pieces SportswearTailored garments Sportswear Belts & Wallets ChildrenswearSwimwear Undergarments Luggage Men's tailored clothingUnderwear Large Leather goods
UmbrellasSilk ScarvesShoesTiesWatchesSunglassesBeauty Products
Product Categories- The New Products(Product Mix)
Expand vigorously in Accessories segment◦ Only 4% share of the market (5th in Luxury
segment)◦ Introduction of the new products – eats into share
of the competitors thus automatically increasing share.
Diverge into children wear segment to increase the share in the apparel segment◦ Only 3% stake in the market (2nd in Luxury
segment)◦ Launch sports line (jackets etc.)
Recommendations
Place(Channels of distribution)
• Asian Markets (e.g. India, China etc.)• Retailers (choose them after careful scrutiny)
• Problem of counterfeiting• Maybe one or two flagship stores (initially in a country)• Start with Tier I and Tier II cities (posh markets)
UK and US market Focus on the flagship stores & directly operated stores Continue the current strategy of acquisitions of distributors
PromotionIssues
► Only 3% of sales (~ 98mn EUR) being spent on advertisements
► Asian and other Markets (with low penetration)
Proposed Strategy
► Adopt aggressive promotion strategy in the European and US market (rope in new models)
► For the Thomas Burberry use local advertising channels
► Rope in big stars(with big referent power) to attract markets
► For Tier II cities use local advertising channels
Popularity of brand among Non-target ConsumersPromotion Challenges
Popularity of Brand among Non-Target Customers
Issues
► Targeting non-target customers
Problem of Counterfeiting
Opportunity
► Burberry achieving aspirational status among youth
Challenge
► Prevent alienation of core customers while targeting new customers
Strengthen the Thomas Burberry brand◦ Caters to the aspirational youth vying for high end
fashion◦ Flanker brand to the Burberry brand
Promotion◦ Proper promotion
Local media (No national TV)◦ Proper distribution
Retailers (after proper scrutiny)
Recommendations
Role of the “Check”
“Check”
In the clothing line only 40% of the products did not use the check (and the sales increased)
In the apparels section 60% to 70% sales were check The check design is mainly targeted to the female
consumers Inhibition to use the check by the male consumers
Current Situation
Attribute Positioning of the Check
Male
Check
► Perception of feminity and hence a degree of dissonance
Non Check
► More in sync with the male macho image
► More adaptable to the men's-wear line
► Goes well with this category due to the perceived feminity
► Seemingly indifferent
Female
Re-launch the Burberry brand in the menswear segments with a less subtle expression of the check
Keep a high end fashion “check” line intact for the core customers (who associate Burberry with check)
Gradually phase out check (in the other lines) as it limits design options
In the Accessories segment e.g. perfume bottles, beauty products etc. stress on “check”
Strategy for milking the “check”
Sustainability of Brand Positioning
Sustainability of Brand Positioning(current scene)
• Comfortably nestled between • Lifestyle (represented by Ralph Lauren) &• High end Fashion products (represented by Gucci)
• In the Accessories and some Men’s apparels• High end brand in women’s wear and most of men’s apparels
Issues
► High end customers gravitating towards discount warehouses
Opportunity
► Middle Income people shopping at luxury retailers
Challenge
► Integrating the high end and the mid segment customers with a product line (different)
Issues and the Current/Proposed Strategy
Issues
► High End Brands launching a product in the lower category to compete with Burberry.
► Low Prices brands like launching a brand in the Burberry segment
Existing /Proposed Solution
► The existing Burberry brand is priced such that it takes care of the competition
► Strengthen the low end brand of Burberry (e.g. Burberry London)
• Will serve as a flanker brand.
• Will cater to the younger and comparatively less affluent.
PLC
Time
Sale
s
Introduction
Growth
Maturity
Decline
Pioneering
Competitive Comparative
Imposing “Time Premium” for fashion◦ Introduce new fashion in the Prorsum brand◦ After a time, introduce them in the Burberry brand
and after that in theThomas Burberry brand
Advantages◦ Extended life cycle of the product resulting in◦ Higher revenues
Recommendations
THANK YOU
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