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1. Executive summary
This report summarizes the results of the research made on Burberry Company as the result of
examination of the text provided and study of the range of book recourses on marketing
2. Introduction
The purpose of this report is to show the result of the research on Burberry Company, its Marketing Mix
variables, different segmentation methods and targeting principles they use, environmental factors
affecting the marketing affecting the company in addition to the usage of digital marketing tools and
linking these factors to the theory knowledge obtained from the range of resources.
3. Results of the research on Burberry Company
3.1. Marketing Mix of Burberry Company
Obviously, the research on the Marketing Mix that Burberry offers will help understand both
environmental factor and segmentation strategy that the company uses. Kotler and Armstrong (2007)
define the marketing mix as the range of "controllable tactical marketing tools", which include product,
price, place and promotion. Megicks and Blythe (2010) also add that a company have to produce
adequate mix of these 4Ps to reflect the needs and the wants of the targeted markets. Therefore, the
analysis of the marketing mix of Burberry should be done first, to further understand at which market it
is targeted and what segmentation methods it is employing.
3.1a. Product
Product, as Kotler and Armstrong (2007) define, is tangible or often intangible object, or mix of them,
offered to the customers. As for 2010 Burberry offers women’s, men's and children’s wear, in addition
to the shoes, perfumes and accessories such as handbags, leather goods and scarves, within Burberry
Prorsum, Brit and London collections. The company is mostly famous and associated with its legally
protected black, tan and red check and trench coats and jackets. The new shift was made as the part of
the development of Burberry Brit collection, now the company offers the range of less conservative,
urban products focused on young people. The product life cycle patterns are increasingly changing, the
brand, especially fashion one, has to be maintained by the increased numbers of novelties and new
products (Rath et al., 2008). As the result of this, another change in Burberry that is coming in force is
the increase of the number of annual collections from two to eight to strengthen the competitive
advantages of the brand. As the result of the analysis of the text, it can be concluded that company is
not only offering merely the high-quality clothing and other products, but also unique "Anglo-Saxon
style" with 150-year history, in addition to the high quality service, which is now offered not only in the
stores (as Luxury Institute suggests) but also through the online.
3.1b. Price
Concerning the Price, Burberry is considered as luxury (premium in Spain and Japan) brand with the
large price differentiation between the Prorsum, Brit and London collection, one example is the price of
£1,895 and £895 for the similar jackets in Prorsum and Brit collections respectively. The analysis if the
text shows that the prices for Burberry production are in the middle or even starting points in the luxury
and premium markets. The performance of the company shows that the market positively reacted on
further price differentiation and going to the broader market.
3.1c. Place
According to Kotler and Keller (2008), the place part of marketing mix as the system of delivering the
service or goods from the place of production to the customer. Therefore, the supply chain, distribution
system and intermediates of Burberry should be analyzed to show the "Place" factor. As for 2010,
Burberry operated globally with 139 retail stores, while retail accounted for about 58% and whore for
34% of revenue. The considerable changes were implemented in this field recently, with the reallocation
of the manufacturing capacity, focusing on emerging markets, further expanding the US market,
reforming the Japanese are and introduction of SAP-led efficiency programme. The latter one
significantly improved the supply chain and logistics within Burberry, consolidating distribution centres,
drastically reducing the price of delivering goods, and emphasising the e-commerce opportunities. In
addition, the new 'Runway to Reality' approach allowed decreasing the period of delivery from runway
from six month to seven weeks, significantly increasing the satisfaction of customers, while helping in
better understand their needs.
3.1d. Promotion
Promotion is the range of combination flows that company delivers to the customers, including
advertising, public relations, personal selling and sales promotion, as Armstrong and Kotler (2007)
explain. Burberry employs an array of these possibilities, including conventional advertisement, Prorsum
collection wearing by celebrities, and other PR campaigns. Choosing Emma Watson as the face of the
company is considered to be successful promotion measure too. Sales promotions were heavily used
during the time of crisis, with 50-60% rather than more usual 20-30% in the period of economic growth.
Another important step is going online, Burberry has moved 25 percent of its global advertising spend to
digital media with different Activities ran on online press and social networks.
3.2. Marketing Environment of Burberry Company
Evidently, nowadays every company, especially such fashion company as Burberry, should match and its
product range with the marketing environment, reflecting the changes in both micro and macro
environment spheres (Burns and Bryant, 2007). These changes results in opportunities and threats, as
Grewal (2008) and Palmer (1999) examples with the range of the cases of companies’ inevitable failure
as the result of the prolonged ignoring of the environmental changes. There is a separation of the
environmental factors on micro and macro ones (Oldroyd, 2006)
3.2a. Micro environmental factors
The micro environmental factors are those which directly or closely influence the company’s ability to
satisfy the needs of the customers (Kerin et al, 2008). This includes the company's internal environment,
suppliers, marketing intermediaries, competitors and various publics, including the customers
themselves.
Competition is an important environmental factor since "the competition is increasing in this sector"
with such fashion houses as Chanel, Gucci and Luis Vuitton, taking into account their movement to the
"broader market". The competitors of Burberry often has the advantages in greater financial and other
resources, thus the company should put the efforts into developing and promoting its competitive
advantages to sustain the growth of sales, as Rath (2008) shows.
The public opinion of the brand is very important for fashion companies, including Burberry. For
example, the management of the company take a range of measures to decrease the linkage between
Burberry brand, especially its famous check, with hooliganism. This is mainly done through the struggle
against Burberry counterfeiter production via lobbying the range of the rules and restrictions and
maintaining the special internationally operating team to "to register, protect and enforce its trade
marks and other intellectual property rights...through a mixture of criminal and civil legal action and
negotiated settlement"
Media coverage and particularly “editorial impact in fashion magazines” is crucial for fashion brands, as
an important micro environmental factor for the companies in the industry (Rath, 2008). Burberry is
proved to be effective in this field with featuring on 270 magazine covers, as the result of PR effect of
employing Watson as the face of the brand and young celebrities wearing the Burberry production, as
well as the launch of Burberry Acoustic and taking advantages of internet social platforms.
Burberry's performance depends largely on its senior managers and design teams. The resignation of
key individuals or the inability to recruit individuals with the relevant talent and experience to enable
future business growth could adversely impact Burberry's performance. Thus, proper hiring and
retaining talented designers and managers are required, as Burns and Bryant (2007) suggest.
Effective cooperation suppliers and marketing intermediates help to deliver the correct products to the
customer at lower prices, without any delay. The company took steps in the development of inventory
and supply chain management, including the introduction of new IT tools (i.e. SAP-led efficiency
programme) in this sphere, which resulted in lower transportation and warehousing costs. To add, the
restructure of the range of operation activities, such as reshaping distribution centres, the transfer of
manufacturing capacity and restructure of Spanish operations also altered the micro environment of the
company.
3.2b. Macro environmental factors
On the other hand, the macro environmental factors are mainly related to the changes in the cultural,
demographic, economic, natural, political, and technological spheres, thus they are usually not
controllable by the actions of company, though the company must to react on the changes in these
spheres to succeed (Kotler and Armstrong, 2007; Pride and Ferrecell, 2008). The economic factor is one
of the most important in the macro economic sphere; because it includes such crucial variables as
economic condition in different regions, thus change in spending patterns, in addition to the fluctuation
of the exchange rate, as Pride and Ferrecell (2008) add.
For example, Burberry, as the part of the global luxury market, was exposed to the economic downturn,
particularly in Spain and USA, the countries mostly impacted by the crisis. However, the following
economic recover affected the performance of the company, in addition to the fact that premium
closing sector was less damaged by the recession, and Burberry is planning to expand into fast-
developing emerging markets such as China, India, Middle East and Brazil. The fluctuation of exchange
rate are also weighty, for instance, the recent successful performance of the company was partly linked
to the weak pound. But, the drastic alterations in the future exchange rates between the Pound and
Euro, US Dollar and particularly Yen, in which the considerable amount of Burberry profits from its Japan
comes, will evidently affect the financial performance of the company.
Government regulations, tax policy and political environment are also important factors for Burberry,
since the company will be affected by the next year's VAT increase, change in UK government policy in
addition to the political and regulatory unpredictability in the emerging markets.
3.3. Segmentation methods positioning principles of Burberry
Burberry's production is not a mass product; it is targeted to specific market segments regarding the
psychographic, demographic, behaviour and other features of the possible consumers, as Kotler and
Keller (2008) explain. As the part of evaluating different market segments at which it should target, the
Burberry should take into account the attractiveness of the possible segments and company's capacity,
as they suggest. This analysis is affected by such factors as that are measurability, accessibility, and
substantiality and action ability (Kerin, et al, 2008).
3.3a. Psychographic segmentation
Kotler and Armstrong (2007) define the psychographic segmentation as the segmentation aimed at
particular groups based on social class, lifestyle or personality characteristics, the income thus is also
important. As the Burberry is "positioned in the middle of the luxury market", linked between "lifestyle
(Ralph Lauren) and fashion (Gucci)", the company targets at the consumers from upper-middle to luxury
market, especially considering the division of the production on different levels. The first level is
presented by "Burberry Prorsum", the high-fashion designing and the most expensive, while the
Burberry Brit, the "casual week end wear section" and Burberry London are targeted to broader market.
3.3b. Demographic and geographic segmentation
Concerning the demographic segmentation, Ms. Ahrendts is sure that Burberry is attractive "to both
genders and all ages", and the sources of revenues confirm this assertion. However, it should be noted,
that the analysis of marketing and advertising campaign of Burberry show that the company desires to
appeal to the young people, or for those who want to look younger. In addition, despite of the high
regard of the brand by both male and females, there is a distinction in the consumer patterns between
them, especially concerning the spending patterns during economic turmoil and recovery. To add,
Burberry should pay special attention to the children’s wear market, which is unrealized opportunity for
Burberry. The behaviour positioning is also well-planned in Burberry, since the brand is considered as
the one having "Authentic British heritage and unique democratic positioning within the luxury arena".
The behaviour segmentations is somehow correlated with the geographic one, with Asian and emerging
market expecting the feel of "unreconstructed Englishness" from the brand. Another fact, that should be
noted as regard of geographic segmentation, is that the Burberry brand is recognized as premium rather
than luxury brand in two of the main markets; Spanish and Japanese ones. Moreover, the Spanish
market also shown that the costs of geographic segmentation, thus maintaining exclusive collection, are
not resulting in expected outcomes for Burberry, therefore it was replaced with the line of clothes that
is offered globally
3.3c. Further product delineation
One of the measures, that helped to succeed, and raise the sales in the hard period was increasing the
product delineation, especially between Burberry London, more causal and Burberry Brit more tailored
collection range of the products. The reason why this step is considered to be promising is that Burberry
will be able to attract younger consumer, expand to new growth categories, such as jeans, with their
Burberry Brit, while retaining conservative consumers, who seek the iconic check and Britishness from
Burberry London. Burberry has to choose the best market segments from these points, evaluating its
growth characteristics and size, as. This measure is particularly proper considering the fact that as the
result of economic downturn, consumers of luxury and premium brands often mix, or even switch to
mid-market items. This measure will also allow entering the broader market, as the establishment of the
first standalone boutique fully dedicated to "more affordable, sporty range" of Burberry Brit, where the
casual wear and denim were presented.
3.4. Burberry’s use of digital marketing tools
Scott (2010), Chaffey (2009) and Roberts (2007) describe advantages of employing digital marketing
tools, such as low costs, selling and collecting payment online opportunities, opportunities for sustaining
the affiliate systems, viral potential of promoting activities, opportunities for quick adaptation to new
moods and needs of consumers and creating the value by the customers themselves. However, as all of
the sum up, the disadvantages include risk of over sophistication of the system and tight competition,
the viral potential of bad reaction of the audience, requirement for very quick adaptation and labour
intensity, overwhelming of skills and knowledge required for system’s functioning and inconvenience for
conservative customers.
Many luxury goods companies were not able to create the adequate system of online sales, as well as
the social media network, as Burns (2009) and Chuffey (2009) suggests. Considering the fact that luxury
goods companies have not been responding to these new requirement of digital era, Burberry
management decided to shift 25 percent of its global advertising spend to digital media to expand the
under penetrated market with the perspectives of high growth.
Therefore Burberry tried to create "the seamless link between the physical and digital presence of the
Burberry brand, responding to the direction of retailing as an increasingly multichannel proposition",
achieving 60% growth in e-commerce this year. The social network campaign, with more 700,000 fans
on Facebook, 1.2 million Twitter comments, social networking website artofthetrench.com and Burberry
Youtube channel in addition to the range of iPhone apps and 'Runway to Reality' concept is proved to be
successful in terms of the number of visitors and increase of the revenues.
4. Conclusion and recommendations
It would be recommended to make further research on the Burberry Company, their marketing strategy
and competitive positions to better understand the theory knowledge obtained from the numerous
sources. The research, however, was very helpful in understanding the marketing theories and concepts
and relating them to the real situations and environment.
Bibliography
Burns, L.D. and Bryant. N.O., 2007. The Business of Fashion: Designing, Manufacturing, and Marketing,
3rd ed. Fairchild Pubns.
Blythe J. and Megicks P., 2010. Marketing Planning: Strategy, Environment and Context. Financial Times
Management
Burns A.C. and Bush R.F., 2009. Marketing Research, 6th ed. Prentice Hal
Chaffey D. et al., 2009. Internet Marketing: Strategy, Implementation and Practice, 4th ed. Prentice Hall.
Grewal D., 2008. M: Marketing. McGraw-Hill.
Kerin R., Hartley S. and Rudelius W., 2008. Marketing, 9th ed. McGraw-Hill/Irwin.
Kotler, P. and Armstrong G., 2007. Principles of Marketing, 12th ed. Prentice Hall.
Kotler P. and Keller., 2008. Marketing Management, 13th ed. Prentice Hall
Oldroyd M., 2006. CIM Coursebook 06/07 Marketing Environment. Butterworth-Heinemann.
Palmer A. et al., 1999. The Business and Marketing Environment, 3rd ed. McGraw-Hill Publishing Co.
Pride W.P. and Ferrecell O.C., 2008. Marketing, 14th ed. South-Western College Pub.
Rath P., et al., 2008. The Why of the Buy: Consumer Behavior and Fashion Marketing. Fairchild Pubns
Roberts M. L., 2007. Internet Marketing: Integrating Online and Offline Strategies, 2nd ed. Atomic Dog.
Scott D.M., 2010. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases,
Online Video, and Viral Marketing to Reach Buyers Directly, 2nd ed. Wiley
Bibliography
Burns, L.D. and Bryant. N.O., 2007. The Business of Fashion: Designing, Manufacturing, and Marketing,
3rd ed. Fairchild Pubns.
Blythe J. and Megicks P., 2010. Marketing Planning: Strategy, Environment and Context. Financial Times
Management
Burns A.C. and Bush R.F., 2009. Marketing Research, 6th ed. Prentice Hal
Chaffey D. et al., 2009. Internet Marketing: Strategy, Implementation and Practice, 4th ed. Prentice Hall.
Grewal D., 2008. M: Marketing. McGraw-Hill.
Kerin R., Hartley S. and Rudelius W., 2008. Marketing, 9th ed. McGraw-Hill/Irwin.
Kotler, P. and Armstrong G., 2007. Principles of Marketing, 12th ed. Prentice Hall.
Kotler P. and Keller., 2008. Marketing Management, 13th ed. Prentice Hall
Oldroyd M., 2006. CIM Coursebook 06/07 Marketing Environment. Butterworth-Heinemann.
Palmer A. et al., 1999. The Business and Marketing Environment, 3rd ed. McGraw-Hill Publishing Co.
Pride W.P. and Ferrecell O.C., 2008. Marketing, 14th ed. South-Western College Pub.
Rath P., et al., 2008. The Why of the Buy: Consumer Behavior and Fashion Marketing. Fairchild Pubns
Roberts M. L., 2007. Internet Marketing: Integrating Online and Offline Strategies, 2nd ed. Atomic Dog.
Scott D.M., 2010. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases,
Online Video, and Viral Marketing to Reach Buyers Directly, 2nd ed. Wiley

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Marketing Mix of Burberry Company 2011

  • 1. 1. Executive summary This report summarizes the results of the research made on Burberry Company as the result of examination of the text provided and study of the range of book recourses on marketing 2. Introduction The purpose of this report is to show the result of the research on Burberry Company, its Marketing Mix variables, different segmentation methods and targeting principles they use, environmental factors affecting the marketing affecting the company in addition to the usage of digital marketing tools and linking these factors to the theory knowledge obtained from the range of resources. 3. Results of the research on Burberry Company 3.1. Marketing Mix of Burberry Company Obviously, the research on the Marketing Mix that Burberry offers will help understand both environmental factor and segmentation strategy that the company uses. Kotler and Armstrong (2007) define the marketing mix as the range of "controllable tactical marketing tools", which include product, price, place and promotion. Megicks and Blythe (2010) also add that a company have to produce adequate mix of these 4Ps to reflect the needs and the wants of the targeted markets. Therefore, the analysis of the marketing mix of Burberry should be done first, to further understand at which market it is targeted and what segmentation methods it is employing. 3.1a. Product Product, as Kotler and Armstrong (2007) define, is tangible or often intangible object, or mix of them, offered to the customers. As for 2010 Burberry offers women’s, men's and children’s wear, in addition to the shoes, perfumes and accessories such as handbags, leather goods and scarves, within Burberry Prorsum, Brit and London collections. The company is mostly famous and associated with its legally protected black, tan and red check and trench coats and jackets. The new shift was made as the part of the development of Burberry Brit collection, now the company offers the range of less conservative, urban products focused on young people. The product life cycle patterns are increasingly changing, the brand, especially fashion one, has to be maintained by the increased numbers of novelties and new products (Rath et al., 2008). As the result of this, another change in Burberry that is coming in force is the increase of the number of annual collections from two to eight to strengthen the competitive advantages of the brand. As the result of the analysis of the text, it can be concluded that company is not only offering merely the high-quality clothing and other products, but also unique "Anglo-Saxon style" with 150-year history, in addition to the high quality service, which is now offered not only in the stores (as Luxury Institute suggests) but also through the online.
  • 2. 3.1b. Price Concerning the Price, Burberry is considered as luxury (premium in Spain and Japan) brand with the large price differentiation between the Prorsum, Brit and London collection, one example is the price of £1,895 and £895 for the similar jackets in Prorsum and Brit collections respectively. The analysis if the text shows that the prices for Burberry production are in the middle or even starting points in the luxury and premium markets. The performance of the company shows that the market positively reacted on further price differentiation and going to the broader market. 3.1c. Place According to Kotler and Keller (2008), the place part of marketing mix as the system of delivering the service or goods from the place of production to the customer. Therefore, the supply chain, distribution system and intermediates of Burberry should be analyzed to show the "Place" factor. As for 2010, Burberry operated globally with 139 retail stores, while retail accounted for about 58% and whore for 34% of revenue. The considerable changes were implemented in this field recently, with the reallocation of the manufacturing capacity, focusing on emerging markets, further expanding the US market, reforming the Japanese are and introduction of SAP-led efficiency programme. The latter one significantly improved the supply chain and logistics within Burberry, consolidating distribution centres, drastically reducing the price of delivering goods, and emphasising the e-commerce opportunities. In addition, the new 'Runway to Reality' approach allowed decreasing the period of delivery from runway from six month to seven weeks, significantly increasing the satisfaction of customers, while helping in better understand their needs. 3.1d. Promotion Promotion is the range of combination flows that company delivers to the customers, including advertising, public relations, personal selling and sales promotion, as Armstrong and Kotler (2007) explain. Burberry employs an array of these possibilities, including conventional advertisement, Prorsum collection wearing by celebrities, and other PR campaigns. Choosing Emma Watson as the face of the company is considered to be successful promotion measure too. Sales promotions were heavily used during the time of crisis, with 50-60% rather than more usual 20-30% in the period of economic growth. Another important step is going online, Burberry has moved 25 percent of its global advertising spend to digital media with different Activities ran on online press and social networks. 3.2. Marketing Environment of Burberry Company Evidently, nowadays every company, especially such fashion company as Burberry, should match and its product range with the marketing environment, reflecting the changes in both micro and macro environment spheres (Burns and Bryant, 2007). These changes results in opportunities and threats, as Grewal (2008) and Palmer (1999) examples with the range of the cases of companies’ inevitable failure as the result of the prolonged ignoring of the environmental changes. There is a separation of the environmental factors on micro and macro ones (Oldroyd, 2006) 3.2a. Micro environmental factors The micro environmental factors are those which directly or closely influence the company’s ability to satisfy the needs of the customers (Kerin et al, 2008). This includes the company's internal environment,
  • 3. suppliers, marketing intermediaries, competitors and various publics, including the customers themselves. Competition is an important environmental factor since "the competition is increasing in this sector" with such fashion houses as Chanel, Gucci and Luis Vuitton, taking into account their movement to the "broader market". The competitors of Burberry often has the advantages in greater financial and other resources, thus the company should put the efforts into developing and promoting its competitive advantages to sustain the growth of sales, as Rath (2008) shows. The public opinion of the brand is very important for fashion companies, including Burberry. For example, the management of the company take a range of measures to decrease the linkage between Burberry brand, especially its famous check, with hooliganism. This is mainly done through the struggle against Burberry counterfeiter production via lobbying the range of the rules and restrictions and maintaining the special internationally operating team to "to register, protect and enforce its trade marks and other intellectual property rights...through a mixture of criminal and civil legal action and negotiated settlement" Media coverage and particularly “editorial impact in fashion magazines” is crucial for fashion brands, as an important micro environmental factor for the companies in the industry (Rath, 2008). Burberry is proved to be effective in this field with featuring on 270 magazine covers, as the result of PR effect of employing Watson as the face of the brand and young celebrities wearing the Burberry production, as well as the launch of Burberry Acoustic and taking advantages of internet social platforms. Burberry's performance depends largely on its senior managers and design teams. The resignation of key individuals or the inability to recruit individuals with the relevant talent and experience to enable future business growth could adversely impact Burberry's performance. Thus, proper hiring and retaining talented designers and managers are required, as Burns and Bryant (2007) suggest. Effective cooperation suppliers and marketing intermediates help to deliver the correct products to the customer at lower prices, without any delay. The company took steps in the development of inventory and supply chain management, including the introduction of new IT tools (i.e. SAP-led efficiency programme) in this sphere, which resulted in lower transportation and warehousing costs. To add, the restructure of the range of operation activities, such as reshaping distribution centres, the transfer of manufacturing capacity and restructure of Spanish operations also altered the micro environment of the company. 3.2b. Macro environmental factors On the other hand, the macro environmental factors are mainly related to the changes in the cultural, demographic, economic, natural, political, and technological spheres, thus they are usually not controllable by the actions of company, though the company must to react on the changes in these spheres to succeed (Kotler and Armstrong, 2007; Pride and Ferrecell, 2008). The economic factor is one of the most important in the macro economic sphere; because it includes such crucial variables as economic condition in different regions, thus change in spending patterns, in addition to the fluctuation of the exchange rate, as Pride and Ferrecell (2008) add. For example, Burberry, as the part of the global luxury market, was exposed to the economic downturn, particularly in Spain and USA, the countries mostly impacted by the crisis. However, the following economic recover affected the performance of the company, in addition to the fact that premium closing sector was less damaged by the recession, and Burberry is planning to expand into fast-
  • 4. developing emerging markets such as China, India, Middle East and Brazil. The fluctuation of exchange rate are also weighty, for instance, the recent successful performance of the company was partly linked to the weak pound. But, the drastic alterations in the future exchange rates between the Pound and Euro, US Dollar and particularly Yen, in which the considerable amount of Burberry profits from its Japan comes, will evidently affect the financial performance of the company. Government regulations, tax policy and political environment are also important factors for Burberry, since the company will be affected by the next year's VAT increase, change in UK government policy in addition to the political and regulatory unpredictability in the emerging markets. 3.3. Segmentation methods positioning principles of Burberry Burberry's production is not a mass product; it is targeted to specific market segments regarding the psychographic, demographic, behaviour and other features of the possible consumers, as Kotler and Keller (2008) explain. As the part of evaluating different market segments at which it should target, the Burberry should take into account the attractiveness of the possible segments and company's capacity, as they suggest. This analysis is affected by such factors as that are measurability, accessibility, and substantiality and action ability (Kerin, et al, 2008). 3.3a. Psychographic segmentation Kotler and Armstrong (2007) define the psychographic segmentation as the segmentation aimed at particular groups based on social class, lifestyle or personality characteristics, the income thus is also important. As the Burberry is "positioned in the middle of the luxury market", linked between "lifestyle (Ralph Lauren) and fashion (Gucci)", the company targets at the consumers from upper-middle to luxury market, especially considering the division of the production on different levels. The first level is presented by "Burberry Prorsum", the high-fashion designing and the most expensive, while the Burberry Brit, the "casual week end wear section" and Burberry London are targeted to broader market. 3.3b. Demographic and geographic segmentation Concerning the demographic segmentation, Ms. Ahrendts is sure that Burberry is attractive "to both genders and all ages", and the sources of revenues confirm this assertion. However, it should be noted, that the analysis of marketing and advertising campaign of Burberry show that the company desires to appeal to the young people, or for those who want to look younger. In addition, despite of the high regard of the brand by both male and females, there is a distinction in the consumer patterns between them, especially concerning the spending patterns during economic turmoil and recovery. To add, Burberry should pay special attention to the children’s wear market, which is unrealized opportunity for Burberry. The behaviour positioning is also well-planned in Burberry, since the brand is considered as the one having "Authentic British heritage and unique democratic positioning within the luxury arena". The behaviour segmentations is somehow correlated with the geographic one, with Asian and emerging market expecting the feel of "unreconstructed Englishness" from the brand. Another fact, that should be noted as regard of geographic segmentation, is that the Burberry brand is recognized as premium rather than luxury brand in two of the main markets; Spanish and Japanese ones. Moreover, the Spanish market also shown that the costs of geographic segmentation, thus maintaining exclusive collection, are not resulting in expected outcomes for Burberry, therefore it was replaced with the line of clothes that is offered globally
  • 5. 3.3c. Further product delineation One of the measures, that helped to succeed, and raise the sales in the hard period was increasing the product delineation, especially between Burberry London, more causal and Burberry Brit more tailored collection range of the products. The reason why this step is considered to be promising is that Burberry will be able to attract younger consumer, expand to new growth categories, such as jeans, with their Burberry Brit, while retaining conservative consumers, who seek the iconic check and Britishness from Burberry London. Burberry has to choose the best market segments from these points, evaluating its growth characteristics and size, as. This measure is particularly proper considering the fact that as the result of economic downturn, consumers of luxury and premium brands often mix, or even switch to mid-market items. This measure will also allow entering the broader market, as the establishment of the first standalone boutique fully dedicated to "more affordable, sporty range" of Burberry Brit, where the casual wear and denim were presented. 3.4. Burberry’s use of digital marketing tools Scott (2010), Chaffey (2009) and Roberts (2007) describe advantages of employing digital marketing tools, such as low costs, selling and collecting payment online opportunities, opportunities for sustaining the affiliate systems, viral potential of promoting activities, opportunities for quick adaptation to new moods and needs of consumers and creating the value by the customers themselves. However, as all of the sum up, the disadvantages include risk of over sophistication of the system and tight competition, the viral potential of bad reaction of the audience, requirement for very quick adaptation and labour intensity, overwhelming of skills and knowledge required for system’s functioning and inconvenience for conservative customers. Many luxury goods companies were not able to create the adequate system of online sales, as well as the social media network, as Burns (2009) and Chuffey (2009) suggests. Considering the fact that luxury goods companies have not been responding to these new requirement of digital era, Burberry management decided to shift 25 percent of its global advertising spend to digital media to expand the under penetrated market with the perspectives of high growth. Therefore Burberry tried to create "the seamless link between the physical and digital presence of the Burberry brand, responding to the direction of retailing as an increasingly multichannel proposition", achieving 60% growth in e-commerce this year. The social network campaign, with more 700,000 fans on Facebook, 1.2 million Twitter comments, social networking website artofthetrench.com and Burberry Youtube channel in addition to the range of iPhone apps and 'Runway to Reality' concept is proved to be successful in terms of the number of visitors and increase of the revenues. 4. Conclusion and recommendations It would be recommended to make further research on the Burberry Company, their marketing strategy and competitive positions to better understand the theory knowledge obtained from the numerous sources. The research, however, was very helpful in understanding the marketing theories and concepts and relating them to the real situations and environment.
  • 6. Bibliography Burns, L.D. and Bryant. N.O., 2007. The Business of Fashion: Designing, Manufacturing, and Marketing, 3rd ed. Fairchild Pubns. Blythe J. and Megicks P., 2010. Marketing Planning: Strategy, Environment and Context. Financial Times Management Burns A.C. and Bush R.F., 2009. Marketing Research, 6th ed. Prentice Hal Chaffey D. et al., 2009. Internet Marketing: Strategy, Implementation and Practice, 4th ed. Prentice Hall. Grewal D., 2008. M: Marketing. McGraw-Hill. Kerin R., Hartley S. and Rudelius W., 2008. Marketing, 9th ed. McGraw-Hill/Irwin. Kotler, P. and Armstrong G., 2007. Principles of Marketing, 12th ed. Prentice Hall. Kotler P. and Keller., 2008. Marketing Management, 13th ed. Prentice Hall Oldroyd M., 2006. CIM Coursebook 06/07 Marketing Environment. Butterworth-Heinemann. Palmer A. et al., 1999. The Business and Marketing Environment, 3rd ed. McGraw-Hill Publishing Co. Pride W.P. and Ferrecell O.C., 2008. Marketing, 14th ed. South-Western College Pub. Rath P., et al., 2008. The Why of the Buy: Consumer Behavior and Fashion Marketing. Fairchild Pubns Roberts M. L., 2007. Internet Marketing: Integrating Online and Offline Strategies, 2nd ed. Atomic Dog. Scott D.M., 2010. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers Directly, 2nd ed. Wiley
  • 7. Bibliography Burns, L.D. and Bryant. N.O., 2007. The Business of Fashion: Designing, Manufacturing, and Marketing, 3rd ed. Fairchild Pubns. Blythe J. and Megicks P., 2010. Marketing Planning: Strategy, Environment and Context. Financial Times Management Burns A.C. and Bush R.F., 2009. Marketing Research, 6th ed. Prentice Hal Chaffey D. et al., 2009. Internet Marketing: Strategy, Implementation and Practice, 4th ed. Prentice Hall. Grewal D., 2008. M: Marketing. McGraw-Hill. Kerin R., Hartley S. and Rudelius W., 2008. Marketing, 9th ed. McGraw-Hill/Irwin. Kotler, P. and Armstrong G., 2007. Principles of Marketing, 12th ed. Prentice Hall. Kotler P. and Keller., 2008. Marketing Management, 13th ed. Prentice Hall Oldroyd M., 2006. CIM Coursebook 06/07 Marketing Environment. Butterworth-Heinemann. Palmer A. et al., 1999. The Business and Marketing Environment, 3rd ed. McGraw-Hill Publishing Co. Pride W.P. and Ferrecell O.C., 2008. Marketing, 14th ed. South-Western College Pub. Rath P., et al., 2008. The Why of the Buy: Consumer Behavior and Fashion Marketing. Fairchild Pubns Roberts M. L., 2007. Internet Marketing: Integrating Online and Offline Strategies, 2nd ed. Atomic Dog. Scott D.M., 2010. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers Directly, 2nd ed. Wiley