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Strategic Brand Management: Bottega Veneta in China

This is the project that our group prepared to assess the management of a luxury Italian brand in Chinese market. It includes a brief survey, inventory analysis in the local context, as well as the analysis and recommendations to enhance the brand's activities, which will benefit the brand equity in long term of the brand without damaging the brand image. The goal is to "translate" the language of the brand to convey the messages and preserve the importance of craftsmanship, connection with lifestyle, and the symbolism among Chinese consumers.

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Strategic Brand Management: Bottega Veneta in China

  1. 1. BOTTEGA VENETA “When your own initials are enough”
  2. 2. TABLE OF CONTENTS Introduction market analysis brand inventory: brand elements & secondary associations brand inventory: existing 4ps pods + pops brand exploratory brand resonance mm recommendations conclusion
  3. 3. o  founded in 1966 as a leather goods house o  known for its signature “intrecciato”, a unique weaving pattern created by the bottega veneta craftsmen COMPANY BACKGROUND o  acquired by the house of brands, kering, in 2001. o  currently headed by creative director, tomas maier
  4. 4. o regained its footing in the industry by returning to its original identity o fastest growing brand in kering COMPANY BACKGROUND o bottega veneta handbags contributed to 85% of its revenue, driving record profits o china was the best performing market even though only entered the market in 2007
  5. 5. BOTTEGA VENETA IN CHINA 41 outlets in china even distributed amongst the first, second and third- tier cities largest flagship store located in shanghai which serves as a concept store known as to the locals, its chinese name was unveiled on its weibo page in 2013
  6. 6. 1 2 Rise of the upper and middle class -  More noticeable in the second and third-tier cities -  Greater disposable income and growing purchasing power Changes in local tastes and preferences -  Preference towards discreet brand designs -  Emphasis on local craftsmanship and culture (E.g. Shang Xia) LUXURY BAG TRENDS
  7. 7. 43 Increased spending outside china -  Import tariffs and higher pricing strategies -  Currency fluctuations and rising middle class -  Sales in Europe rose 29% while revenues in Japan jumped 26% Promotion of brand heritage -  Immersion into brand culture -  Interest in history, heritage and product quality of brand LUXURY BAG TRENDS
  8. 8. 5 Luxury brands taking to e- commerce -  Fall in growth of luxury bags industry -  Move to online platforms help reach a wider audience -  45% of online consumers purchased most of their luxury items online LUXURY BAG TRENDS
  10. 10. “venetian shop” symbolizing origins from vicenza, italy bǎo nurture preserve the youth forever dié butterfly beauty and femininity jiā home “venetian shop” BRAND NAME
  11. 11. philosophy of individuality and confidence never uses bold logos, secondary lines and celebrity endorsements discreet luxury for self assured consumers who do not feel the need to “wear someone else’s name” “when your own initials are enough”
  12. 12. unique artisan technique of weaving leather synonymous with brand “non-logo” logo attempts to copy by other designers but bottega’s quality and precise craftsmanship remains unrivalled not only bags but almost every bottega product INTRECCIATO
  13. 13. o  pivotal character o  saved company from brink of bankruptcy o  brought brand back to life o  designed many of bottega’s iconic bags TOMAS MAIER o  founded artisan school to perpetuate traditions o  devised ways to make sure that brand kept strictly to its brand identity yet continue to attract consumers
  14. 14. BRAND ELEMENT Criterion Brand Name Brand Mantra Intrecciato Tomas Maier Memorability x x ✓ x Meaningfulness ✓ ✓ ✓ ✓ Likability ✓ ✓ ✓ ✓ Transferability ✓ ✓ ✓ ✓ Adaptability ✓ ✓ ✓ ✓ Protectability ✓ ✓ x x
  16. 16. bottega veneta made in italy transfer quality high specialization elegance quality artisans specializing in intrecciato elegance COUNTRY OF ORIGIN
  17. 17. •  held 3 exhibitions in shanghai so far •  latest one was ‘facing faces’ •  to protect local culture & help young artists grow •  convey connection to local culture and boost brand image ART SPONSORSHIP
  18. 18. Bottega Veneta Art Exhibitions TRANSFER chinese credibility (reputable artists) intellectual theme classic artisan intrecciato design heritage of 49 years since 1966 sophistication european contemporary art ART SPONSORSHIP
  19. 19. each season, a different guest photographer/artist is invited to shoot an ads campaign given free rein to interpret, capture and communicate the brand’s creations, injecting own art & story into the ads “ART OF COLLABORATION”
  20. 20. bottega veneta photographers & artists transfer aesthetic individual unique storytelling creativity classic designs “when your own initials are enough” innovation “ART OF COLLABORATION”
  21. 21. waitanyuan: a renowned commercial area peppered with splendid buildings that have layers of rich history dating back to the early 20th century that is now undergoing redevelopment, aiming to revamp to become the 21st century landmark of sophistication deeply associated with cultural and fashion concepts largest concept store in china located in one of the preserved historical buildings in waitanyuan leverage on waitanyuan’s rich history and culture, further adding to the brand’s artistic image
  22. 22. Bottega Veneta Waitanyuan TRANSFER Colonial style buildings Rich cultural history Commercial district “Venetian Shop” Luxury Heritage of 49 years since 1966 LOCATION OF STORES
  24. 24. “stealth wealth”: category of rich people, who are less inclined to flaunt their affluence, thus, giving only subtle hints about the wealthiness
  25. 25. product: handmade, exquisite design & materials, aesthetics, empowerment, lifestyle price: signal of luxury, higher margin in china In china: weak link to lifestyle, insufficient augmented product externalities/tariffs, growing demand, brand image maintenance
  26. 26. place: unique store concept, landmark locations promotion: visual ads, experiential, website & social outlets underleverage of social media tools, lack of world expo succession events, “lost in translation” omni-channel strategy is not exploited in china (no online shopping)
  28. 28. Competitive frame of reference •  Premium luxury category; Avg. Product Price Range up to US$5,000
  29. 29. Competitive frame of reference •  Quantitative Research on 40 Chinese Luxury Consumers •  Important Purchase Dimensions: Craftsmanship & Exclusivity •  Main Competitors: Gucci, Celine, Fendi, dior Craftsmanship (artisanal) Exclusivity Accessible Mass-produced
  30. 30.   BRAND ELEMENT SECONDARY ASSOCIATIONS POP HIGH LEVEL OF CRAFTSMANSHIP & USING FINEST MATERIALS       (=) sophisticated consumers are discerning and premium luxury brands must offer products of artisanal quality; ex. Gucci embraces her hand-crafted legacy of producing 100% of the products in Florence workshops EXCLUSIVE DISTRIBUTION CHANNELS     (=) tightly-controlled distribution network of directly operated boutiques, exclusive franchise stores & strictly selected department/specialty stores worldwide; ex. in China, both BV and Celine will slow down the pace of store openings but expand the shop spaces COUNTRY OF ORIGIN: “MADE IN ITALY”   ✓ (=) “marriage of masterful design and artisan technique”; synonym of “elegance”, “sophistication” & “desirability”; ex. Celine (France) opened a leather goods factory in Florence, Italy to leverage on secondary association POINTS OF PARITY
  31. 31.   BRAND ELEMENT SECONDARY ASSOCIATIONS POD BRAND MANTRA: “WHEN YOUR OWN INITIALS ARE ENOUGH”   ✓   (+) integrating brand mantra into PRD designs; unlike other premium luxury brands, BV’s products wetn logoless that exudes timeless elegance and sophistication  “ART OF COLLABORATION”     ✓ (+) strategic collaborations in advertising;   BV invites different photographers & artists in each ad campaign to interpret the brand, BV = “work of art” EXTENSIVE PRODUCT PORTFOLIO   (+) leverages on expertise in leather craftsmanship to extend into home collection ; provides greater variety to sophisticated consumers, allows them to immerse in luxurious lifestyle experience POINTS OF DIFFERENCE
  32. 32. bv positions itself as a premium luxury bag brand, targeting the upmarket, individualistic and sophisticated consumers who seek timeless elegance and a luxurious lifestyle experience BRAND POSITIONING
  34. 34. secondary research: 1)  online interviews with tomas maiers and marco bizzari 2) online report by cnbc BRAND EXPLORATORY main findings: o  sophisticated global consumers with confidence & personal style; o  upmarket individuals willing to pay a premium for craftsmanship of bv handbags. o  “louis vuitton has become too ordinary”, prefers brands like bv due to “exclusivity”.
  35. 35. on a group of 40 consumers to assess consumer’s awareness, perception and attitude QUANTITATIVE RESEARCH “select all of the luxury bag brands that they have heard of before in the list” bottega veneta: 67%, below the median score of 85% of 27 luxury bag brands listed. 0 10 20 30 40 50 Louis Vuitton Chanel Prada Bottega Veneta T.O.M Recall (%) “name the first three luxury bag brands that come to your mind”
  36. 36. top reasons for purchase: o  high level of craftsmanship in products top reason for non-purchase: o  inability to identify with the brand QUANTITATIVE RESEARCH reason for purchase or non-purchase of bv handbags
  37. 37. “list the words that comes to your mind when you hear bottega veneta” WORD ASSOCIATION TEST “high-quality” “venice” “weaving” “exclusive” “expensive”
  38. 38. weaving logoless understated durable craftsmanship expensive MENTAL MAP: FUNCTIONAL
  39. 39. BOTTEGA VENETA sophistication luxurious lifestyle elegance discreet soft obscure MENTAL MAP: SYMBOLIC
  41. 41. Which of the following luxury bag brands have you heard of before? SALIENCE low brand awareness
  42. 42. •  shunned away from celebrity endorsements and display of a visible logo •  country of origin: italy •  BV initials project –  introduced in china –  increased engagement with the brand –  expression of individuality and uniqueness •  brand personality: ‘discreet’, ‘confidence’, ‘individuality’ ‘ sophistication’ IMAGERY
  43. 43. o discreet yet recognizable through design o credible and trustworthy brand dedication to artisanal production reliability inscribed in all kering brands o consistent delivery of extraordinary craftsmanship through specialised school that trains leather artisans skills to perfecting intrecciato weaving understanding the heritage of artisan production “i like bv because of the craftsmanship behind the brand” JUDGEMENTS 3 1 2 5 11 12 6 Strongly disagree Strongly agree
  44. 44. •  evokes more personal and enduring feelings •  self respect – pride themselves with the craftsmanship and heritage due to brand’s commitment to stick to artisanal origins – personal satisfaction and self regard •  low levels of social approval – lack of conspicuous logo – self assured consumers “bv gives me a sense of social approval” “bv gives me a sense of self respect” FEELINGS 5 4 5 6 8 5 7 Strongly disagree Strongly agree 12 9 8 3 4 3 1 Strongly disagree Strongly agree
  45. 45. •  behavioral loyalty – low repeat purchases •  disengaged community – unique individual expression of style and lack of interactive social media platforms impede affiliation with other users associated with the brand •  lack of active engagement – relationships after purchase are not sustained – lack of platforms for interaction with brand after purchasing product “I will buy as much of BV as I can” “i feel a deep connection with those who uses BV’s bags” RESONANCE 18 5 7 4 2 2 2 Strongly disagree Strongly agree 17 9 8 2 3 1 0 Strongly disagree Strongly agree
  47. 47. additional elements like warranty & repair services contribute to overall value perceived by customers PRODUCT: WARRANTY, REPAIR issues: no warranty for bv bags proposal: offer warranty or repair services
  48. 48. exhibitions -  trend of chinese consumers emphasizing brand heritage PRODUCT: EDUCATING & HOSTING CUSTOMERS VIA EXTENDED SHOP SPACE -  exhibitions leverage on the trend, where chinese consumers value brand heritage -  exhibitions to educate, increasing brand knowledge
  49. 49. hosting top tier customers -  utilize exhibition space for exclusive previews -  enhance customer service -  reinforce positioning - “luxury lifestyle experience” PRODUCT: EDUCATING & HOSTING CUSTOMERS VIA EXTENDED SHOP SPACE
  50. 50. e-commerce o  rise of e-commerce in china o  luxury brands slow to establish their e-commerce o  bv has competency in this area - online store available in 48 countries o  proposal: o  introduce e-commerce services PLACE
  51. 51. 1)  artists and photographers 2)  co-branding PROMOTION: COLLABORATIONS
  52. 52. fly hnwi consumers to the main workshop in florence, italy o  interactive tour o  know more about the production processes and methods of making a bv bag o  customers customizing their own bag PROMOTION: EXPERIENTIAL MKT 1 - bv yet to establish resonance - targeted at bv’s top tier customers
  53. 53. cocktail parties o  build a community around the brand PROMOTION: EXPERIENTIAL MKT 2 - bv yet to establish resonance - targeted at bv’s top tier customers
  54. 54. o  targeted at consumers in general o  inspiration station o  fashion advice, write reviews of bv products, engage in online discussions with fellow community members PROMOTION: ONLINE UGC PLATFORM o  generate more keywords, better seo o  improve brand awareness, establish r/s with customers
  55. 55. Only 10 percent of Chinese consumers are satisfied with the service of luxury retailers in China Top reasons - staff with limited knowledge of the products (China Luxury Forecast, 2014) PEOPLE “More than any other communications medium, employees can breathe life, vitality, and personality into the brand.” (Leonard L. Berry and A. Parasuraman, Marketing Services: Competing Through Quality)
  56. 56. PEOPLE 1 2 reinforcing brand mantra via staffs’ self-expression staff training
  57. 57. THANK YOU FOR YOUR ATTENTION lim chee yang, lim xue ying, sharon lim yu-zhen, tan sheng liang, tracy seet hui li, victoria paskannaya
  58. 58. design by icons from inspired by “yves” by tugcu design co.