INNOVATIVE MARKETING &COMMUNICATIONS AT BURBERRY
AUTHENTIC BRITISH HERITAGE“From its founding in 1856, Burberry has become the leading British luxurybrand globally.The brand is defined by:• Britishness• Authentic outerwear heritage• Historic icons: the trench coat, trademark check and Prorsum knight logo• Democratic luxury positioning• Innovation and intuition” (Burberryplc.com)In 1914 Burberry ‘trench coat’ was born & the Burberry Check was introducedas a lining 1920s. The trench coat and the Burberry check are now globallyrecognised in line with their prorsum horse logo.
MARKETING SUCCESS/FAILURESFAILURES• Brand “Hijacking”: SUCCESS Association with hooligan and “chavs” • Regaining control of the• Counterfeits brand: buying back the• Spanish operation business - Spain • China & moving into other emerging markets – India/ Brazil • Brand differentiation • Innovative technology
CURRENT STRATEGYMarketing Innovation1. Launched new Burberry.com site2. Extended luxury leadership position in social media3. Continued transformation of fashion shows4. Further digitisation of the brandStrategy & Mission, Burberry 2010/11, Burberry plc.com
CURRENT MARKET• Increase of 5.4% in value of retail sales from last year• Increase of 0.9% in sales volumes from last year• Average online weekly spend increased to £561.5 million in October 2011 compared with £518.7 million in September 2011• Retail accounted for 64%• 32% growth in retail• 26 new stores open worldwide this year
COMPETITOR ANALYSISCompetitor Market Strategy Target Market Strength WeaknessRalph Lauren Magazines, Middle & Multiplex Lack of first rate merchantainme upper brand design nt, technology segment, youthGucci Limited Middle & Established Instability in quantity, upper class, brand image & management & endorsement, hip international fashion base expensive presencePrada Exclusivity, Middle & High prices, High prices, product upper brand loyalty, availability differentiation, segment, brand quality pioneers fashion
SWOT ANALYSISSTRENGTHS WEAKNESSESPrestigious brand name & heritage Overexposure of the brand – ‘chav’ perception & 3rd partyInternational presence distribution in 2005Controlled distribution channels Rapid growth adding pressure to the supply chain &Product design, quality & range resourcesDigital leader Dependency on wholesale to department storesExclusive luxury market sector & pricing Dependency of ICT due to a large focus on social mediaCelebrity endorsement Limited target market due to the brands price strategyOPPORTUNITIES THREATSFranchises, further stores/concessions Counterfeit goodsSponsorships & celebrity endorsement CompetitorsInvestment & growth in emerging markets (China etc) Economic climate& new markets (Eygpt, Armenia, Isreal, Mongolia). Operating in emerging volatile v marketsFurther e-commerce & marketing development Consistency of standards (3rd parties/channels)New product development (seasonal designs)
PORTERS 5 FORCES• Buyers: buyer power is not strong due to the substitution• Substitute product: competitor apply• Suppliers: distribution hub changed.• New entrants: capital investment, economies scale.• Industry rivalry: take over the market share for competitor
CRITIQUE OF PORTERS 5 FORCES• Personal situation too complex• Environment has changed• Economic crisis• Globalization and competitors• Technology developed, internet shopping
PESTPOLITICAL ECONOMIC Current global economic climateRetail tax (VAT) economic cycle/ raise and fall in each countryEmployment law – minimum wage, working Reduced disposable income of consumerconditions, hours etc (Consumption capacity)Manufacturing restrictions – CSR Global market – exchange ratesTrade restrictions CPI for target country imports and exports rate –target countrySOCIAL TECHNOLOGICALdemography / geography Social medialower disposable income E-commerce/websiteVaried fashion preference globally Online promotionsVarious culture/value Digital market/innovateBritish image/acceptability
BOSTON MATRIX MARKET SHARE High Low High Women’s wear Luxury JewelleryMARKETGROWTH Low Luxury Glasses Men’s Luxury Belts
BOSTON MATRIX CRITIQUE• Linkbetween market share and profitability isquestionable• Ignores the potential of declining markets• Assumes each business unit is independent of others• Too simplistic• Only one indicator and measureOverall, it is too simplistic to be used on its own.However, it does give an indication of whereaboutsproducts are in the market and the best ways to moveforward.
MARKETING OBJECTIVESA design, marketing & retail led company (Angela Ahrendts, 2010):-• Increase sales by 10%• Increase online conversion by 15%• 5% Growth in new & emerging markets• Reinforce the heritage of the brand & regain trust• Continue to excel as a digital leader
MARKETING & COMPETITIVE STRATEGYMarketing Strategy - Ansoffs MatrixCurrent Market – market penetration Product• Digital Current New• Celebrity endorsement Market ProductNew markets – Diversification Current Penetration Development• Diversified growth• NPD• Enter new markets MarketConcentric diversification – same Marketbrand, new market Development DiversificationSpreads risk - economy NewStrengthen financial positionCompetitive Strategy• Market leader – digital• Market challenger - goods
MARKET SEGMENTATION• Competitive industry from discount brands to haute couture• Exclusive and luxury• Historic icons• Art of the trench website was a social media site launched in 2010• Aimed at the younger audience• Face of Burberry – Emma Watson• Connection to British roots• Appeal to a broad audience• She appeals to a number of demographics
MARKET SEGMENTATIONPalmer and Millier (2004) provided a framework forthe considerations of segmentation.Who buys• Lifestyle – Luxurious• Fashion aware• Sex – menswear expanded• Stage of the family lifecycle – no childrenWhat is bought and why• Benefits to the customer• Perceptions – how the brand is seen• Customer loyalty• Price sensitive – bespoke, luxury brand
TARGET MARKETTRENCH• Iconic piece• Originally for Forces• Reinvention• Younger audience• Celebrity endorsement• artofthetrench.com• Burberry AcousticTarget• Young professional 18 - 30• Large amount of disposable income• Fashion conscious
POSITIONING• Consistent and positive regarding the productTrenchartofthetrench.com, social media siteBurberry BespokeOuterwear heritageClassicIconic luxuryDistinctively British
MARKETING MIXProduct• Womenswear, menswear, Non apparel, childrenswear, home• Bespoke Price• High quality, exclusive luxury • Physiological - Prestige pricing• NPD – seasonal • Limited discounting• Burberry branding – logo/check Young, profes • Exclusive - high GP• Limited availability sional, exclusi ve luxury, classic PromotionPlace ally British • Digital – burberry.com & various• Flagship stores & Concessions social media• Short channel structure (P-C/P-R- • Competitive advertising C) with full management • Advertising media – TV, Magazines• Digital - Burberry.com & various • Joint promotions –Harrods social media channels • Sponsorships – HOYS etc• New store openings in new & emerging markets
CRITIQUE OF THE 4 P’SWaterschoot (1999) highlights a number of problems with the mix…1. “it focuses on what marketers do to customers rather than for them”2. “it is externally directed & ignores the internal market”3. “it says nothing about interactions between the mix variables”4. “it takes a mechanistic view about markets”5. “ it assumes transactional exchange rather than a relationship” (Baker, 2007)In 1981 Booms and Bitner challenged the marketing mix, introducing the 7 P’s(price, product, place, promotion, participants, physical evidence, process)which is viewed as more comprehensive, defined and detailed than the 4Psmodel and provides a broader perspective including people (Rafiq &Pervaiz, 1995).
CRITIQUE OF THE 4 P’SProcess• Efficient standardised sales process Physical evidence• High quality customer service (personal • Clean, modern, brand Participants/people shopping) standard store layout• Clear online across all retail avenues • Highly trained & navigation, with timely • Changing knowledgeable & efficient online sales facilities, mirrors to aid employees - added transactions the sales process value• Visual shortcuts to sales • Products to be as they • Fit brand – aesthetically platforms appear online or in • After sales support –• SAP order systems advertisements refunds/exchanges/ • Branded packaging & advice receipts • Logo on all POS
WHY DIGITAL?There are FIVE main benefits of e-marketing:1. Sales growth2. Added value3. Get closer to the customer4. Save costs5. Extend the brand onlineSummarised as the 5 S’s – Sell, serve, speak, save & sizzle. (Caffey, 2008)• Burberry Facebook has over 9 million likes with Facebook itself having over 800 million users• Burberry Twitter has over 600 thousand followers with 100 million users• There are 8 million viewers on YOUTUBE• Burberry has 11 thousand 12 million people use LinkedIn
IMPORTANCE OF SHARINGhttp://mashable.com/social-media/
LINKEDIN• Burberry employees, job vacancies & those with interest in the company• Professionals & networkers• Sponsored advertisement s & sharing facility• Example sponsored ad - target high salaried, fashion sector who follow the company, have job titles such as director, corporate, manager etc. Share information from website to LinkedIn hits target market – young professional’s
BURBBERY.COM &ARTOFTHETRENCH.COM• SEO, rich & varied content, design fits purpose, clear navigation, visual shortcuts, interactive design process.• Online exclusives, become more social RSS/twitter feeds (widgets), YouTube sharing, blogs, data capture functionality, strategic & affiliate marketing, LinkedIn sharing, mobile application• Social media only works if people are using it & sharing information• People who use social media applications on their phones are twice as active as non users• Application development will increase usage of artofthetrench.com• Application development of Burberry.com will increase sales
MEASUREMENT OF OBJECTIVES • Benchmark digital performance against the competition & using analytics • Top line sales • Online sales & conversion • Market share • Brand perception & loyalty
RECOMENDATIONS• Continue to invest in new & emerging markets in order to reduce risk.• Produce a mobile application for the artofthetrench.com to increase awareness & burberry.com to increase sales. Also targeting a young fashion conscious market.• Link all digital marketing tools together to make sharing easier across all platforms. Cover all social media channels in order to remain a digital leader.• Seasonal new product development & product diversification in order to reach new markets & retain customer loyalty.
REFERENCESBurberry Plc. (2011) Corporate profile – overview [online] cited 01/12/11, Availablefrom, http://www.burberryplc.com/bbry/corporateprofile/overview/Burberry Plc. (2011) Strategy & Mission 2010/11 [online] cited 01/12/11, Availablefrom, http://www.burberryplc.com/bbry/corporateprofile/strmis/Barnett, Emma (2011) Burberry, Angry Birds and Mumsnet launch first Google+ brand pages [online] cited01/12/11, Available from,http://www.telegraph.co.uk/technology/google/8874657/Burberry-Angry-Birds-and-Mumsnet-launch-first-Google-brand-pages.htmlMohammed Rafiq, Pervaiz K. Ahmed, (1995) "Using the 7Ps as a generic marketing mix: an exploratory survey of UK andEuropean marketing academics", Marketing Intelligence & Planning, Vol. 13 Iss: 9, pp.4 – 15Facebook (2011) Burberry [online] cited 01/12/11, Available fromhttp://www.facebook.com/profile.php?id=554295458&ref=tn_tnmn#!/burberryTwitter (2011) Burberry [online] cited 01/12/11, Availablefrom, http://www.facebook.com/profile.php?id=554295458&ref=tn_tnmn#!/burberryLinkedIn (2011) Burberry [online] cited 01/12/11, Available fromhttp://www.facebook.com/profile.php?id=554295458&ref=tn_tnmn#!/burberryYouTube (2011) Burberry [online] cited 30/11/11, Availablefrom, http://www.youtube.com/user/Burberry?blend=1&ob=4
REFERENCESTechland Times [online] cited 1/12/11. Available from:http://techland.time.com/2011/09/09/twitter-reveals-active-user-number-how-many-actually-say-something/Office of National Statistics [online] cited 1/12/11. Available from:http://www.ons.gov.uk/ons/rel/rsi/retail-sales/october-2011/stb-october-2011.htmlBurberry plc Finances [online] cited 1/12/11. Available from:http://www.burberryplc.com/bbry/newsrel/finnews/2011/2011-11-15/2011-11-15.pdf
BIBLIOGRAPHYBunz, Mercedes (2009) Burberry checks out crowdsourcing with The Art of the Trench [online] cited 01/12/11, Availablefrom, http://www.guardian.co.uk/media/pda/2009/nov/09/burberry-art-of-the-trenchBonnerville, K (2010) Burberry launches commerce-enabled iPad application, Luxury Daily [online] cited 04/12/11, Availablefrom http://www.luxurydaily.com/burberry-streams-fashion-week-live-enables-ecommerce-via-ipad-app/OPPAPERS.COM Burberry Investigative Report And Competitors. [online] cited 20/11/11, Available from:http://www.bing.com/search?q=burberry+competitors&src=IE-SearchBox&FORM=IE8SRCWarc Burberry case study [online] cited 30/11/11, Available from: www.Warc.comBurberry World strategy and mission [online] cited 28/11/11 Available from:http://www.burberryplc.com/bbry/corporateprofile/strmis/Max-Adler.net Critical review of Porters five forces. [online] cited 28/11/11, Available from: http://www.max-adler.net/porters-five-forces-critical-review.htmlBBC News business Burberry fashion brand reports 40% profit rise. [online] cited 27/11/11 Available from:http://www.bbc.co.uk/news/business-13557085West D, Ford J, Ibrahim E. Strategic Marketing. Creating Competitive Advantage (2010). 2nd Edition. New York, OxfordUniversity Press.