(Name of your Institution)
Bibliography 16
Brand Analysis: Marketing and Communication Strategy - Dior
1.Introduction
Fashion industry is indefinite and multilateral in respect of beauty of colors, fragrance and apparel. The report is going to discuss the French based fashion brand DIOR – part of Louis Vuitton Moet Hennessy, the world largest luxury group. We shall discuss in brief; the company’s background along with its achievements, challenges and future scope in the fashion industry. The main focus of our discussion would be the Brand Analysis, which will include the marketing, communication and brand strategies adopted by Dior to reach its potential customer .
The report will highlight different models of marketing such as SWOT (Strength, Weakness, Opportunity and Treat) and PESTLE (Political, Economic, Social, Technological, Environmental and Legal), Communication and Branding strategy of Dior expanded along with time, industry and customer requirements. It will help us understand the practical application of theories in a different scenario existing in real circumstances.
1.1Background of DIOR
French Designer Christian Dior established its first set up as a private house on 16th December 1946, at 30 Avenue Montaigne Paris B; the official set up year followed by the organization is as 1947. To assist Christian Dior potential, Marcel Boussac an influential and wealthy businessman had extended financial support. The set up known as couture house became a vital part of an influential and well settled textile business that was already operated by Boussac with an initial capital of 6 million and 80 employees as workforce. Christian Dior along with his expertise and vision to beautify every possible opportunity introduced new style and cuts in apparel design, much known for its narrowed and soft shoulders, skirts as corollas, full busts and waists as narrow as lianas. Its first show took place in 1947 with six girls in Paris.
1.2 Company’s Current Profile
Dior today is managed by its creative director Mr. Raf Simson from 2012 onwards across 210 locations of the world. The company is known for designing and manufactures ready-to-wear, footwear, fashion accessories, perfumes, make-up, jewelry, watches, skin care products etc. It has a workforce of 84,981 employees with 3,204 outlets all over the world with more than 13% share in the global fashion industry .
With a Turnover of €5.3 billion including of 17% Skin Care share, 35% Makeup and 48% Fragrance share in the industry.
Figure 1: Dior’s Market Share for each category
Dior Financial Report (2013) indicates the revenue of the company in 2010, 2011, 2012 and 2013 with respect of the industry. According to the company’s recent data, the total revenue of the company is €1100.00 million with respect to the industry that is € 3600.00 million in the year 2013.The operating profit is at 15.43% along with Net profitability at 8.36 and Profit ratio at 11.97% as informed by the company officials and statistics.
2. SWOT Analysis
A focused strategy is extremely important for any organization; it ensures that the given resources are optimally utilized to achieve sustainable growth. The strategy is designed to meet market need along with the goals of the organization. They are dynamic and uniquely interactive in nature. In order to format a strategy is required to have marketing analysis at place (Keller, 2006). Market Analysis can be performed by studying the both internal and external environment of the industry as well as the company to frame a suitable roadmap for an organization Therefore; we’ll here discuss the SWOT for Dior to understand both its internal and external environment.
2.1 Strength
Dior is a top luxury brand with a strong history and has been a strong player in the fashion industry since long. It is counted as one of the top brands for lots of its products with high quality parameters with a strong focus on fashion trends. Trends are introduced and followed by Dior is popular worldwide because of its great designers and strong brand values. It has a strong presence in all most all high end luxury stores in the world. The customer loyally is very high as its customer find all the possible range of products starting from apparel, watches, perfumes, cosmetics, accessories, ski care, makeup etc.
Dior has an excellent strategy placed for advertising and marketing to reach it desired segment. Being at the heart of the fashion industry i.e. Paris has been a major advantage for Dior. Also, it is a source of inspiration for many similar brands for continuous innovation and high end products. To keep the quality standards high, best qualified manpower and upper management is in place at Dior which ensuring high industry standards as well. It supports young fashion designers and artist work .
2.2 Weaknesses
The company has a presence in the limited market being a highend brand, and its high priced products make its segment narrow and skewed, unlike its few other competitors. Though Dior is hugely popular among women for its product line but it’s equally unpopular for men products. It also has difficulty in maintaining its brand image in different countries with different cultures. The replicas created using its name in the market are another problem to differentiate the originality and also hamper its image sometimes.
2.3 Opportunities
It is important for Dior to expand its market presence to reach large numbers of customers all across globe. It can even develop e-commerce to penetrate the markets unexplored, along with that the company has a huge scope to invest largely in the men industry which is not fully explored till date. More technological advancement must be planned by Dior to meet economies of scale, so that markets such as China can be fully utilized.
2.4 Threat
The major threat that can be faced by Dior is from no one other than its highend competitors such as GUCCI, CHANNEL, LOUIS VUITTON, ARMANI, etc which hold similar product line, markets and ideology. There are new companies emerging in the same market with easy substitutes to its products is another problem to maintain its profitability and sustainability.
3. Marketing Analysis by using PESTEL
This model of marketing analysis helps in describing the macro environmental factors used in environmental scanning component of strategic management. It comprises of Political, Economic, Social, Technological, Environmental and Legal factors which covers the placement of a company and identify areas of actions.
3.1 Political Factors
Changes in European Union have let the tariff decline which has a direct effect on the import and export numbers of Dior products. The expansion plan of opening new stores across the continent has got affected; bringing new challenges for Dior. It has even reduced price for some of its products to meet its competitor level and has plans to expand in Asian market in near future.
3.2 Economic condition
During the economic crises in USA during 2008-09 the economic condition of the company was also affected with the constant fall in exchange rate up till 12%. Even with the economic bent down of Japan the company has faced poor sales growth and reduced margins. Besides that the sale in Middle East countries and China held very strong during that period which let Dior have strategy of future growth in the developing markets of the world.
3.3 Social Factors
Socially Dior has a strong history of popularity and contribution in styling the culture and design all across the world. It has been known for its best quality products & design since ages and has been respected by many admirers even today .
3.4 Technological Factors
In order to meet competition Dior has explored different areas of investment and product innovation under his brand name. Dior got its watch designed by John Galliano and Victoire de Castellane in 2005; this had a major impact on the trend of Dior’s Fashion style. It wasn’t easy to get it accepted by Women as a brand for watches at that time; the move was strong yet risky for the company’s image. Similarly, the company collaborated with Mode Labs to manufactures a cell phone handset which it named as ‘My Dior.’ The handset was extremely expensive with 2 mp camera, multimedia goodies and a touch screen. These technological initiatives as let Dior exploit new markets and product for its customers.
3.5 Environmental and Legal Factors
Christian Dior is a legally formed private company, registered on the stock exchange with no fraud ever recounted on its name. It has followed all the government regulations with respect to the fashion and cosmetic industry even since its evolution.
4. Dior’s image as a Brand
Dior is a French brand known for its highend products and excellent quality in the fashion industry since 1947. The vision for Christian Dior the originator of Dior was to seek beauty to live up to the expectations of the most sophisticated, sexy and elegant women in the world .
Starting with the colour used such as Black, White and Grey is basic in nature are very much even maintained today and thought classy. High end fabrics such as Silk, worsted wool, gorgeous embroidery products, etc. Since its inception, it has been promoting femininity and glamour with heritage print.
4.1 Brand Positioning
The competitor frame of reference would include brands in the same or related category to identify the right placement and conception for it whereas; point of parity refers to the values shared by the competitor and the brand itself. When compared to its competitors like Louis Vuitton, Gucci, Versace, Armani - apparel style, fragrances and price are point of reference because all are on the different lines. On the other hand beauty, sophistication and high society standards are points of parity.
Target Customer - The target segment for Dior includes females, males and kids with high social status as well as high budget. The customer with high taste, standard of living and high shopping budget are preferred for brand promotion.
ChristianDior.com is the epitome of fashionable fabulousness. Each of the sub-brands is addressed visually and verbally in accordance to its own distinct brand identity. It is a brand with true international presence; customers and clients all across the world can view the site in French, English and Chinese. Each area launches an optimized screen for maximum visual impact, while a guitar riff blares and a colorful Dior logo serves as a placeholder during a relatively quick site load. On the site the area where Jewelry is displayed is a strong example of Dior embodying its brand mystique, both in visual presentation as well as in content. The Dior logo appears in diamonds.
Brand Image is classic, elegant, romantic, trendy, and feminine among its customers.
4.2 Competitors to Dior
Dior has many competitors in different product line, but some of the high end competitors are GUCCI, LOUIS VUITTON, CHANEL, SAINT LAURENT, PRADA, ARMANI, etc..
5. Communication Strategy
Communication is an important tool to reach company’s potential customers . A correct communication strategy needs to be at place for passing on its message and catering to the demands of the customers. Dior has below communication strategy adopted for brand establishment and recognition.
5.1 Advertisement
Print ads in Magazines and newspapers create huge awareness about the brand and especially media ads, where models’ wearing the Dior brand has created a space in the minds of the target buyers . Dior being a luxury brand has a market for high end product which is targeting the high income group. Therefore, people involved in a high class social circle are extremely cautious of what they are wearing according to different occasions. Social media today has become a powerful media to reach customer of varied taste, class and income group. It’s important to identify channels on which the media ads must be played and along with magazines read by high society class.
5.2 Exhibition
Organizing exhibitions in order to display company’s product or launch a new line of product is an old yet, very useful way to reach one’s potential customer. During exhibitions, these companies get a chance to interact with their customers freely that is not possible on a retail outlet, have feedback on their products and know their competitors product line .
Figure 2: Communication Mix for Dior
These exhibitions are the central place were the demand and supply meet for different brands and product line. Along with product knowledge it also enhances the customer preference, brand image and encourage first time customers to try new brands and style.
5.3 Direct Marketing
The loyal customers are the biggest brand ambassadors especially for this category of products. It provides complete satisfaction to them by viewing and selecting the product of their choice and as per their requirement. It is one way to keep the loyal customers has a regular visit to their stores and en cash the footfall. Almost 80 % of business revenue comes from the 20% loyal customers. The strategy to reward such loyal customers by way of royalty points and rewards works best in such an industry. This strategy not just enhances he public image of the company but also encourage buying compulsiveness among customers. This adopted strategy by Dior has paid them well .
The company has a loyalty program known as ‘Dior Loyalty Program’ through which they interact with their customers through e-mails or mails through post. It records each amount of the transaction, adds on the loyalty points which they can utilize for more shopping or as a payback option. They even send invitations to their customers for a pre launch of their new collection – presenting them with free samples, souvenirs etc.
5.4 Fashion Events
Dior being a high end customer brand it has been immensely active in participating in public or private events to promote its brand. They have been organizing fashion show to display their creating since long. It has designed customers for films in the mid 90’s to public its attire and style.
Today all across world celebrities of different countries showcase its creation through shows, public events, films – both Hollywood and Bollywood is dominated by this name. Even the known Harrod’s Dior Exhibition is organized especially to display its creation. A place called mini theatre where all the classic attire, accessories etc are placed in order to showcase the story of transition and new fashion trend of the industry . A café with the name of Dior Café has been set up to create an atmosphere for the customer and enhance their experience. Other events such as Red Carpet participation; Oscars, BAFTA, Golden Globe, etc have celebrities displaying customer designed especially for each of them on demand . On a boutique opening which takes place at a massive scale from the décor to the display everything is made to speak about Dior. It has even been seen in VIP dinners and Cocktail parties all across nations.
For its reads it even has a 3 volume set of books comprising of its transition, culture, style, product line and almost everything that anyone would want to know about the company.
5.5 Digital Communication
If we are talking about highend customer we cannot forget their technological advancement and involvement. This is important to identify as the positioning of the brand and the product needs to be done through that way. Digital communication is an important tool to reach a large number of desired customers in a small span of time and cost . The digital magazine of Dior has been launched online which enables customer to know new trends in fashion on go. It also has a page in Facebook that is very famous among its followers. Apart from that it also has a strong presence on Twitter, YouTube, where one can find every possible video regarding fashion and latest they have a Dior iPhone application providing any required information with a one click.
5.6 Personal Selling
What can be better than personal selling? This technique is traditional but immensely satisfying to the customer as they get a chance to see the products, test and try them. Also, the company gets a chance to have face-to-face interaction with the customer; it helps them give their customer right direction, choices and advices .
6. Conclusion
Dior has a well-defined marketing and communication strategies at place to capture the market and potential customer. Though it is widely present in most of the countries but the scope to expand further still exists. It is a brand that speaks for high quality, beauty and style for the elite class of society. Among its competitors, it holds a strong position and provides an opportunity to greater exposure internationally. Launching strategies to expand is the best suitable one with a well-researched exclusivity, desirability and increased awareness among different income class. The company must take steps to preserve exclusivity for its designs and product quality so that company reputation is not hampered through imitation. The company’s logo must be designed in a single way to increase identification for its product. Local advertisement needs to encourage so that first time users market can be captured. More products for men must be launched to have greater exposure in the male category.
Bibliography
Bruce, M., & Kratz, C. (2004). Turbulent Btrandscape: retailing luxury brands in the UK and France. British Academy of Management Conference. Saint ANdrews Uniiversity (Scotland).
Catry, B. (2003). The great pretenders: the magic of luxury goods. Business Strategy REview , 10-17.
Dior. (2013). Dior Financial REport. Retrieved June 22, 2014, from Fashionbi.com: http://fashionbi.com/brands/dior
Hines, T., & Bruce, M. (2007). Fashion Marketing: Contemporary Issues. Routledge.
Kapferer, J.-N. .. (2012). The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands. New Delhi: Kogan Page.
Keller, K. (2006, May 19-20). Building Strong Brands: Three Models for Developing and Implementing Brand Plans. Retrieved June 22, 2014, from Carlson School of Management: http://www.carlsonschool.umn.edu/assets/75894.pdf
Keller, K. L. (2001). Building Customer-Based Brand Equity: A Blueprint for Creating Strong Brands. Marketing Management , 15-19.
Manning-Schaffel, V. (2005, February 28). Christian Dior . Retrieved June 22, 2014, from Brand Channel: http://www.brandchannel.com/features_webwatch.asp?ww_id=216
Market Publishers. (2012). Christian Dior SA Fundamental Company Report. Retrieved June 22, 2014, from Market Publishers. Com: http://pdf.marketpublishers.com/bac_swot/christian_dior_sa_swot_analysis_bac.pdf
Okonkwo, U. .. (2007). Luxury Fashion Branding: Trends, Tactics, Techniques. Palgrave MacMillan.
Rebecca, T. (2013, July 3). Dior Communication Strategy. Retrieved JUne 22, 2014, from Slideshare: http://www.slideshare.net/Tiffany2690/dior-communication-strategy
The House of Dior. (2014). From 1947 to 2014. Retrieved June 22, 2014, from Dior.com: http://www.dior.com/couture/en_int/the-house-of-dior/from-1947-to-2014
Thomas, D. (2012). Dior Marketing Strategy. Retrieved June 22, 2014, from PBWorks.com: https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&uact=8&ved=0CEEQFjAE&url=http%3A%2F%2Fdjthomas.pbworks.com%2Ff%2FDior.ppt&ei=wICnU5ueIsy6uATL4oJI&usg=AFQjCNHr25MdRxWe0GQTJCYB-HpbtvTJKw&sig2=plUI9TFTDxF2YUBCJVwAZg
Woods, L. (2011, December 6). Christian Dior SA: Company Profile and SWOT Analysis. Retrieved June 22, 2014, from Research and Markets: http://www.bloomberg.com/article/2011-12-16/aDmLrA06cHp0.html
