Executive Summary ----------------------------------------------------------------------3
Background --------------------------------------------------------------------------------4
Introduction --------------------------------------------------------------------------------4
SWOT ------------------------------------------------------------------------------------5
PESTEL ---------------------------------------------------------------------------------5-7
SPICC ------------------------------------------------------------------------------------7-8
Consumer Analysis-------------------------------------------------------------------------8
Market Segmentation --------------------------------------------------------------------8
Target Market -----------------------------------------------------------------------------9
Competitor Analysis & Positioning ----------------------------------------------------9
Marketing Mix-----------------------------------------------------------------------------9
Product -----------------------------------------------------------------------------------9
Price -------------------------------------------------------------------------------------10
Place -------------------------------------------------------------------------------------10
Promotion -------------------------------------------------------------------------------10
People -----------------------------------------------------------------------------------10
Process ----------------------------------------------------------------------------------10
Physical Ambience --------------------------------------------------------------------11
Conclusion -------------------------------------------------------------------------------11
References -------------------------------------------------------------------------------12
Executive Summary
Chanel as a leading fashion brand has been able to keep up with the times and trends in an excellent manner. The brand equity and recognition of Chanel is excellent in the luxury brand market. However, a set of guidelines are required to consistently offer the best products in the market. Additionally, the marketing effort requires a steady and reliable framework that can analyse the future opportunities and the impending threats in an all-encompassing manner.
Background of Chanel
Chanel is a leading fashion brand and operates on a global level. The brand Chanel was launched in 1910 by Gabrielle Bonheur Chanel and since then Chanel has grown to a level where it operates in more than 310 stores globally.
With its brand of luxury lines Chanel has been able to carve a niche for itself in the eyes of the consumers in a successful manner and has been able to develop new segments in relation to the needs and demands of the times.
Introduction:
The marketing strategy for luxury fashion brands necessitates a refined technique along with high level of originality and modernization. The luxury brands provide a means to a lifestyle that is produced by psychological and emotional needs.
This emotional connectivity with the consumer reflects how customers think and feel about the infusion of fashion in their lives. People purchase luxury brands to make a statement about their likes and attitude towards various facets of life.
It is for this reason; a conscious effort is involved when purchasing fashion apparel. As the barriers to entry are becoming low, the luxury brands segments have evolved as a cut-throat market.
New outlooks towards fashion apparel offer considerable challenge to the marketers to manage their brands effectively. In this respect, many luxury brand markets rigorously adhere to offering new concepts to the customers rather than merely offering a product.
The new perception of luxury is fuelling the growth of fresh brands which is intensifying the competition. Therefore, the focus has now shifted from the product to consumer which contributes to embed novel brand strategies for the luxury brands.
Technology has also played a pivotal role in helping the luxury brands to create and sustain the competitive advantage. It is for this reason; the luxury brands are redefining their core competencies and developing products for diverse customer segments.
The research investigates about the marketing strategies of luxury fashion brand Chanel.
Marketing Environment:
The scanning of the marketing environment is a valuable tool to ascertain the internal strengths and compare it with the external aspects that can impact the business. Every factor has its own dynamics and will impact the marketing efforts of the firm.
In the following section, the SWOT, PESTEL, and SPICC analysis for Chanel will be presented.
SWOT Analysis:
PESTEL Analysis
SPICC Analysis:
Supplier:
Supplier relationship is vital for Chanel to maintain its high standard. In this regard, all decisions about sourcing of raw materials are carried out keeping in view the qualitative aspects. Furthermore, Chanel is critical of ensuring that every part of the supplier contract is lucid and implemented accordingly.
The “Metier d’art” fashion show is a regular event that is dedicated to pay homage to the distinction in craftsmanship of the suppliers of Chanel (Cabon, 2014).
Publics:
Effective disclosures about the business process add value to the business and customers love to associate themselves with firms that are trustworthy and Chanel duly complies with all these vital facets of their business.
Intermediaries:
The strategy of Chanel is to sell its products to selective retail outlets. Notable retailers include the Harrods, The Boots and The Perfume Shop etc.
Customers and Markets:
While Chanel has dedicated customer segments in West with a loyal customer base it needs to look out for new opportunities. The emergence of China as a potentially big market would also intensify competition in different product categories. Chanel needs to focus more on the younger generation as they are now more affluent and look for ways to look exclusive and fashionable.
At the same time, the competitive pressure is likely to increase in the wake of globalization and people look out for fashion products that can offer more engagement and an everlasting experience (Wild et al. 2009). The following images demonstrate the individual look that Chanel creates for its customers to have a bigger impact on the customer segments.
Source: (http://www.chanel.com/en_US/fashion/haute-couture/show-2014-15-fall-winter-looks.html)
Competition:
Coco Chanel is a foremost player in the fashion apparel industry. The existing retail market for fashion luxury brands is dictated by quality.
The competition is very intense in the luxury brand market. This has prompted Chanel to tap in new prospective markets. Dior and Hermes are the foremost competitors of Chanel.
Consumer Analysis:
Target Market:
An effective fashion marketing of luxury brands requires taking a holistic approach. The reason is to appraise the brand and leverage its potential in the existing and new markets.
Furthermore, the competition would be significantly varying in different markets; in this regard every geographical location would offer a new challenge to the firm to deal with.
The products offered by Chanel cater to the women segments aged between 18-60 years. Chanel also targets the mid-twenties men through a range of products. Chanel has a massive presence in different parts of the world.
Customer segmentation of Chanel:
This geographic segmentation comprises the huge Asian and the European markets. In addition, Chanel operates its stores in urban vicinities of Paris, New York, Miami etc.
The psychographic segmentation of Chanel is built on uniqueness and individuality. The brand is targeted at upper end of the customer segment
Competitor Analysis and Positioning of Chanel:
Competitor Analysis:
The supply and demand for different products is determined by the market forces. However, it can be noted that price can be an easy differentiator than quality.
The availability of several players vying for the clutter also indicates that competition is intense and customers have several choices available.
In this regard, the most significant strategy to uphold the loyal customer segments as consumers have more affection for their preferred luxury brands.
Positioning:
The position strategy entails what the brand stands for in order to differentiate it from the competitors. Chanel positions itself as a distinctive brand that is prestigious and for a selected few.
The positioning strategy of Chanel centres on enhancing the impression of the brand and inculcate a top of the block impression among its users. Therefore, Chanel connects its brand values to the powerful and the rich segment of the society.
This includes the socialites, the affluent people and people with ample influence and reputation. The eternal sophistication is the attribute that Chanel entrenches in the minds of the consumers.
Source: (chanel.com)
It is important to note that there is a thin line between being ‘snobbish or ‘elegance’. Therefore marketing the luxury fashion products must be handled with diligence to ensure that the essence of the brand is not lost.
Marketing Mix of Chanel:
Product:
An excellent product signifies what the business is all about. As the luxury brands have the benefit of a rich lineage, McCarthy (2013) asserts that this becomes an indivisible element of the aura and charisma of the brand.
Chanel has a wide range of product categories targeted towards diverse customer segments. The Product Line includes Clothes, sunglasses, handbags, beauty products, jewellery, watches etc.
The performance of the Chanel products gratify at the product as well as the experiential level. The technique of integrating quality and exclusive design in Chanel product range produces an emotional connection which enhances the value of the brand (Nagasawa and Sugimoto, 2010a). The logo of Chanel is acknowledged as one of the most recognised luxury brand logo. The logo is depicted in the following figure:
(Source: Google images)
Price:
The price for Chanel products is high that is why it is recognised as a luxury brand. Furthermore, McCarthy (2013) is of the view that the high price also connects with the exclusivity that Chanel sells to its customers. The following figures would display the various price ranges for Chanel products.
Source: (http://www.theperfumeshop.com/fcp/product/fragrances/-/Coco/1530?sku=1002625)
The Price of the depicted COCO Eau De Parfum Spray is $48.50
Place:
The luxury brand necessitates upholding the perception of scarcity. This scarcity is basically the unique selling proposition of the luxury brand. The retail stores are the foremost selling point of Chanel products to avoid counterfeits and maintain its persona (McCarthy, 2013).
The fashion shows serves as the platform for Chanel to showcase its products to the audiences. In addition, catalogues and mail orders are also utilized to sell the wide variety of products.
Promotion:
The promotion utilizes all customer tough points. The Chanel website exemplifies the culture of Chanel. Above the line advertising along with promotion in culture magazines like Vogue is a vital part of their strategy.
A very significant feature of the promotion strategy is to demonstrate the modern spirit of Chanel through imagery and unique style. More importantly, the communication strategy of Chanel is to express stylish grace through its promotional campaigns and public relations.
This involves use of storytelling to captivate the attention of the audience and relate with the rich history of the brand (Kattan, 2013).
The advertising for Chanel products is energetic as well as versatile that highlights stature. The social media is also effectively utilized by Chanel.
People:
People strategy is an integral part of the marketing mix of Chanel. The staff mobilization is at the heart of an effective strategy at Chanel to enhance the quality of its operations.
Processes:
The business processes at Chanel are built around brand innovation. The operations require vision and often representative of the quality standards maintained at the firm. Therefore, the supply chain monitoring is significant to ensure operations are not halted. This precision is the hallmark since delivering quality products require attention to details.
Physical Ambience:
The physical ambience of Chanel stores displays that the impression of the brand is comprehensible and reliable. The underlying aspect is to provide life to different products that can gain the attraction of the customer. This vitality is critically essential for Chanel to maintain the elevated standards that it utilizes as its differentiating strategy to mesmerize the customers.
Conclusion:
It is important to note that branding is an effective means of simplifying the solution for the consumer. From the perspective of Chanel, the brand signifies its responsibility of catering to the high end consumer segments.
Therefore, attractiveness of Chanel products stems from its imagery which enhances its reputation and simultaneously maintaining its elusiveness.
The critical success factors of Chanel is all about developing niche markets and creating new customers who are willing to pay the premium price.
The success in fashion attire helped in extending its line of products through its legacy and adhering to modern trends. This legacy dates back to the unique personality of Coco Chanel which is effortlessly represented in the Chanel products.
In addition, another important aspect is to infuse modern trends in societies where latest fashion trends are not followed.
References
Kattan, O. (2013), Coco Chanel: masterful storytelling in the luxury branding insdustry. Retrieved from http://www.brandstories.net/2013/10/16/coco-chanel-masterful-storytelling-luxury-branding-industry/
McCarthy, J. (2013), Chanel is 2013 Luxury Marketer of the Year. Retrieved from the website http://www.luxurydaily.com/chanel-is-2013-luxury-marketer-of-the-year/
Nagasawa, S., and Sugimoto, K. (2010a), The Succession of Technology and Production of the Technology Management Brand "Chanel," Waseda Business & Economic Studies, No.45, pp.41-55,
Wild, J.J., Wild, L.K. and Han, C.Y.J. (2009), International Business the Challenges of Globalization Prentice Hall
