Burberry Case Study - Essay Example

?Burberry Case Study Identify and explain the environmental factors affecting the marketing of Burberry (20 Marks) It’s not a coincidence that Burberry, has become a famous brand, till nowadays having been founded in 1856 in England already. Burberry had been producing some kind of quality clothes that were being worn by famous people with a prestige at the time of creation, and was soon established as business selling high quality clothes in quality as such but also of a certain style that all people had liked from the beginning of production and manufacturing. Then the beginning was good, and facilitated further purchase in also other countries of Europe and the world. As the phrase on finance says, “Capital is added to capital”. Then by raising its production, Burberry proceeded to more investments, being able to increase its profits, by keeping quality, starting to produce more items in a variety of goods, such s perfumes, and several kinds of accessories as well as increasing production variety of its initial goods. Then this gave Burberry the chance to expand to markets all over the world, and throughout year’s conquest the whole world, by multiplying its funds. Some other factors, like production of military uniforms, before the I World War indeed, contributed to creating some favouring circumstances for potential customers, that increased by the years. Also and most important, there have been some keen managers, really interested in the job, who also, managed to create a changing mentality of people and potential buyers, under the dominating scheme and emblem that not only prosperous and wealthy ones, should be able to have access to the wonderful and exceptional products of Burberry, but more or less any buyer of middle class should be able to afford Burberry’s products. Actually the management applied by these keen managers and policies, was balancing first percentages between wholesale and retail, and apply strategies, such as keeping prices lower than other brands, and raising, a bit, but not much in conditions of recession, being actually flexible in this, and also training retails staff to increase retail sales as much as possible. They also knew there, to which markets they should expand most, meeting their needs, to the profit of Burberry. Also some other implementations such as SAP and it’s strategies proposed included in IT technologies investments, and moreover and most important, the ability of Burberry to adapt to new market conditions all the time, throughout its organized marketing managements as above have contributed not only to its survival but also its constant growth and development. 2. Explain the criteria and the different segmentation methods which can be used by Burberry (10 marks). Burberry an established brand in clothes, accessories and perfumes, should focus on an organized marketing management in order to assure its position in the global market. Criteria should be focused on axes of management, such as enhancement of retail sales, and the appropriate training of staff, implementation of e-commerce and sales online, for example by SAP and IT technologies, a well balanced system between wholesales and retails, as well as a balanced system of sales of products across global markets, by concentrating, on meeting needs of consumers in every country, by adapting prices. Also, new policies would consist in good and proper advertising and always new products to be manufactured, by keeping quality of old ones, thus adapting its development to meeting market requirements of nowadays. In fact quality criteria, as above should substitute some criteria based on quantity, and vice versa, strategies, on production of quantity, should replace some criteria of quality, so both will be well balanced, and adapted to consumer psychology, be being able to ‘’convince consumers of their “personal interest” to buying Burberry’s good s and products. Thus segmentation, in terms of both quality and quantity criteria, would give the impression, that Burberry is a brand ahead of others, by having established quality, since long time ago, and giving the impression that it is an “evolving” business brand. Then its products “are designed with customer in mind”. 4. Using segmentation targeting and positioning principles how and why have Burberry changed their segmentation strategy over time? (10 Marks). As target of an Enterprise is develop and grow there are some strategies that have to be applied over time, in regard to segmentation targeting and positioning principles, why and how Burberry has changed this strategy over time : Then, changing their segmentation strategy has to do with quality management and quality assurance, in order to start producing more items little by little, after having assured a certain amount of capital, which was reinvested for raising funds, in regard to “future” production. Then the amount of each product produced, has been met needs of some categories of consumers, focusing on their main and up-to-date needs, such as those of women, for example. Making prices affordable thus make them high or lower upon time of recession, Burberry, has always been able to sell its products as brand products, so that it has been able to overcome financial crisis even nowadays, by being flexible in adapting to a balance of needs and expectations of consumers. It focused on selling its products as retail sales, throughout well organized retail selling at shops, and in markets, all over the world,, selling cheaper, managed to meet lower financial standards but selling in ‘’quantity’. In fact, selling “packets” of items, such as different kind of accessories together, apart from clothing, Burberry has proven very promising, in keeping quality, as at the beginning, of its foundation, but giving possibility to customers in buying also, quantity, along with quality. This has ensured to Burberry, raised funds along with keeping its strategic targets all over the world, and where its products are being sold. Also the impact of e-commerce has been great to the psychology of consumers, for people are able to purchasing online. Also throughout law, they have been able to have a control over “bad imitations”, and keep the original commercial token of real Burberry brand on all its products, and make real Burberry production distinct from every such imitation, based on labelling, and prices showing its products “are real Burberry items”. 3. Discuss and explain the rationale of the Marketing Mix variables used by Burberry (30 Marks) When a business starts, nobody can know about its future, even if it starts with best market conditions. Thus in this case, has applied Marketing Mix variables, in order fist to establish its products as good quality products, all over the world, by selling a bit expensive at the beginning. As long as the Business grew, Burberry, had of course to keep level of quality, besides producing more quantity, to meet needs of market. Then in order to do this, and be able to meet labour costs, it was selling a bit more expensive, besides keeping prestige of the Company. But then, when its manufactures started spreading across the globe and demand became much higher, but also for being able to stand competition all over the world, having to face other brand opponents, it started lowering its prices, for selling large amounts, but also adapted to market conditions at time of recession. Actually, Burberry, invested nd reinvested, by balancing labour costs, with large quantities of products, thus producing accessories, that cost less, but being able to “convince” consumers, of that the products sold, would meet their consuming needs in the long run, that their big range of products are of quality, and affordable, so they managed to sell in large quantities. Also balanced wholesales and retails, at shops or online, have dramatically increased, profits, from retail sales all over the world. Then profits are by far higher, that cost of investment. This Marketing Mix variables, contributed to a good advertisement of the company first by assuring quality of a brand of such calibre. 5. Discuss and explain the rationale of Burberrys use of digital marketing tools. What are the advantages and disadvantages of this approach? (20 Marks) Burberry also has been taking advantage of digital marketing tools and e-commerce. People can buy products online; this has contributing to spreading profits of Burberry across the globe, at large scale, and bothering congestion at shops of retail sale. Then of course this is a great factor of trading a product, as products are bought in large quantities over the Internet, thus reducing any costs of retail sales at shops. But, it’s not the same as real and live shopping, in a shop, as well as that selling prices are out of control, being sold in Amazon or Ebay, in wholesales, and in lower prices, that cannot be controlled. So any wholesale, can be cost-effective for sellers, but it’s to the disadvantage of Burberry this way somehow. Also implementation of SAP, in regard to IT (Information Technology) managed to organization, and planning as well designing of products, within a range of marketing strategy, targeting to establish Burberry as top brand, which has been also managed. Digital marketing tools, contribute to “decentralising”, thus, expanding sales at maximum, but the real “meaning” of a brand is this way lost, as products thus, get equalized to any similar products of other brands, and in view of the whole procedure of digital sales, profits can also get lower some time. Also, some expenses, involved in digital marketing, make sales less cost effective for consumers, thus being discouraged, in buying, and thus, some loss in profits are unavoidable. 10 Marks for appropriate business report format Burberry, today brand in clothing, perfumes and accessories, was founded in 1856 already, and at that time, nobody could have known how it was going to evolve and grow. Thus by end of 2010, it has already had 130 retail stores, 140 concessions (excluded Spain), 44 outlets and 97 franchise stores. Revenues fell up to 8% in 2008, while the increased again by 9% between 2009-2010. Burberry has specialized in the luxury area of clothes, perfumes and accessories, upon which ‘’brand’’ is based. Thus it has reached fabrication of women’s clothes by 36%, for men up to 24% and for children up to 5% recently. It has expanded mostly to Europe, but also in, America and Asia, to growing and emerging markets such as China and Japan. Due to its keen managers, who applied strategies, of adaption to needs and requirements of market, its keen financial policy, such as affordable prices for consumers of lower income, but also keeping its prestige in qualities, and balance in labor costs, Burberry has managed to raise its overall revenues, apparel and no apparel (less revenues in non apparel production), by 50 million GBP, in the last 3 years already. Nowadays also, Burberry still remains and is considered a top brand, satisfying tastes of the most difficult clients all over the world, focusing in developing retail sales, also through Internet and strategies of digital marketing. The implementation also and support by SAP, has contributed to well organizing the marketing scale and design of stores, in regard to appearance. Burberry has taken advantage to every favorable opportunity, in regard to live sales in stores as well as online sales, keeping its prestige at the same time, in regard to qualities, as tradition of the brand, plus being protected from bad “imitations” of other products, sold as “Burberry”. Burberry has been always considered, and mainly for the last few decades as a “high fashion brand” (London News Week-Magazine, 2011) well established around the globe, and ensuring qualities in a variety of products. References London News Week (2011), Magazine-London, 18 Feb 2011 Read More