Gucci and Prada Strategies - Essay Example

Gucci and Prada Gucci and Prada Strategic Plan Gucci and Prada focuses on a similar strategic plan. They utilize a differentiation strategy. This is an effort by both firms to satisfy the diverse needs of the high-end market. This aims at increasing revenue by increasing the number of customers. Gucci and Prada have a wider range of markets including clothing, fragrant, handbags and other accessories (Som & Blankaert, 61). They both utilize the model in an effort to increase their market shares while at the same time retaining existing customers. The two companies are rivals in a number of products. Their luxury status deters them from using the cost- leadership approach. In this market price directly represent the quality of a product. There is need to outshine the competing firms by introducing goods that unique and fits the customer’s requirement. The two firms utilize the approach in an effort to maintain their profit margin while venturing into new markets. The two rival firms focus on unique products to attract customers. Gucci for instance introduced customized bracelets and handbags to a number of its Asian market. This was a counter move by the firm to emulate Prada who offer the same service across its wider market. The move by Gucci was aimed at attracting more customers form the Asian market to compensate the European market widely dominated by Prada. The unique service to the Asian market is aimed at increasing revenue by widening its market size (Passariello, 2015). The customized products are far much expensive compared to an ordinary good. Thus the luxury firms utilize the price factor to emphasize on quality. The two firms attract the high end market by unique and expensive goods in the market. The firms depend on loyalty and of customers and new components in market to promote their goods. This strategic plan allows the firm to directly connect to its clients and offer services based on the customer’s request. Target Markets The two firms the high end market by offering services and goods with unique characteristics. Their ventures across the world target high income earners and celebrities across the world. This means that they offer a wider range of products to the same market group. The aim of the two firms is to create a loyal client base and satisfies their needs while at the same time increase the company’s revenue collection. Accessories and clothing from the two firms aim outshining each other across the world (Passariello, 2015). The high end market targeted by the firms’ bases their preference on quality and uniqueness. Gucci enjoys a wider market in America while Prada enjoys a large market in Europe. The Asian market remains the target for both firms. Having identified a similar target market, both will utilize their differentiation strategy in attracting new customers. This would mean value addition while maintaining their high prices. The similarity in line of production would mean that the firms concentrate on similar model in an effort of outshining each other. The cost in this type of market is not a factor while determining the market. Higher prices create a perception that the goods offered are of high quality (Som & Blankaert 6). The companies would concentrate in high quality products in an effort to attract a loyalty base in the Asian market. The main concern will be on how to introduce their products. Upon penetration the firms will aim at satisfying the needs of their customers. Customers will choose their products based on quality. Similar strategies will mean that each firm will be targeting a specific number of clients while Gucci and Prada Value Proposition According to Philip Kotler et al (2008), competing firms design their value proposition in order to outshine each other. The main concern of many firms is how to design these models in order in order to attract customers. Prada engages on psychological strategy that portrays their products as of high quality while discouraging loyal customers from purchasing products from rival firms. The high-end market being their target market, the firm concentrates on basic details on a product in an effort to maintain their luxury status while ensuring service delivery. Gucci on the other focuses on a similar concept but concentrate on products quality and high end marketing. This will allow competition in the market while allowing customers to choose products based on their needs. The two would have a similar proposition as they target the high-end markets. The design of their proposition would focus on needs satisfaction while at the same time promoting the value as a company. The value proposition in this case will be determined by their target market. While trying to outshine each other the firms will design their value proposition on the based on the target market and the type of completion Positioning Strategy The strategy will allow each firm to attain a competitive advantage over their rival firms. Gucci and Prada focus would be the customers. Gucci positioning strategy bases on the product rather that service provision. The products are branded as a means of identity. Prada on the other hand focus on both service delivery and product promotion (Milano Fashion Institute 11). They both aim at marketing their product as luxury good while at the same time promoting their firms’ product. The competing firms adjust their strategy in an effort to maintain their current market position. The Gucci venture in the European market indicate change on positioning strategy to accommodate the ever- growing luxury market (Som & Blankaert, 80). Prada on the other hand retain their product and service strategy in an effort to outshine their rivals in both the Asian and the European market. The counter move by each firm aims at attracting new customers. The luxury market is characterized by a large number of loyal customers. Thus any strategy by these types of firms would be aiming at attracting the growing luxury market. Service and product provision would be essential in determining the amount of new customers attracted to the firms will depend on the strategy deployed by the firm. The two firms’ may deploy a similar strategy but specific detail will determine the market trend. Gucci and Prada’s wide luxury market sizes are attributed to their positioning strategy which aims at creating a large loyal customer base and allowing room for seasonal shoppers. Works cited Kotler, Philip, Armstrong Gary, Wong Veronica & Saunders John. Principles of Marketing. London: Pearson, 2008. Print. Milano Fashion Institute. Brand Equity, brand Identity & Brand Strategy. 2012. Web. 9 Feb. 2015. Passariello, Christina. "Prada is making Fashion in China." The wall Street Journal 24 June 2011. Web. 9 Feb. 2015. Som, Ashok & Blankaert Christian. The Road to Luxury: The Evolution, Markets and Strategies of Luxury Brand Management. New York: Wiley & Sons Read More