Marketing Mix Analysis of Valentino - Essay Example

Marketing Mix Analysis of Valentino Introduction The current condition of the global economy is highly unstable and is being driven by uncertainty.Studies suggest that a large number of firms in every sector are struggling hard for survival and holding market positions. In such a time, it is gathered that demand and interest in luxury products and services among consumers have increased exponentially. The trend is not limited to a particular sector but can be witnessed across various sectors including the fashion industry. In this regard, Valentino is a prominent name. The brand produces and offers a variety of products and services that belong to the luxurious segment of the fashion industry (Market line, 2014). Considering the economic condition worldwide, the paper assesses the marketing strategy of Valentino and presents recommendations in this regard. Company’s background and current performance Valentino Garavani, also known as Valentino, launched his first product line in 1959 and since then, the company has made relentless efforts to become a prominent name in the fashion industry. Presently, Valentino is considered as one of Italy’s finest exporters of luxury fashion, and it has created an elegant range of fashion wear for various personalities over the past four decades. Besides apparel, the company offerings consist of shoes, bags and accessories. Valentino opened the first store of the company in 1960 in Paris and introduced the signature ‘Red Valentino’ along with the ‘V’ label. Though the company started in Italy, presently it has stores all over the world. In 2013, the company earned revenue as high as 110 billion Swedish Kroner and its operating margin was around 16%. The assessment suggests that the company is enjoying steady growth even in an uncertain economic condition (Valentino, 2014a). According to Reuters (2013), the company observed 25 percent growth in its revenue in 2013, while its CEO claimed that the company is in its growth phase considering the increase in demand for luxury products among shoppers, especially in China and the United States. Market scenario and competitors’ analysis Besides the global market, Valentino prominently operates in Italy. The Italian apparel industry was observed to undergo a declining phase between 2009 and 2013 and the phase is expected to continue till 2018. The growth rate was determined to remain below 1%. Contrastingly, markets in Germany and France witnessed moderate growth. The market was determined to be the most lucrative one for women’s apparel as it captured around 53 percent of the total market share. Market competition is relatively high in the industry considering its poor performance (Fashionbi, 2015). The apparel industry targets men, women and children without any discrimination. However, considering the increase in demand of products among female shoppers, Valentino should focus on women as its target market. Market distribution in this regard is strongly inclined towards brand outlets instead of departmental stores and supermarkets. Geographically, the Italian apparel industry occupies the second position after Germany in the European market. The most important players in this market are Benetton group, Consortium Bimbo Italia, Gruppo Coin and Inditex along with other global players. Therefore, it can be indicated that the degree of competition is moderately high in the industry (Market line, 2014). Marketing mix analysis Under marketing mix assessment, the factors that have been assessed in the paper are product mix, price, place, physical evidence, people and promotion. Product mix Product mix refers to the assortment of products that a company offers to its consumers. Valentino offers its product line to male and female consumers and its offerings comprise apparel, bags, shoes and accessories. The service offerings include fashion shows in various countries for exhibiting the organization’s collections. Most products of the firm are luxurious in nature and have a short product life cycle. The offerings of Valentino can be considered under the purview of fast fashion as the trend keeps changing in every six to eight months. With respect to product mix, product line depth and width are very crucial. It was determined that the width of the Valentino product lines is relatively shorter than its depth. There are only four different product lines (Rafiq and Ahmed, 1995; Ivy, 2008; Valentino, 2014a). Pricing Pricing is an important aspect of marketing mix as a firm’s revenue and product image heavily depend on the pricing strategy. There are several pricing strategies that a firm can adopt with respect to the product image they would like to develop in the mind of consumers. Valentino is a renowned brand in the fashion industry and is known for its exclusivity. Since the products present a luxurious and elite image, the main pricing strategy of the company is premium pricing. However, considering the ongoing market situation, Valentino is adjusting its pricing strategies and including certain pricing tactics so that large number of consumers can afford its products and thereby revenue and market share can be increased by the firm. The major pricing tactics of Valentino consists of selling products at discounted price and creation of a second product line that mainly focuses on selling budget products that are affordable by mass (Reuters, 2010; Valentino, 2014a). Place The concept of place predominantly emphasises on distribution channels and strategies adopted by a firm for distribution of its products. There are three retail distribution strategies, namely, intensive distribution, exclusive distribution and selective distribution. Valentino is an exclusive brand and to exhibit the same in its distribution strategy, the corporation has adopted selective distribution strategy. Selective distribution strategy implies opening of restricted number of outlets within a specific geographic location. This strategy is cost effective and imparts feeling of exclusivity among shoppers who are ready to travel around for purchasing from store. The brand has its stores in the Asia, America and Europe and the total outlet count hardly exceeds 10000. Additionally, the company has online boutique from where consumers can directly purchase products by means of the Valentino website (Valentino, 2014b). Physical evidence Physical evidence is referred to various physical cues that a firm can provide to consumers with respect to the products so that they can evaluate the same prior to making any purchase. The physical evidence mainly comprises various aspects of physical environment such as spatial layout, ambience and functionality along with symbol, signs and artefacts. Valentino stores have been designed in such a manner that visual code implies strong sense of exclusivity and classiness in the ambience. The interior of shops have been designed in such a manner that it delivers a sense of charming and luxury shopping experience to shoppers. The retail outlets have been designed similar to luxury houses and palaces, while some of the stores have been coloured in neutral shades with mild golden and pink hues so that consumers feel a sense of dreaminess thereof (Casadei, 2013; Tortora, 2013). People People are an essential aspect of a business; consequently, it is considered as the last P in the marketing mix. This aspect implies that an organization should develop its products and other relevant strategies by understanding the perception of its consumers as the products and services are mainly targeted to acquire maximum number of customers. Valentino not only sells products for earning revenue but the products are also developed to make individuals feel good about them (Vanity Fair, 2004). Promotion Marketing communications strategies Marketing communication is essential for delivering right message regarding products of the firm to right consumers at right time. Communication strategies are important in marketing so that consumers are aware of the existence of the product and its unique selling propositions. Most global brands depend on three Ps of marketing communication, namely, push strategy, pull strategy and profile strategy (Rafiq and Ahmed, 1995; Ivy, 2008). In brief, push strategy focuses on pushing products to consumers irrespective of their needs. The strategy is practiced by means of retailers, who pitch the product more compared to its substitutes. Push strategy is appropriate when brand loyalty is limited. In pull strategy, demand and brand loyalty for product is relatively high and product lines of a firm can be differentiated from that of others based on certain specific features. In contrast, profile strategy emphasises on adopting a marketing communication strategy that helps in developing a good relationship with various stakeholders of the firm and building market reputation (Rafiq and Ahmed, 1995). Valentino has adopted pull strategy as the company already has moderate level of brand loyalty on the part of consumers who can afford its products. Valentino undertakes various promotional strategies to attract consumers. Another reason for adopting pull strategy is that the Valentino products are largely differentiated and very exclusive in nature. The unique selling proposition (USP) of Valentino is to offer complete materialistic luxury to its consumers by means of apparel, shoes and accessories so that underlying beauty of every individual is accentuated. The USP is communicated to the target market mainly by means of advertising campaigns and international fashion shows. The message that is conveyed through its ad campaigns is elegance, class and beauty. The firm mainly uses emotional appeal to allure consumers, while the execution technique focuses on femininity, fantasy, luxury and feeling of exclusivity. Most of the ad campaigns of Valentino focus on creating a perfect person by emphasising on looks and elegance. The ad campaign portrays the brand image of being exclusive and presents a celebrity touch (YouTube, 2014). Marketing communications mix There are several marketing communication tools that are implemented by a firm for communicating brand message. These tools are ad campaigns, customer relationship management, digital communication and events such as fashion shows. Most of the ad campaigns of Valentino can be accessed by means of its website, while other ads can be observed at various international fashion magazines. Customer relationship management is pursued through a number of loyalty programs. The company e-mails newsletters to consumers for informing them regarding the latest and upcoming collections and for inviting them at various fashion shows. The fashion shows are considered very effective for communicating consumers regarding the fashion trend and collections of Valentino (Ivy, 2008). Valentino implements both above-the-line and below-the-line advertising strategy. Under above the line strategy, the company advertises by means of magazines, billboards and television while below the line strategy comprises direct communication by means of email and social networking. Besides these communication techniques, the company is engaged in product placement by way of movie promotion. Valentino does not promote its products through television advertisements. Instead, it employs a set of assorted media tools for product promotion. Since the products belong to elite category, ad campaigns and fashion shows can be considered as the best promotion methods (Ivy, 2008; Valentino, 2014c). The ad campaigns were observed to be successful in fulfilling criteria of AIDA model of advertising. The ads have been crafted in such a manner, that they have an absolute power to gain the attention of consumers. Almost all the advertisements emphasise on beauty, femininity, perfectness and sensuality. The apparels and accessories reflect elegance and exclusivity. Since the brand is endorsed by a large number of celebrities, the celebrity impact is strongly responsible for holding interest of consumers; the desire to afford clothes that have been endorsed by one’s favourite celebrity has positive impact on demand for Valentino products. Since Valentino is a luxury fashion brand, it is accessible to the elite class of the society with strong purchasing power. The ad campaigns encourage consumers to visit the store where they can access the collections and make purchase (YouTube, 2014). Conclusion and recommendations Since 1960, Valentino has been one of the favourite brands of celebrities and consumers belonging to the privileged social layer of the society. The company has designed several Red Carpet gowns and it is often endorsed by celebrities such as Keira Knightly and Neil Patrick. Being a luxury brand, the company does not advertise its products by means of television. However, it can adopt occasional television advertising for greater consumer awareness. Valentino products are premium priced; as a result, consumers often fail to afford it regardless of willingness. In this regard, it can be recommended that Valentino should launch a range of products that is moderately priced instead of selling off expensive products at discounted price (Reuters, 2010). This will help Valentino in increasing its market share. Lastly, Valentino should have more number of stores across various locations because often consumers are interested in purchasing the brand but fails to do so due to lack of sufficient stores. Reference list Casadei, D.M., 2013. RED Valentino opens in Moscow. [online] Available at: [accessed 26 February 2015]. Fashionbi, 2015. Valentino Financials. [online] Available at: [accessed 26 February 2015]. Ivy, J., 2008. A new higher education marketing mix: the 7Ps for MBA marketing. International Journal of Educational Management, 22(4), pp. 288-299. Market line, 2014. Apparel Retail in Italy. [pdf] Market line. Available at: [accessed 26 February 2015]. Rafiq, M. and Ahmed, P. K., 1995. Using the 7Ps as a generic marketing mix: an exploratory survey of UK and European marketing academics. Marketing Intelligence & Planning, 13(9), pp. 4-15. Reuters, 2010. Lowering luxury prices can be costly. [online] Available at: [accessed 25 February 2015]. Reuters, 2013. Valentino sees 25 pct revenue growth in 2013 – CEO. [online] Available at: [accessed 25 February 2015]. Tortora, L., 2013. Valentino: new openings [online] Available at: [accessed 26 February 2015] Valentino, 2014a. Valentino. [online] Available at: [accessed 25 February 2015]. Valentino, 2014b. Store locator. [online] Available at: [accessed 26 February 2015]. Valentino, 2014c. Experience. [online] Available at: [accessed 26 February 2015]. Vanity Fair, 2004. So very Valentino. [online] Available at: [accessed 26 February 2015]. (people) YouTube, 2014. Valentine ad campaigns. [online] Available at: [accessed 26 February 2015]. Read More