..'does exactly what it says on the tin'...
Monday, 31 August 2009
Friday, 28 August 2009
Wednesday, 26 August 2009
With the recent revelations of Microsoft playing about with the colour preferences of their marketing photograph and now apologising for the 'mishap', surely the more significant issue is why they feel they needed to make such changes.
Microsoft has apologized for the incident and taken the offending image down, as well as stating they would be looking further into the matter. A spokesman said: 'The image has been removed. Diversity and inclusion are core values and business imperatives of Microsoft and we apologise for any offence that might have been taken.'
From a marketing viewpoint Microsoft were both right and wrong in adapting their marketing photograph for a sensitive market, and allowing such minorities to manipulate their values and beliefs. What should be taken from this incident is to identify that differences and inequalities still exist in some parts of the world. It should be our aim to overcome these differences for a more unified and equal world, and if mishaps of this kind do nothing but remind us of the single minded minorities that are still among us, then let that be the drive for us to continue in our efforts.
Tuesday, 25 August 2009
Creative, Strategic, Dynamic, Fresh, ROI, Infusing, Digital, User Engagement, Interactive, Mindset, Value Justification, Benchmarking and Social, just a few of the buzz words and terms that fly around any Ad office, and clutter the minds of any Adman. However, as important as they may be in Adland, how relevant or understood are they to the consumer? Or is it even important whether they're relevant or understood by the masses?
Friday, 21 August 2009
Thursday, 20 August 2009
With the 2 year exclusivity deal with O2 set to come to an end next month, the iPhone is set to yet again spread it's far stretching wings and expand upon it's already fruitful market. With the rights of the iPhone 3G being opened up to both Orange and T-Mobile, the Apple iPhone is set to further it's stronghold within the UK mobile phone market. Already holding a dominant position within the market, the new opportunity for the iPhone to expand and reach even more is one Apple will most definitely be relishing.
The new opportunities for Apple do not merely lie in the consumer markets, with Orange having a stronghold in the corporate side of communications too. This will undoubtedly be a key factor in the continued drive for growth and success for Apple and it's grip on the mobile communications market. In essence this is the second wave of attack from Apple in the UK market. Opening up the exclusivity of the iPhone now increases their relative target market as well as it's presence on the shop floor. By firstly gaining a larger presence in the high street the product is set to interact with more consumers, and benefit from more retail space. Secondly, it will now become a viable and competitive option for network loyal customers, who did not want to move from their respective network providers over to O2.
In addition to this, the new competitiveness within the market will help create new offerings and better value for money for the consumer, which should therefore help reduce the price and costing of the iPhone. This in-turn will make the iPhone gain a larger target market again, with it's lower price attracting more consumers, and therefore the iPhone tapping into more than just the top end of the market.
However, what must be stated, and considered is the fact that it's only the iPhone 3G that is being opened up to Orange and T-Mobile. O2 still remains the sole provider of the iPhone 3GS, the newer, more refined iPhone. This is a very important factor to both O2 and Apple, as this still keeps O2 at the forefront of the iPhone market, and most importantly, the exclusivity of the 3GS allows O2 to maintain it's own pricing strategy, with relatively low concerns in regards to Orange and T-Mobile.
So, after the dust has settled, and the iPhone becomes more freely available, and consumers see prices dropping, and network providers get a more level playing field, there's only one true beneficiary of this, yes, you got it...Apple.
Wednesday, 19 August 2009
Tuesday, 18 August 2009
It's all Digital Digital, so damn Digital
Are dirty, greasy, cheap fast foods all that we're allowed to eat after a night out of boozing and dancing and well in some cases puking..? Drinking over half your recommended daily calorie intake in 3 hours is all good and well, but that does not mean we want to then line our delicate stomachs with chicken so cheap even the stray cats would leave it behind, and a kebab so greasy it looks worse than my hair did in my teens!
Monday, 17 August 2009
Can anyone remember the talented, happy, vibrant, magazine adorned days of Kerry Katona..? Well nor can I. This once upon a time pop sensation has seen more ups-and-downs than Bill Clintons trousers, but even he's managed to re-emerge with a credible and almost respectable image of late. With new images of Kerry Katona surfacing all over the media showing her undignified and simply unacceptable approach to self medication, I wonder are her days as a 'usuable' public figure finally over?
We've seen Kerry in magazines, billboards and TV at every stage of her rather peculiar journey, from the highs of pop stardom, to the lows of depression, to the highs of her ability to overcome her issues, to the lows of addictions. Throughout that period Kerry's been able to utilise herself effectively, and in both good times and bad she's used that image to sell her brand, whether its for Iceland or MTV. However with the recent images emerging of Kerry snorting copious amounts of cocaine in her bathroom, surely she's put the final nail in her demise as an advertising and branding asset for good. With Icelenad looking to pull out of their contract with Katona, and her shows ratings dwindling by the week it's difficult to see how even another re-brand and freshened approach would help her bounce back once again. No doubt the PR spin will once again be out in force and a new 'makeover' forecast for the coming months, but now it's honestly felt the brand that is Kerry Katona and all it represents has finally hit rock bottom, maybe not so much with this one action alone, but the culmination of everything involved and her ability to repeatedly become the talk of the town, for all the wrong reasons.
Kerry Katona we do wish you well, but from Adland, I think we'd rather just watch from afar.
Friday, 14 August 2009
Tuesday, 11 August 2009
Whats the best ad you've seen on the box over the last few months...? This time last year I could roll a list as long as my arm off in a matter of seconds, but today there just isn't the creativity, oomph and dynamism...or is there...
Well there is one that stands out, for it's uniqueness, dynamism, ability to generate wide spread interest, with gallons of creativiey and an 'oomph so powerful that it can be felt in the dark valleys of..well Liverpool St. station..yes you got it, it is the T-Mobile – Life's for Sharing campaign.
The T-Mobile campaign stands out more so than any other due to its ability to be fresh and dynamic and capture the imagination of not only their target market but a larger audience, while maintaining the core elements of a successful campaign. The 'Liverpool Street Station dance' showed how advertising and marketing can still push the boundaries in being creatively dynamic and generating interest on a huge scale due to its fresh and unique approach.
However, for me the most important factor of this campaign is how it infused that creativity and dynamism into a successful and connecting marketing 'idea' for T-Mobile. The campaign held the core values of sharing, enjoyment, people and emotion, together with this fresh, dynamic, inspiring idea to produce a campaign which connected to T-Mobile very successfully. Credit should also be giving to the creative edge of the campaign, as over night it became more than an 'advert', it transformed into an internet phenomena, and the talk on everyone's lips.
I believe this was a very successful campaign due to its ability in every way to be fresh, connecting and interactive, while constantly relating to the brand in question. Looking back at it, each element of the campaign worked immensely well with everything involved, from the wide spread interest generated, to the fusion of values and ideas, to the idea of sharing, down to the simplicity of the overall idea itself.
A campaign very precisely put together, and perfectly executed.
The internet has developed immensely sine it began in 1957 with the formation of the Advanced Research Projects Agency (ARPA) by the US, which was no more than a connection of two computers, up until 1992 when the World Wide Web was released by CERN, (Hobbes Internet Timeline, 2003), up until today, where we see internet as the best technological advancement since, well since time began. The Internet has ‘enabled’ many businesses in many different ways; one of the key contributions it has made to all types of firms is in restructuring and developing the supply chain. The Internet has changed the ways in which businesses operate and work with suppliers and distributors; this has occurred and affected the B2B market considerably. E-commerce has become an essential tool for any kind of business, it is regarded by many as the way forward in survival and gaining sustainable competitive advantage, whether that be offline or online, or both. The largest segment of e-commerce is the buying and selling of goods and services by the businesses to the other businesses, (Forrester Research, 2004).
‘E-commerce is the use of the Internet and the Web to transact business. More formally, digitally enabled commercial transactions between and among organizations and individuals’, Laudon and Traver, (2003).
Essentially e-commerce is the more than just the buying and selling of products electronically, involving all pre-sale and post-sale activities, panning across the whole supply chain of a firm. E-commerce has impacted firms in many different ways, it’s affected the ways in which firms trade, purchase, sell, build relationships, interact with customers and suppliers, and how they transfer goods and money.
On a broad level e-commerce can be split in to two sub-sections, business to business, and business to consumer, these two different approaches stimulate different methods and requirements from firms, (Madlberger and Kotzab, 2001). In undertaking e-commerce in the different groups different concepts and requirements are exercised, in this report e-commerce will be looked at in relation to B2B organizations, and the role it plays in them.
E-commerce has enabled firms through seven unique features it possess:
Ubiquity – available everywhere, work, home, school, at anytime
Richness – Video, audio, and text is possible
Information density – technology reduces information costs and increase quality
Source: Laudon and Traver (2003)
However e-commerce is not a process whereby all these factors must be utilized or used in some way in order for it to be successful. They are he benefits of e-commerce, and some of those benefits will out way others to certain firms.
‘B2B: Business transactions conducted over public or private networks, including public and private transactions that se the Internet as a delivery vehicle. These transactions include financial transfers, online exchanges, auctions, delivery of products and services, supply-chain activities and integrated business networks.’ (Cunningham, 2001)
The subject of B2B e-commerce can be very detailed, and stretch far and wide to all the links a business may have with other businesses, and external sources. Where e-commerce has become its own, and been utilized successfully, and where it is most valuable is in the changing process of activity and supply chain management.
Supply chain issues have existed in all types of businesses for many years, and it’s pretty certain that they will continue to exist in the future. However, the level of significance these issues may have on certain types of businesses may be debatable or varying accordingly to the type of business. What the Internet as enabled is the development and adaptation of the Procurement process, essentially changing ‘the way firms purchase the goods they need to produce goods for consumers’, (Laudon and Traver, 2003; pp.709).
Business to business activity is seen to be more complex and multifaceted than that of business to consumer, the B2B supply issues are therefore directly related to the activity between suppliers and the organization, primarily on the Buy-side. The Buy-side(Upstream supply chain), (Chaffey, 2004), relates to and involves all the interaction between the firm and is supplier(s), it is the full process of engaging with suppliers in obtaining the end product or service, which can then be moved along to the Sell-side and to your customers.
Upstream supply chain – B2B
The B2B supply chain issues that have emerged are that:
B2B activities are conducted with companies and partners through supply chains or distribution networks
It is primarily a Buy-side issue
The chains have increased in their complexity and now the Internet extends the reach, and potentially the rate of exchange
These three issues can relate to any form of organization, whether it is service based or product, the implications and resulting factors are the same. However the importance of B2B e-commerce between service-orientated and profit centered organizations is something that may have different orientations.
In restructuring the supply chain in relation to e-commerce a B2B firm can gain many opportunities that can benefit them in their market. Disintermediation is a key factor that e-commerce allows firm to adapt and utilize. This is basically the ‘removal of intermediaries such as distributors or brokers that formally linked the company’ to its primary suppliers (Chaffey, 2004; pp.37). This offers firms the opportunity to buy directly from the supplier with reduced costs and shorter cycle times, therefore making the firm more efficient and effective. The other side of this is Re-intermediation (‘the creation of new intermediaries between customers and suppliers providing services such as supplier search and product evolution’, Chaffey, 2004; pp.39). This offers the business the chance to use B2B exchanges to source products or services at lower costs. This can all be utilized to accomplish the changes that e-commerce can bring to the firm, without any restructuring of the supply chain technologies such as email, web-based ordering, EDI and order tracking can be used to reduce costs and cycle times. And both disintermediation and re-intermediation options can be facilitated through email, web-sites EDI and e-commerce.
But the question B2B e-commerce in the service industry needs to address is whether it’s really essential for a not-for-profit organization to be fully integrated in B2B e-commerce activity? Or can they cope without it? Or is it more important for a not-for-profit organization as they have no income directly?
The adoption of e-commerce has occurred predominantly in the manufacturing and product based industries, however more and more service based organizations are adapting their strategies and implementing e-commerce strategies. One of the most successful and domineering companies to implement e-commerce has been Direct line. By adapting their whole organization, and stakeholders’ to a new and revolutionary strategy and way of ‘doing’ things they were able to completely change the market and become a market leader. The insurance industry may not look to be the best suited in adding value to the supply chain or the Buy side of a firm through e-commerce or e-procurement, however this clearly shows it can have monumental effects on any type of organization.
The ways in which Direct line, and many other financial companies have benefited from such implementations are through:
Reduced purchasing cycle time and cost
Enhanced budgetary control (achieved through rules to limit pending and improved reporting facilities)
Elimination of admin errors
Increasing buyer’s productivity
Lowering prices through product/service standardization and consolidation of buys
Improving information management
Improving the payment process
Source: Turban et al. 2000
These factors clearly have immense effects on the companies running costs and roles in their respective markets. By increasing efficiency, lowering costs, and increasing the effectiveness of working with other organizations in providing the service to consumers many firms have seen the benefits of e-commerce. These effects re not only in financial value, but also relate to productivity and organizational structure. Better interaction between companies and suppliers have helped improve products and services for consumers, it has also benefited in achieving substantial growth, not only for you, but key stakeholders.
This can also be looked at in the not-for profit organizations. It is apparent from the outset that profit or sales are not the key issues for such service providers; however, e-commerce can assist such firms in many other areas. Not-for-profit organizations are primarily there to provide a service or project awareness of some kind across to consumers or the public; they do however still have the same supply chains as other firms. These supply chains work and are in place in order to gain or obtain key data or information, in order to provide it to an end user, so fundamentally they are intermediaries for others, or protocol for certain organizations or societies in providing a service to stimulate respective targets, i.e. charities. Obviously the exchange of ‘goods’ is different and the interaction, along with the goals of both the firm and its suppliers or distributors. However, e-commerce can assist and help the firm in its procurement process in providing the systems to make such organizations efficient, and work better with its stakeholders. This can assist the overall service to the consumer, and help implement the ‘pull’ strategy for the firm, but also for the services it provides. An example of this is the ‘portal’ (Chaffey, 2004) site 2wm.co.uk which provides information and support to all aspects within the west midlands. By implementing e-commerce with its strategic partners and stakeholders 2wm.co.uk have been able to provide a service that would be very difficult to duplicate offline. 2wm.co.uk have utilized B2B e-commerce by working directly with its ‘suppliers’ and restructuring the supply chain into an interactive ongoing relationship to whom consumers have access to through the portal. This has been very effective as data and information has been communicated both back and forth, and is continuously updated through the procurement process. This allows ‘suppliers’ of information or data to supply it as and when they feel the need to do so, or when requested.
Another example of where B2B e-commerce has worked very well is through auction sites. Auction sites at the bare minimum are places to trade or market, they aim to bring two sets of individuals together to a place where they can trade. Various auction site offer one-to-many markets, providing the seller with buyers and the buyers with products; this can be seen in the business orientated DoveBid.com site. The site provides the service; there is no cost at all to post your products on the site, although it is only done through an invitation process and items are not common ‘consumer’ use products. The site has developed its supply chain by implementing supply chain management from the seller, through themselves and down to the consumer, at no stage does the site see or hold the product, however, it holds all the key links in the supply chain and manages them.
This shows the importance e-commerce can have within an organization and how it can help improve the quality of the service being provided. E-commerce is not specifically one item or one element of the process; it enables and aids firms in many different ways and in many different areas.
Yes e-commerce is new way of doing business, yes e-commerce is beneficial to any type of firm, yes e-commerce is something all firms are looking to utilize in the future if they’ve not already done so. However it must also be noted that e-commerce is the next stage in a log running process. Firms and organizations have for many years now been using various systems or structures in order to communicate effectively with trade partners and stakeholders. E-commerce did not originate with the Internet, it merely took a step further and was taken to new level or stage.
Since the early 1980’s firms have been implementing communication systems, the most effective being EDI (Electronic Data Exchange). Over the years EDI has developed from simply a system for document automation, to document elimination and finally continuous replenishment. EDI is a specialized system and used for interaction, and supports direct commercial transactions among strategically related firms. However, unlike e-commerce, EDI has the weakness of being unable to support vast amounts of suppliers and distributors meeting in one virtual network. In essence this has helped e-commerce in taking the role of an electronic system to the next level, and becoming the most successful tool to implement, which has been enabled through web technologies.
E-commerce has a very broad and drawn out definition, however implementing all such functions is not always necessary. E-commerce to one firm may involve all aspects of e-commerce from buying to selling, and eCRM to post sale servicing. An example of this s Dell, there entire network has been enabled by e-commerce and this has changed there whole supply chain systems and management, from supplier interaction to customer contact, to delver and post sale services. On the other side of the argument, many firms have only utilized certain areas of e-commerce, in relation to their business and the products or services they offer. An example of this is various shopping mall sites, one of which is the Bullring site. It has utilized e-commerce in providing the service of information, knowledge, and data by working with suppliers of this information, the council, retailers, consumers, in order to provide a service with improved quality and better access abilities to all aspects of the Bullring through one, portal to an extent.
As it’s evident from the various sites discussed, and from personal experience e-commerce has completely changed the market and the organizational structures of firms and its stakeholders.
The key implications that B2B e-commerce has had is that it has created the virtual organization, giving firms the ability to exist virtually with virtual links to one or many suppliers, distributors and customers. It has also helped in creating new distribution channels from both suppliers to firms, and from firms to customers. This impact has overall improved the distribution channel support by allowing stakeholders to work together, and compliment each others abilities and strategies in providing the product or service from one end, the beginning, through the supply chain, to the end user.
This has allowed firms to implement supply chain management, increasing efficiency and effectiveness of their firm, but also improvement of the overall process for customers. Another factor that e-commerce has impacted strongly is customer relationship management. It has enabled and developed a firms’ ability to acquire customers, retain existing customers through supply chain management, improve the quality of service, and employ strategies to extend and selectively target certain customer segments. In doing so, eCRM has been able to be implemented within any type of business, whether it’s a product or service based company, for-profit or not.
E-commerce is a process, and it is unique to each and every business or situation. The end result of the process is dependant upon the type of firm or organization in question; however the importance of e-commerce is as valid for any type of firm.
One of the most important aspects that need to be identified and related to e-commerce in recognizing the potential for e-commerce is the objectives of the firm or organization. Varying objectives will cause different uses of e-commerce, however the importance of reaching ones objectives are as equally as important to any type of firm, from profit based, to not-for-profit. Therefore it is essential to note that e-commerce is applied in many different forms, and for many different motives, however the importance of it will be directly related to ones objectives, which are they key priority to every firm.
Monday, 10 August 2009
In today’s competitive and strategic markets companies are having to use the most diverse and effective marketing strategies in order to gain an advantage over their rivals, and stimulate consumption in a vast number of ways. Clothing has become more than just ‘wear’; it integrates into an individual’s life and has become an extension of ones self and their beliefs and values. In doing so, the consumption of clothing, in particular segments and groups, has developed into an act of propelling yourself into the environment through the garments you chose to wear, or more importantly, the ‘names’ you chose to associate with. This is, in most cases controlled by the designers and manufacturers of such clothing, however, in some cases the consumer influence has overwhelmed certain brands affecting the brands meanings, values and standings.
The clothing industry has grown immensely in the past few years, and a large proportion of that growth has been within the designer clothing industry. It is expected the designer clothing industry will slow down in future, however strong luxury brands will continue to prosper in an economy where disposable income continues to rise. With designer clothing for ever occasion and event, and designs to fulfil any individuals’ desire and taste, this market has become a very volatile and turbulent place of trade.
The designer clothing market is worth an estimated £1.5billion in the UK, (Mintel, 2005) with Burberry, Calvin Klein and Paul Smith dominating the store presence, due to their wider market and lower exclusiveness. The structure of the overall market is in the form of a pyramid shape, the higher upon the pyramid you stand, the higher your price and the higher your exclusivity:
Haute couture – exclusive designs, made to measure services mainly for women £10,000+
Semi-couture – limited editions, customised, not bespoke
Mainline designer ready to wear
Second line designer – sub-brands or diffusions
Lower sub-brands, high street designer lines
Designer lines exclusive to certain retailers – Debenhams, H&M, oasis, at mainstream prices
The designer clothing industry has seen a slight downturn in the past year, however with continuing growth in PDI within the UK (Mintel, 2005); it is obvious that there is more disposable income available, however only the strongest, and most desirable brands will reap the benefits of such changes. Therefore the market is becoming ever more competitive and challenging, with consumers moving towards one brand over another. This will significantly affect the dynamics of the market; fortunes of designers will depend largely on whether they hold the ‘must have’ items consumers desire. This is an area largely influenced by the media; with the strongest consumer base for designers now being the 15 – 24 year olds (Mintel, 2005), who are highly fashion conscious and highly interested in designer clothing, the media message projected by designers is the key area in order to influence and bring about awareness, and also gain positive ratings amongst the ‘fashion elite’, over advertising itself.
Growth in such a market is very difficult, the balance of maintaining exclusivity and uniqueness, with the desire to grow and expand conflict immensely in a niche market. One of the turning points within the industry was the utilisation of accessories. Accessories, such as sunglasses, handbags and shoes enabled designers brands to develop and expand their market, while maintaining their exclusivity and limited but highly attractive market. Designer accessories account for almost over a third of all designer brand sales, this shows the importance of brand or product extension, while minimising, or limiting market extension.
However, the consumption of designer goods is changing everything about the designer industry. Exclusive designs and brands are becoming ever more accessible, and they are in no way exclusive to the ‘traditional smart, high-earning core customers’ (Brooke, 2005). With more and more individuals consuming luxury brands, and familiarity breeding contempt, are luxury brands really that luxury and desirable? This is the predicament facing all designer brands, who aim to grow their markets and expand their businesses, yet maintain their exclusivity and niche appeal.
With sales climbing after huge declines in profits over the past few years in the UK market, Burberry is a prime example of a designer brand being affected in this whirlwind of a market. Internal upheaval, and consumer associations, fuelled by media cataclysm Burberry has seen its high end British appeal brand scorn and transformed from right under their noses. Whether Burberry were in a process to expand their market or stimulate growth in existing markets, their story is one every designer brand should assess and ponder upon. Having seen Gucci go through similar fate in the 80’s and 90’s (Brooke, 2005), and Hugo Boss and Paul Smith still trying to climb back up after their extension strategy misfortunes (Rogers, 2003), Burberry is a designer brand that could well be eaten up by the dynamics of such a market, or claw back to more stronger and superior position. As a result of Burberry’s very present and current happenings it is valuable and beneficial to look closer at the designer brand and its market in order to, not only understand the industry better but to also gain a better understanding into the interaction of designer brands with consumers, and the roles consumers play for designer brands.
In order to understand and put value to the knowledge of how the brand is operating and change today, it is essential to gain understanding on Burberry, and its values and principals from when, and how it began.
1856 – Burberry was founded in 1856 when 21 year old Thomas Burberry, a former apprentice to a country draper, opened an outfitters shop in Basingstoke, Hampshire, England
1870 – Business thrived and by 1870 Burberry became known as an ‘emporium’ with an increased focus on the development of outdoor wear for local residents and visiting sportsmen who frequented the store
1880 – Thomas Burberry invented gabardine – a breathable fabric made using an innovative process where the yarn was waterproof before weaving. This fabric was not only waterproof but also extremely durable. A patent was taken out in 1888
1891 – Thomas Burberry opened his first shop at the Haymarket, now the site of Burberrys corporate headquarters
1895 – The officers Tielocken Coat, designed by Burberry in 1890’s, was the forerunner to today’s trench coat
1911 – The Norwegian explorer, Captain Roald Amundsen was outfitted in Burberry when he became the first man to reach the South Pole on December 14th 1911. Amundsen left a Burberry gabardine tent to inform Captain Scott of his successful mission
1914 – In 1914 Burberry was commissioned by the War Office to adapt their earlier design of the service uniform for British Officers to the military needs and equipment of the time
1920 – The Burberry Check, registered as a trademark, was introduced as a lining to the trench coat in the 1920’s. Soon the red, camel, black and white check became synonymous with Burberry
1955 – Burberry was first awarded Royal Warrant from Her Majesty The Queen in 1955
1989 – A further Royal Warrant was awarded 1989 by His Royal Highness The Prince of Wales
2002 – Burberry launched its exclusive ‘Art of the Trench’ made to order trench coat service
2006 – Burberry celebrates its 150 year anniversary
Over Burberrys 150 year history, it has seen itself become an integral part of British society and heritage. Its relations with the monarchy, and historic associations, have helped build a luxury brand which thrives on its distinct British sensibility, strong international recognition and differentiating brand values that resonate across a multi-generational and dual-gender audience, (Burberry, 2006).
Having made its mark in 1880 with the development of the revolutionary fabric, the Gabordine, Burberry soon enhanced its image and brand qualities with valuable associations with explorers and the military. This led to Burberry gaining a reputation for high quality, and a prestigious reflection on its brand. This exclusiveness and high-status recognition helped Burberry open a store in London and Paris, taking the Brand to an international audience. At this time Burberry was in a very unique and niche market, there was very little competition, and the brand Burberry was seen as being the utmost quality and status. This was reflected in its target market and the folk who consumed such a product. Having high associations with the British royal family and the British autocracy it was evident that one had to be ‘someone’ in order to be dressed in such clothing. The target market was very well established, high-status consumers, with wealth and desire to project their standing within society, put simply it was the Rolls-Royce of the clothing industry.
Burberry soon progressed into the global market having seen the opportunities available, and the rewards of having such a niche, high end product. Soon Burberry span across Europe, Asia and the US through supply chains and wholesale agreements. This internationalisation of a niche brand, which began as a small shop in Basingstoke, took one very large step in order to become truly global. In 1955 Burberry was taken over allowing the expansion of retail networks in the UK and abroad, this gave way to licensing to third parties for products and designs. However, this delegation of rights and control had considerable implications for the brand and its image. As a result of the licensing, inconsistencies become more and more apparent in design, quality, and pricing throughout Europe, and the world. This damaged Burberry’s image and brand qualities resulting in sharp falls in profits, sales, reputation, and their stronghold in the designer goods market (Strategic Direction, 2005).
The brand began to lose is prestigious qualities as well as its core customers, who no longer saw Burberry as an ‘elite’ brand for the wealthy ‘honourable’ folk. Competition from the Gucci group, and Versace became more and more intense, they were consistent, high quality and very much design led and customer focused, therefore redefining the designer brand and taking the term ‘elite’ to a new forefront.
Today Burberry is essentially a middle-of-the-road designer brand (Ritson, 2005); it is not the elite brand such as Gucci or Versace. This is primarily due to its limited design led clothing lines and lack of presence of the global catwalks (Ritson, 2005). There core customer today differ from those in their early years.
Burberry offer designer clothing at a lower strategic level of those from Gucci and Versace (Strategic Direction, 2005), this is obviously reflected in their target market, and is positioned towards the middle of the designer market pyramid (Mintel, 2005). Their target market are still wealthy affluent consumers, however it runs through many socio-economic groups from ABC1’s, 2’s and D, making it a less exclusive and admirable brand. However over the past few years Burberry has addressed this factor are in a process of adapting and changing their brand and move to a more exclusive and elite nature. This change in their appeal and offering has been a direct reaction to the recent consumption patters of their products, and the association of their brand and products with less desirable consumers. This has seen direct effects on Burberry’s overall sales, with global underlying sales up by 10% to £715.5 million, and operating profits increasing further by 16% to £165.5 million in 2005. in terms of product categories, Burberry’s strongest division is womenswear with 34% of total sales, and not surprisingly menswear and accessories take up and even 27% each, representing the importance of accessories to Burberry, and all designer brands. The remaining sales are split between licensing (11%) and other (1%) (Mintel, 2005). It is essential to state that these figures represent the overall picture for Burberry, however, within the UK, Burberry have suffered and have seen a slowdown due to environmental factors and the market.
In the UK market, the iconic Burberry check and some items of clothing/accessories have been consumed by a style tribe called the ‘Chavs’. This demographic is young, male and female, working class, and widely publicized in the media as wearing designer labels but with little taste, and allegedly causing trouble. The influence that these groups of individuals have had on Burberry is immense, they have undoubtedly changed the brands image and meaning in ways Burberry never imagined possible. This has obviously affected Burberry’s core customers, who to some degree find it undesirable to consume the brand which is now visibly worn by such individuals, and therefore are disassociating themselves with the famous check’. The effect can be very negative and some UK retailers dropped the brand as their up-market customers do not want to be associated with Chavs.
“Yes it negatively affected Burberry sales across the UK – just like Hackett was affected when it started being worn by (alleged) football hooligans. But Hackett has come back and Burberry will be fine because they are downplaying the check and moving the collection on.”
– Director, department store
“I don’t think it has really affected Burberry. There is the working class/nouveau riche market and the aficionados market. Burberry has a strong business in its own market that transcends a lot of barriers. Ralph Lauren is worn by loads of middle-aged overweight Americans but it still has designer associations and doesn’t put off young fashionable people buying it.”
– Menswear consultant (Source: Mintel 2005)
The key fundamental problems and weaknesses that Burberry had were that it was a very visible brand. The Burberry check is recognizable all over the world, and yes it may be a great asset, however, the check is instantly recognizable; and visibility of the brand led to a direct association with chavs. A more subtle and intimate feature would play a stronger and more intelligent role as a communicative device with its core customers. The second weakness is that due to Burberry’s positioning it is very much accessible in the high-street, and has a low couture presence. This makes Burberry a middle of the tier in the luxury market. The final weakness Burberry failed to address is their relations with the media. They failed to counter any threat chavs had on the brand, or comfort existing customers who were well aware of the chav phenomenon taking place. They let the ‘phenomenon’ runaway with itself, and by the time they wanted to react, some would say it was too late (Ritson, 2005).
At present Burberry is in the process of re-inventing their brand and image through a more design led focus, and developing a more up-market, elite brand. This has been complimented by Burberry stopping production of certain products which are predominantly consumed by ‘chavs’, and the decrease in the use of the visible check on their clothing. New advertising campaigns and distribution networks are allowing Burberry to evolve their brand into what they feel is best for the brand, with the use of certain celebrities, and the imagery and meanings they depict.
This is being led by the arrival of a new leading designer, a bespoke range for the ultra exclusive clientele, and the introduction of Burberry to the catwalk. They are hoping these changes will help develop a brand that will attract premium buying consumers through an elite brand and design-led portfolio, and also a somewhat price diffused range to help maintain a level of growth while sustaining exclusivity.
“It was definitely a negative influence on Burberry and now it is affecting Dior that the Chavs are also wearing (the J’adore Dior T-shirt and logo prints). It has a negative effect on retailers selling the mainline because, rather like an item being counterfeited, it will have less appeal to the up market shopper. Having said that, Louis Vuitton bags are copied everywhere but they still sell. Burberry is getting over it now because the brand is about a lot more than just checks.”
– Consumer fashion journalist (Source: Mintel 2005)
From looking at the designer industry and the changes it has gone through recently, and the influences and overriding dynamics facing the designer brands it is clear to see that this is a volatile market, and one in which the dynamics of the market are very different to any other. Changes in demand can have obscure results for an organization in this market, to an extent one could argue it is very much a niche market, and most consumers of this market would like for it to be kept that way. However, changing consumer behavior and shifting consumption patterns constantly transform and alter the market, but more importantly, they effect the positions and perceptions of the designer brands themselves. This has been clearly seen and identified in many brands over the past 20 to 30 years, and most recently in the case of Burberry. A high quality, sought after brand has seen its image transformed by the association of their brand and products with certain social groups within the UK, whether their able to move on from this problem as a designer brand will be determined in their ability to regain their elite consumer, and distinctiveness as an exclusive, limited designer brand.
The most important element to understand is that growth in such a market may not be the most valuable or attractive proposition or strategy to move the designer brand forward, exclusivity and uniqueness are key to maintain the notion of a ‘designer brand’.
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