Brand Audit Project Final Report Company: Burberry Group: Jasmine Roscoe, Jessica Johnson, Mardreas Jones, Sierra Lowery FTM 382 Spring 2012 Instructor: Dr. Xu 1
Table Of Contents A. Executive Summary 3 B. Company History & Background 3 C. Objective 4 D. Industry Analysis Product Market Analysis 4 Financial Analysis 5 SWOT Analysis 6 Competitors 7 E. Brand Inventory 8 Target Markets 8 Marketing Program 8 Brand Architecture 9 Brand Personality, Elements, and Mantra 11 Competitor Analysis 12 Brand Inventory Assessment 13 F. Brand Exploratory 14 Market Observation 14 Brand Awareness and Association Assessment 14 G. Reccomendations 16 Branding Strategies 16 Brand Marketing Programs 17 Secondary Associations and IMC Proposal 19 References 22 Appendix 24 2
A. Executive Summary This brand audit evaluates the industry presence of Burberry and provides recommendations in order for the company to increase it’s market share. The objectives of this audit are: -to identify current place industry -to evaluate current marketing procedures in place -to observe consumer sentiment -to recommend ways for Burberry to enhance it’s current position In this analysis the marketing and product mix are heavily analyzed. Burberry offers a variety of product and different price points, as well as conducts intense marketing campaigns. The findings of the effectiveness of these were very high, but there is still room for improvement. The company does an amazing job reaching inside and outside of its customer base. The hope of the company is to be on the mind of those who can and cannot afford the products, because those who can will buy and those who can’t will associate prestige with the company and when they can afford the product they will shop there. Recommendations made were generally dealing with how to increase marketing effectiveness and relevance when dealing with their target market. Other recommendations were made dealing with the evaluative approach the company uses as well as offered a new modern but timeless look to their brand hangtags. B. Company History & Background Burberry was founded by Thomas Burberry in 1856, in Basingstoke, Hampshire, England. At the time Burberry worked as a draper’s apprentice and was only twenty one years of age. By 1870 the small shop started by Burberry had grown into an “emporium” that focused on outdoors attire. In 1879 Burberry invented garbardine, a fabric that is waterproof and 3
durable but breathable. A patent was taken out on the fabric in 1888. In 1891 the company opened a store in the west end of London and in 1895 developed the Tielocken, the precursor to the trench coat. In 1901 the trademark Equestrian Knight accompanied by the work “prorsum” first appeared. In 1914 the creation of the iconic trench coat occured and has been the staple of the Burberry brand ever since. In the 1920’s the Burberry Check was introduced to the brand. From 1856 to 1955 Burberry was an independent company, in 1955 it was taken over by Great Universal Stores. The company flourished and in 2002 was initially introduced to the London Stock Exchange. C.Objective The purpose of brand audit is to utilize the select evaluative tools learned throughout the course to analyze Burberry’s industry presence in comparison to its competitors. The goal is to uncover the strengths, weaknesses, opportunities and threats and provide suggestions to increase the brand’s market position. D. Industry Analysis Product Market Analysis Burberry is a leading luxury brand in the world market. Due to it’s wide product mix Burberry is able to cater to a number of markets. Outerwear remains the core of the Burberry apparel business, from timeless iconic pieces to innovative contemporary styles. Outerwear accounted for over half of their retail apparel sales during the year. In 2006-2007 Burberry historically licensed the first full in-house global menswear collection. This first collection reported growth of 31 percent in menswear. Building childrenswear remains a key focus for the company. Childrenswear integrated into the global company in 2010, with the division now located in the company London headquarters. Non-apparel 4
remains the main growth of the company contributing 40 percent of retail and wholesale sales during the year. Large leather good are a high seller of the Burberry non-apparel business, representing about 50 percent of revenues in its category. Men’s accessories was amongst the strongest performing categories. Women’s shoes represent an important growth opportunity for Burberry reaching 7 percent of mainline sales in 2011. Boots, performed particularly strongly (www.burberryplc.com). In June 2010, Burberry launched its first cosmetics line, Burberry Beauty. Bring focus of attention on natural, effortless beauty. Burberry Beauty first introduced as a test format through a limited number of wholesale partners globally and to customers on burberry.com. Burberry Beauty supported by Burberry advertisement campaigns and runway shows, experienced a strong early response from consumers and press as it approached its first year anniversary. Burberry has three global licensing agreements with fragrance, timepieces, and eyewear (www.burberryplc.com). The Burberry store is a luxury brand with a distinctive British sensibility, strong international recognition and differentiating brand values that resonate across multi- generational and duel-gender audiences. Since its founding in England in 1856, Burberry has been known for quality, innovation and style (www.beverlycenter.com). Financial Analysis Burberry’s revenue has increased steadily over the past four years. In the fiscal year ending in March 2011, Burberry reported revenues of approximately $2,336.2 million (Data Monitor, 2011). In comparison to the previous fiscal year, this was a total increase of over 25%. The group's operating profit was $465.1 million in fiscal 2011, and the net profit was $324.3 million (Data Monitor, 2011). Burberry generates revenue through retail (also including e-commerce), wholesale and licensing. For the 2010-2011 year, retail accounted 5
for approximately 64% of revenue, wholesale 29% and licensing 7% (Data Monitor, 2011). The products that generated the most revenue in 2011 were non-apparel items such as leather goods and the Burberry Body fragrance. Women and men apparel products followed in second and third place respectively. Children’s wear generated the least amount of revenue in 2011. SWOT Analysis Burberry has a goal of continuing to hold “great brands [that] project a pure, consistent experience across all channels in order to standout in today’s cluttered consumer arena.” (Data Monitor, 2011) The “pure and consistent experience” is maintained through authenticity and integrity that allows all consumers to trust the heritage brand and continue to shop their products. In addition to consistent and trustworthy products, Burberry focuses on investing in their team culture by reinforcing company values. The company functions on the principle that the Burberry brand is “the touchstone against which all activity is measured” (Data Monitor, 2011). In addition to upholding brand integrity, Burberry has focuses on operating under high quality standards through an ethical supply chain and other responsible operations and focuses on Corporate Responsibility. Since 1856, Burberry has operated under the belief that “to be a great brand you also need to be a great company” (Burberry plc, 2011). Currently they tackle “issues related to climate change; and efforts to inspire employees on issues of ethical trade, environmental sustainability and community investment” (Burberry plc, 2011). While the heritage and consistency is a strength within the company, it has proven to be an issue in modern times. In the past decade, the company began “revitalizing the Burberry [by addressing] inconsistencies with the modern democratic luxury positioning 6
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