Burberry's Global Marketing Strategies

This assignment examines Burberry's approach to global marketing. It requires students to analyze the company's strategies, particularly focusing on core competencies in digital marketing and the chosen market entry methods. Students must support their analysis with relevant academic literature, industry reports, and online resources.

GLOBAL
MARKETING
MANAGEMENT
1

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
1. Explanation regarding competencies of brand and their implication in international
expansion.....................................................................................................................................3
2 An analysis of Burberry's internal strength and weaknesses....................................................4
3 An analysis regarding external opportunities and threat ........................................................5
4 A competitor analysis of Burberry............................................................................................8
5. Segmenting, targeting and positioning of Burberry.................................................................9
6. The realistic marketing objective that can be set by Burberry in India market.....................10
7. Market entry strategy that can be used by Burberry .............................................................11
8. Four Ps of marketing to be followed by Burberry in India ...................................................11
9. Analysis of marketing budget ...............................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES .............................................................................................................................14
2

INTRODUCTION
With the integration of economies through globalization, the world has become a global
village. To expand business in global economy is just not a mere option but it has become a
necessity for attaining market leadership and staying competitive. The global marketing is a
important concept that help organization to make modification in business strategies to adapt to
changes in other countries (Globalization on the rise in the modern era, 2011). It further help
business enterprise in gaining global recognition. The global marketing provides opportunities to
companies to transfer their offerings, business ideas etc to across the national boundaries. In
present report various aspects of global marketing management will be explained. In this report,
market entry strategy for Burberry will be provided. Burberry is a UK based luxury brand
providing high end fashion apparels, accessories, cosmetics etc. Further in this report, with the
help of critical analysis, internal competencies and weaknesses of brand will be highlighted.
TASK
1. Explanation regarding competencies of brand and their implication in international expansion
Burberry is elite fashion brand, known for providing high end fashion wears. The brand
reflects prime quality, outstanding style and elegance in its products. The company is providing
its valuable services from more than 150 years, therefore there is strong brand recognition in
market. Therefore, the key competitive advantage available to Burberry is its powerful brand
name and successful image in market (Globalization - First era of modern globalization: to
1914. 2015). In addition to this aspect, the expertise of brand in digital marketing also serve as
competitive advantage to the brand. The company was first to launch new iPhone applications
like “Runway to Reality' which enable elite customers to purchase designer fashion apparels
from runway collection instantly (Strategy report on Burberry, 2015). Further, company also
possess competitive benefit in terms of digital innovation like, introduction to Burberry Retail
theater. With this aspect, Burberry broadcast its Spring Summer Collection live show into
number of flagship stores present in different parts of world. This further assist company in
providing multimedia experience to its customers by live streaming fashion shows using HD
(high definition technology) screens, speakers etc. Therefore, company is able to attract large
number of customers. Another competitive benefit available to firm is regarding creative and
3

competent human resources that assist organization in developing competitive market strategy.
Further, Burberry have gained competencies for its trench coats which are famous worldwide.
Furthermore, company can use its competencies to expand in international market. The
global image will make it easy for brand to attract customers in target foreign country. With the
Thereafter, company can make best use of its digital technology for entering the foreign market.
For instance, company has recently started digital branch in shopping mall located in China.
Likewise, company can open digital branches in foreign countries where it is still not operational
(Core competence of digital marketing, 2015). Further, Burberry can expand its global presence
by using online media. In this respect, brand can use social networking sites and other media
channels like, Youtube, Facebook, Twitter, Pinterest etc. Further, Burberry can offer its products
in international market by designing mobile applications for android cellphones. This will help in
reaching the products of brand to the target customers. Thereafter, company can enter the
international market use its core competitive product, trench coats and scarves that showcase
outwear heritage of brand and elegance with supreme quality.
2 An analysis of Burberry's internal strength and weaknesses
By analyzing the strength and weaknesses company will get better understanding of its
functioning (Barney and Clark, 2007). Further, it can use its capabilities to overcome its
weaknesses. Thereafter, it also enable brand to take best advantage of upcoming opportunities.
Since, its inception that company is intending to expand its operations by entering into global
market, it is feasible for marketing manager of brand to critically analyze the internal strength
and weaknesses of brand. The description of which is as follows:
Strengths
 Strong brand image: Burberry is well established brand providing luxurious apparels
since 1856. Further the brand is known for its royal heritage as its products were also
admired by royals like, Queen Elizabeth, Prince Charles etc.
 Digital innovation: Burberry is renowned for integrating digital technologies. The
company is operating digital branches, flagship stores giving multimedia experience to
customers (Bharwani and Butt, 2012).
 Strong business relationship with elite brand: Burberry have strong corporate
relationship with elite brands like Apple etc. The company started its famous applications
4

like Runway to reality etc through iPad etc. New digital store has commenced by
company in T mall of China, owned by Alibaba a famous e-commerce company.
 International presence: Burberry have more than 500 stores in different foreign
countries. Due to international presence, company have gained global recognition.
Organization offers its products to both wholesale and retail customers.
 Negotiating power with suppliers: Company have strong bargaining power with
suppliers which reduces operating cost for organization (Carney, 2005).
 Royal warrant: Burberry has accepted Royal warrant from elite persons like Queen
Elizabeth and Prince Charles, therefore company can use this aspect for marketing its
product as elite brand.
 Engagement with community: Burberry is able to enhance interpersonal relationship its
target customers by using social media. Therefore, there are large number of fan
following in social sites like, Facebook, Pinterest, Youtube and Twitter (Hill, 2008).
 Focused marketing strategy resulting in brand retention: Burberry believes in
focused branding techniques which not only save cost but also assist in easy brand
recalling and retention. In this aspect, company promote its high end products only
through magazines, celebrity endorsement, fashion shows etc.
Weakness
 Premium prices: The products offered by Burberry are too costly therefore it cannot be
afforded by middle class customers. The company have gained image of costly brand this
impact the sales of low priced products also.
 Restricted product line: As compared to other brands of fashion and beauty segment,
Burberry have limited product line having apparels, accessories etc (Doh, 2005).
 Intense competition with other brands: The sales of Burberry are declining from past
few years due to shift of customers to other brands like, Gucci, Louis Vuitton, Prada etc.
Therefore, brand is facing intense market rivalry.
3 An analysis regarding external opportunities and threat
Described below is the analysis of various opportunities and threat, Burberry face while
operating in domestic as well as international country.
Opportunities:
5

 Diversification into emerging markets: Burberry can expand into international market
such as, Egypt, India, Turkey etc where company is not functioning. Further, the
competition level in such countries is quiet low which means that company will have
enhanced opportunities.
 Changing lifestyle of customers: With the integration of developed and developing
economies, the demand of fashion outwears and accessories is also increasing in
emerging countries (Czinkota and et. al., 2009).
 Expansion in product line: Burberry can expand its product line by adding other types
of products and services. This will also give competitive benefit to company in
comparison to its rivals.
 Increasing demand of high end products: The demand of premium products is
witnessing a hike rate of 33% (Indian market) which states that company have good
possibilities if it expand its market share in developing countries.
 Sponsorship of Fashion events: Burberry can sponsor more fashion events and other
shows that will enhance the popularity of brand (Bharwani and Butt, 2012).
Threat:
 Increasing competition: The market competition for Burberry is increasing from brands
like, Gucci, Prada, Jimmi Choo, Hermes etc. that are major threat for the existence of
brand.
 Fake products: The major threat faced by Burberry is regarding imitation of brand of its
products which can impact their brand equity (Hill, 2008). Therefore, the fake products
sold in the name of brand can impact the image of Burberry in market.
 Changing taste of customers: The customers taste and preferences changes rapidly
which result into short life span of product and products become outdated and remain
unsold in stores.
Furthermore, with the help of PESTEL analysis the impact of external factors on the operations
of company can be illustrated. It is explained as follows:
 Political factors: It refers to rules, regulations, taxation and other policies framed by UK
government. Burberry is functioning in various developing countries therefore, it is also
6

required to consider regulations of respective host country. In this respect, company
makes timely payment of tax and other duties.
 Economic factors: The GDP, GNP, inflation, monetary policies etc and other economic
policies of country can impact the performance of company in domestic as well as
foreign country. The reduction in disposable income can directly impact the demand of
products offered by brand. The recession of UK resulted introduced sales of Burberry
products (Bluementritt, 2006).
 Social factors: The lifestyle, income, taste and preferences of customers can impact the
functioning of company. Therefore, by understanding the social factors of target market
before expanding its operations company can get fruitful outcomes. In this respect,
company has gained popularity in Indian market by making best use of social factors.
 Technology: The upgraded technology assist Burberry in getting competitive advantage
(Technology and Globalization: Modern-Era Constraints on Local Initiatives for Land
Reform. 2000). The company is first brand to start live streaming shows in its flagship
stores, therefore customers can buy products from catwalk. Further, company is also
using e-commerce sites like artofthetrench.com which enable consumers to order
customized products.
 Environmental factors: With the growing environmental awareness, it is becoming
crucial for company to consider environmental factors. In this aspect, company is
recycling its waste that could be further used in insulation of car parts. Thereafter,
Burberry is doing energy efficiency by using LED lightning, renewable energy etc.
 Legal factors: The legal regulations can impact the performance of company. Therefore,
Burberry ensure that it strictly adhere policies like, competition, employment,
discrimination etc (Czinkota and et. al., 2009). Therefore, company ensures that it
indulge in healthy trade practices only. Thereafter, while appointing staff, it ensures there
is no discrimination on the basis of caste, creed, gender, religion etc.
4 A competitor analysis of Burberry
With the help of competitor analysis, company can identify the strength, weakness of its
existing and prospective consumers in UK and target Indian market. This will assist company in
availing upcoming future opportunities and taking effective steps top avoid potential threats. The
7

major competitor of company are, Ralph Lauren, Gucci and Prada. Therefore, the marketing
actions of these company have direct impact on the demand of products of Burberry. The
competitor analysis of brand is as follows:
Major Rivals Marketing
strategy
Target market Strength Weakness
Prada It provide unique
and innovative
products.
It ensure
differentiation in
its products
Higher and upper
middle level of
fashion customers
Superior quality
of product, brand
recognition and
loyalty among
consumers
Prices are too
high
Ralph Lauren It use fashion
magazine,
celebrity
endorsement and
latest technology
for promotion
High and middle
class customers
Diversified brand Limited designs
and lack of
innovation
Gucci limited quantity
of products
offered in market
, Heavy
promotion
through celebrity
and fashion
models
Higher and
middle class
consumers
Strong presence
in foreign market,
established brand
name and image
Heavy expense in
marketing,
fluctuation in
management
All the major brands of company are already present in the target market of India.
Therefore, to sustain competition from them Burberry should consider the market strategies,
strength, weakness of the major rivals. This will help company in developing effective and
innovative strategy. Therefore, Burberry can get an edge over its major competitors.
8

5. Segmenting, targeting and positioning of Burberry
In order to expand its market share and increase its customer base, Burberry can enter
into foreign market. The emerging market will provide greater opportunities for people to serve
the needs of customers in better manner. It has been identified that company is not having its
presence in country like India therefore, it can enter into market of target nation. However, to
facilitate such entry, it can take help of segmenting, targeting and positioning. This can be further
explained as follows:
 Segmentation: It is marketing tool through which entire market is divided into small
parts which further help in reaching the target customers effectively. Burberry can divide
the market on the basis of various factors like, demographic, psychographic and
behavioural etc. The demographic factors involve division of market on the basis of age,
gender, occupation etc. Thereafter, psychographic factors involve division of market as
per the lifestyle, taste and preferences of customers. Further, behavioural segmentation
involve purchasing patter, needs etc of customers (Alexander, Quinn and Cairns, 2005).
By considering these factors company can offer range of fashion apparels, accessories etc
for both men and women from age 16-40. Further, company can attract brand conscious
customers, of elite group who prefer traditional yet stylish wears. Thereafter, major
consideration can be given to women who like shopping a lot.
 Targeting: It is a marketing strategy through which Burberry can select the prospective
customers to whom they want to market their product. Here, the business enterprise can
target the elite customers of India. Further, to target them company can again use
applications of iphone etc (Bluementritt, 2006). Further, Burberry can also use celebrity
endorsement by promoting the products through famous celebrities of South east Asia,
UK etc. Shows sponsored by Burberry can be organized in India which will attract the
target customers.
 Positioning: With this strategy, Burberry can attain a distinct position in the minds of
customers. For this aspect, company can use online marketing by making use of its
competitive benefit in terms of digital technology. The company is known for live
streaming its fashion shows in its outlet. The same can be used in new stores of Burberry
9

in India. However, the strong brand image of company will assist in getting new position
in new market.
6. The realistic marketing objective that can be set by Burberry in India market
In order to ensure successful market entry, company can make SMART objectives. With
this company can create, specific, measurable, attainable, realistic and time bound goals for the
business enterprise. The main objective of preparing SMART objectives is that it will assist
company as goal where the efforts of organizational members should be directed. Therefore, it
will serve as a guide for managers and other employees (Hamilton and Webster, 2012). The
marketing objectives will provide a framework which will be considered by the executives of
Burberry while functioning and taking business decision. Since, company is intending to expand
in the international market of India , marketing objectives will play an important role. India is a
renowned tourist destination therefore, company can not only target the local residents but also
various customers coming from diversified nations. Therefore, company can explore larger
customer base and expand its market share as well as profitability. The realistic marketing
objective can be explained as follows:
 SMART Objective: The marketing manager of Burberry can frame specific goal that it
want to attain. Here, the company wants to expand its market share by 25% and increase
the sales of high end clothing segment by 30% in 1 year. However, the company is
repeatably alleged that its mostly favored by women customers therefore, it can increase
the male customer by 10% solely in India (Tomlinson, 2013). For this aspect, Burberry
can increase promotion for attracting more men. Further, the company want to increase
the number of fan followers solely from India therefore, new social groups, pages etc can
be used. Therefore, company can expand its market base by using indirect and direct
channels of marketing.
7. Market entry strategy that can be used by Burberry
There are large number of methods that can be used by business enterprise for entering
the foreign market. To enter the India market appropriately, the market entry strategy can be
used by marketing manager of company (Westport.Brown, 2006). There are various methods of
market entry like, export,
10

counter trade, licensing, Joint ventures etc. Therefore, company can analyze the production cost
of target market; India and if the cost is too high it can export its product. Further, organization
can produce in target nation. Thereafter, company can also enter into joint venture by small
clothing organization of UK. From the aforementioned option it is feasible for Burberry to enter
the market of India through joint venture. The market entry strategy can be explained as follows:
Market entry strategy
Burberry can identify small business yet leading business in clothing segment this will further
give competitive advantage to company (Market entry strategy). In addition to this aspect, the
company can gain benefit for the knowledge of partner company regarding preferences of local
customers, their taste, purchasing pattern etc. Further, joint venture will also assist business
enterprise in sharing risk. Thereafter, joint venture will give synergy advantage to company.
Thereafter, Sainsbury can also avail benefit from the resources owned by the partner company.
Therefore, company can get benefit of technology, human assets, fixed assets etc of joint
ventured company. Apart from this, company can also setup new outlets in India.
8. Four Ps of marketing to be followed by Burberry in India
 Product- product can be defined as the goods and services which satisfy the need and
demand of people in market. The products of Burberry is apparels for the age group of
16 to 40 years which the company will sold in India (Bharwani and Butt, 2012). In
addition to this, the special feature of these apparels is that they will be more fashionable
and trendy. India is also considered as one of the most popular tourist destination in the
world. Therefore, the products of Burberry will not only satisfy the need of local people
but these apparels will be also sold to tourists.
 Price- Price can be determined the the values of a product which is perceived in the mind
of customers. At the time of determining prices, businesses are required to be very careful
as the sales somewhat relies on the price (Asgary and Walle, 2002). Burberry will sales
its products on high prices while doing business in India. The rationale behind this is that
it will the company to maintain its brand image in effective manner. Burberry is
considered as a famous brand in clothing industry and therefore the prices of its products
offered in India will be high.
11

 Place- Place is from where people can buy the products and services of an organization.
Burberry will sales its products with the help of three physical stores in different
locations of India. At the time of selecting the location for store, the brand will take care
of the fact that the location is easy to accesses and people do not have any kind of
difficulty in finding the products (Hill, 2008).
 Promotion- The promotion will be carried out using both the sources which are online
and offline sources. Ads will be displayed on social media sites such as Facebook and
twitter whereas promotion will be also carried out on Television and newspapers,
9. Analysis of marketing budget
The marketing budget for Burberry in India will consist of three major activities which are online
promotion, advertisement on television and newspapers and events. Further the budget of all
these activities is mentioned below as:
Online promotion: ฿,20000
Advertisement: ฿,100000
Events: ฿,50000
The company will try to carry out all the marketing activities in the given budget so that the
marketing objectives can be achieved in best possible manner (Vander, 2010). The budget will
also help company in reducing extra expenses. Thereafter, company can keep track of its inflows
and outflows.
CONCLUSION
From the aforementioned report, it can be concluded that globalization is important
concept that will assist company in expanding its business operations. The internal analysis
reveals that Burberry have strong reputation in market. Further, company enjoys competencies
with regards to digital marketing and powerful brand image. Thereafter, external analysis states
that in order to stay competitive it is important for Burberry to consider macro factors.
Segmenting, targeting and positioning will help company in making successful entry in market
of India.
12

REFERENCES
Books and Journals
Alexander, N., Quinn, B. and Cairns, P., 2005. International retail divestment activity.
International Journal of Retail and Distribution Management. 33(1). pp. 5-22.
Asgary, N. and Walle, A.H., 2002.The cultural impact of globalisation: economic activity and
social change.Cross Cultural Management: An International Journal. 9 (3).pp.58 –
75.
Barney, J. B. and Clark, D. N., 2007. Resource-based theory: Creating and sustaining
competitive advantage. Oxford: Oxford University Press.
Bharwani, S. and Butt, N., 2012. Challenges for the global hospitality industry: an HR
perspective. Worldwide Hospitality and Tourism Themes. 4 (2). pp.150 – 162.
Bluementritt, T., 2006. Integrating strategic management and budgeting. Journal of Business
Strategy. 27(6). pp.73 – 79.
Bramwell, B. and Lane, B. 2000. Tourism Collaboration and Partnerships: Politics, Practice
and Sustainability Clevedon. Channel View Publications
Carney, M., 2005. Corporate governance and competitive advantage in family‐controlled firms.
Entrepreneurship theory and practice. 29(3). pp. 249-265.
Czinkota, M. R. and et. al., 2009. International business. Dryden Press.
Doh, J. P., 2005. Offshore outsourcing: implications for international business and strategic
management theory and practice. Journal of Management Studies. 42(3). pp. 695-
704.
Hamilton, L. and Webster ,P.,2012. The International Business Environment. Oxford University
Press.Nandi,S.,2009. International Business Environment. Tata McGraw-Hill
Education.
Hill, C., 2008. International business: Competing in the global market place. Strategic Direction,
24(9).
Tomlinson, J., 2013. Globalization and Culture. John Wiley & Sons.Kinggundu, M.N., 2002.
Managing Globalization in Developing Countries and Transition Economies:
Building Capacities of a Changing world. Praeger Publisher,
Vander, C.M., 2010. Globalisation and human rights: Some implications for the African content
and government. World Journal of Entrepreneurship, Management and Sustainable
Development. 6 (3). pp.181 – 191
Westport.Brown, P.J., 2006. Globalization in 2020. Nova Publishers.
Online
Core competence of digital marketing. 2015. [Online]. Available through :
<http://essentialmarketingplanning.blogspot.in/2014/06/burberry-builds-on-core-
competence-of.html>. [Accessed on 24 th December 2015].
Globalization - First era of modern globalization: to 1914. 2015. [Online]. Available through:
<http://www.americanforeignrelations.com/E-N/Globalization-First-era-of-modern-
globalization-to-1914.html>. [Accessed on 24th December 2015].
13

Globalization on the rise in the modern era. 2011. [Online]. Available through:
<http://www.examiner.com/article/globalization-on-the-rise-the-modern-era>.
[Accessed on 24th December 2015].
Market entry strategy. n.t.d [Online]. Available through :
<http://www.fao.org/docrep/w5973e/w5973e0b.html> [Accessed on 24 th December
2015].
Strategy report on Burberry. 2015. [Online]. Available through :
<http://www.burberryplc.com/documents/ar-1415/burberry_strategic_report_2014-
15.pdf>. [Accessed on 24 th December 2015].
Technology and Globalization: Modern-Era Constraints on Local Initiatives for Land Reform.
2000. [Online]. Available through:
<http://www.isn.ethz.ch/Digital-Library/Publications/Detail/?ots591=0c54e3b3-1e9c-
be1e-2c24-a6a8c7060233&lng=en&id=28983>. [Accessed on 24th December 2015].
What Is Human Resource Management, 2015. Early Globalization and the Slave Trade. 2003.
[Online]. Available through: <http://yaleglobal.yale.edu/content/early-globalization-
and-slave-trade>. [Accessed on 24th December 2015].
14