Marketing and Management

The aim of this report is to discuss about the business operation of Gucci in terms of their current global scenario. Gucci is one of leading high end fashion brands in the world but with the increase in the competition, it is important to review their competencies n gaining the long term sustainability. This report discussed about the mission and vision statement of brand along with their orientation towards marketing. In addition, the 5Cs of the business operation of Gucci are also being analyzed and it is identified that they are having one of the most effective management mechanism. The existing marketing strategy of them is identified and a few limitations are being identified. On the basis of these limitations, the marketing mix is recommended for Gucci in this report. The potential target segment for Gucci is also identified in this report. It is expected that this recommended marketing mix strategy will help Gucci in gaining long term business sustainability.

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Marketing and management
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Executive summary
The aim of this report is to discuss about the business operation of Gucci in terms of their current
global scenario. Gucci is one of leading high end fashion brands in the world but with the
increase in the competition, it is important to review their competencies n gaining the long term
sustainability. This report discussed about the mission and vision statement of brand along with
their orientation towards marketing. In addition, the 5Cs of the business operation of Gucci are
also being analyzed and it is identified that they are having one of the most effective
management mechanism. The existing marketing strategy of them is identified and a few
limitations are being identified. On the basis of these limitations, the marketing mix is
recommended for Gucci in this report. The potential target segment for Gucci is also identified in
this report. It is expected that this recommended marketing mix strategy will help Gucci in
gaining long term business sustainability.

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Table of Contents
Introduction......................................................................................................................................3
Company profile..........................................................................................................................3
5C analysis of Gucci........................................................................................................................4
Company......................................................................................................................................4
Customers....................................................................................................................................5
Collaborators................................................................................................................................6
Competitors..................................................................................................................................6
Context.........................................................................................................................................6
Feedback generation mechanism.....................................................................................................8
Analysis of marketing strategy........................................................................................................9
Identification of the target market...............................................................................................9
Identification of the value proposition for the target market.....................................................11
Positioning statement analysis...................................................................................................11
Recommended marketing mix strategy.........................................................................................12
Product.......................................................................................................................................12
Price...........................................................................................................................................12
Promotion..................................................................................................................................13
Place...........................................................................................................................................13
Conclusion.....................................................................................................................................13

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Reference.......................................................................................................................................15

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Introduction
In the current business scenario, contemporary business organizations should have the
proper mechanism of determining the business factors in order to have the competitiveness. This
is due to the reason that the more will be the effective determination of the business factors, the
more will be the suitable value proposition for the target customers. However, it should also be
noted that prior to the initiation of the marketing strategies, customers should be segmented and
targeted (Cacciolatti and Lee 2016). This is due to the fact that based on the trends and
preference of the target customers, marketing strategies should be designed. The more effective
will be the design of the marketing strategy, the more will be the probability of gaining positive
return from the market. This report will discuss about the mission and vision statement Gucci
along with discussion of their key business elements. In addition, the target market for Gucci will
be identified and based on that, marketing mix elements will be discussed.
Company profile
In the current global fashion industry, Gucci is one of the leading brand names originated
in Italy in 1921. It is termed as the highest selling Italian brand in the world as of 2014. They are
mainly offering ultra expensive and luxurious fashion and leather items. However, in the recent
time, number of premium fashion brands operating and increasing the competition for Gucci.
This is also creating the importance for Gucci to review their business environment and
determine their effectiveness. The mission statement of Gucci states about offering the fashion
items with finest materials and detailing for the best level desired value to the customers. This
denotes the Gucci is majorly leveraging on the product quality in delivering value to the
customers (Atwal and Williams 2017). On the other hand, the vision statement of Gucci states

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that they want to become the market leader in the ultra premium and luxury segment in the world
along with becoming responsible in terms of business activities. As of now, Gucci is offering
whole range of men and women fashion products are being offered. Added accessories include
footwear and bags. Thus, the entire fashion segment is getting covered by Gucci. It is identified
that Gucci is following a mix of product orientation and market orientation in their business
operation. This is due to the fact that market orientation is being followed by them in designing
the value proposition as per the market trends and preferences. This concept is getting reflected
in the continuous improvement in the product portfolio of Gucci (Samli 2013). On the other
hand, Gucci is also following product orientation due to the fact that they are not following the
fashion trends in the global market rather creating newer fashion trends. In addition, the brand
positioning of Gucci is complementing on their product orientation. The niche target customer
segment of Gucci is buying the items irrespective of their utilities.
5C analysis of Gucci
Company
The positive and negative business factors Gucci will be based on the SWOT analysis.
Strengths  The major strength of Gucci is their brand value and identity. Even
though they are operating among the niche target segment, but their
brand identity and exposure is well penetrated (De Mooij 2018).
 In addition, the profitability of Gucci is also their strength because of the
fact that average profitability of Gucci is high due to their premium
pricing.

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 Worldwide presence of Gucci is also helping them to cater to their target
customers across the world.
Weaknesses  Target audience is small for Gucci due to their expensive positioning.
Thus, their market share is also limited.
 Controversy regarding their advertising approach is taking a toll in their
market value. They are accused for promoting sexuality in their
advertisements (Paul 2015).
 Emergence of counterfeited products is diluting their brand value along
with creating negative impression among the target segments.
Opportunities  Younger generation is getting more aware about the high end fashion
trends and thus the business opportunity for Gucci is getting increased.
 Emergence of the developing economies such as India and China is
further increasing the opportunities for Gucci in targeting these markets.
 Developing new product line such newer accessories will help Gucci in
targeting new customer segments (Bellini and Pasquinelli 2016).
Threats  Emergence of economic recession will be challenging because with the
reduction in the purchasing power of the customers, preferences for
premium and expensive products will get reduced.
 Competition is getting higher for Gucci with the business development of
their competitors such as Armani, Ralph Lauren and Burberry.
Customers

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Gucci is serving to the end customers only across the world. The target customer segment
of Gucci expects products with premium price. In this case, the snob effect is relevant. This is
due to the reason that as per the snob effect, target customers of Gucci expect that they will buy
the product, which are not accessible to the larger segments and that will be exclusive. This is the
typical behavior being expected from the targeted customers of Gucci.
Collaborators
Amor collaborators of Gucci include their suppliers. They are dependent on the external
collaborators only in the case of backward integration and not in the forward integration. Gucci
is sourcing the finest materials for their products from different suppliers and thus they are the
only collaborator for Gucci. They do not have any external retailers and distributors as the entire
process of forward integration is controlled by Gucci itself.
Competitors
There are number of competitors operating in the same market segment as Gucci and
each of them is enjoying positive brand value and identity in the market. For example, brands
such as Burberry and Armani are operating in the premium market for long time and they are
having the capability of competing with Gucci (Uggla 2017). Potentiality of the new entrants as
threat is less for Gucci. This is due to the reason that new competitors will not be able to match
the brand identity of Gucci even by investing huge.
Context
Political and legal
factors
Gucci is having their presence majorly in the developed and stable
markets and thus they are facing lower intensity of unstable political

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factors in their global operations. In addition, the global trade wars
being initiated majorly between the United States and China is having
negative impact on the business of Gucci. This is due to the reason
that Gucci is sourcing their materials from different regions and
selling the end products across the world. Thus, the price of them is
determined by the global trading patterns (Ananda, Lamberti and
Hernandez-Garcia 2015).
Economical Even though Gucci is operating in the premium and niche market
segment but still the competition is high for them due to the presence
of number of other competitors. Thus, the sales volume of Gucci is
determined by their competitors. In addition, the growth of the global
economy is also having impact of the business of Gucci. The more
will be the growth of the economy, the more will be the potentiality of
Gucci and vice versa (Merlo and Perugini 2015).
Social Snob effect determines the social trends for Gucci. This is due to the
fact that snob effect will motivate the customers to invest for the
premium products of Gucci. In addition, with the current global trends
towards the fashion statement, Gucci is having favorable long term
business viability. However, the rapid change in the taste and
preference pattern of the customers will have negative impact on
Gucci as it is difficult to frequently coping up with the change.
Technological In terms of the technological factor, Gucci is leveraging on the latest
and advanced technologies in their business. However, the intensity of

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the technology in the manufacturing process of Gucci is low due to the
fact that they are producing the fashion items by hand woven with
proper details.
Feedback generation mechanism
Gucci is having intensive market research process compared to the mass market fashion
brands due to the fact that they are not catering to the larger target segments across the world.
Moreover, the intensity of the market intelligence is less for Gucci due to the fact they are not
following the current trends in introducing new products and they are creating the fashion as new
and one of the kind. It is identified that Gucci is leveraging majorly on the feedback from their
existing customers in gaining the market insights (Ordenes et al. 2014). In this case, the fashion
shows being conducted by Gucci are the major sources of gaining feedback from the target
customers. These fashion shows are the touch points between the designers and target customers
with Gucci. Based on the feedback being gained, the future fashion trends of Gucci are designed.
This is enabling Gucci in getting the insights about what the customers are expecting from the
brand.
Feedback from the designers is also helping in determination of the threat of the
competitors. This is due to the reason that customers of Gucci are also having the idea and
understanding about the value propositions of their competing brands. Thus, their feedback is
helping in identifying the areas of improvement for Gucci and the advantages they are enjoying
over their competitors. The context of the business is changing and the fashion industry is more
vulnerable to the change. In this case, the market research process of Gucci through conducting

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different shows and exhibitions are helping in identifying the changes. This can be concluded
that due to the reason that Gucci is operating niche and lower market operation, the market
research process of them is also intensive in nature (Moghaddam 2015). As discussed in the
earlier section, Gucci is having lower dependency over their collaborators. Thus the importance
of the feedback regarding the change in the role of collaborators is also low for them.
Analysis of marketing strategy
Identification of the target market
The basic step that should be followed in developing the market strategy is identification
of the target market. This is due to the reason that based on the preferences of the target market
customers; marketing plan including the marketing mix strategies should be designed. In this
case, the target market for Gucci will be identified based on different segmentation variables.
Demographic segmentation The most potential target age group for Gucci is between 25 and
45 for the man and woman wear and the age group below 20 for
the children wears. The young adult age groups are being targeted
due to the reason that this age group comprises of successful
professionals and fashion seeking. In addition, this age group is
having the purchasing power for buying the products of Gucci and
has the preferences for showing off their successful life. On the
other hand, the age group of below 18 is also targeted for the
children wear but they are considered as the secondary target
audience (Dibb and Simkin 2016). This is due to the reason that
this age group is not having the earning members and they are

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dependent in the young adults.
In terms of the gender segmentation, both female and male
customers are targeted as Gucci is offering fashion items for both
the genders. In terms of the income level, high and premium
customer segments successful in their life are only being targeted.
This is due to the reason that Gucci is not targeting the sales
volume rather they are leveraging on higher profitability and
exclusiveness.
Geographic segmentation In terms of the geographic segmentation, only the customers from
the tier I and metropolitan cities are targeted. The target customers
from higher end segments are only available in the tier I and
metropolitan cities along with the higher affordability and trend for
availing the premium fashion items. It should also be noted that
not all the tier I cities across the world are targeted because the
economy of the market is important for them to get the access to
their targeted customers.
Behavioral segmentation In terms of the behavioral segmentation, customers seeking the
higher end lifestyle and successful life presentation are the target
segment. This is due to the fact that the ultra premium positioning
of Gucci is meeting the snob effect and expectations of this benefit
seeking customers. In addition, customers having the detailed
knowledge about the fashion items with focus on details are also
being targeted (Manfredi et al. 2014). The added focus and

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concentration being given by Gucci in manufacturing their
products is suitable in targeting the details seeking customers.
Psychographic
segmentation
In terms of the psychographic segmentation, loyal customers are
the major target customer segment. This is due to the reason that
Gucci is not focusing on increasing their new customer segments
rather creating positive word of mouth among the existing
customers and managing their loyalty.
Identification of the value proposition for the target market
The value proposition for the target customers for Gucci should be based on luxury as the
core element. However, the major differentiating factor between the existing value proposition
and the recommend one is the diversity. As of now, the product assortment Gucci for both the
male and female fashion products is low and each of introduced style being offered in each
season. However, it is recommended that the product diversification in terms of styles and
varieties should be more in each season (Osterwalder et al. 2014). This will provide more options
to the customers in choosing from. It can be concluded that the luxury and exclusivity of the
products of Gucci coupled with the diversity and larger assortment will offer the maximum value
proposition for the targeted customers.
Positioning statement analysis
It is recommended that Gucci should position their products on the basis of product class
and benefits. On the basis of the product class based positioning, the premium branding of Gucci
will be leveraged, which will cater to the target audience of them. In addition, positioning of the

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products on the basis of its class will also help Gucci in differentiating their value proposition in
the market even by offering the same and similar products (Adina, Gabriela and Roxana-Denisa
2015). On the other hand, positioning on the basis of benefits will help Gucci in getting
differentiated from their major and close competitors. This is due to the fact that the benefits in
the forms of product quality, material quality and lasting ability will help Gucci to create more
propositions among the target customer segments.
Recommended marketing mix strategy
Four Ps or elements of the marketing mix will be discussed in order to mitigate the
identified limitations in the current approaches of Gucci along with enhancing their long term
business viability.
Product
It is recommended that Gucci should increase the product diversity and variability for
their existing customer segments. In terms of the core product level, the quality of the materials
used in producing the fashion items should be focused. This will create customer satisfaction in
the long term. In terms of the augmented product level, Gucci should focus more on their social
class of their products, which will help to attract the target customer segments towards the brands
(Manfredi et al. 2014). The augmented product level should also include exclusivity being
offered to the customers. This will further enhance the snob effect among the target customers.
In terms of the social level of the products, the designs and the service process quality should be
focused, which will create positive experience among the customers.
Price

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It is recommended that Gucci should continue with their premium pricing strategy in
their coming years also but the price skimming strategy should also be initiated. This is due to
the reason that with the help of the price skimming strategy, newly introduced products of Gucci
in each season will be priced at higher side, which will help in gaining the maximum profitability
from the market (Dibb and Simkin 2016). In addition, the older items should be priced in lower
segment with time to extend their life cycle. This is due to the reason that premium products of
Gucci are having shorter life cycle and lowering the price in each stage will extend the life cycle.
Promotion
It is recommended that Gucci should initiate the social media marketing process apart
from their existing process. This is due to the reason that even though they are not focusing on
market share but the new customer acquisitions are important for long term business viability
(De Mooij 2018). Thus, with the help of the social media marketing, Gucci will be able to
increase the presence of their brand in the market along with gathering the feedback from them.
Thus, the relationship between the target customers and the brand will be more.
Place
In terms of the distribution strategy, it is recommended that Gucci should continue with
their existing exclusive distribution strategy. This is the most applicable for their premium
positioning. However, it is also recommended that the exclusive stores of Gucci should be
increased across different regions. This is due to the reason that with the enhancement of the
global economy, number of potential customers is increasing for Gucci (Osterwalder et al. 2014).
Thus, the existing retail presence of them is not enough to tap the growing opportunities. In this

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case, the increase in the exclusive stores of Gucci will be beneficial in the catering the growing
potential segments.
Conclusion
This report concludes that Gucci is having distinctive and unique approach to the
marketing in their business operation. It is identified that intensity of the collaborators is low for
Gucci due to the lower presence of them. On the other hand, it is identified that competition is
high for Gucci with the presence of number of premium brands, This report concluded that the
target customer segments will be vast and wide even for the niche positioning of Gucci. Different
segmentation variables are being used in identifying the potential segments for them. It is
recommended that Gucci should position their items based on product class and benefits. It is
also recommended that the discussed marketing mix elements in this report will help Gucci in
meeting the expectations of the customers effectively.

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