Comparison of Marketing Strategies: Gucci vs Hermes

This report compares the marketing strategies of Gucci and Hermes, two luxury fashion brands. It discusses their product offerings, pricing strategies, distribution channels, and promotional activities. The report also highlights the similarities and differences between the two brands.

Report
1

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
Critically evaluate the marketing strategies of two brands..........................................................3
Compare the marketing strategies of Gucci and Hermes............................................................6
Which brand has gain strong competitive position and combat Covid-19 situation?.................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
2

INTRODUCTION
Marketing is defined as the process of making planning and executing the conception so
that it could satisfy the needs and requirements of customers so that goal is attained within a set
time frame (Mogaji and Roberts, 2016). In this, marketer would prepare an appropriate strategy
by taking several factors into consideration such as promotion, branding and so on which assist
firm in decision making which help in managing the operations smoothly. This report is based on
comparison of two luxurious brand with their similarities and includes current marketing
strategies which tends to combat coronavirus.
Main Body
Critically evaluate the marketing strategies of two brands
Marketing strategy involve the formulation of planning so that goal is attained in a
respective time period as it assists the firm in facilitating better decisions which provide a
reasonable growth and ensure sustainability for a long term (Li and et.al., 2016). In other words,
the manager of a firm would prepare an effective strategy so that it could maximise the share of
market and win the hearts of customers in a pre-determined time period. The current report
involves the evaluation of marketing strategy of two high end luxury brand that operates within
Asia such as Gucci and Hermes. Both the organisation offer men and women accessories which
are luxury product and with these feature both of them manages higher profitability. But as other
businesses, these two-luxury brands are also get affected with the impact of COVID 19 as stores
get shut due to lockdown and people do not prefer to visit stores to purchase product. Other than
this the economic condition of countries also gets affected which in turn changed the buying
behaviour of customers throughout the world (King and Coughlin, 2016). The needed both the
organisation to improve the marketing strategy that suits more as per the current situation and
help both the organisation to maintain its profit and sale in marketplace. Following are detail
about the marketing strategy followed by both the organisation,
Gucci
3

Overview: Innovative, progressive and influential, Gucci has reinvented as a wholly
modern approach for fashion related items which are offered as per the fashion and trend of 21st
century. It is a luxury fashion brand which is headquartered in Italy, but after its high end trendy
items such as handbags, accessories, shoes, make up, fragrances etc. popularity take it to the
international level. Now this organisation is also performing well with Asia countries by
providing a better status with these high quality and trendy accessories and other items. Other
than this it also offer its services online which is a most effective step toward its growth at global
level.
Mission: The main mission over which Gucci operates is that it wants to become a leader
within luxury market throughout the world. In other words, it want to create a product
differentiation to always offer its customer with products that they not found at other place and it
become the first priority of each customer (Gucci Mission, Vision & Values. 2020.).
Vision: Its vision is to reinventing the wholly modern approach of fashion. Under the
supervision of creative director Alessandro Michele, Gucci has already redefined its product as
per 21st century and trying to reinforce its position as most desirable brand worldwide.
Marketing strategy : Gucci is a high end fashion brand which was established in year
1921 and it is a part of Kering group which is a parent company and also one of the leading
brand of apparel and accessories which maintain the portfolio of Luxury, sports and lifestyle
brand. Gucci maintains at a mix of demographic and psychographic segmentation strategy to
offer its product or services. Despite of brand’s exclusivity and unattainability for many of the
consumers that always remain popular as its fame are more attributed toward its appeal toward
rich public figures. Following are the marketing strategies adopted by Gucci,
 Its marketing of product is mainly done by the artists where majority of their products are
being worn and marketed by some of the famous artists. Other than this it also display its
products on the cover page of magazine by displaying it over some famous models. This
remains a point of attraction for the customers (How Gucci’s Digital Strategy Maintained
Its Global Presence. 2020).
 It also uses social media platform to spread information about eth product it launches in
market. The most commonly used social media pages are Facebook, Instagram, YouTube
etc. which support in capturing the attention of larger number of people. Due to this
social media market, Gucci get around $4.4 million on revenue last year in 2016.
4

 The Gucci is well known for its luxurious shopping experience which it offer with the
help of its online website which is uniquely designed and present its product in organised
manner. It’s online store features the ready to wear collection which are curated in a way
that they are appear on the run ways.
Hermes International SA
Overview: It is a high fashion luxury brand and manufacturer which is established in year
1837 which is specialised in offering lifestyle accessories, perfumery, leather, jewellery,
watches, ready to wear and home furnishing. It is headquartered in Paris, France, but now also
performing well within Malaysia and highly demanded by the people of that country (Hermès.
2020). Due to its performance and market performance, company has ranked as 33rd position
within the Forbes list under the title of “World’s most valuable brand”.
Mission: The main mission of the Hermes is to offer high quality fashion accessories to
the customers with the high quality of services to the emerging market.
Vision: The main vision of Hermes is to become most customer centric company which
opt toward brining Russian made product to the global landscape.
Marketing strategy: The marketing strategy of Hermes remains constant with the
principle of exclusivity and heritage of company. It follows the range of marketing strategy with
an aim to keep its product visible in the market and maintain the marketing position.
 The main marketing strategy I follows is sponsoring the product through an event which
direct fit with the image and legacy of company. It mainly sponsored with the horse
racing event throughout the world.
 It also maintains the strategic collaboration with the independent artists as well as
designers with an aim to raise the visibility of the product (Jabbar, 2016). The main aim
behind such collaboration is to enhance the aura of exclusivity around the specific
product portfolios.
 The Hermes also uses content marketing as well as social media platform which is highly
engaged within the marketing and communication campaign which help in spreading
awareness about product among customers throughout the world. With getting progress
using this the Hermes also ranked under 100 most innovative company within Forbes
which dropped to year 2014 up to rank 32 which was one of the biggest achievements.
5

 Other than this it also performed marketing with a new way i.e. online pop up virtual
store which is dedicated to brand silk square, twills, shawls, stoles and scarves. This was
made with We chat where the product in collaboration with Apple features the classic
pattern of Hermes scarf over the wrist band. When a viewer click on pop up ad they
automatically sent to Hermes watch collection pages (Hermès enhances China digital
game with first WeChat pop-up store. 2017.). This collaboration or marketing strategy are
made with china and help a lot in expanding the business as well as market profitability.
Compare the marketing strategies of Gucci and Hermes
Gucci is one the luxurious fashion brand that deal with experimenting with fashion and
other accessories as it is known for new and stylish patterns which provide a best one stop
solution for buyers. Hermes International is one of the leading high fashion luxury goods
manufacturer who specialize in lifestyle accessories, leather, jewellery, watches, home
furnishings, perfumery and ready-to-wear products. The comparison of marketing strategies
between Gucci and Hermes with the help of marketing mix are presented as follows:
Marketing Mix
elements
Gucci Hermes
Product Gucci has diverse product portfolio
in its marketing mix with great
depth, length and width. Its
product line includes
handbags, shoes, jewellery,
watches, ready to wear
products, and other
accessories for children,
women and men. It has
range of fancy shoes, bags
etc. For example: Gucci has
bring innovation in its
products by brought an
maximalist, edgy look to its
In order to get prosper in
competitive market, Hermes use
innovation and customization in
its products (Vlados, 2019). The
diverse product portfolio of
company comprises of
jewellery, apparels and
accessories, fragrances,
watches, leather goods,
equestrian and other luxury
products. For example: Hermes
brings innovation in the
materials it uses. Material
embodies form and feel,
6

new collections, interlacing
collectively a wild range of
inspirations from Greek
statue to Resurgence dress
to '80s street style.
exacting as well as evokes the
strength of senses, from the
hands of artisans to customer’s.
Collectively, hand and eye
chooses the premium quality,
converting innovation into
sensory experience.
Price Gucci use premium pricing strategy
for its products. In relation to
apparels, the price relies on the
quality fabric as well as work done
upon it. The main reason of using
premium pricing strategy is that the
materials which company used are
of premium quality. For instance:
the leather handbag of Gucci ranges
from 500 to 3000 U.S. dollars. The
prestigious pricing strategy makes
the product a status symbol of
people.
Hermes also adopted premium
pricing strategy in order to
imbibe the sense of exclusivity
that is what luxury customers
look for. For example: the price
of its leather handbags ranges
from 7550 to 150000 dollars.
Through launching limited
edition, the company ensures
exclusively of its product.
Place For achieving organic growth and
profits, company's optimising its
existing network. It operates in
many countries including Asia,
Australia, Middle East, America,
Europe etc. The supply chain of
Gucci is very efficient and assist in
delivering goods with cutting edge
innovation (Vlados, 2019). It has
limited number of franchises and
more than 500 directly operated
Hermes operates business in hot
fashion districts worldwide such
as United States of America,
Europe, Japan, Asia Pacific in
order to maximize sales and
increase its customer base. It
distributes its goods through
307 stores all around the world
and also offer its products
online.
7

stores as well as online stores.
Promotion For promoting its products,
company use advertisements,
look books, banners, social
and print media. Apart from
this, its marketing
campaigns features on
different social media
platforms such as Facebook,
Tumblr, YouTube, Pinterest,
Instagram,.
The promotional strategy of
Hermes includes Waiting list
strategy, Communication
media, Celebrity
endorsement, Outdoor
advertising Fashion show.
Apart from this, it also
uses websites for
promoting its products.
Similarities
The Hermes and Gucci both are luxury brands and operate over several different
countries throughout the world and among them all both the organisations are also operating
within the Asian country which is emerging market for the fashion and accessory brand. Both the
organisation believes in differentiating their business practices but among them all they also
share certain similarities (Hollensen, 2019). This includes brining differentiated innovation
within product to represent the offering that remain unique and actually not accessible with other
brand. This means its unique design products are always remaining most successful marketing
strategy that support them in achieving the competitive edge within market place.
8

(Source: Innovative Design Leather Handbag of Hermes and Gucci)
Other than this, Gucci and Hermes both the organisation make use of social media
platform in order to remain engaged with the customers to offer them a better shopping
experience (Yan, Chen and Yue, 2017). This social media exposure help the organisations in
maintaining their presence as well as market awareness among the customer belongs to different
part of world. Another similarity between the brand is that they collaborate with artists or
designers in order to promote their product and make them available among the customer as the
choice of their favourite person whom they follow in their actual life. Due to better performance,
high end luxury fashion accessories and market performance, both the organisation get position
among the top 40 companies within the business list published by Forbes.
Which brand has gain strong competitive position and combat Covid-19 situation?
As per the analysis performed over both the brand in term of their marketing strategy used
as well as position in market it has bene found that the Gucci have strong competitive position.
This is so because it has formed a strong brand reputation and customer trust throughout the
world in term of its unique design, pattern and quality which people do not found any where else.
9

It is a subsidiary brand of Kering group which maintain a huge portfolio of brand and due to
which company has better cash flow whenever it require. Other than this its approach to more
than 120 country is also one of the biggest advantage for the brand as it can maintain its
customer base and also manage with volume of sale.
Due to this pandemic there is downgrade in sales and also due to lockdown or social
distancing factor some of its stores also get temporary close down which have impact on demand
as it directly affects the profit margin of the company. But as Gucci also maintain its online
presence which remains a positive factor for the brand as with the help of this it continues to
operate even during the situation of coronavirus which provide a reasonable growth as the firm
deal with all kinds of products and services. Other than this the endemic lead all the people to
stay at home to reduce the spread of corona virus which in turn lead them to become more
accessible to the social media platform (Glende and et.al., 2016).. The was a kind of chance for
Gucci to make more and more people informed about the accessories and other related products
that brand is offering. Hence this social media platform reach of Gucci supported it a lot in
maintaining its brand presence and generating the base of maintain the volume of sale as well as
profitability even within the pandemic. Hence with all of these marketing strategies Gucci would
be able to ensure about the optimum utilisation of funds that would assist the firm to overcome
several challenges and underpin a fast recovery and transformation by the year 2021.
CONCLUSION
From the above information, it can be comprehended that business environment in which
company carry out its operations is regarded as dynamic so the manager of firm would facilitate
changes which help in executing the operations in an efficient manner. The manager would make
planning and coordinate the activities by following unity of command which promote a positive
atmosphere in a workplace. Various measures are adopted by firm so that they could face combat
situation of pandemic.
10

REFERENCES
Books & Journals
Glende, S., and et.al., 2016. Increasing the acceptance of assistive robots for older people
through marketing strategies based on stakeholder needs. International Journal of Social
Robotics. 8(3). pp.355-369.
Hollensen, S., 2019. Marketing management: A relationship approach. Pearson Education.
Jabbar, H., 2016. Selling schools: Marketing and recruitment strategies in New Orleans. Peabody
Journal of Education. 91(1). pp.4-23.
King, D. and Coughlin, P.K., 2016. Looking beyond RTI standard treatment approach: It's not
too late to embrace the problem-solving approach. Preventing School Failure:
Alternative Education for Children and Youth, 60(3), pp.244-251.
Li, C.Z., and et.al., 2016. SWOT analysis and Internet of Things-enabled platform for
prefabrication housing production in Hong Kong. Habitat International. 57. pp.74-87.
Mogaji, E. and Roberts, B., 2016. Marketing strategies of United Kingdom universities during
clearing and adjustment. International Journal of Educational Management.
Rowley, J., 2016. Information marketing. Routledge.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Yan, Y., Chen, Z. and Yue, J., 2017. Algebraic state space approach to model and control
combined automata. Frontiers of Computer Science.11(5). pp.874-886.
Online
How Gucci’s Digital Strategy Maintained Its Global Presence. 2020.[Online] Available through:
<https://www.referralcandy.com/blog/gucci-marketing-strategy/>.
Gucci Mission, Vision & Values. 2020. [Online] Available through: <
https://www.comparably.com/companies/gucci/mission>.
Hermès. 2020.[Online] Available through: <
https://martinroll.com/resources/articles/strategy/hermes-the-strategy-behind-the-global-
luxury-success/>.
Hermès enhances China digital game with first WeChat pop-up store. 2017. [Online] Available
through: <https://retailinasia.com/in-shops/hermes-enhances-china-digital-game-with-
first-wechat-pop-up-store/>.
11