Burberry: MINTEL Fashion Accessories Report - Repositioning Strategy

This report provides a comprehensive analysis of Burberry's brand repositioning strategy, focusing on its fashion accessories segment and its move towards the luxury market. The report examines the importance of brand positioning and repositioning, highlighting the strategic implications for Burberry. It delves into the current market scenario, including the increasing revenue generated by luxury brands in the UK, and Burberry's focus on the high-growth potential of its bag category. The report explores the concept of perceptual mapping to visually represent Burberry's positioning relative to competitors like Gucci and Primark. It further discusses various methods Burberry can employ to effect its repositioning plans, including advertising and innovation. The report concludes by emphasizing the importance of understanding the customer base and implementing effective promotional and innovative strategies for Burberry to achieve its goal of becoming an elite luxury brand, referencing key academic sources throughout.

MINTEL FASHION
ACCESSORIES
REPORT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................2
TASK 3............................................................................................................................................3

INTRODUCTION
The concept of brand positioning and repositioning is an important one indicating the
effect it has on the business if done successfully as well as implications thereof, if failed. This
report aims to provide the importance, relevance, strategic implications in regards to Burberry
which is looking for a repositioning of its Bags and other categories to a higher luxury segment.
TASK 1
As per the case scenario given, Burberry has intended to go more up-market. This means
that the company wants to focus more on the niche market segments that include an array of
small but affluent customers. As per MINTEL, increase in tourism to UK have boosted the
revenue generated by luxury brand in 2016 and the first quarter (Q1) of 2017. Initially, Burberry
focused on outdoor attire. It also includes accessories that contribute to the 37% of total group
revenue. Sales for this segment increased by 10% during the Q1 of 2017. Category of Bags is
considered to be the one with the highest growth potential. This category has become the central
focus of Burberry so much so that the management wants to reposition this accessory segment
towards the luxury sector through extension of price architecture and scale-down of sales to
lower-end retailers and wholesalers (Chegini, Molan and Kashanifar, 2016). In addition to this,
the company plans on developing new luxury leather goods and accessories for the niche market.
As evidenced by Mulberry, Burberry aims to not extend its price architecture too an extreme
extent so much so that the company struggles to recover its costs and break-even.
This indicates that positioning and repositioning strategies adopted by marketers are
important as they may result in complete collapse of existing as well potential markets for the
business. Essentially, Positioning is the process of strategically placing their product offerings in
target markets or segments so that they are able to effectively communicate its attributes to the
customers based on their preferences, needs, tastes and incomes (Hennigs and et.al., 2013). On
the other hand, brand repositioning, as the name suggests, is concerned with shifting the product
offering from one position to another in the target market. This is an important strategy adopted
by marketers that indicates the concerns of how the business perceives its current performance
and brand. This is an important step for marketers since repositioning a product in the market
would mean altering its position in the minds of existing and potential customers too. It can have
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serious implications if done in a poor manner resulting in alienation or confusion among the
consumers. However, if done successfully, it can lead to:
 Addition of increased value to the existing product;
 Development of an improved product that can cater to the needs of the customers and
business in a better way;
 Help in successful recreation of meaningful product service as well as increase brand
equity for the business.
Therefore, brand positioning as well as repositioning strategies undertaken by the marketers are a
crucial decision that can have an adverse effect on the company's image and customer base.
TASK 2
A positioning or perceptual map are the graphical representation of the customer
perception of business' product offerings on the basis of their pricing strategy, values derived
from using their products as well as competitor perception of their product lines. These aide
marketers to visually communicate regarding how the product would perform or be positioned if
they alter their strategies on a small or a magnified scale (Liu and et.al., 2016).
In the context of given case scenario, the following illustration demonstrates the
positioning of Burberry in relation to other established luxury brands such as Gucci which is a
result of repositioning of its brand:
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As can be seen from this illustration, the company would have a difficult time competing
with pre-established brands such as Chanel, Primark, Louis Vitton and Gucci. The business ranks
high in fashionability as well as Price which goes for Gucci as well as. Gucci’s increase in sales
has been mainly contributed by the renewal of Gucci's brand appeal undertaken by Alessandro
Michele. This has led to attracting younger customers with new styles, thus, generating new sales
as well as customers. Therefore, if Burberry aims to perform well in high end sector it needs to
improve its quality as well as undertake aggressive promotional strategies to attract the niche
market being almost a new entrant for that segment (McColl and et.al., 2013).
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As far as Primark is concerned, it is known to have a diverse range of products , however,
it is in the low-price as well as low innovative category. After Burberry’s repositioning strategy
is made effective, the brand would be highly unrelated in terms of target market and product
offerings to that of Primark.
TASK 3
Burberry’s decision to undertake repositioning strategy is crucial for the business, hence,
it is important for the company to adopt, cautiously, the methods that would help in achieving its
goals and objectives. The company can undertake the following methods in order to effect its
repositioning plans:
 Repositioning through Advertising: If Burberry chooses this option, the company must
focus on identifying crucial requirements, needs and preferences that the potential market
entails. Based on that the company must link the relevant advertising strategies with the
perceptual map in order to increase brand awareness as well as reposition itself closer to
the competitors. This can be achieved by allocating a dedicated budget to advertising
department, and undertake creative means of advertising options to communicate its
brand as one of luxury among the niche market.
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 Repositioning through Innovation: Burberry can also undertake repositioning through
innovation by developing an improved version of the existing product or create a new
product dedicated to the new target market altogether. This can be achieved by
understanding the consumer perception regarding similar brands of the target market and
finding new ways to cater to their tastes and preferences in a more effective and
innovative way. Such a step would ensure rise in brand awareness as well as increase in
sales for Burberry (Miller and Mills, 2012).
CONCLUSION
Looking at the arguments made above, it can be concluded that Burberry can be
successful in achieving its dream of becoming an elite luxury brand if its able to comprehend its
customer base and successfully implement promotional as well as innovative strategies in the
market.
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REFERENCES
Books and Journal
Chegini, F., Molan, S. B. and Kashanifar, S. S., 2016. An examination of the impact of cultural
values on brand preferences in Tehran's Fashion Market. Procedia Economics and
Finance. 36. pp.189-200.
Hennigs, N. and et.al., 2013. Brand extensions: A successful strategy in luxury fashion branding?
Assessing consumers’ implicit associations. Journal of Fashion Marketing and
Management: An International Journal. 17(4). pp.390-402.
Liu, S. and et.al., 2016. The standardization-localization dilemma of brand communications for
luxury fashion retailers' internationalization into China. Journal of Business
Research. 69(1). pp.357-364.
McColl, J. and et.al., 2013. It’s Vintage Darling! An exploration of vintage fashion
retailing. Journal of the textile institute. 104(2). pp.140-150.
Miller, K. W. and Mills, M. K., 2012. Contributing clarity by examining brand luxury in the
fashion market. Journal of Business Research. 65(10). pp.1471-1479.
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