Burberry Marketing Plan: A Comprehensive Analysis and Audit Report

This marketing group assignment provides a comprehensive marketing audit and plan for Burberry, analyzing its macro and micro environments, competitive forces using Porter's Five Forces, and internal strengths and weaknesses through a SWOT analysis. The report highlights the impact of Brexit, the shift towards digital and personalized luxury experiences driven by millennials, and the importance of technology in Burberry's marketing strategy. It examines Burberry's competitive positioning, supply chain sustainability, and efforts to combat counterfeit goods. The analysis considers factors such as social/cultural trends, technological advancements, economic uncertainties, and competitive rivalry within the luxury fashion market. The plan emphasizes adapting to changing consumer behaviors, leveraging digital platforms, and maintaining a strong brand reputation in the face of global challenges. This document is available on Desklib, a platform offering AI-powered study tools and a wealth of academic resources for students.

26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
MARKETING PLAN
MARKETING AUDIT
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
MACRO ENVIRONMENT
The critical macro environmental factors currently reflecting Burberry are intertwined.
Social/cultural and technological appear to be the most essential influences followed by
the current uncertainty for the UK based company of the Political/economic impact of the
country’s impending exit from the European Economic Union (Brexit). Brexit uncertainty
has affected decisions made in Burberry. An expansion of its textile manufacturing in
Leeds has been put on hold (Snowdon, 2017).
Changes in tourism levels affect Burberry throughout Europe and within the UK its
London sales. With sterling low as a result of the vote for Brexit the UK continued to see
strong sales from tourism (Burberry, 2017:12). Luxury Sales in Europe are affected by
tourism. The previous downturn in tourist flows has reversed and continued to support
the market in the UK. (Bain & Co, 2017). However, the effects of 2017 London terror
attacks on tourism and therefore Burberry sales is yet to be realized. Due to the impact
of uncertain markets and the slowing of demand in luxury markets Burberry is aiming to
make significant cost savings of £100m by 2019 to offset this (Burberry, 2017).
According to Deloitte’s latest research in luxury markets, trends are moving from
physical to digital and standardized to personalized (2017). Burberry recognizes that
luxury customers are “becoming increasingly discerning in their shopping experiences,
expecting a high level of service, exciting experiences and innovative bespoke
products,” (Burberry, 2017:31). It is recognized that luxury shoppers are becoming
younger, in particular, millennials (generally accepted as those born 1980-2000) are
recognized as key customers for luxury markets. Kotler et al. state that “because of
their numbers millennials make up a hugely attractive market,” (Kotler & Armstrong,
2016: 101). They go on to describe them as “tech-savvy, price-conscious” who “seek
opportunities to shape their own brand experiences and share them with others.”
Deloittes (2017) shows that consumers want more shopping channels, 39%expecting
home delivery, 44% rewards through gifts and 45% personalized gifts and services.
Customers expect a seamless experience, whether within their home country or when
traveling, whether on line or instore (McKinsey, 2018).
The large potential consumer market of millennials is intertwined with the fast-paced
evolution of digital services. Although technology has accelerated globalisation and
markets are increasingly local and segmented. While it does not take much to adapt
global marketing to local needs “e-commerce, e-tailers, fulfillment and payment must be
tailored to local markets,” L2 (2018). Millennials are a group increasingly purchasing on
line with 42% of purchases being through this medium (Deloittes, 2017). The forecast for
online luxury sales is that they will triple by 2025 (McKinsey & Co, 2018).
Technology has a significant impact on the macro environment affecting Burberry in
terms of opportunities and threats. Burberry uses the latest platforms for promotion and
sales (Burberry, 2017: 14) keeping up with innovation in these areas. Burberry
recognises technology-based threats to be one of the leading risks to its brand.
Increasingly sophisticated technological security threats globally, which Burberry
identify, could have a significant impact on both cyber systems and information security
affecting both brand reputation and business operations (Burberry, 2017:62).
Whilst legal and environmental factors are always present they are not currently seen as
being essential influences or challenges to Burberry within the external environment
other than the continued battle against the availability of counterfeit goods and the
ongoing work with suppliers to ensure sustainability within the supply chain.
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
Using Porters 5 forces enables the consideration of the impact of external and internal
factors on brand positioning.
Rivalry
There is considerable competition in the luxury fashion market. According to
Bloomsberg (2018), Burberry share prices have not fared as well as its closest
competitors in the last year. The impact of the departure of Chief Executive Christopher
Bailey can be seen in share prices. Initially, there was a spike, but the index trend was
down and was only beginning to recover; its closest rivals have risen considerably whilst
Burberry just regained what it lost.
Competition within the luxury sector is not solely based on price and also reflects other
factors such as customer’s perception of image and status of being seen with the brand.
Burberry announced a strategy in November 2017 to reposition itself in the luxury brand
market, reducing its availability- pulling out of some department stores and increasing
prices (Wood & Kollewe, 2017).
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
Burberry has identified handbags as a product area for greatest potential growth
reporting an increase of 16% in full price sales in 2017, which it links to new launches
and increasing novelty for well-established lines (Burberry, 2017). “Redesign of our
China site to tailor it more effectively to local preferences and behaviors drove increases
of around 70% in direct-to-consumer sales while giving valuable insights for our overall
site development for the future,” (Burberry, 2017:14).
Burberry.com is available in 44 countries and 11 different languages The 2017 Launch
of Burberry’s customer app available on iPhone v9 and above links online and in-store
experience for customers (Burberry, 2017). This social media development has given
Burberry the competitive advantage over its rivals, whilst also evolving to follow the
customer’s bargaining power and enable them to stand above their competitors.
Burberry has joined with “Farfetch” an online platform (Mintel, 2018b), which enables
many items including Burberry handbags to be delivered within 90 minutes in London
and same day delivery in London and Manchester. This innovation again follows the
non-traditional route of supply which is preferred by millennials and can be seen a
developing advantage over its market challenges and seeks to achieve the objective of
increasing their market share.
Citing a report by Exane BNP Paribas on the 2016 digital performance of luxury brands,
Business of Fashion (2017) reports that whilst Burberry remains the leading brand for
online its advantage is narrowing with its rivals are closing the gap.
Burberry boasts 48 million followers worldwide on Social Media (Burberry, 2017). Figures
change rapidly , whereas the top 4 positions for followers on Facebook in June 2017 were
Louis Vuitton, Dior, Burberry and Michel Kors (Statistica.com, 2017).
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
Suppliers Bargaining
Burberry is working to increase the amount of leather sourced from tanneries holding
recognised tannery certification - 77% in 2017 (Burberry, 2017). Its cotton is sourced
from Peru where it has a 30-year relationship with some suppliers. The need for
continuing sustainability in the supply chain and these long-term relationships mean that
suppliers have medium bargaining power.
Customers Bargaining
Customers have little impact on price in the luxury markets. They do have bargaining
power for their loyalty. Their bargaining power is for their continued or new custom.
Companies have to entice them with a positive experience, rewards for commitment as
well as high-quality luxury goods.
When products are introduced in the online business markets, the price is never
bargainable. People buy as per the indicated amount on the platform. Surprisingly,
people still buy. When it comes to online selling, price doesn’t really matter a lot, what
matters is the kind of services one gives his/her clients. The better the services, the
higher the rate of customers. What online business can use to attract customers is by
introducing discounts and offers during different periods to attract more customers to
their companies (Chaffey, 2016, 00).
New Entrants
The threat of new entrants to the luxury market is relatively low due to the barriers to
entry with many luxury fashion brands possessing heritage associated with opulence and
quality, e.g. Burberry founded 1856 and Louis Vuitton 1851. Some well-known
newcomers were established more recently and had arisen as competitors in the market,
e.g. Michael Kors 1981 and Versace 1978. However, the threat of new entrants to the
online market is high as barriers to entry are low for existing luxury firms.
Substitutions
Potential substitutes are unusually high around accessories such as sunglasses and
handbags, especially with the emergence of counterfeit goods of such quality that they
are difficult to identify and control; there is online advice to consumers how to tell the
difference. Some end users are not concerned with whether an item is counterfeit or
not, only that it can pass as Burberry. Burberry uses increasingly high tech ways of
identifying fake products including image recognition (Marr, 2017). In 2012 Burberry
successfully sued a group of Chinese internet counterfeiters and was awarded
$100million in compensation by an American court.
SWOT ANALYSIS
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
“Firms need to monitor the rapid changes taking place in these variables in order to
exploit potential opportunities and to minimize potential threats,” (Fahy & Jobber,
2015:34).
MICROENVIRONMENT
THIS SECTION TO BE DEVLOPED LINKING CUSTOMER ANALYSIS FURTHER
TO SEGMENTATION PROFILE REMEMBERING PERSONALITY, VALUES AND
LIFESTYLE DIFFERENCES.
Kotler and Armstrong describe a company’s microenvironment as “all the actors that
affect positively or negatively, its ability to create value for and relationships with
customers” (2016:70)
The microenvironment part of marketing plays a huge role in the marketing plan. The
customer's end statements mean a lot to the business. If the customers suggest that the
marketing strategy is not of any benefit, then there can be no need of having the plan.
Quotes From: Botsman, R and Rogers R, 2011 What’s Mine is Yours 2nd ed London Collins
“statistics show that they are competitive, commercial and ambitious as any other
generation in history” (pg54)
“Sharing and collaboration have become as second nature” (pg55)
Competition is a must happen activity in business. There are very many businesses
which deal with clothes and fashion other than Burberry. To win the customers, the
Company need to be a step further than the other related companies. That’s why this
plan is the best for the Company. In today’s generation, there is the digital disruption.
Businesses which appreciate the current technology trend never fail. If the industry takes
advantage and shifts their plan to the online platform, they will be far away from failure.
The other business will be left behind selling their products to local consumers only while
the business will concentrate on both local and global consumers.
Not direct quote but general sentiment: The coming together of cultural change and
development of technology means that this change to collaboration by the millennial
generation has a medium to enable those values to be sustainable
“We can now show status, group affiliation and belonging without necessarily having to
buy physical objects” (pg98). One can imagine an era where people just rent clothes and
other related commodities. It will be fun since people will be wearing things according to
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
the latest fashion every single day. People will not fill their physical wardrobe, but they
will have their online wardrobe. It is a new generation where everybody lives online
these days. People are not outdated compared to the past. They are being swallowed by
the new technology hence it will be easier for the business to advertise and easier for
the customers to also understand. Furthermore, having a wardrobe online will look like a
new fashion, and people will shift towards the process since people enjoy new things and
leave the old things out in play (Westwood, 2016, 00).
“We have the ability to experience things without owning them; all people need is a
smartphone or computer” (pg98)
The process can and will be easy to use. The use of electronics like mobile phones and
computers make everything easy these days. What people need is the internet
connection and these devices, from there they can choose the type of products they
want from the Company. While giving an order, these people can also provide the
measurements of their body to get the right clothes or other wear products. As soon as a
person orders, things will be easy since the buyer will just wait for the product to be
delivered using deliver carriers Company to his/her house. The best thing about this
service is that anybody anywhere can access the services and purchase the product. If
the company adopts this marketing plan, there will be opening markets to the whole
world without incurring other costs of physical buildings and the likes. People
everywhere will be able to purchase what they want from their comfort. The marketing
plan will make the Company large to a point it will be known in the whole world not only
in London. The sales will increase gradually, and in the future, they will be forced to
increase their employees plus stock to make sure they accommodate everything.
Rifkin (2000) cited in Botsman&Rogers (2011: 99) stated “for a growing number of
enterprises and consumers the very idea of ownership will seem limited, even old-
fashioned, twenty-five years from now”
Product Service System (PSS) “product owned by a company and multiple users share
its benefits when the product has limited use because of fashion (handbags) (Pg101)
Hiring is the future, that’s where the generation is moving to. People will have the ability
to choose whatever they want, use it once and then return it. The fashion business will fit
in this kind of business. The reason is fashion changes daily hence people can find it
hard to buy and own a certain cloth thoroughly knowing that the next day there will be a
new fashion in the market. It will feel as if it is a loss. Therefore, people will tend to hire
the products of the Company rather than purchasing them.
VISION
“A brand’s value proposition is the set of benefits or values it promises to deliver
to consumers to satisfy their needs,” (Kotler & Armstrong, 2016:33).
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
MARKETING
OBJECTIVES
NEED TO FILL OUT WITH DEFINING OBJECTIVES AND MEASUREMENT OF
SUCCESS
“Once the target audience has been defined, marketers must determine the desired
response” (Kotler & Armstrong, 2016: 455).
 To grow the market share of Burberry online by 10% within 12 months by increasing
social media presence and introduction of online rental service.
 To increase profit by 5% within the next annual financial accounting period by
providing media platform cost effective rental service to the target audience.
MARKETING
STRATEGY
SEGMENTATION
As stated by McDonald and Dunbar (2012: 4) “Customers segment themselves, they do
not slot themselves into predetermined categories, and the propositions that appeal to
them are those that satisfy their needs by delivering the benefits they are looking for at
a price they perceive as providing superior value for money.”
In segmenting our customer market for our bag rental service, focusing on Millennials,
we further segment Millennials taking into consideration “customer’s bargaining” from
Porter’s five forces.
Profile Segmentation
Mintel (2011) informs that “25-34s” are the main purchasers of non-clothing luxury
goods” and from their research, it is purported that “women are more than twice as
likely” to invest in opulent accessories.
“Young consumers are the future of all fashion brands, and Burberry knows “how” to
speak to them directly through social media,” (Phan et al., 2011:213).
Distribution of ACORN Rising Prosperity Our target Millennial segment is the image-
conscious woman, likely to be in a white
collar, managerial or professional role, with
an income higher than the national
average, likely paying a higher rate of tax
and recognized by the ACORN targeting
classification as ‘Rising Prosperity.’ These
are generally highly educated, most
prosperous, 25-34 years old, living in our
major towns and cities and moving up the
career ladder. They are financially
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
confident, frequently use the internet to
research purchases, use their phones for
social media and like to keep up to date
with current affairs. They prefer the big
city lifestyle where there are many
opportunities to socialise and spend. CACI
(2014).
Our online rental service will launch in
London and Manchester as these cities
align with the segment and have suitable
transport infrastructure to meet our
logistical requirements for the rental
service.
BRAND POSITIONING
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
Kotler and Keller (2016:297) endorse the assertion that “the act of designing a
company’s offering” enables businesses to “occupy a distinctive place in the minds of
the target market.” Fahy and Jobber (2015:132) affirm that there are elements to be
studied when determining brand position, “namely, the customers, the competitors and
the company itself.”
Incorporating this reasoning in the new venture, it is acknowledged that innovations
within the rental service by Burberry is required to ensure the brand identifies positive
product is repositioning against its competitors whilst continually developing the already
successful approach to the use of social media and digital platforms. It could be said
that the current brand positioning of Burberry is seen as closely matched to that of its
main competitors such as Louis Vuitton, Michael Kors, Vivienne Westwood and Gucci.
Arguably Burberry needs to further develop this position in line with their identified value
by successfully acknowledging and giving customers what is of significance to them.
Identified needs within millennials have been researched, and the outcome shows that
the rental market alongside digital innovations are important to them as they are “smart
shoppers” and are “no longer content with the traditional purchasing model,” (Mintel,
2018).
Burberry (2018) have identified that their vision for the brand as a whole is to re-position
and move towards providing more “luxury fashion” goods. This is defined in the
competitor positioning map above. Burberry identifies the re-positioning as below.
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
(Burberry, 2018)
The new Burberry handbag rental service would necessitate the development of the
brand strengths of authenticity and status whilst seizing opportunities within online
market growth. Challenging the threats of competition and international market
uncertainty could give further opportunities. Identification of its points of difference and
parity, “that consumers strongly associate with a brand,” (Kotler & Keller, 2016:300) and
incorporating this into its strategy should assist with market positioning. Embracing
strengths and threats may enable the brand to remain strong whilst faced with increased
social uncertainties. Having such a strategy could safeguard Burberry’s established
brand positioning within the luxury goods market.
Burberry (2018) describes themselves as “digital pioneers with a strong reputation for
extraordinary creativity.” The marketing plan embodies the Burberry strategy of digital
innovation being a “fundamental and integral part of the brand” and continues the ethos
of “delivering personalized experiences and true Omni channel services,” (Burberry Plc,
2018). Increasing online and social media platform presence and innovation is important
to the brand; albeit this has been their strength against their competitors, it is
acknowledged that this gap is narrowing. “However, to preserve its core customer
base,” (Phan et al., 2011: 213) the continuance of its development of stores and
promotion of goods would be necessary. Continued use of creativity in the use of music,
art and traditional media such as videos and celebrity endorsement would be beneficial.
Provision of integrated media will address the needs of the millennials and look to further
cement their position of a luxury brand.
Sir John Peace, Chairman of Burberry, acknowledged in the 2016/17 Annual Report that
the “performance of the sector” had been impacted by demanding macro environmental
factors (Burberry, 2017:10). Burberry within its vision therefore further pinpointed
“drivers to reignite the brand,” (Burberry, 2018). Two of these are displayed below
which are embedded within the focus for this marketing strategy.
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26475 – Marketing
Group Assignment
201611864, 201611856, 201611881, 199926606, 200021053, 201611867
4,000 words
(Burberry, 2018)
Millenials are said to have the confidence and ease with technological advances as the
peer group embrace the technological environment that has been driven with the
introduction of new and innovative media outlets as pointed out by Kotler and Armstrong
(2016:101) who go on to assert that “they don’t just embrace technology; it’s a way of
life”. The mixture of media utilized for the Burberry rental service is imperative to the
success of this plan. Ensuring that the segment is reached by a combination of media
would be the way forward to ensure that the millennials have sight of the service
offered. “One of the benefits of advertising is its ability to reach a large number of
people at relatively low cost,” (Palmer, 2004:429). The expansion of smartphones and
the accessible, fast and reliable online connectivity available enables peers to provide
feedback to each other. “Research shows that 4 in 10 millennials in the UK ask friends
before they make a purchase”, (Mintel, 2016) so by providing platforms for these
“influentials” to provide feedback enables them to “better connect with on-the-go
consumers.” Phan et al. (2011:214) express the opinion that within this digital arena
that the customer is a collaborator and not just to be targeted as spectators.
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