Marketing Strategies for Luxury Brands: Burberry Case Study

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Assignment 2: Individual Assignment
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Table of Contents
Introduction......................................................................................................................................3
Task..................................................................................................................................................4
Conclusion.......................................................................................................................................8
Reference list...................................................................................................................................9
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Introduction
The case study analyses the problems, which a business organisation has to face, related to
marketing. The case study deals with importance of positioning and repositioning. A positioning
map is presented to show the positioning strategy of Burberry in comparison to Gucci and
Primark. Two methods of repositioning are suggested foe brand like Burberry.
Burberry founded in the year 1856 is a branded fashion company located in London, England.
The product produces clothes, perfumes, cosmetics and accessories. The revenue collected by
the company is £2,732.8 million (burberry.com, 2019).
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Task
Explain the relevance and importance of positioning and repositioning for marketers.
What are the implications for the performance of the business if such a move is successful?
An essential marketing plan includes product positioning. Product positioning is way in which
which marketers communicates with the customers to understand the customer needs, various
pressures, communication channels and carefully crafts messages.(Moon and Kamakura, 2017).
The marketer determines to communicate with the customers to understand their needs,
availability of communication channels, competitive pressures and constructing carefully the key
messages while product positioning.
The term repositioning means making necessary changes (Tidd and Bessant, 2018). The market
reposition includes changing the strategy, which were previously used to target the market
(Derval, 2018). A company plans to reposition during extreme cases during declining
performance or increase in competition. The positioning and repositioning plays an important
role in branded organisation like Burberry. The accessories reflect 37% of the total revenue and
the sales increased by 10% in the first 6 months of 2017 in this category (Reports.mintel.com,
2019). The small leather goods and handbags were highly demanded by the customers. The
organisation has positioned its strategy meticulously which was clearly seen as the sale of the
bags raised up to 16 percent at the end of March 2017. The brand has also launched various other
products like the Buckle and Bridle bags along with novelty and established products.
Burberry has various historic brand positioning benefits for its quality and style. An effective
poisoning helps the organisation maintain its brand value in the market. Burberry saw turnover
in the UK increase 8.6% for the year ended 31 March 2017 driven by an increase in tourism
spend in London, global revenue growth for the six months ended 30 September 2017 was flat.
Increase in the tourism has affected the company positively by increasing the turnover by 8.6%
at the end of March 2017(Reports.mintel.com, 2019). According to the UK retail, sales the brand
needs to boost up in the domestic market as the international sales reflected a positive result in
the market. The brands is planning that it will reposition the market strategies and shift its focus
towards the international market more as the output is positive. Marco Gobbetti the new CEO
has decided that the reposition will be targeted on the luxurious sector by improvising the
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High quality
Low quality
Low price
High price
architectural price and back scaling sales to end the retailers. Burberry is planning to produce
more luxurious leather accessories, which will attract more customers.
In the case of Burberry, demonstrate by means of a positioning map, how the positioning of
the brand will change as result of this process. In presenting map, also identify where on
the map the following brands would be located: Gucci and Primark
Figure 1: Map positioning of various brands
(Source: created by the learner)
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Burberry has various competitors in the market. Burberry and Gucci are a luxurious brand but
the customers prefer Burberry over Gucci in the domestic market as the Burberry offers high
quality products in low price in comparison to Gucci (FERNIE J. and PERRY, 2018). Burberry
has made new strategies maximise customer satisfaction by upgrading the technological
requirements by the organisation. Primark is an Irish fashion retailer, which is also a well-known
brand, but it produces products with low price and low quality. Mulberry is trying to compete
with the luxurious brands.
The organisation had to plan the strategy as many customers were out priced as it tried to
compete with he luxurious brands. Burberry has experienced a high sale during tourism in
London especially in the leather goods. On the other hand, Gucci gave a strong competition to
the Burberry. The other luxurious brands like Givenchy, Prada and LVMH produces high quality
products and the prices are very high compared to other brands. Only the elite customers can
afford products from those brands. Burberry has recently planned to invest and improvise the
leather products specially handbags. According to various reports Gucci gave strong competition
to Burberry in leather handbags, Thus the Burberry has made new plans to minimise the threats
and operate strongly in the domestic market and worldwide.
Provide two methods, which brands such as Burberry might use to achieve repositioning
Gobbetti the newly appointed CEO has made a reposition plan for 5 years, which will reposition
Burberry as luxurious player truly, and a brand that will re energise the brands sales growth. The
organisation is facing a huge competition from LVMH and Kering. The strategy will mainly
focus on leather goods as it has experienced a 16% sale on the market price and the percent
revenue on leather goods is less than 40 percent (Massara et al., 2019). The recent competitors of
Burberry are Gucci, which has incurred 55 % sales in this group (Reports.mintel.com, 2019)
Digital innovation
Burberry is a heritage brand but the laurels have never been happy with the brand. Related to
digital media Burberry has always has taken a backseat for many years but now the company has
shifted its focus towards digitalisation. The company will incorporate AI technology, social
media and big data are some of the new steps taken to fight with its competitors (Steenkamp,
2017). Burberry has 50 million followers in 20 different social media sites. A new chat box in
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face book messenger was launched in 2016 as a part of promotion. This chat box a new
repositioning plan has helped the customers to receive various updates about the brand and
products. The brand will also made its own app which the customers can download and explore
the products by Burberry in just one tap. Burberry is targeting the new generation as a new
repositioning strategy.
Physical stores
Burberry has stores where a huge number of people interact. The company has planned a
repositioning strategy to provide a service model to provide standard service to the customers.
This step is initiated to keep the customers loyal towards the organisation. The brand is also
focusing on exploring the RFID technology, which will help the customers to have a better
experience (Perry et al., 2019). The brand has trained the marketers to interact with the
customers to understand their needs, which will help the company to keep the employers loyal.
Communicating with the customers is a new strategy, which will help the company to mould its
products accordingly.
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Conclusion
The case study can by concluded by various interpretations on positioning and repositioning on
Burberry. The luxurious brand has to face various competitions thus; it has to reposition its
marketing strategies, which will not affect the brand name of the organisation. A positioning
map shows Burberry positioning to face the threats from various other brands. At the end two
approaches have been suggested which is essential for Burberry to operate strongly.
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Reference list
Derval, D., 2018. Finding the Right Positioning. In Designing Luxury Brands (pp. 51-76).
Springer, Cham.
Massara, F., Porcheddu, D. and Melara, R.D., 2019. Luxury brands pursuing lifestyle
positioning: effects on willingness to pay. Journal of Brand Management, 26(3), pp.291-303.
Perry, P., Kent, A. and Bonetti, F., 2019. The use of mobile technologies in physical stores: The
case of fashion retailing. In Exploring Omnichannel Retailing (pp. 169-195). Springer, Cham.
Reports.mintel.com. (2019). Fashion Accessories - UK - January 2018 - Market Research
Report. [online] Available at: http://reports.mintel.com/display/858699/ [Accessed 26 Jul. 2019].
Steenkamp, J.B., 2017. Customer Propositions for Global Brands. In Global Brand Strategy (pp.
45-73). Palgrave Macmillan, London.
www.burberry.com (2019). Burberry - Iconic British Luxury Brand - Select Your Location.
[online] Burberry.com. Available at: https://www.burberry.com/ [Accessed 26 Jul. 2019].
FERNIE, J. and PERRY, P., 2018. Luxury supply management chain. Logistics and Retail
Management: Emerging Issues and New Challenges in the Retail Supply Chain, p.149.
Moon, S. and Kamakura, W.A., 2017. A picture is worth a thousand words: Translating product
reviews into a product positioning map. International Journal of Research in Marketing, 34(1),
pp.265-285.
Tidd, J. and Bessant, J.R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
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