Diesel: An Analysis of Marketing Principles and Strategies

This report provides a comprehensive marketing analysis of Diesel, a prominent retail clothing brand. It begins with an introduction highlighting the importance of marketing practices in the competitive business environment and then delves into Diesel's organizational background, history, and unique selling proposition (USP). The report outlines Diesel's mission statement, customer profile, and immediate environment, including company products, competitor analysis, and corporate partners. It further examines the relevant macro-environmental factors, such as economic, demographic, social, political, and technological influences. A detailed SWOT analysis is presented, followed by a summary of critical issues and strategic recommendations. The report concludes with a summary of findings and a list of references and bibliography, offering a thorough examination of Diesel's marketing strategies and business environment to inform strategic decision-making and ensure the company's continued success in the fashion industry.

Marketing principles
Name of the student
Name of the University
Author note

Table of contents
1. Introduction..................................................................................................................................3
2. Organizational background / history & USP...............................................................................3
3. Mission Statement.......................................................................................................................3
4. Customer profile Description......................................................................................................3
5. Immediate Environment..............................................................................................................3
A) Company Products..................................................................................................................3
B) Analysis of main competitors.................................................................................................4
C) Corporate partners..................................................................................................................4
6. Relevant macro environment factors...........................................................................................5
A) Economic environment...........................................................................................................5
B) Demographic environment.....................................................................................................5
C) Social environment.................................................................................................................5
D) Political environment..............................................................................................................5
E) Technological environment....................................................................................................5
7. SWOT analysis............................................................................................................................6
8. Summary of critical issue and recommendations........................................................................7
9. Conclusion...................................................................................................................................8
10. References and bibliography.....................................................................................................9

1. Introduction
In the current competitive business environment, maintaining the standard marketing practices
have become necessary for ensuring the business sustainability (Fan, Majie, et al). In order to
satisfy the potential target, the product promotional activities and business strategies need to be
developed by understanding both the external and internal business environment. The purpose of
this study is to critically analyze the both the external and internal environment of Diesel, which
is a cloth manufacturing company. Analyzing the business environment, the emerging issue has
been identified in the study and providing the strategic recommendation against the issue, the
study has aimed to ensure betterment in the company.
2. Organizational background / history & USP
Diesel is the popular retail clothing brand in the Italian market that was established by Adriano
Goldschmied in the year 1978. After the establishment, various strategic initiatives have been
adopted by the company in case of ensuring the sustainable position in the fashion industry. The
company has gained popularity in the market with its denim wear. The company has gained the
revenue of €2.9 billion in the year 2015 (Storelocator.diesel.com 2020). Introducing the clothing
in the most luxury level, it has developed its strong image in the global fashion industry. The
company mainly operates in the lifestyle and retail sector and being a complete Lifestyle brand
the company has developed its unique position in the market. Reviewing the history of the
company, it has been identified that actual founder of Diesel was Renzo Rosso, who started
stitching the jeans in the beginning.
3. Mission Statement
Analyzing the mission statement of thee company it has been identified that by creating the
perfect apparel line, the company tries to help people in finding the unique path of life for
expressing their individuality in better manner (Storelocator.diesel.com 2020). In short it can be
said that the company aims to provide the opportunity to individuals in which they can be able to
dress up by maintaining their own individuality.
4. Customer profile Description
Analyzing the marketing strategy of Diesel, the target market of the company can be described
by dividing into three different segments. Demographic, psychographic and geographic segments
have been chosen in this study for describing the customer profile. It is true that by maintaining
its comparison with Gucci, Diesel has maintained its luxury clothing brand image in the market.
In the demographic segment selecting the income level of people it can be said that upper middle
class people and upper class people are being targeted by the company due to its premium
pricing strategy. From the psychographic segment, it can be said that the people who are
fascinated with the premium lifestyle are in the target list of the company. In case of geographic
segment, it can be said that Diesel mainly targets men and women customers especially from the
urban areas.
5. Immediate Environment
A) Company Products
The company was established by mainly focusing on the jeans manufacturing strategy. However,
after the establishment, with the gradual growth in the market the company has added others
clothing, accessories and footwear in its products. In order to sell clothing in the market the

High price
High qualityLow Quality
Low Price
company has introduces diesel and Diesel Black Gold. Therefore, in the market product
diversification strategy is being followed by Diesel.
B) Analysis of main competitors
Fig: Positioning Map
(Created by author)
Analyzing the emerging fashion industry, it can be said that Dolce, Lee, Calvin Klein, Wrangler,
Forever 21 and Gucci are the major competitors of diesel, which have also maintained the strong
position in the market by introducing the standard quality of cloths. All the above brands produce
the fashionable cloth for the young people. In the initial stage, diesel was mainly concentrated
towards jeans, However, with the changing time, it has focused crossing its limitation. Dolce is
also the popular brand in the clothing industry with the revenue of 129 million EUR , Gucci with
710 million USD, Lee with 123.7 million USD, Forever 21 is with 340 million USD, Calvin
Klein with 259 million USD and Wrangler with 367 million USD are giving tough competition
to Diesel. These all brands almost targets the same target market, which has increased the market
competitive for Diesel. In the above positioning map, Diesel has been placed in the high price
and high quality position with Gucci and CK, in that case, it can be assumed that in the emerging
market, the company can face high threat from these companies.
C) Corporate partners
Diesel can be considered as the raw brand in the emerging clothing industry. The clothing line of
the company has been promoted through two brands such as Diesel and Diesel black Gold. The
luxury fragrance line of the brand is owned by L’Orial. Moroso, Scavolini, Foscaarini and Seletti
are the corporate partners of Diesel. By making the partnership with Fossil, it has promoted its
accessories in the market. By continuing this, it can be said that being the retail manufacturer, the
company has enhanced its operations by maintaining the strong partnership with the brands like
Fossil and L’Orial for maintaining its uninterrupted global operation.

6. Relevant macro environment factors
A) Economic environment
From the last few decades, fashion industry can be considered as the fastest growing sector in
US. It is true that the economic factors highly influences the fashion industry (Jin et al.). After
the impact of 2008 regression, the US economy has started recovering in fastest manner that has
increased the change for fashion industry growth. Efficient employees with high payment
structure can cause challenge for the outsider companies to maintain the continuous growth.
However, it is true that the high economic fluctuation can create negative influence on the
growth of Diesel in the market.
B) Demographic environment
The demographic environment covers various aspects that influences the trading sector. In the
macro environmental analysis process, the environmental protection regulation influences the
waste management and others operational activities (Guo, Liang, et al.). The demographic
characteristics also influences the religious belief that influences the dressing habits of the
customers. In that case the demographic factors in US market are in the moderate favorable
condition for Diesel.
C) Social environment
The social factors are highly connected with the economic situation in the country. Analyzing the
living standard of people in this country, it has been identified that most of them are fond of
luxury products (Griffiths et al.). Brand name is the significant contributor in the US market that
influences the sales rate. On the other hand, the changing needs of the customers has made them
different from the previous generation. People have become from of luxury products which has
driven their attention towards the imported brands. In this situation, it can be assumed that the
social factors are in favorable condition for Diesel.
D) Political environment
The US government has the ability to encourage the fashion companies by providing
opportunities in the local market. In that case the companies, which are being imported in the US
market face huge challenge due to high taxation (Guo, Liang, et al.). As the rate of taxation
increases in that case rate of products also get increased where competing the local brands
becomes challenging for the outsider companies like Diesel. On the other hand, geopolitical
instability and uncertainty in the global economy have made the situation quite difficult for the
companies in the market. It is true that within 2016 to 2017, the US government has expected to
change some political uncertainty, however, uncertainty is still in the same condition. After the
Brexit condition, it is quite tough for the outsourcing brands to maintain the sales operation in
the US market. Therefore, it can be said that the political environment of Diesel in Us market is
not suitable.
E) Technological environment
Technology can be considered as the important part in the PESTLE analysis. From the beginning
of 21st century, huge changes in the technological sector has been identified. The globalized
business environment has got highly influenced by the technological advancement in the fashion
industry. Mobile device based shopping trends among the people has got increased and it has
also increased the availability of brands to the customers (Griffiths et al.). It has increased
bargaining power of the customers due to availability of brand information on the internet. After
the introduction of technology, business has become more transparent and it has influenced the

high production and standard supply chain. Being a global ruler, US has brought huge
technological advancement in its fashion industry, which can bring the positive impact for
Diesel.
7. SWOT analysis
Strength Weaknesses
 Being the completely lifestyle brand,
Diesel had established its strong image
as the luxury product selling brand in
the fashioning sector.
 In order to make the promotional
strategy effective the company has
adopted string advertising strategy and
adding pictures it has made the page
attractive.
 Since 1995, the company is
maintaining high pressure on the
internet with its publicity stunts.
 Recently the company is operating on
almost 80 countries all over the world
and with the total numbers of 2500
employees, it is serving the potential
target community.
 The product diversification is the
significant strategic direction of the
company that has brought high growth
in its business revenue
(Storelocator.diesel.com 2020).
 By maintaining the premium pricing
strategy the company has maintained
its exclusiveness in the market.
 The major weakness of the company
is the Jeans of Diesel is very
expensive and only available in few
stores.
 Analyzing the sales trend of the
company it has been identified that
only the high sales is visible in the
designer Jeans which can negatively
impact on the overall sales ratio.
 Availability of similar products in the
market has created huge pressure on
the company to maintain its brand
image.
 In the fashion industry, increasing
numbers of competitors as well as
changing needs of the customers has
created high sustainable pressure on
the company.
 The outlet store challenges has created
operational issues in the company.
Improper coordination between the
outlet store and the retail market, the
customer service gets hampered
(Storelocator.diesel.com 2020).
Opportunities Threats
 It is true that concern regarding Eco
friendliness among the people is
raising days by day, which may get
satisfied with the promotional
campaign (Storelocator.diesel.com
2020).
 Nowadays people have become highly
fashionable and increasing sense of
fashion among the people can promote
the better growth to Diesel in the
market.
 Being a popular brand name in
clothing sector, it can be easier for the
 Analyzing the market threats of
Diesel, it has been identified that in
the highly fragmented fashion
industry, maintaining the customer
loyalty is very challenging.
 The high bargaining power of the
company sometimes create huge
impact on the pricing strategy adopted
by Diesel (Storelocator.diesel.com
2020).
 Due to the currency changes and
fluctuation in taxes, the revenue of the
company may highly get influenced.

company to enhance its business in the
emerging markets like Africa and
India.
 In order to maintain its standard
position in economic scale, the
outsourcing of some division can be
beneficial for the company.
 Due to high contribution of fashion
industry in the GDP rate, the
government has also shown interest
towards this.
 In the emerging fashion industry,
increasing employment opportunities
has dragged the attention of large
numbers of people.
 Currently many of the fashion
designing companies have started
developing in the market by mainly
focusing on Jeans, which has created
new entrants threat for Diesel.
8. Summary of critical issue and recommendations
Analyzing the issues identified in the above section, it can be said that being an outsider
company in the US market, it is quite challenging for Diesel to ensure its suitable position.
Improper political support and various issues such as bad investments, financial losses and
others, the company has faced major failure in the US market. On the other hand, store thefts as
well as improper invoices have influenced the overall performance of the company. Due to
bankruptcy, the company has faced huge loss in the market. Analyzing the critical issue faced by
the company, describing the growth strategy, possible strategic aspects have been mentioned
below. In this study, Ansoff matrix has been described for providing the strategic solution for
Diesel.
Figure: Ansoff growth Matrix
(Source: Gurcaylilar-Yenidogan, Tugba, and Safak Aksoy)

Market development: Market development strategy is being applied when an organization enters
in the new market with existing products (Ansoff, Igor, et al.). If the company follows this
strategy in that case, the company needs to shift its business from US and needs to develop a new
setup in a different country. Analyzing the situation of Diesel in US market, it cannot be denied
that the company is going through the huge struggle in the current period, in that case, avoiding
the bad investment, this strategy can be adopted by the company.
Diversification: Diversification is the existing growth strategy for Diesel in which the company
introduce itself in the new market with the new products. As the company is already following
the diversification strategy, in that case, this strategy will not be beneficial for mitigating the
current challenges.
Market penetration: In case of following the market penetration strategy, the company tries to
generate growth in the existing market with the existing products. Analyzing the situation of
Diesel in the US market it has been identified that not only the competitors, but also the company
has its own issues, which has created negative growth in the US market. In the current situation,
with the negative image, it can be quite difficult for Diesel to survive in the market.
Product development: In case of product development, new products are being introduced in the
existing market. It is true that Diesel has faced various challenges in the US market, in this
situation reducing the market risk product development strategy can be beneficial for Diesel. As
the company follows the premium product range, in that case in the new product development
strategy, introducing the reasonable range of products in the market the company can be able to
gather the attention of lower middle class people that can ensure its positive growth in the
market.
9. Conclusion
In the study, it can be concluded that in the emerging fashion sector, Diesel has developed its
string position in the market. However, due to high competitiveness and various operational
challenges, market risk for the company has got increased. In this situation maintaining its
sustainable position in the market and ensuring the sustainability, product development strategy
can be beneficial for Diesel as following this strategy, the company can enhance its target
segment. This strategy can also help Diesel to deal with the recent loss.

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%7d&utm_content=ongoing_%7bcampaign_name%7d--%7badgroup_name%7d--diesel
%20official%20site--%7bmatch_type%7d----&gclid=EAIaIQobChMI9-
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