Gucci in the UK: Market Segmentation and Positioning

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Task 2- Group Presentation

Table of Contents
• Introduction
• A brief overview of the luxury clothing market
• Macro and microenvironment Analysis of the company
• Segmentation, Targeting and Positioning of the company
• Marketing mix elements of the company
• Conclusion
• Recommendation
• References

Introduction
• Marketing is the activity of business organizations that are consisting
of the various tactics and strategies for identifying, generating, and
maintaining strong relationships with the consumers.
• Gucci is a popular name in the industry of luxury fashion and leather
products. The organization is an Italian company headquartered in
Florence, Tuscany that was founded in the year 1921 by Guccio
Gucci.

A brief overview of the luxury clothing
market
• The luxury product market
internationally has valued
US$217billion in 2016 the average
annual sales of luxury products for
the top 100 organizations of the
world is US$2.2 billion.
• The focus organization Gucci is a
luxury clothing organization that is
based on Italy. Some other luxury
clothing companies are Ralph
Lauren, Louis Vuitton, Chanel,
Armani, Prada, Burberry etc.

Macro and microenvironment Analysis
• PESTLE analysis
• Political factors: In the UK the propaganda of Brexit can have
a huge impact on its functioning as it is expected that a
tremendous change can occur in the rules, regulation and
policies of the country.
• Economic factors: The rise in the inflation rate in the UK is
also a major factor that can help the organization to become
successful in the luxury clothing market.
• Social factors: The trend of the society regarding the quality
of the raw materials used in manufacturing the products is
another greatest factor for Gucci in the UK.

Macro and microenvironment Analysis
(Contd.)
• Technological factors: The technological infrastructure of
the country is highly advanced and thus attracts
entrepreneurs worldwide.
• Legal factors: The law of the UK regarding employment,
equality, consumer protection are some common laws that
are obvious to be followed by Gucci when expanded to the
country.
• Environmental factors: The operation of Gucci is highly
dependent on the environmental issues of the host
countries as the organization utilize natural resources for
manufacturing its products.

SWOT analysis
1. Strength
• The brand equity and Brand Image of Gucci is very strong an efficient.
• Effective control over the distribution channels.
• A strong relationship with the distributors, retailers as well as the suppliers.
2. Weakness
• Huge investment is required for the protection and maintenance of the brand
image.
• Gucci has to face losses because of fake and cheap simulations of the brand in
countries across the world.
3. Opportunity
• Expansion to emerging markets like China is the biggest opportunity for Gucci.
• Gucci can create competitive advantage in various segments of the business.
4. Threat
• Presence of tough competitors has resulted in the limitation of the market
share.
• Substitutes of the products are highly available in the market.

Segmentation, Targeting and Positioning
of the company
1. Market segmentation
• There are different kinds of segmentation like Demographic,
Geographic, psychographic and behavioural segmentation.
• A combination of the demographic and psychographic
segmentation is used by Gucci. The company focuses mainly
on the lifestyle of its customers.

Segmentation, Targeting and Positioning of
the company
2. Targeting
• There are two targeting strategies that are differentiated and undifferentiated
targeting strategies .
• Gucci uses the differentiated targeting strategy by targeting various segments
of the market and offering them with the different product at the same time.
3. Positioning and differentiation
• Positioning relates to the perception of the customers regarding a good or
brand with respect to the competing goods and brands .
• Gucci uses to position its products in front of society as a representation of
high quality and climax of the craftsmanship of Italy by its fashionable and
trendy range of clothes.
• A value-based positioning strategy is used for positioning the luxurious
products.

Marketing mix elements
• The Marketing Mix stands for the
collection of variables that can be
controlled and identification of their
levels that businesses utilize for
influencing the destination market.
• The different variables of the marketing
mix are Price, product, promotion and
place. These four variables are termed
as the 4Ps of the marketing mix
• However, three more variables were
also added to the mix that are physical
evidence, process and people. The
complete set is known as the 7ps of the
marketing mix.

Marketing mix elements (Contd.)
1. Product
• Gucci gives more concentration to the designs of its luxurious clothing range utilizing their
experience of more than 100 years.
• High-quality products are the goal of the country which is the main reason behind the high
price.
2. Price
• The target of Gucci is the elite class people and thus they have chosen a premium pricing
strategy for their products.
• The high quality of the Gucci clothes justifies the selection of premium pricing strategy.
3. Place
• The worldwide availability of Gucci and growth of its network ensures that it can further
expand to more places especially to the emerging nations.
• The world-class and quality products have helped it to grow to any country.

Marketing mix elements (Contd.)
4. Promotion
• For the promotion of its brands, Gucci depends on the
traditional advertising method through magazines, printouts,
banners and billboards.
5. People
• Gucci maintains a strong relationship with its customers,
employees and suppliers by engaging them into their business.
6. Process
• The organizational structure of Gucci is effective in maintaining
and balancing the daily works and also its leadership style helps
it to make vital decisions in the toughest situation in an effective
manner.
7. Physical Evidence
• The logo of the company signifies the quality of its products
worldwide. The high quality and its brand name are enough to
tell its physical presence to the customers.