Marketing Fundamentals: Gucci Case Study Report and Analysis

This report delves into the marketing fundamentals, utilizing the luxury brand Gucci as a comprehensive case study. It begins with an introduction to marketing and its core processes, followed by an examination of Gucci's mission, objectives, and situational analysis. The report meticulously outlines the stages in the marketing process. It then applies various analytical frameworks, including PESTLE analysis to assess external factors impacting Gucci, Porter's 5 Force Model to evaluate competitive dynamics, and SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Furthermore, the report explores key marketing strategies such as segmentation, targeting, and positioning, culminating in an evaluation of the 7 Ps of the marketing mix. The report concludes with recommendations for Gucci, providing a holistic understanding of marketing principles within the context of a global luxury brand.

MARKETING
FUNDAMENTALS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MARKETING FUNDAMENTALS................................................................................................3
Marketing.....................................................................................................................................3
Stages in Marketing Process........................................................................................................4
Pestle Analysis.............................................................................................................................7
Porter’s 5 Force Model................................................................................................................9
SWOT Analysis.........................................................................................................................10
Segmentation.............................................................................................................................11
Target.........................................................................................................................................11
Positioning.................................................................................................................................11
Marketing Mix...........................................................................................................................12
CONCLUSION..............................................................................................................................12
RECOMMENDATIONS...............................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Marketing is a complex process which helps in driving the profitable action of customers.
The organizations use many strategies in order to position their products and services in the
marketplace and it also helps in motivating the customers to buy the product. Gucci is a well-
known brand of Italian Luxury which deals in selling of fashion and leather goods performing its
operations worldwide (Ivanov, 2016).
The report will discuss the main stages and processes of marketing. The pestle factors for Gucci
will also be highlighted. The report will also discuss the Porter’s 5 Force Model along with the
SWOT analysis. The strategies for Segmentation, Target and Positioning will also be elaborated.
The research will also evaluate the 7 Ps of Marketing Mix along with giving some
recommendations.
MARKETING FUNDAMENTALS
Marketing
It can be defined as the business of promoting and selling products or services. This activity
and processes are meant to create, communicate, deliver and exchange offerings that value the
customers, clients, partners as well as society. (Baines and et.al., 2017). The individuals who
perform the functions of marketing are known as Marketers. Their main aim is to expand the
products and services of the company keeping in mind various internal and external factors.
Marketing Process mainly deals in making attempts to satisfy the endless needs of the
customers by performing various series of actions. The stages are mentioned in the diagram
below:
3

Figure 1: Stages in Marketing Process
Source: Weller.J,2017
Stages in Marketing Process
There are various steps in the marketing process which are explained below:
4

Figure 2: Detailed Steps in Marketing Process
Source: Weller.J,2017
5

Mission Statement of Gucci
Being cool and responsible brand and the value the company has for itself in terms of
craftsmanship, its mission is to gain leadership in the market of Luxury and that too on the
world-wide level.
Objectives
 Gucci aspires to improve its brand name to make it the most recognizable and high
rated in the world.
 Increase the sales by 40% till the end of 2021 by enhancing its reputation and quality
of products
 The aim is to become a leader in selling of Haute Couture and become the most
dominant fashion image on various online and offline platforms.
 Implement various strategies to deal with threats like downturn in economy etc.
Situational Analysis
Gucci is facing many problems because of the Economic Crisis which forces the people to
buy less expensive brands. Although Gucci is internationally renowned, admired, respected and
limited powerhouse of fashion, the countries like China and India are exporting fake
merchandise to be distributed illegally which proves to be a threat to the company. So, Gucci
must improve its sales by appealing the needs of current and potential customers to the social
status.
Strategies
 Gucci must create its value brand which sells the products at lower price than its typical
products which can increase its sales among the middle and upper-middle class customers
(McLean, 2019).
 Ensure the customers by giving lifetime guarantee in the products as the knock-off will not
be able to give guarantee on the merchandise products and must advocate strict laws to
control the illegal knock-off merchandise.
6

 The company must change the target media audience which also includes the middle class
customers along with celebrities.
 Gucci can do partnership with any celebrity to promote its products and services.
Implementation
The implementation of all the above strategies must be efficient to obtain the desired
results. Brand can be created by giving a different logo and creating the awareness of brand
among the target customers. Guarantee on the products can provide the company with more loyal
customers. It can be given by selling best quality products which do not need repair or
maintenance and are durable (Visser, Sikkenga and Berry, 2019). Changing the target audience
can increase the customer base rapidly because the celebrities can afford its typical products but
the middle class customers lack it. So, it can target those persons also who cannot afford
expensive products by selling them products of its different brand. Gucci can have celebrities as
partners by giving them some products free for first use which will make them ready to promote
its products.
Control
The strategic control is mandatory for its effective implementation. The company must
keep a tab on the implementation of all the strategies because sometimes they divert from the
aim to achieve the target. For example, the developing of different brand can diminish the value
of the main brand. So both brands must be performing simultaneously. Targeting the middle
class people must not hide the need to target the celebrities which increases the value of the
brand. Therefore, it is necessary to have a control on the strategies.
Pestle Analysis
This analysis for Gucci analyses the impacts of various external factors on its business. It
helps to examine the brand in terms of business tactics (Deepak and Jeyakumar, 2019). Impact of
Pestle Factors also helps the company to understand the dynamics of the emerging market in
order to improve its business.
Political
7

Political Factors impacts the brand like Gucci in a more negative manner with some
positive impacts. Gucci is negatively impacted by the changing laws in terms of import, export
and increased cost operations. The taxes imposed on the company forces it to sell the products at
high prices which deceases its profitability. On the other hand, the cheap labour available can
result in high profit margin to the brand.
Economic
This mainly aims in the customer’s power of purchasing. Gucci faced numerous
challenges including the skimmed prices and high insurance purchase. The financial market is
efficient which results in increasing in the capital at fair prices. The economic crisis affected the
company but being a luxury brand, doesn’t affected much economically. The stability of
currency was also a problem during international trade.
Social
The company has created a large customer base with loyal customers by satisfying their
demands selling the products like fur coat, leather bags etc. This resulted in social activist which
condemns the policy of the company to use the raw materials in the manufacturing of the
products along with the target market to be assigned (Vilá Trepat, 2016). The lower social status
of the people makes it difficult for Gucci to promote its products which also relies the company
on niche marketing. The company must also aim at some projects which safeguards the women’s
rights and healthcare of children.
Technological
Gucci being a luxury brand, focuses of different types of technical innovations to
improve the efficiency of its operations. The brand also creates the awareness of its products by
marketing online through social networking sites like YouTube, Facebook etc. The people are
technologically advanced so it becomes easy for the company to give every update of the brand
on the online platforms. This will also reduce the costs of marketing increasing the overall
profitability.
Legal
8

These factors restrict the operations of the company. In order to increase the goodwill and
customer base, Gucci must follow all the laws and regulations while providing unique products
to the customers (Ostanik, 100insights Inc, 2016). So, the legal factors create a boundary for the
company to perform all the functions on the other hand following the laws can give security and
guarantee to the businessman as well as customers.
Environmental
The customers of Gucci are becoming more environment-friendly and also they do not
prefer the cruel products instead considers environment as their social responsibility. So, the
company must focus on all the eco-friendly methods in all its processes of packing, delivery etc.
the company earlier killed many animals but must now be a role model for other companies by
not involving in exploitation of animals. This can increase the customer base as well as goodwill
along with creating awareness to save the environment.
Therefore, the Pestle factors has a great impact on the company Gucci. The company must take
the advantage all the factors by reducing their negative effect on its growth.
Porter’s 5 Force Model
This model is generally a framework which analyses its competitiveness in the market. It
describes the power of its competitors. Following are the 5 forces of this model for Gucci:
Competitive Rivalry
The level of this force is both high as well as low in case of Gucci being the part of
fashion and luxury industry. The number of competitors are very few, the companies mainly do
not focus on capturing market share from each making the level of the competition weak. On the
other hand, Gucci is forced to lessen its prices to compete in the market and also to make unique
strategies which makes this force stronger. The company must differentiate its products and
target to new customers by conducting a thorough market research.
Threat of New Entrants
The level of this force is mostly high because it needs a high capital and investments to
compete with the existing players. The new entrants are unable to use much differentiated
9

products than the existing ones. The new entries also face lots of legal problems as they need to
have licenses before selling the products. Gucci can spend much money on marketing to build
the identification of brand strong which will help it to regain the customers from going to the
new entrants.
Bargaining Power of Suppliers
The level of this force is low as the suppliers have less control over the prices in brands
like Gucci as they have to provide reasonable pricing. The products provided by the suppliers are
standardized with less differentiation. So, Gucci must buy the products at low price from the
suppliers and also build strong relations with them.
Bargaining Power of Buyers
Its level is moderate as the buyers also do not have much control over the prices because
they have only few firms to choose from. The product differentiation in this industry is also high
so the buyers can’t find the alternative for the product easily. Gucci can take its advantage by
building large customer base and economies of scale.
Threat of Substitutes
The level of this force is very low because there are very few substitutes available in the
industry in which Gucci operates. The substitutes if available are much expensive which are not
sold easily. Gucci can provide unique products of greater quality which will force the customers
to buy at lower prices than the price of its substitutes.
So, the above mentioned forces helps to evaluate the profitability of the company Gucci by
examining the stronger and weaker forces.
SWOT Analysis
It provides a management framework which helps the company in benchmarking its
business and the performance considering all the competitors (Rainmaker, 2017). The factors of
SWOT analysis for Gucci are as follows:
Strengths
10

Gucci has strong brand image and equity with strong relations with suppliers and
retailers. It has a huge portfolio of unique products in the field of clothing, apparel, wallets,
watches etc. It also has associations with various automobile companies like Ford, General
Motors etc. which helps it in competing with other players.
Weaknesses
The major weaknesses of Gucci are that it has to face various losses as it has fake
imitations of its brand worldwide which are also cheap and it needs huge investment in order to
maintain and protect its brand image.
Opportunities
Gucci can target the youth of the countries worldwide as it deals in the stylish designs
which will attract the number of youths (Hodgkins and et.al., 2019). It can also take the
competitive advantage in different fields and also tap luxury markets in emerging economies of
India and China.
Threats
Gucci has to face a tough competition which results in limited market share growth. It is
sometimes vulnerable to recession, fluctuations in global price etc.
Segmentation
Gucci can segment its market in the sectors of Premium Apparel and clothing which helps
it to cover all the areas of market and enhance its customer base.
Target
Its target market must be the middle aged, high income as well as high status individuals to
cover the middle class customers and the celebrities also.
Positioning
The company Gucci has its projection in the form of a sophisticated brand along with the
most innovative one.
11

Marketing Mix
It consists of the 7 Ps which helps to evaluate the different aspects of the company (Jenson,
Doyle and Miles, 2020). The marketing mix of Gucci is as follows:
Product: It dealt with the unique products including the leather products but now deals with the
clothing and other accessories. Its products also include fashion wear for men and women.
Price: It has premium pricing because of its superior quality products which does not make
customers sad but satisfied with quality. It also gives discounts on various products.
Promotion: It has innovative marketing strategies to tackle the dynamic environment. It also
gives various ads for the perfumes etc. It also organizes various fashion shows for attracting
celebrities.
Place: It perform its operations in expensive up street locations in Europe, USA, Asia, Middle
East, Australia and many more places.
People: Its employees are much skilled and are aware of all the marketing fundamentals and
competition and untrained are given regular trainings.
Process: It focuses on the process to be environment friendly in packaging, delivery etc.
Physical Evidence: It is evident on online platforms like social networking sites and websites
and offline on established stores.
CONCLUSION
The report above concluded the marketing fundamentals of the well-known company Gucci.
It described the marketing process along with mentioning the impact of Pestle factors. The forces
of Porter’s 5 Force Model are also highlighted for the company. The SWOT analysis for Gucci is
also done. The report also evaluated the segmentation, targeting and the positioning of the
company. The report was concluded by mentioning the 7Ps of Marketing Mix of Gucci. It will
finally give some recommendations.
RECOMMENDATIONS
The company Gucci must target the middle class customers also along with the celebrities. It
must make the company presentable on the online platforms and websites. It must make its
products differentiated to take the competitive advantage from the existing players. It must
decide some reasonable pricing for the middle class customers.
12