Luxury Marketing Strategies for the Gucci Brand: A Detailed Report

This report provides a detailed analysis of Gucci's luxury marketing strategies. It begins with an introduction highlighting the importance of brand value and the impact of digital platforms. The main body delves into Gucci's rationale for employing social media and CSR activities, emphasizing their role in brand building and customer engagement, including how they engage the millennial generation. The report outlines Gucci's mission statement and SMART marketing objectives, focusing on social media and CSR initiatives. It then examines the STP (Segmentation, Targeting, and Positioning) framework, detailing Gucci's target market, segmentation strategies (demographic, geographic, psychographic, behavioral, and socioeconomic), and positioning as a high-end luxury brand. The report also discusses Gucci's branding strategy, including its vision, story, and visual elements (logo, colors, and mood board). Finally, it recommends a marketing mix strategy, covering product, pricing, and distribution strategies. The conclusion summarizes the key findings and the importance of the strategies discussed.

Luxury Marketing
Strategies

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Rationale behind the strategy.................................................................................................1
Mission Statement..................................................................................................................2
Marketing Objectives.............................................................................................................2
STP.........................................................................................................................................2
Target Market ........................................................................................................................3
Positioning strategy................................................................................................................4
Branding strategy....................................................................................................................4
Visual elements of branding...................................................................................................5
Recommended marketing mix strategy..................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Luxury Brand Marketing Strategies focus mainly on creating values that are of highest
level for the brand and also elevating various elements of a brand. Different brands opt for
various strategies in order to lure its customers and create an impact on their minds. The final
decision that customers make to purchase a product or service is mostly the result of what they
hear or read online on different websites and on social media.
Gucci is a luxury brand from Italy offering products in fashion and leather category. The
brand was founded by Guccio Gucci in the year 1921 and is headquartered in Tuscany, Italy
(Atwal and Williams, 2017). The brand is one of the oldest brands in the fashion industry
operating globally today.
This report states new objectives that the company should set and what strategies with
respect to conducting CSR activities and social media activities should the company opt for and
follow in order to achieve the same.
MAIN BODY
Rationale behind the strategy
The rationale behind Gucci opting for social media and CSR activities is that the
company can communicate and connect with people in different segment. The people may not be
only the ones who can afford Gucci's luxury products but others also. This will help in creating a
community for the brand but also create a brand image and helping the company's branding of
products worldwide .
The hike of digital technology and social media lately has brought sudden changes and
trends that are being used by fashion and luxury companies to constantly interact with their
followers and subscribers online. Different social media channels like Facebook, Snapchat and
Instagram are used exclusively by different brands for carrying out promotions and understand
customers' expectations. The brand is able to engage the millennial generation by carefully
understanding the customers and coming up with different campaigns to engage them.
One of the fundamental principles of Gucci is Corporate Social Responsibility which also
forms the foundation of its branding (Chandon and Laurent, 2016). Gucci has executed a series
of processes to merge together social, environmental and ethical rights into its business. The
brand along with its employees, customers, stakeholders, associations etc. promote a social
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responsibility policy which values the worth of ethics of business, respect for human rights,
protection of health of workers and their safety, stakeholders and suppliers etc.
Mission Statement
A mission statement explains the being of an organization, who are the main customers
of the company, the products it manufactures, services it delivers and what geographical regions
the company operates in.
Gucci aims to become the market leader in the luxury segment globally by putting in
efforts and and maintaining the same (Godey, 2016).
Marketing Objectives
An objective is a set basis that explains what a company or an individual desires or aims
to achieve. SMART objectives are a form of objectives that enable managers in an organization
to set goals that are specific, measurable, achievable, realistic and timely in nature. These
objectives not only help in the overall performance improvement but also enhancing the
productivity and helping in achieving the goals on time.
 To implement social media strategies every 6 months in order to promote organisation's
products and services effectively that in turn help in enhancing the business sale by 25%.
 To constantly upgrade the organization's CSR activities within 6 months to increase the
growth opportunities by 20%.
STP
STP stands for segmentation, targetting and positioning is a structure used in marketing
that provides a summary of the market segmentation process which groups the customers into
different segments according to various aspects, and targets the most beneficial segments and
finally positioning the brand and its products into the minds of the targetted people (Henningerr,
2017). Segmentation – Gucci uses a mix of strategies in order to define a segment of customers
for its products and therefore comes out with products that are way ahead of the trends in
the industry. The major customer segment of Gucci are primarily celebrities, premium
class people whose buying behaviour is very different from normal people. The brand
also divides segments based on the style sense of people.
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◦ Demographic : Men and women who are young professionals and belong to the
premium class and have an upper professional status and are brand conscious.
◦ Geographic - Mainly United Kingdom and countries with high incomes where
people do not hesitate in paying premium for a product they desire to purchase.
◦ Psycho graphic : High-net-worth people who view luxury as superior from of service
and look for exclusive quality.
◦ Behavioural : These are the people whose behavioural and shopping habits are mostly
influenced by social media.
◦ Socio Economic : People in this segment are interested and support social issues and
cultures and have high motivation.
 Targetting – The company targets people who are involved and have a sense for high
class fashion and want to stay updated with the latest and fresh trends in fashion. The
brand image along with the product quality, designs and accessories is what attracts the
customers most towards the brand. Gucci carefully examines and then designs its
products according to the latest fashion trends in the market (Jin and Cedrola, 2017).
 Positioning – The company is positioned as a high end luxury brand in the minds of
people offering the latest trends and designs when it comes to fashion. As a result of this,
the company has stores across the globe at high profile, posh and premium locations.
Gucci is one of the oldest and fastest growing and profit making brands in the luxury
segment (Kapferer, 2017).
Target Market
Product Category Primary Target Market Market Segment
Men's wear
Men with a strong taste in
fashion and who belong to
premium class.
People in the age groups of 18
to 50 years.
Women's wear
Women who are more
interested in high class fashion
and belong to high society.
Women in the bracket of 18 to
60 years of age.
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Children's wear -
From newborns to children up
to 12 years of age.
Gifts
People who are willing to pay
premium.
Both men and women
Jewellery and watches
Men and women who are
willing to pay premium.
Both men and women
Beauty
Affluent women who belong to
premium class and pay more
attention to style and design of
the product.
Women from 18 to 50 years
Positioning strategy
Gucci, being a high end luxury brand has opted for a powerful positioning strategy over
its competitors. The brand, after immense amounts of efforts has been able to position itself as a
high end luxury brand in the minds of people. Gucci inherits features of unbeatable quality,
excellent craftsmanship together with the unique talent of its workers the company has been able
to out stand itself. The products offered are durable and of high quality having a brand image
because of its French heritage and artisan skills (Ko and et. al., 2016). Gucci has presented itself
as a brand that is not accessible by all and the best quality products that are beneficial in the
minds of customers. Also, the brand differentiates itself in various ways like the products it
offers, their style, type of distribution, target segment and promotion thereby making it an ultra-
premium luxury brand.
Gucci has made its place among the world's 4 most valuable and luxurious brands.
Besides having been listed on the same category, all the for brands have their own distinct and
unique brand positioning strategies. Also, the brand is known to focus on sensuality with its
product offering (Mosca, 2016).
Branding strategy
Brand strategy refers to a long term plan which is aimed at the overall development of a
brand in order for it to be successful and achieve its goals and objectives. Italy based high end
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fashion house, Gucci is known as the world's largest selling brand and the most recognisable
brand.
 Vision : A vision statement explains what an organization aims to achieve over a period
of time.
Gucci, as a part of its new vision, aims to redefine luxury in modern time along with
further strengthening its position as the most aspired fashion brand in the world. The brand's
products represents the highest level of Italian craftsmanship and excellent quality. Story (Essence and Personality) :
Gucci, the high end luxurious fashion brand, as we know it today was established by
Guccio Gucci in the year 1921 in Florence, Italy. The brand is known for its essence in
producing high end leather and specifically horse bit loafers (Tom Dieck and et. al, 2017).
The brand started off by producing primarily leather goods as well as premium silk
goods, handbags and shoes. Gucci came into existence when the founder, Guccio Gucci, while
working as a lift attendant took notice of the style the beautiful luggage bags of many high class,
wealthy people (Ozuem and Azemi, 2017).
The year 1953 marked the opening of the first overseas store of Gucci and the passing
away of Guccio Gucci. The famous Gucci logo that is used till date came into existence in the
1960s.
Visual elements of branding
Brand identity of any company refers to the face of the brand representing its core values,
ideas and personality. Gucci is a brand having a very powerful brand identity of excellent
craftsmanship with innovative and unique designs.
The Gucci logo represents authenticity and magnificence across the world and is
designed taking the initials of the name of its founder, Guccio Gucci. The logo is in fact one of
the most recognisable logos in the luxury segment and is a best selling brand across the globe.
The colours red and green are Gucci's most known branding tools with stripes that are hand
woven by the artisans of the brand to show brand mastery.
Mood board : Mood board refers to the constitution or a collage of images, visuals and
other objects that are often created for the presentation and design purposes. A mood board
assists designers in creating styles and designs that are unified for a particular project. The
creative director at Gucci, Alessandro Michele has launched the label into a completely new age.
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A normal Gucci bag colour palette has 5 colours ranging from Grullo to Medium
Carmine.
Recommended marketing mix strategy
Product mix strategy -
Being a well known brand globally, Gucci offers a vast portfolio of its products with
great length, depth and width. The Gucci product line ranges from handbags to ready made
products to shoes and jewellery for men, women and children. There is a wide length in each of
its product lines. For example- In the bags segment, it has totes, sling bags, clutches etc. with
large options to choose from. In accessories, Gucci offers sunglasses, belts of various different
designs, watches, wallets and beauty products.
For its shoe line, the brand offers a vast range of fancy shoes, ballerinas, sneakers, boots
and shoes for the customers to choose from. The shoes are designed keeping in mind that the
brand statement and uniqueness is maintained at all times (Rios, 2016). The Gucci sunglasses are
catchy with classic designs that are comfortable yet stylish. The distribution of the products is
done worldwide through highly trained staff with an appealing and good-looking packaging.
Despite being such an old brand, Gucci has been able to maintain the quality of its
products till now and being in line with all the fast changing fashion trends making style
statements.
Pricing strategy -
Products offered by Gucci are premium priced. The pricing of the products is done on the
basis of the quality of fabric used and the amount of time and work put into making the product.
The final price includes all kinds of charges and expenses that were incurred. The company does
offer discounts and offers on its website and stores sometimes to attract more customers. To
increase its profits and revenues, the company has made efforts on increasing its product lines.
Gucci has maintained a pricing policy that is reasonable and premium pricing policy also.
The final products of Gucci have a made in Italy logo on them (Ryan, 2016). Gucci is associated
with prestigious pricing with unique products. Gucci is known for not compromising on its
quality at any time and hence bargaining and cost cutting on the products is not possible.
With such unique and high end products the customers who can afford to buy Gucci's
products so not hesitate on paying a premium for the products. The current pricing strategy
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followed by the brand is a competitive strategy with it charging high prices for its products
online as the delivery costs are also included in them.
Place/ Retail marketing strategy -
Gucci is modifying its already existing community in order to increase its revenue and all
over profits. The brand is primarily into manufacturing, distributing, merchandising and
marketing of its products online as well as offline. The brand, last year came up with a new
digital campaign for its spring collection that featured augmented as well as virtual reality
experiences. The company also launched an app that lets the customers try on different shoes that
the brand offers which is based on augmented reality. Online and offline customer service : Gucci has been able to create the perfect experience
for its customers by being highly interactive with its customers both online as well as
offline. It has a special team that is dedicated towards providing customers with
assistance 24/7 (Tan, 2016). The staff at their physical store also is very helpful and are
ready to assist the customers in case of any confusion.
 Online and offline store design : Shopping at any of the Gucci's stores is considered to be
an experience in itself with the stores offering a visual treat. Gucci went under a
makeover with all of its stores and website being restructured and redesigned. The
website of the brand is also which was made by the brand and developed by an agency in
Milan.
Promotion strategy -
Gucci has used different promotional strategies all over the world in making the brand as
successful as it is today. The brand represents status, luxury and class through its products.
Online promotion of products is done through various channels like Facebook, Instagram,
Google Ads etc. to name a few. Various deals, offers and discounts are offered that help in luring
the customers and building a new community and attracting new customers (Tan, 2016).
The company targets high class, wealthy people who are willing to pay premium. Gucci
also promotes its products offline by running offers and discounts in its stores and using national
as well as international celebrities as ambassadors for endorsing the products.
CONCLUSION
From the above report, it can be concluded that in order to be successful, a company
should make constant continuous efforts to enhance its overall business strategies and to be able
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to perform to the level of its competitors. A careful study of the overall performance of the brand
should be done by the management so that it helps while making decisions.
The rationale behind opting different types of strategies is that the brand is able to
communicate with its customers and understand their needs and what they expect from the
brand. The strategies not only help in building a brand image but also in achieving the goals and
objectives.
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REFERENCES
Books & Journals
Atwal, G. and Williams, A., 2017. Luxury brand marketing–the experience is everything!. In
Advances in luxury brand management (pp. 43-57). Palgrave Macmillan, Cham.
Chandon, J. L., Laurent, G. and Valette-Florence, P., 2016. Pursuing the concept of luxury:
Introduction to the JBR Special Issue on “Luxury Marketing from Tradition to
Innovation”. Journal of Business Research. 69(1). pp.299-303.
Godey, B. and et. al., 2016. Social media marketing efforts of luxury brands: Influence on brand
equity and consumer behavior. Journal of business research. 69(12). pp.5833-5841.
Henninger, C. E. and et. al., 2017. Consumption strategies and motivations of Chinese
consumers: The case of UK sustainable luxury fashion. Journal of Fashion Marketing
and Management: An International Journal. 21(3). pp.419-434.
Jin, B. and Cedrola, E. eds., 2017. Fashion branding and communication: core strategies of
European luxury brands. Springer.
Kapferer, J. N. and et. al., 2017. Advances in Luxury Brand Management. Springer.
Ko, E., Phau, I. and Aiello, G., 2016. Luxury brand strategies and customer experiences:
Contributions to theory and practice. Journal of Business Research. 69(12). pp.5749-
5752.
Mosca, F. ed., 2016. Global marketing strategies for the promotion of luxury goods. IGI Global.
Ozuem, W. and Azemi, Y. eds., 2017. Digital Marketing Strategies for Fashion and Luxury
Brands. IGI Global.
Rios, A. E., 2016. The impact of the digital revolution in the development of market and
communication strategies for the luxury sector (fashion luxury). Central European
Business Review. 5(2). pp.17-36.
Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital
generation. Kogan Page Publishers.
Tan, C. S., 2016, July. Does Luxury Really Care? How Cause Related Marketing Shapes Brand
Perception And Purchase Intention In The Japanese Luxury Market. In 2016 Global
Marketing Conference at Hong Kong (pp. 282-283).
Tom Dieck, M. C. and et. al., 2017. Hotel guests’ social media acceptance in luxury hotels.
International Journal of Contemporary Hospitality Management. 29(1). pp.530-550.
Online
About Gucci. 2016. [Online]. Available Through: <https://www.gucci.com/int/en/st/about-
gucci>.
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