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Burberry Branding Case

Essay by   •  November 12, 2013  •  Case Study  •  1,286 Words (6 Pages)  •  1,683 Views

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1. Describe the evolution of Burberry's positioning and customer base.

As a brand with long history tracing back to the 1850s, Burberry has long been known for its luxury and durability. During the mid 1950's, Burberry was one of the most promising fashion brands in the world. However, with mistakes in their business strategy, Burberry's situation worsened. The primary problem was that they didn't impose strict control over their licensees who had relatively high freedom in their operation. Thus, it was difficult to maintain the quality and design of products across markets and resulted in deteriorated brand image. Before Bravo's era, Burberry was perceived as a "conservative" brand that was being used by older people.

Bravo came in and repositioned the brand. In order to expand the customer base to include younger customers, while at the same time, retaining the core customer base, they repositioned themselves as "accessible luxury". Burberry positioned themselves between being functional, which has long been its main value, and being aspirational, adding the fashion mechanism into the brand. Thus, they've managed to extend their customer base by retaining existing customers who seek luxury and functionality, and adding younger generations who seek aspiration.

2. The case notes that Bravo's team has managed to elevate the overall status of the Burberry brand. How has it managed to accomplish this?

Apart from repositioning the brand, improving the operations is also very important to the company's success. As mentioned in the first question, Burberry had problem with licensees who were given freedom. Burberry became much stricter in controlling the quality in sourcing and manufacturing. Whenever the products needs to utilize skills from outside the company, licensees were carefully selected to design, manufacture, and distribute product. The carefully selected licensee ensures product quality that is up to the company's standards which would maintain the brand's great reputation. Bravo had also imposed stricter controls on the licensing agreements with older licensees in order to guarantee consistent products across markets. The same applies for old distributors. To guarantee tighter control, Burberry terminated some contracts, buying some distributors, and renegotiated contracts with others. These efforts, apart from preventing low quality products that would tarnish the brand's image, also allowed the company to structure its distribution channels. As a luxurious goods, the brand must not over-sale and create ubiquity. Customers are willing to pay more for luxurious products because it represents uniqueness and self fulfillment. Thus, if everyone is able to use the product, than it has failed to establish itself as luxurious goods.

To be consistent with their positioning, the pricing strategy also had to be adjusted. Gross margin were increased to 56% compared to 47%. Promotional strategy was also very important in establishing the success. Burberry selected models such as Stella Tenant and Kate Moss which represented their target markets. Stella represented more towards the luxurious aristocrat which was the core customer base of the brand, whereas Kate Moss represented more towards the modern fashion oriented customers

3. What did Bravo and her team do in order to revitalize Burberry's product line?

Prior to Bravo's era, distributors and licensees were messed with the designed and quality of products. The company relied on only a few core products of the company. Thus, Bravo's first action was to eliminate outdated designs and products that were inconsistent with the brand's image. After that, they started to create new products which could be classified as either continuity or fashion-oriented. Products in the continuity category have several years of life cycle while fashion-oriented products had shorter cycle and are introduced to the market on a collection basis. The primary collections under the Burberry brand are womenswear, menswear, and accessories.

Bravo also expanded

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