MM5003 – MARKETING MANAGEMENT ASSIGNMENT ASSIGNMENT 1. GUCCI GROUP NV CASE
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MASTER O 2USINESS AMINISTRATION SCOO4 O 2USINESS AN MANAGEMENT INSTITUT TEKNO4OGI 2ANUNG $01
e-ne Prb)e! The main problem of this research is that Gucci made losses in excess of US$ 40 million and faced bankruptcy, in 1994 The cause of this problem is that the internal family feuds o!er o"nership and re"ards, happened The family mana#ers also exploited the brand "ith a nondiscriminatin# distribution and product licensin# strate#y There "ere also too many product lines %up to &0,000 product lines', such as alcohol, playin# cards, and toilet paper, that must ha!e caused hu#e production costs that lead to the excess losses of the company
Re6ear7, e6"+n (esearch desi#n is the outline of ho" a research is conducted The research "e conducted is based on our data collection The data collected is secondary data from articles and o)cial "ebsites re#ardin# Gucci to back up our analysis to help restructure the company
S)#t"n ( t,e 8rb)e! 1 Gucci *rand Stabilisation +ana#ement de!eloped formidable expertise in product de!elopment, supply chain control, brand communication and luxury fashion retailin# & +ultibrand c-uisition ..( %.inault.rintemps (edoute' made a si#ni/cant in!estment that facilitated this transformation, "hich si#nalled their emer#ence as the Gucci Group Gucci Group onsolidation The company sou#ht to exploit 2#roup resources 3 mana#ement production and lo#istics distribution 3 to build these brands, "hich o!er time can contribute meanin#fully to the Gucci Group returns5
E9terna) S"t#at"n Ana)y6"6 6xternal analysis is concerned about the in7uenced from the en!ironment factors that "ould be help or harm the success of the business and can be seen the opportunities and threads *efore restructure, The Gucci Group doesn8t ha!e a uni-ueness as a multiluxury brand con#lomerate compare "ith the four leadin# companies *ased on the case, Gucci Group need to be a"are of the competitors in the same aspects, like ouis :uitton, .rada, hanel, etc The threat can deri!e from the ne" comer on the luxury fashion retailin# like (ebecca +inko;, +ichael
etc, and substitutes products due to there is similar luxury brand product Similarly, in reco#nition of the hu#e si#ni/cance of distincti!e brand identi/ers %such as the double G emblem or interlockin# for hanel', iconic products and reco#nisable symbols The parentin# ad!anta#e pro!ided by the Gucci Group to its subsidiary companies inextricably linked to their core competency in luxury fashion brand buildin# and the a!ailability of corporate resources The o!erarchin# luxury brand strate#y has been to control product desi#n and -uality, #lobal distribution and communications and consistently maintain the ima#e of the brand to maximise the lon# terms #ro"th and pro/tability To expand the business Gucci Group supposed to look for"ard to seein# another opportunities, like de!elopin# a luxury fashion brand frame"ork >eri!ed from the /ndin#s of the Gucci Group there8s a propose model for the luxury fashion brand to create the opportunities? 1 +arketin#? fashion sho"s, store "indo" displays, public relation acti!ities, product packa#in#, and todays "e can use social media to in7uence the customer & 6ndorsements? lookin# for brand ambassador that "ill attract potential customer .roduct inte#rity 4 @conic productsAdesi#n? di;erentiate "ith other products B Cla#ships stores D store brand concept E .remium pricin#? a de/nin# and nonne#otiable dimension of luxury fashion brand positionin# F ultureAherita#e *esides that, Gucci also must be able to complete !arious primary and support acti!ities of each brands consolidated to de!elop and sustain a competiti!e ad!anta#e The Gucci Group acti!ities re-uired are the six key dimensions that de/ned their brand stabili=ation strate#y, "hich are? 1 & 4 B E
(eestablished control of Gucci product desi#n and manufacture (eestablished control o!er Gucci product distribution reate a balanced product portfolio for a luxury brand 6stablish a luxury marketin# communications platform reate a luxury brand consumption experience irin# Tom Cord as a creati!e director 3 to desi#n direction and control
Interna) S"t#at"n Ana)y6"6
@nternal situation analysis is the thorou#h kno"led#e and understandin# of the stren#ths and "eaknesses "ithin the industry Stren#ths are positi!e factors, "hich can be tan#ible or intan#ible, and are "ithin the control of the industry Heaknesses are factors that can hold back the industry to achie!e their #oals The stren#ths of the Gucci #roup that has the parentin# ad!anta#e are as follo"in# 1 The Gucci #roup has a clearly de/ned strate#y "ith respect to the mana#ement of a luxury #oods brand Therefore, they "ill ha!e some alternati!es plan in case the unexpected happenin#s occur & The Gucci #roup has encoura#ed syner#ies in terms of intra#roup supply and resource utilisation Cor example, Gucci supplies leather #oods to I!es Saint aurent @t is to pre!ent the short of supplies that can retain the production processes in the industry The Gucci #roup pro!ides central support to each brand "ith respect to communications, ima#e, and /nance Therefore they can maintain the #roup8s brand ima#e in the society 4 The Gucci #roup real estate experts pro!ide store de!elopment acti!ity, such as I!es Saint aurent in the US and Japan, "hile *otte#a :eneta 7a#ships in +ilan, .aris, and ondon Therefore, the brand "ill be kno"n "orld"ide B The administration and information systems in the Gucci #roup is centrally controlled @t is to control the acti!ity of the subsidiaries in order to maintain their performances E The ra" materials and media procurement for all brands of the Gucci #roup is a centralised function Therefore, there "on8t be any short of supplies of the ra" materials and any contradictions bet"een the subsidiaries about the #roup F The Gucci #roup has en#a#ed hea!ily in corporate de!elopment throu#h the ac-uisition of other businesses The "eakness of the Gucci #roup that "e mana#ed to analyse is that the desi#ner, Tom Cord, becomes inextricably linked to the brand Therefore, there must be a limitation of the product8s de!elopment in desi#n that can cause the lack of inno!ation of the brand
Se+!entat"n Tar+et"n+ and P6"t"n"n+ 1 S6G+6KTT@LK a' >6+LG(.@ i' Gender
Gucci product can reach all #ender because Gucci ha!e any se!eral product for men and "omen, such as Macket D coat for man and "omen, suits for man, dress for "oman and many more ii' #e Gucci product can reach all a#es because ha!e any se!eral product for the ne" born baby till the oldster, such as clothes for ne" born baby, suits for man, leather Macket for the oldster and many more iii' @ncome Gucci product is on the hi#h income se#ment because Gucci is luxury brand uxury brand ha!e a hei#htened status that a;ords an opportunity for their o"ners to char#e premium prices This is due to the fact that hi#hincome consumers tend to #i!e luxurious #oods such as luxury product b' .SILG(.@ i' Social lass Gucci product is on the upper class include upper uppers and lo"er uppers Upperupper class "hen they #i!e lar#e sums to charity o"n more than one house and send their children to the /nest schools o"erupper class "hen they are acti!e in social and a;airs and buy expensi!e house, brand and cars ii' ife Style ifestyle is a person8s pattern of li!in# as expressed in his or her psycho#raphics,
@t in!ol!es measurin# consumers
maMor acti!ities,
interest and opinions Ln Gucci costumers, lifestyle they ha!e is people "ho like shoppin#, fashionable and care products that they uses c' G6LG(.@ i' ountries ity ulture *ecause of Gucci an exclusi!e product and has a hi#h price, so Gucci should be placed in de!eloped countries and maMor cities like Ke" Iork, .aris, on#
"hich market tar#et The strate#ies for brand loyal customers are !ery di;erent from that used for ac-uirin# ne" costumers
& T(G6T@KG Tar#etin# is de/ned as process of e!aluation and focus po"er pull se#ment o;er the most suitable for a #roup of re#ions or countries "hich ha!e must si#ni/cant response Gucci must select and specify one more tar#et market se#ment to be ser!ed @t is necessary for the assessment of external opportunities %poll po"er se#ment' and business stren#th %internal' to take ad!anta#e of any market opportunities that exist Gucci product can reach all #ender and all a#es @t8s happens because Gucci ha!e se!eral product Gucci is luxury brand so only people "ith hi#h income can buy it and only upper class include upper uppers and lo"er upper class Gucci product suitable for people "ho like shoppin#, fashionable and care products that they uses So Gucci should be placed in de!eloped countries and maMor cities like Ke" Iork, .aris, on#
This
Mar;et"n+ Strate+y ( G#77" "n ter! (: Va)#e Pr86"t"n and Mar;et"n+ M"9 1 :alue .roposition of Gucci Group Prd#7t
Benefits
C#6t!er
Experience
Wants
Features
Value Proposition Canvas
Gucci8s .roduct Uni-ue brand ima#e and features 6xclusi!e retail en!ironment .remium pricin# 6xcellent channels of distribution >istinct packa#in# 6xclusi!e store desi#n and layout
ustomer Hants .resti#e Timeless @conicA(eco#nisable
Gucci pro!ide the experience of their Nluxury brand strate#y8 throu#h their uni-ue product ima#e and features, their outstandin# ser!ice, their exclusi!e retail en!ironment, their pricin#, their channels of distribution and complete "ith their
distinct packa#in# A)) t,e
brand "!a+e6
& +arketin# +ix nalysis %4.' of Gucci Group @n this section, "e8ll analy=e the luxury brand8s strate#y of Gucci Group K: throu#h marketin# mix analysis %4.'
1 i#hly
Prd#7t fashionable
and
uni-ue
products super!ised by Tom Cord & bsolute !alue ensured by "ell selected skilled craftsmen Karro"in# do"n of
stores & (eno!ation
of
directlymana#ed
stores under the super!ision of Tom licensed
products
Pr"7e 1 i#h pricin# based on absolute !alue abo!e function & i#h prices tar#et
1 enterin#
P)a7e on directlymana#ed
Cord and other measures to re7ect the brand ima#e Pr!t"n 1 ##ressi!e and focused in!estment in hi#hly fashionable ad!ertisin#,
the
customers Sou#ht hi#h but fair prices
"ealthy
such as run"ay, fashion ma#a=ine, etc & Utili=ed publicity "ith Tom Cord as an icon %face of the brand'
Re(eren7e6 +oore, + hristopher, and Grete *irt"istle, The Kature of .arentin# d!anta#e in uxury Cashion (etailin# 3 The ase of Gucci Group K:, >i!ision of +arketin#, Glas#o" aledonian Uni!ersity, Glas#o", Scotland, U<, pp 11B Ka#asa"a, ShinOya, and Teruhiko Cukuna#a %&01&', Strate#ic +ana#ement and *rand +ana#ement on the uxury *rand 2GU@,5 *ulletin of H*S (esearch enter, Ko 4, pp 9F10P
