Compare Burberry’s market position relative to that of its competitors including Polo, Coach, Armani and Gucci. Is Burberry’s competitive position sustainable over long term? Why or why not?
Burberry has positioned its brand in the minds of consumers to be “functional luxury.” Burberry maintains a product line with great width and depth consisting of many products. Their products fall into one of two main categories: fashion or continuity. Fashion products are designed to be responsive to fashion trends and are introduced on a collection-by-collection basis. Continuity products have life cycles that are expected to last for a number of years. Burberry also has three primary collections: womenswear, menswear, and accessories. With so many different products offered in different collection and the fashion vs. continuity of Burberry products the product mix is very great. This contributes to the positioning of the Burberry brand. Burberry has received awards for the Contemporary Design Collection of the Year and the Classic Design Collection of the Year. This illustrates how diverse the Burberry brand is.
Therefore, the market positioning for Burberry varies. Burberry can appeal to the hip 25-year-old man or the conservative 65 year old man. However, many Burberry ads feature younger models. Recent Burberry ads have featured everything from a British landscape with aristocratic looking models to edger ads with models in bikinis. Taking all of this into account, Burberry is targeted towards many different segments of the population with one common theme, functional luxury.
Burberry has many competitors that include: Coach, Polo, Armani, and Gucci. Relative to that of Burberry’s competitors, they have positioned themselves very well in the minds of consumers. Coach primary positioning is on handbags. While Coach also carries other accessories that range from watches and shoes to scarves and dog collars, Coach remains primarily in the accessory end of fashion. Coach was also not even a player in the top 10 luxury goods players. However, Coach held 6% of the accessories share and in a price comparison was more on the low end of cost for accessories. This does not however reflect Coach’s marketing positioning. Coach is just simply more affordable and more accessible to the general population.
Polo’s marketing positioning is centered more towards clothing. While Polo was a number two player in the top luxury brands they captured the most market share for apparel, however, lower priced than Burberry. The Polo brand has great brand equity and is very well established in the minds of consumers. Armani, another competitor or Burberry, placed 8th in the top 10 global luxury goods. While Armani really only focuses on apparel the brand still maintains a strong luxury position in the market. Gucci also placed in the top 10 global luxury goods. Gucci’s marketing position is towards luxury accessories. They captured 12% of the accessory market share and were the highest priced brand for accessories.
Overall, Burberry’s competitive positioning is suitable over the long term. While brand like Coach and Gucci focus more on accessories and Armani and Polo focus more on the apparel market, Burberry has succeeded in penetrating both the accessory and apparel market while remaining a luxury good. Burberry has also succeeded is positing itself between brands such as Polo Ralph Lauren and Armani in apparel, and between Coach and Gucci in accessories. Burberry also has many different lines within the Burberry brand. This allows for more high-end goods and goods that would be feasible for purchase by the general population. Burberry’s positioning of functional luxury is extremely competitive and will sustain over the long-term.
The case notes that Bravo’s team has managed to elevate the overall status of Burberry’s brand. How has it managed to accomplish this?
The Bravo team was very successful in elevating the overall status of the Burberry brand. This was not an easy task or something that was accomplished over night. Bravo’s goal when she took over was to transform Burberry into a “luxury lifestyle brand that was aspirational, stylish, and innovative.” Some immediate changes made to Burberry to help accomplish this and elevate the overall status were cosmetic. This included changing the company’s name from Burberry’s to Burberry and introducing a contemporary new logo and packaging. Then Bravo went on to reposition the brand. This meant attracting younger customers while retaining Burberry’s core customer base. The product line was also updated. The new product line included products classified as either continuity or fashion-oriented. Continuity products were expected to have much longer life cycles and fashion-oriented products were responsive to fashion trends. Burberry also updated its product line to have three primary collections: womenswear, menswear, and accessories. With all of these new and radical changes Burberry was able to elevate the overall status of its brand.
Should Burberry’s be aggressively transitioning to a more restrained use of a check?
In our opinion Burberry should not be transitioning to a more restrained use of their signature check design. There are various reasons to back this opinion. Most importantly the check is the history of Burberry. The check is also internationally recognized by all demographics and is prevalent on a large portion of products that generate high sales.
The Burberry check has been used for one hundred and fifty years now, from the lining of its very first garment to the current garments on the shelves now. Burberry has gone through many changes, especially in the past ten years, to transform itself into a luxury lifestyle brand that is stylish and innovative, but at the same time traditional. Throughout these style transformations, the check has remained prevalent. The check has displayed lasting power within its design and should be continuously used at the current volume.
Because of the continuous years the check has been used, it has become increasingly distinguishable for one of any demographic. Elderly men that know it from coat linings to young teenage girls that wear the perfume and want the handbags recognize the check. Burberry should take advantage of using the check on its merchandise when two very different people can relate to the brand and both have a positive opinion of Burberry displaying luxury.
The check still continues to generate a large portion of sales for Burberry. There are the loyal customers who love Burberry for the design aspect of garments and accessories and others that buy it because of the name. These consumers that are purchasing Burberry because of the name most likely buy the products with the prevalent check design. Because of their brand value, consumers want to “show off” their products. The Burberry check has grown to become prestigious like the Louis Vuitton “LV”, the two Chanel “C”s and the Coach “C”s. Without the heavy use of the check, Burberry would loose a good amount of this consumer segment.
What effect will this decision have on the long-term sustainability of the brand?
The above are all factors that will contribute to the lasting power of Burberry as a luxury brand. The check has continuously been prevalent in its merchandise from introduction in the eighteen hundreds until present time, and rendered high sales. We feel that there is no reason to cut back on the use of the check for these reasons. Until the check displays a continuous decrease in sales, Burberry should not restrain the use of their check. With continued use of the check we think that it will only increase the likelihood of Burberry’s long-term sustainability because they are keeping their brand known. For example, if customers are walking by and see the Burberry check on a perfume bottle, they have recognized the brand, therefore having a reminder that Burberry is there. If the check was not present on the bottle, it is likely that the customer walked by without even noticing Burberry at all; a product will never sell if consumers do not know it exists.
Describe Burberry’s customer base?
Burberry’s customer base is unique. That is the easiest way to describe the brand’s following. Originally in 1856 the brand started by Thomas Burberry opening a draper’s shop in England. There he created gabardine, which is a fabric that waterproof and breathable. This created the customer base of anyone who ventured out into extreme conditions. Burberry’s trench coat was the official coat of the British Army in World War I, which went along with the previously stated customer base.
In the 1920s and 30s, Burberry check pattern was introduced as lining but soon became the signature trademark. This changed the customer base into politicians, celebrities (which included actors and actresses), and famous adventurers. During this time period the Burberry trench coat was appearing in all sorts of Hollywood movies by famous actors and actresses, which created the prestige of the brand. Burberry’s designs and quality were even favored among the British royalty, which created the luxury image for the brand and opened it into upper crust following.
Between 1955, when Great Universal Stores Plc. (GUS) bought Burberry, and up until 1990s, Burberry had been licensed to a variety of products and categories that were not consistent with the brand’s image. However, the brand did grow worldwide. The customer base during these times was all over. Due to the different licenses the brand was sold at all different locations and prices that attract different followings.
In the 1990s, the Burberry brand took yet another turn in its customer base. The company’s customer base was concentrated on older males and Asian tourists. This was a result of the brand being sold at stores that were inconsistent with its quality proposition. The mid-90s the brand had the image of being stodgy and conservative with an older customer base.
A breathe of fresh air came into the company when Rose Marie Bravo took over as chief executive in 1997. She changed Burberry from an outerwear manufacturer into a luxury lifestyle brand. Her goal was to reinvent Burberry. One of Bravo’s first decisions was to reposition the brand and attract a new customer base that was younger while keeping the current one.
Who is Burberry’s target customer?
Burberry’s target customer is someone who wants luxury while being functional. The brand’s point of difference with other luxury brands is that they could be luxury, aspirational, and functional. Burberry decided they were going to reach these customers from Bravo identifying their niche betweens labels of Polo Ralph Lauren and Giorgio Armani on the apparel side, and between Coach and Gucci on the accessories end. The Burberry team priced the products between these price points to reach consumers. Burberry wanted to create the image of accessible luxury.
Burberry wanted to target younger consumers to create a following and a loyal base. They want to reach these customers so they continue to broaden their brand, while being profitable. For instance, they used the example of wanting their men’s products to appeal to a 25 year-old male going on his first interview and wanting to something hot while still appealing to a 60 year-old banker that wants quality and a modern, classic appearance. This can be defined as cross generational. Burberry wants their apparel and accessories to reach the different generations but keeping the image of style, protection, and functionality. They are hoping the desired young market loves their “realness and authenticity.”
How could Burberry’s popularity among non-target customers affect the brand? How should Burberry’s respond to this popularity?
Burberry being popular among non-target customers can affect the brand positively and negatively. Burberry is starting to find out that their brand is becoming very popular in the hip-hop and urban youth community. These consumer markets are not what Thomas Burberry exactly had in mind when he created the company, but nonetheless it shows Burberry is crossing into new markets.
Becoming popular with non-target customers is a positive. It shows Burberry that their campaign to revamp the company is working. If the youth is interested in a company that has been around since 1856, then they are doing something right. This goes along with the desire to reposition Burberry to a younger customer base while keeping their loyal customers. This new popularity shows the company that it has reached an aspirational level to today’s youth.
Some negatives involved in this recent popularity are pushing away Burberry’s core customers and changing the brand’s image. If Burberry’s goal of becoming ‘accessible luxury’ is attracting consumers that are not desirable it can be negative in every aspect. These consumers tend not to have brand loyalty, fizzle out over years, and bring a different image to Burberry. The last of these stated qualities, the changing of Burberry’s image, is the most worrisome. If the image of the brand were to change to the brand of today’s hip-hop community, then Burberry would most likely loose their core customers. Those customers are not fans of hip-hop, and would not want that image associated with them when wearing the clothing and accessories.
The future will determine if there can be a happy medium between the two starkly different perceptions. One possible idea is for Burberry to create a new line for the youth, while sticking to the brand’s position and lifestyle. The new line can be for these new emerging markets, while the core customers have their favorite lines. This idea could work to keep both consumer markets happy while being profitable for Burberry, but it would be difficult to keep the image of the brand from shifting.
Creating a new line with the intention of it being for the youth, urban youth, and hip-hop community would be revolutionary within the brand and would address and capitalize on the newfound popularity. It also helps create a nice flow between product categories within the brand. Burberry is in the works to create a children’s line (as of 2007 it has already been launched), so if a youth category were created then it would create clothing for all aspects of life for the next generation. This translates into a new core customer base and the possibility of attainable longevity of the company.
Should Burberry be launching Brit, the new perfume line?
Yes, Burberry should be launching Brit, the new perfume line. This line can prove to be extremely profitable due to the product category. Perfume is a category that crosses all customer bases. This means Burberry Brit can be popular with teenager girls wanting a new scent and the fashionista that just saw the Burberry runway show in Milan.
The perfume line could also create new customers for Burberry. Not only in the obvious that they would be purchasing the perfume line, but if they love the perfume they will want to try another product from the fashion company. This will also help with brand loyalty among consumers. This is created by the fact that no longer will they have to go somewhere else for their signature scent, they can now purchase perfume along with their favorite clothing and accessories.
Burberry stated that it hoped Brit would have the lasting impact of the Chanel No. 5 fragrance. This is a big goal to try and attain, but it can be reachable. However, launching the perfume line to women in their “30s, English, and charismatic” might not give them that desired outcome. Those women most likely shop at Burberry and wear Chanel No. 5. It is a fragrance that is already set and has a certain classic appeal about it. Attracting women that are already set in life and have their signature scent are not going to switch perfumes now at this stage. If Burberry sets their perfume to women in their late teens and 20s, positioning it to them as the perfume that is their signature scent and their Chanel No. 5, then Burberry has done the impossible by creating brand loyalty with the next generation. They will have created their version of Chanel No. 5.
What other product categories should Burberry be entering?
It is hard to say what product categories Burberry should be venturing into next due to the extensive branch. We believe Burberry should expand on their current categories. For example, Burberry’s accessory line could add new products like the handbags can add new and different types of bags; the perfume line can add not only Burberry Brit for women but include a men’s line. This line of perfume should also include different scents; a wise decision for Burberry is to venture into other beauty products like lotion, etc with their scents.
In the case, it was mentioned that Burberry was looking into a children’s line. This move would be the best move for the brand. Loyal customers of Burberry would want their children to follow suit and dress in their favorite fashions, and other consumers would want the luxury of Burberry for their children. The line would be very successful and profitable for Burberry.
Another area that can be successful is home design. We didn’t find mention of products that can be used in home décor. According to Exhibit 2 of Burberry’s Sales Breakdown, the category of accessories is second, behind women’s wear, with 28.6% of total sales or 169.5 million pounds. Adding items such as bed linens, curtains, napkins, pillows, etc. could add to those numbers. Introducing Burberry into the home could open up new consumer markets and add new customers to their current customer base by making the line classic but chic.