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Anny Baker n8585164Brand Positioning for Hugo Boss

For Benita Bell: Friday 12-1pm | Due Date: 15/04/16

Brand Positioning Analysis

AMB211 Brand Positioning Audit Hugo Boss

Table of ContentsBackground.............................................................................3Frame of Reference.................................................................3

Target Market...............................................................................3Nature of Competition..................................................................5

Points of Parity.......................................................................6Points of Difference................................................................7Recommendations...................................................................7Works Cited:...........................................................................9Appendix:..............................................................................10

Anneliese Baker n8585164 For Benita Bell2


BackgroundHugo Boss is an international fashion company, which started in 1923 in Germany. Hugo Boss is renowned for its high quality fashion apparel with a sophisticated European design. This brand is represented in 108 countries, ranking number 96 on the Interbrand top 100 global brands of 2016. Hugo Boss stocks high fashion, premium and luxury apparel, accessories, footwear and fragrance and is split into two categories of HUGO Hugo Boss and BOSS Hugo Boss. Within the BOSS Hugo Boss umbrella, this company has three separate collections. Boss Orange that is premium casualwear, Boss Green is premium and innovative sportswear, and their strongest and most popular collection Boss Black, their luxury and sophisticated business and evening wear.

Frame of ReferenceThis brand is positioned in the market as a high quality, European fashion brand that serves to cater the consumer needs of purchasing luxury items for social status.

Target MarketThe target market of Hugo Boss is men and women 35-55 who are of high economic status ($70 000+ annual income), and therefore have a high disposable income (Vangkilde, 2013). In regards to geographic location, this audience will predominately live in an urbanised society where the need for prestige business attire is higher (Deloitte Touche Tohmastu Limited, 2015). Furthermore, being a luxury apparel brand these consumers are most likely living in advanced urbanistic cities where the brand Hugo Boss is seen to hold social prestige and image.

Geographically, Hugo Boss is most popular in the US and Europe due to the urbanised societies and European design of it’s clothing (61% of sales in Europe 2014, 23% of sales 2014 in USA) (Auhagen, 2011). Furthermore, both these global markets perceive a prestige business image as an important social factor conveying status and power (Corneo & Jeanne, 1997). Therefore, a wide percentage of this brand’s market will be located in the US and Europe.

The internationalisation business strategy of Hugo Boss is to expand into emerging markets such as China (Auhagen, 2011). This is due to the growth of population in this market, who has an increase in disposable income (Auhagen, 2011). Additionally, China has not seen a severe market penetration of premium and luxury goods companies, providing Hugo Boss with the possibility of gaining strong market share (Auhagen, 2011). Already, Asia and the Pacific have witnessed a 14% of sales. Therefore, within the next decade the market will move into this geographic location, slightly altering the target market.



It is found that there are two different types of consumers who purchase luxury brands; consumers who value uniqueness and those who are followers and have a need for conformity (Tian, Bearden, & Hunter, 2001; Brewer, 1991). The first market aims for exclusivity in material items and usually shops on impulse and to satisfy the social needs of prestige and image (Tian, Bearden, & Hunter, 2001). The latter, are described as followers to the exclusive market, who usually wait for items to be discounted and have the perception that using these luxury items will elevate themselves in the eyes of onlookers, particularly those from the first market segment (Brewer, 1991).

Hugo Boss is perceived predominately as developing high quality men’s business attire, due to the popularity of BOSS black collection. According to a study conducted by Matthiesen and Phau, 95.2% of respondents were familiar with the brand Hugo Boss (Phau & Matthiesen, Brand image inconsistencies of luxury fashion brands: A buyer seller exchange situation model of Hugo Boss Australia, 2010). Of this percentage, 75.4% of respondents were aware of BOSS Black, 41.1% HUGO collection and 26.7% Hugo Boss women (Phau& Matthiesen, Brand image inconsistencies of luxury fashion brands: A buyer seller exchange situation model of Hugo Boss Australia, 2010). Additionally, respondents associated this brand with exclusivity, masculinity and high quality. Furthermore, these consumers were portrayed by the respondents as someone personifying prestige, confidence, power and energy, and have an understanding of luxury and style (Phau & Matthiesen, Brand image inconsistencies of luxury fashion brands: A buyer seller exchange situation model of Hugo Boss Australia, 2010). In Australia, the brand Hugo Boss is distributed in either independent Hugo Boss stores or big department stores, which are perceived to sell brands of high social status, like David Jones. Due to Hugo Boss not being seen in stores like Target, Australian consumers like the ones in the above study, further associate this brand with high quality and prestige.

The core benefits consumers are seeking when purchasing a luxury apparel brand like Hugo Boss, is predominately to satisfy social needs (Grubb & Grathwohl, 1967). The Theory of Leisure Class expresses the social honour and esteem of possessing wealth and having evidence for that, also known as conspicuous consumption (Veblen, 1899). This theory has been adopted in modern times. Consumers are still seeking to advertise their wealth and therefore purchase luxury items to fulfill this need of self-complacency of possessing wealth.

This theory additionally helps mold the consumer insight of Hugo Boss being a cross platform fashion brand. Hugo Boss is a ready-to-go business outfit that can transfer into eveningwear attire. In the business sense consumers perceive Hugo Boss as a brand personifying prestige, power and money (Phau & Matthiesen, 2005). In the social sector, this brand is associated with expressing sexuality, confidence, masculinity, power and money, which perfectly aligns with the younger demographics desires for social status, as represented through social media channels and outlets (Vangkilde, 2013).



This target market is also widely recognised through advertising campaigns, dispersed globally. A different look is represented for each collection reaffirming the demographic and psychographic profile on target for Hugo Boss. Additionally, this widens the market of consumers and maximizes the power and global recognition of the BOSS logo. An example of these advertisements can be seen in the Appendix, along with Hugo Boss’ perception of their brand essence with different collections.

Nature of CompetitionA continual growth in luxury goods (€224 billion 2014 from €213 billion 2013) depicts a competitive market for premium and luxury apparel (Consultancy UK, 2015). Additionally, an increase in the amount of disposable income for consumers in the aforementioned market makes this type of apparel a fierce competition for strong brand salience and awareness. Such global brands as Calvin Klein, Ralph Lauren, Burberry and Armani all offer premium to luxury apparel to a similar market.

The figure below illustrates where Hugo Boss sits within the global luxury apparel market for men. Women’s luxury fashion was omitted from this positioning analysis map to simplify it. Furthermore, as expressed above Hugo Boss is predominately associated as a men’s luxury apparel brand. Therefore few women consider Hugo Boss as one of the top few brands to purchase luxury apparel from, known as low brand salience for this category.

Note: Based on researched and personal perceived position of brands.

From this analysis, it can be seen that the main competitors of Hugo Boss are Armani, Burberry and Ralph Lauren. Calvin Klein and Tommy Hilfiger are still

Anneliese Baker n8585164 For Benita Bell

X Armani

X Custom made suits

X Nike

X ZaraX Abercrombie & Fitch

X Lactose

X Tommy Hilfiger

X Calvin Klein

X Salvatore Ferragamo

X Brooks Brothers

X Hugo BossX Ralph Lauren

X Burberry

Low Price

Athletic

High Price

Elegant

5


big competitors in this market, however are not as comparable due to the more perceived athletic appearance of them.

In regards to market share, Ralph Lauren represents 3.48% of the $214.2 billion (USD) luxury goods sales market (2013 fiscal year), Hugo Boss denotes 1.5%, Armani 1.36% and Burberry 1.73% (Deloitte Touche TohmastuLimited, 2015). These four brands have similar brand images competing for the top spot in consumer’s minds for brand association. Overall this market of premium to luxury apparel is highly cluttered and a forever growing market. Being a well-established brand, Hugo Boss will continue to be forced to redevelop and redesign their positioning in the market, with emerging competitors and changes in their main competitors offerings.

Points of ParityOriginally, Hugo Boss started as a brand developing tailored suits for men in Germany. Currently, this brand has expanded into different collections for casualwear, sportswear and women’s wear. Additionally Hugo Boss has displayed popularity in the fragrance and fashion accessories department, particularly in the men’s line.

Being a well-established brand since the 1920’s, Hugo Boss is in their later product life cycle stage. This therefore means that new growth opportunities and threats have emerged over time, with the increase of new competition. The introduction of Calvin Klein, Ralph Lauren and Armani in the 1960’s and 1970’s created market saturation for luxury men’s apparel. In order for Hugo Boss to remain competitive in this market, they developed new collections to keep up with the evolving fashion trends and change of consumer’s needs.

The collections of HUGO Hugo Boss, BOSS orange and BOSS Green, exhibit a more relaxed and athletic style, which still being premium quality. This therefore created points of parity between the brand Hugo Boss, Calvin Klein and Ralph Lauran, both of who excel in designing casual and premium fashion.

Furthermore, attributes that used to be differentiators like the traditional and high quality business attire of Hugo Boss have now become points of parity for emerging brands. Companies that individually tailor suits made from premium quality look at brands like Hugo Boss and Burberry as a frame of reference, meaning their high quality business attire becomes a point of parity with competitors.

Additionally, these competing brands are usually placed next to each other in large department stores like David Jones (Australia) as further frame of reference for consumers. These stores place high quality casual wear like BOSS Orange near Calvin Klein and Tommy Hilfiger, and BOSS Black near the tailored suits next to Burberry and Ralph Lauren, which helps with consumer association and positioning of a brand.



These competing brands have also moved into the fragrance and accessories collections. Again, when one brand introduces a line of cologne being endorsed by a celebrity, the others use it as a point of parity and follows suit (refer to Appendix for advertising examples). Again this brought out an introduction of more competitors with celebrities bringing out their own fragrances to contest, with these well-established luxury brands being a frame of reference and point of parity for them.

Moreover, Hugo Boss’ marketing strategies are similar to competitors, due to similar target market appeal and behavioural tendencies. Whether Hugo Boss started the trend of sponsoring Golf or Motorsports or they followed the trend of Ralph Lauren and Calvin Klein sponsoring golf clothing. Consumers therefore associate these brands with the same thing again creating a point of parity for consumers.

By using a competitor’s point of difference and developing it into a point of parity, Hugo Boss can remain competitive in the fierce and saturated market. Additionally, brands can further express to consumers the difference between their brand and a competitor’s within the same product category, known as displaying their points of difference (Keller, Sternthal, & Tybout, 2002).

Points of DifferenceThere once points of difference of designing and making business-wear for men has now become a point of parity in the growth of competitor brands. A brand’s points of difference should aim to be strong, favourable and unique associations, which are desirable and deliverable (Keller, Sternthal, & Tybout, 2002).

Brand imagery and consumer insight associations are two dimensions that are points of difference for Hugo Boss. First off, the Hugo Boss brand name is something that no other brand has. The established brand identity and brand image of Hugo Boss is something that helps differentiate this brand from its competitors like Ralph Lauren and Burberry. Having started in the 1920’s, Hugo Boss has had the ability for consumers to develop brand associations that have stuck over time, brand associations of class, power, confidence and sexuality (Phau & Matthiesen, 2010). The consistency of Hugo Boss enforcing consumers to perceived these associations have helped develop a strong brand image over time.

Consumer insight associations are something that also differs Hugo Boss from its competitors. The consumer insight of Hugo Boss being a business outfit that can transfer easily into eveningwear attire, while being perceived as personifying money, power, confidence and sexuality. Again, Hugo Boss has displayed consistency in designing a traditional style to suit these consumer needs. Therefore when consumers are looking for a ready-to-go business outfit acquiring the above associations, they can easily recall Hugo Boss as a



strong and favourable brand, knowing they can deliver this look, which is desired by consumers.

RecommendationsAs aforementioned, Hugo Boss is consistently perceived as a brand associated with confidence, power, prestige and masculinity, despite introducing a women’s wear collection in the 90’s (Phau & Matthiesen, 2010). This therefore means that women do not recall or tend to consider Hugo Boss as a luxury apparel brand to purchase. It is therefore recommended that Hugo Boss develop ways to enhance consumer perceptions of Hugo Boss designing women’s clothes so it becomes a viable option for this market. This could be done with celebrity endorsements or women solely advertisements, instead of mixed men and women. This should be implemented over time so the Hugo Boss male image still stays intact. Sale outcomes for women’s wear should be looked at on a yearly basis and a market research report conducted after five years to analyse the consumer perceptions about Hugo Boss female associations.

Another recommendation is to enhance this brand’s digital presence to keep up with today’s consumers (Hensel & Deis, 2010). Burberry and Calvin Klein have already established an exceling digital profile improving consumer’s ability to recall and recognisie these brands (Hensel & Deis, 2010; Zheng, 2011). Hugo Boss should therefore adopt this strategy as a point of parity and a way to increase brand recognition. A way to analyse the outcomes of this would be a digital audit of their presence in a year’s time; how popular Hugo Boss is online (improvement), amount of engagement and increase in sales online.

The final recommendation is to emerge more into the Chinese market, which the Hugo Boss Group have already established is growing (Auhagen, 2011). This can be accomplished by tailoring specific advertisements to suit the target Chinese audience. For example using celebrity endorsements such as a valued Chines athlete (male and female), which represents confidence, sexuality and power, would be a favourable approach to enhancing the popularity of Hugo Boss in China.



Works Cited:Auhagen, C. (2011, November 8). Brand Strategy. Retrieved April 13, 2016,

from Group Hugo Boss: http://group.hugoboss.com/files/Investor_Day_Brand_Strategy_website.pdf

Brewer, M. B. (1991). The social self: On being the same and different at the same time. Personality and Social Psychology Bulletin , 475-482.

Consultancy UK. (2015, October 22). Global Luxury Market Worth 224 billion, top 20 brands. Retrieved April 13, 2016, from Consultancy UK: www.consultancy.uk/news/2803/global-luxury-market-worth-22-billion-top-20-brands

Corneo, G., & Jeanne, O. (1997). Conspicious consumption, snobbism and conformism. Journal of Public Economics , 55-71.

Deloitte Touche Tohmastu Limited. (2015). Global Powers of Luxury Goods 2015. Retrieved April 13, 2016, from Deloitte: http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Consumer-Business/gx-cb-global-power-of-luxury-web.pdf

Grubb, E. L., & Grathwohl, H. (1967). Consumer self-concept, symbolism and market behaviour: A theoretical approach. The Journal of Marketing , 22-27.

Hensel, K., & Deis, M. (2010). Using social media to increase advertising and improve marketing. Entrepreneurial Executive , 87-97.

Keller, K. L., Sternthal, B., & Tybout, A. (2002). Three questions you need to ask about your brand. Harvard Business Review , 5-7.

Phau, I., & Matthiesen, I. (2010). Brand image inconsistencies of luxury fashion brands: A buyer seller exchange situation model of Hugo Boss Australia. Journal of Fashion Marketing & Management , 14 (2).

Phau, I., & Matthiesen, I. (2005, June). The Hugo Boss connection: Achieving global brand consistency across countries. Journal of Brand Management , 325-338.

Tian, K. T., Bearden, W. O., & Hunter, G. L. (2001). Consumers' need for uniqueness: scale developement and validation. Journal of Consumer Research , 28 (1), 50-66.

Vangkilde, K. T. (2013). Exploring Creativity: Evaluative Practices in Innovation, Design and the Arts. Cambridge University Press.

Veblen, T. (1899). Theory of Leisure Class.Zheng, J.-H. (2011, March). Optimale advertising and pricing strategies for

luxury fashion brands with social influences. Hong Kong Polytechnic University .



Appendix:Defined male audience

Brand essence for different collections as perceived by Hugo Boss brand.



Actor Ryan Reynolds representing Hugo Boss fragrance and actor Alexander Skarsgard endorsing Calvin Klein fragrance.

Celebrities Cara Delevingne and Kate Moss representing Burberry fragrance and Beyoncé endorsing Armani fragrance.
