burberry grp6

7/28/2019 Burberry Grp6

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Burberry

Group 6Atul Malik - 17

Puneet Gulati - 51

Sayak Chakrabarty 62

Shakti Tandon - 63

Sidhartha Rastogi - 64


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agenda

Company history

Rose Marie Bravo Era(1997-2003)

Issues ahead(Next 5 years)

Recommendations

References


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Company history

Burberry Group plc is a British luxury fashion house,distributing clothing and fashion accessories andlicensing fragrances.

Burberry is most famous for its trench coat, which wasdesigned by founder Thomas Burberry.

The company has branded stores and franchisesaround the world and also sells through concessions inthird-party stores.

According to a 2009 report released by BusinessWeekly, Burberry was the 98th most valuable brand inthe world that year.

The company is listed on the London StockExchange and is a constituent of the FTSE 100 Index.


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Company history

Founded in 1856,by 21 year old ThomasBurberry who opened a drapers shop inEngland.

Gabardine(Waterproof and breathable fabric) andTrench Coat(Official Coat of British Army in World

War-I) were some its its successful products. Burberry Check pattern, introduced in 1920 was

a trademark in itself.

Aviators, balloonists , politicians and famouscelebrities such as Audrey Hepburn , IngridBergman and Humphrey Bogart wore Burberryproducts.

Such was the quality and design that even KingEdward VIII was a regular Burberry wearer.


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Company history

GUS-A British holding company bought Burberry in 1955. GUS started to license brand in Japan through Mitsui and

Sanyo, by the 1970s

Various issues cropped up when Burberry was licensed.Some of them were:

1. Price, design and quality of products began to vary acrosslocal markets.

2. Parallel Trading was being observed, wherein retailers soldto unauthorized dealers at prices ,channels and locationsthat hampered products brand.

3. Apart from the above ,quality was going down ,firm wasreliant on a few products only and Far East accounted for adisproportionate 75% sales.

4. Firm lacked a cohesive vision and there werestructural/strategic issues.


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Rose Marie Bravo Era(1997-

2003) Bravo joined as CEO in 1997,and had a decent 25 years

experience in the industry.

He immediately hired A-list industry talent ,to transform brandfrom tired outerwear manufacturer to luxury lifestyle brand.

Companys name was changed from Burberrys to Burberry,contemporary logo/packaging was introduced and new

strategic decisions were made .Brand repositioning:

Core customer base had to be kept and younger customershad to be targeted.

They repositioned themselves somewhere between a niche inapparels(Ralph Lauren/Armani) and accessories(Gucci).

The brand was being portrayed as accessible luxury ,that wasaspirational and did not loose its functionality.


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2003)Product Line updation: SKUs brought down from 100,000 to 24K to eliminate

outdated designs.

New design team was hired to redesign traditionalproducts and bring new products.

Product line was categorized in 2 parts:1. Continuity Products :PLC=2-3 years.

2. Fashion-Oriented Products: Designed responsive tofashion trends.

450-500 womens apparel styles introduced each

season. Extended product ranges for spring/summerand check swim suits introduced.

330-350 mens styles offered per season . Moreemphasis laid on iconic plaid rather than check.


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2003) Accessories collection included soft accessories(such as

scarfs, shawls ,ties) and hard accessories(such ashandbags ,belts ,wallets etc).

Burberry began to exercise more control in non-licensedproducts , particularly in areas of design , sourcing,manufacturing and distribution.

Old licensing agreements were reined to removeinconsistencies in price ,design and quality .Some contractswere ended and some re-negotiated.

Brand Portfolio Expansion:

Low priced labels such as Thomas Burberry were availablein Spain and Portugal. Similarly Burberry Black and Blue

existed for young men and women. Prorsum -New label introduced .It consisted of hand tailored

innovative fabrics.

This label targeted high profile ,classy and people trulyinterested in fashion(and with a modern vision)


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2003)Advertising: Photographer Testino was hired for a new

advertising campaign , whose aim would be toassociate brand with trend conscious modernlook ,and at the same time stick to its heritage.

Campaign was launched in 2 phases:

1. First one featured British Aristocrat Model StellaTenant , in 1998.It gave a touch of aristocracy

and class.2. Model Kate Moss ,in the winter of 1999 gave amore modern/fashion oriented outlook to thebrand .Average age of customer was broughtdown.


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Challenges

First issue was as to which product categories shouldBurberry enter in to? They were already planning to launchBurberry Brit-Perfume line featuring a bottle with checkdesign , a new childrens wear line and footwear.

Non target customers such as youth and hip hop musicians ,were going for Burberry .

This affiliation was a clash to Burberrys core customers. The check design was overtaking the brand .It appeared

everywhere from socks ,scarves ,shoes ,coats etc. 25% ofcompanys revenue came from check products .Some peopleonly bought Burberry for the check. Should the firm go forcheck under cover philosophy or continue with its current

position? With the new positioning of the brand the target audience had

increased .So the competitors had also widened .Howsustainable was this positioning of the brand ?Was it suited tolong term growth or should it be altered?


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Recommendations

Expand in the Accessories segment

- only 4% share in the market

- introduction of new products

Diverge into children wear segment to increase the share in the apparel

segment

- only 3% stake in the market

- launch sports line (jackets etc)

Imposing Time Premium for fashion

- Introduce new fashion in the Prorsum brand

- After a time, introduce them in the Burberry brand and after that in the Thomas

Burberry brand

Advantages : Extended life cycle of the product resulting in Higher revenues


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Recommendations

Place (Channels of Distribution)

Asian Markets (e.g. India, China etc.)

Retailers (choose them after careful scrutiny) Problem of counterfeiting Maybe one or

two flagship stores (initially in a country)

UK and US Market

Focus on the flagship stores & directly operated stores Continue the current strategy of

acquisitions of distributors

Promotion

Issues

1. Only 3% sales ~ 98mn EUR being spent on advertisements

2. Asian and Other markets (with low penetration)

Proposed Strategy

Adopt aggressive promotion strategy in the European and US market.

Use local advertising channels for Tier II cities


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Role of the check

(current scene)

In the clothing line only 40% of the products did not use the check (and thesales increased)

In the apparels section 60% to 70% sales were check

The check design is mainly targeted to the female consumers

Inhibition to use the check by the male consumers

Attribute Positioning of the check

Perception of feminityand hence a degree ofdissonance

More in sync withmale image

More adaptable tomens wear line

Goes well due toperceived feminity

Seemingly indifferent

Male

Female

Check Non check


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Role of the check

(proposed solution)

Strategy for milking the check

Re-launch the Burberry brand in theMenswear segments with a less subtleexpression of the check

Keep a high end fashion check lineintact for the core customers (whoassociate Burberry with check)

Gradually phase out check (in the otherlines) as it limits design options

In the Accessories segment e.g.perfume bottles, beauty products etc.stress on check


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Sustainability of Brand Positioning

(current scene)

Comfortably nestled between- Lifestyle (represented by Ralph Lauren) &

- High end Fashion products (represented by Gucci)

- In the Accessories and some Mens apparels

- High end brand in womens wear and most of mens apparels

Challenge

Integrating the high end and the mid segment customers with a product line

Opportunity

Middle income people shopping at luxury retailers

Issues

High end customers gravitating towards discount warehouses


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Sustainability of Brand Positioning

(Proposed Strategy)

High end brands launching a product in thelower category to compete with Burberry

The existing Burberry brand is priced

such that it takes care of thecompetition

Low price brand launching a product in the

Burberry segment

Strengthen the low end brand ofBurberry ( e.g. Burberry Blue & Black)


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References

http://en.wikipedia.org/wiki/Burberry

http://in.burberry.com/store/
http://en.wikipedia.org/wiki/Burberryhttp://in.burberry.com/store/http://in.burberry.com/store/http://en.wikipedia.org/wiki/Burberryhttp://en.wikipedia.org/wiki/Burberryhttp://en.wikipedia.org/wiki/Burberry


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Thank You !!!

burberry grp6

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