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Marketing strategies of Burberry

The marketing of the business will focus on providing value to the customers both through the products sold and information provided through online outlets (Schultz and Kitchen, 2000).

The basic ploy for Burberry has always been to have a signature trend – this is perhaps the most exciting and dynamic part of their management strategy, and they have managed to keep that aspect alive from conception to the modern day products as well (Clancy et al, 2000). One pattern that they have always fallen back on as a signature of their brand has been the distinguishable tartan pattern. This is a huge advantage for a retail marketing plan as having a signature like that can be used very effectively in the displays and designs used to further spread the image of the brand. Furthermore, another major advantage for designing the retail marketing plan for Burberry is that it has an iconic product like the trench coat which can also be used intelligently in retail marketing. The basic idea of the retail marketing plan for Burberry here is to design a marketing mix that will work best with the management techniques already being applied in the company (Day, 2004).

The Burberry Group plc is a very popular and successful clothing and fashion line based out of London, UK (Day, 2004). The Burberry brand also incorporates a manufacturing industry for all its clothing as well as relevant fashion accessories for a specific group. Burberry has already made its name retailing their trademarks across branded outlets all over the world and in multi-outlet malls (Finch, 2005). Furthermore, it already has five established brands that are globally recognized, which are:

Burberry London – the core branding image

Thomas Burberry

Burberry Brit

Burberry Sport

Burberry Prorsum (Finch, 2005).

SITUATION ANALYSIS

The purpose of designing and implementing a retail marketing plan now is to make sure that the overall sales ratio of the Burberry brand increases on the international front. This of course can’t without first conducting the SWOT and PEST analysis on the global scale as well.

SWOT:

The core strength is established brand recognition and established trademark style. Established media and distribution network also adds up to its potency. The major weakness arises as it is a premium product and hence can only aim for upper income families as opposed to the masses with its high price range. It has limited spread in the Asian market. Opportunity would be China’s booming fashion industry as it could be a great venture. Threat is from newer and cheaper brands offering same product range globally.

PEST:

There is little pressure politically on the brand. In fact it has support as Queen Elizabeth II and Prince of Wales both have given Royal grants to the brand in the past. The European economic crisis is a great threat to the pricing of Burberry and hence calls for a repositioning of the price rationale. There are very few social limitations in developing countries. The social cultures are very different. The apparels consumed differ demographically and culturally. The technically developed countries are the major markets to enter. The online shopping strategies are easy to implement and expand the shopping platform.

OBJECTIVES

Business to Customer Objectives:

The smart objectives chosen for the retail marketing plan for Burberry are:

Creating awareness: The primary aim of retail marketing plan is to make sure that the chosen brand is represented visually to the target audience, hence investing in designing the store or creative magazines, giveaways, etc will be the focus of this marketing plan. Furthermore, the marketing will be far more focused with this approach (Philip and Kevin 2006)

Another aim would be to make sure that the retailing allows the customers to ‘discover’ the product as a must-have which will deflect their attention from the pricing criteria. This can be done through focusing primarily on the product and its quality – making the customers believe that they are investing in a product that is worth the price tag (Philip, 2008)

The final aim will be to improve the overall percentage of sales for the company both locally and internationally. This will be done through timely, intelligent and cost-aware allocation of resources with the use of innovative management theories that will increase overall profit ratios and sales ratios (Schultz and Kitchen, 2000). Burberry’s expansion into Europe would be a smart move particularly fashion locale, Paris and Beijing. Increasing franchising in Japan will be another smart move. The sales percentage anticipated would be at 6% in these countries. Deeper penetration in China by opening 8 stores. More details of sales forecasts are given in the later sections.

Management Objectives (B2B):

Marketing management is really crucial in all retail marketing plans as it’s only through the marketing strategies that the retail image can be sold (Joshi, 2005), hence some of the really important marketing management goals must include the following aspects:

Consistent analysis of the progress of retail strategies.

Recording customer’s response to retail designs and mediums.

Managing personable associations with all complementary partners to accelerate the retail visibility for Burberry as well as conduct word-of-mouth advertising.

Engaging not just the customers but also the employees i.e. to keep the motivation levels high in order to guarantee that the quality or intensity of the marketing plan does not falter after the first wave of activities.

Keeping the above points in mind retail management goals, locally and internationally, must incorporate the following in the long run:

Retain as well as increase the percentage of customers investing in and purchasing the brand (Joshi, 2005)

Increase in sales by

6 % in 1st year

10% in 2nd year and

12% in 3rd year

Increase revenue by channels

Retailing: Increase by 5% through opening of new stores in Beijing and Paris. Licensing: Increase by 7% Leveraging franchise in Japan.

STRATEGY

Segmentation:

The market segmentation for Burberry is every straight forward and can be divided into the following characteristics and personality aspects (Zinderman, 2009):

Primary age group: 18-30 years old.

Secondary age group: 30-40 years old (Zinderman, 2009)

Students and working youngsters – Preferably those with a strong sense of style and creative instinct (Zinderman, 2009)

Families in the a higher income group i.e. with earnings that allow discretionary expense (Zinderman, 2009)

Individuals who are not afraid to stand out in a crowd and single-handedly try to bring about a positive change (Zinderman, 2009)

Pricing strategy:

Since Burberry is a premium brand with its target audience belonging to the upper middle class, the pricing will complement that stance. Giveaways or small gifts will be priced from 40 pounds and upwards depending upon the intricate design of the gift chosen. Majority of the clothes will be priced between 200 pounds to and upwards of 1000 pounds and more ranging from items like scarves, cap and other smaller items being priced in the low ranges and the trademarked trench coats being priced in the upper ranges. Hence, the tactic of pricing used here is differential. The prices will of course be aimed to be lower than previously recorded by the branded due to the global expansion into economies that are experiencing financial crisis as well.

Positioning

Burberry as a fashion brand has the following factors that design its positioning and make it stand out from the rest

High dependency on the latest and trendiest fashions – this is well represented through the use of multiple product brands and lines that are launched in the competitive market. Hence each product line specializes in a certain type of demand which does not impact the quality of the end product either (Ries and Trout, 2000)

Investing in the premium luxury accessories and fashion items – this is done through the use of old and new license projects conducted with all the relevant business partners (Ries and Trout, 2000)

Gap Dashboard

The gap dashboard for Burberry can be designed using the marketing metrics. These metrics will be collected after at least a week of the product being open in the POS structure. All the stats will be recorded and then the gap dashboard will be used to conduct monthly comparison and analysis to see how the projected results match the anticipated results and how the progress complements the initial goals of the retail plan. The Gap Dashboard will allow the marketing manager as well as the CEO to assess where the loopholes lie for the inefficient achievement of market goals. The table (Appendix 1.1) shows a hypothetical anticipated result scenario for Burberry under this particular retail marketing plan (Lenskold, 2003).

IMPLEMENTATION

To complement the above goals, the following tactical strategies must be employed:

In Japan, China and Paris: Using the facilities of IT and internet to spread word online using the various social network websites and outlets. This will also present more visual options for the company that could not be employed in other tangible retail activities (Joshi, 2005)

Globally: Using the facilities of newsletters (online and offline) along with magazines, booklets, etc to showcase Burberry’s creative angles and its past success (Keller, 2002)

In Japan, China and Paris: Use sponsorship techniques for arts colleges and universities to scope out the real target market (as explained in the segmentation above) (Keller, 2002)

Globally: Similarly, offering internship programs for local art museums and outlets to increase brand awareness (Keller, 2002)

Globally: Aim to calculate the levels of customer satisfaction and compare them to prior rates to understand where the strengths and weaknesses of the strategy lay (Keller, 2002)

Pricing logic:

The prices will not be lowered so much so that they harm the image of the brand but minimal lowering of the prices will be done. The mark-up over the supplier’s price will also be lowered than engagements to stay competitive i.e. it will be at around 80%. The brand will not need a penetration price as it does not aim to divert from its designated customer base (i.e. upper income families) and move into the masses. Price slashing and penetration are necessary if and when a brand chooses to expand into the masses.

Web Plan – Adaption process

Using a proper website will be the primary way to market the retail outlet. Social media and the internet will the primary tool of communication in this marketing plan. It is important to note here that two marketing mixes can be used in this retail marketing plan: 1) mass marketing and 2) niche marketing. The social media can be an open call to masses whereas the use of customer relations on the selected outlets and franchises in specific areas would be a result of the niche marketing mix strategy. The following aspects will be highlighted in all social media presentations:

A slideshow of all brands and product lines for the customer’s convenience

Updated contact and outlet-location information

Membership/ sponsorship and internship details

Testimonials from business partners

Event details and listings

Links to similar businesses (this will be a two-way road where the link to Burberry will be on the links that Burberry lists in its website as well)

The Social Media Approach

The Retail plan will also aim to use the following social media outlets with similar features as mentioned above:

Facebook

Twitter – For all recent developments and relevant fashion articles related to Burberry or other business partners

YouTube – For launching short creative films or marketing campaigns to promote the brand

Discussion forums open to all customers, employees and management. This will be great to engage customers, make the brand more personable and recording customer response.

Store Design

Burberry outlet designed from this particular retail marketing plan will aim to have the following personality traits: funky, modern, chic, trademarked (tartan and trench coat patterns). The overall ambience of the outlet will be friendly and courteous. The design will be very open with a lot of natural light. The customer will be given total transparency to the products and their original sources. The aim will be to make every visit be a learning experience for the customer so that the customer leaves being more informed about the brand and how Burberry can represent them in the sea of brands. The store design will be aimed to be proactive in design and construction so that the customers are drawn in and left with a very clear cut image of the brand in their minds when they leave. This will also help word-of-mouth retail branding of the store as well as Burberry (Lenskold, 2003).

CONTROL AND MONITORING

Sales Forecast

There is an expectation of sales to dip during the winter and summer seasons when the weather is uncomplimentary to the product ranges made available by Burberry. The graphs below show anticipated sales (monthly followed by yearly) on four major product lines: handcrafted or hand-stitched apparel, gift items and women’s and men’s items. The graphs are followed by a table of overall anticipated sales forecasts. Others factors included in the market research included market trends, consumer behaviours and economic conditions.

Customer Expectation and Retention

Customer Retention and response are very important aspects to assess the success or failure of any or all marketing plans (Patterson, 2008). The customer response suggested in this marketing plan mainly revolves around building strong and personable relationships and sustaining them in the long term. The pyramid below shows exactly that in two circumstances: one when the customers are in a group i.e. on social media and two when the customers are dealt on an individual level i.e. in the outlet or through direct marketing (contingency plan). The former shows a different marketing mix i.e. marketing to the masses whereas the latter shows niche marketing as the chosen marketing mix.

Spending on Channels

Spending on Channels is expected to range in the following figures. The key channels would be radio and online advertising. They are cheaper are cost effective. All units are in USD.

Marketing Expense Budget

Channels

Year 1

Year 2

Year 3

Radio Advertising

35,000

38,000

44,000

Newspaper&Magazine Advertising

45,000

48,500

55,000

Online Advertising

55,000

65,000

70,000

Arts College Sponsorships

25,500

25,500

30,000

Customer Membership Discounts

15,000

15,000

17,000

Internship Offers

20,000

25,500

30,000

Other

15,000

16,000

20,000

(Refer to Appendix 1.7 for approximate costs and selected channels)

During the 3rd year the spending has to be increased as the products reach maturity level. It is very important to extensively promote the declining product range. This is also a part of contingency plan.

Contingency Plan

The contingency plan for Burberry under the current circumstances includes a fresh and approach to the marketing mix that currently exists. The contingency plan must be to revert back to the original marketing techniques. The one that could be most useful is direct marketing. Businesses in the past have made use of direct marketing as a model of complete business or as a complementary to a wider incorporated marketing combination. A number of advantages can be gained from direct marketing by not only sellers but buyers too. Thus, the concept of direct marketing is gaining popularity and recognition. One of the major advantages that I feel a direct marketing plan will achieve is to engage all the parties involved from the manufacturers to the promoters to the web planners to the recruiters to the sales and marketing department. The figure below shows the interconnection of all these departments under the direct marketing plan followed by a table (Appendix 1.3) showing the sales estimates for this contingency plan.

RECOMMENDATION

If the constructed plan works efficiently and hit the targets set in next 3 years, then the next major step would be setting up a high-class fashion institute in Paris and Beijing. The name would be “Burberry Institute of fashion”. Target students will be celebrity children, child artists and employee trainees. Education is a huge business. And this institute will also assist Burberry to showcase its fashion events and creativity development.

CONCLUSION

The marketing plan is designed to increase the overall performance of Burberry by increasing sales, revenue, brand value and customer satisfaction.

References

Clancy, K. J. and Kriegafsd P. C. (2000). Counter intuitive Marketing. The Free Press.

Day, J. (2004). Burberry doffs its cap to 'chavs'. Guardian.[online] available from <http://www.guardian.co.uk/media/2004/nov/01/marketingandpr>[ March 22, 2011]

Finch, J. (2005). GUS shareholders to receive Burberry cheque. Guardian News and Media. [online] available from <http://www.guardian.co.uk/business/2005/nov/18/3>[ March 22, 2011]

Joshi, R. M. (2005). International Marketing, Oxford University Press, New Delhi and New York.

Keller, K. L. (2002). Strategic Brand Management, 2nd ed. Prentice Hall.

Lenskold, J. D. (2003). The Path to Campaign, Customer, and Corporate Profitability. McGraw-Hill Professional.

Patterson, L. (2008). Marketing Metrics in Action: Creating a Performance-Driven Marketing Organization. Racom Communications.

Philip, H. M. (2008). Discovery-Based Retail. Bascom Hill Publishing Group.

Philip, K. P. and Kevin L. K. (2006). Marketing Management, 12th ed. Pearson Prentice Hall.

Ries, A. and Trout, J. (2000). Positioning: The Battle for Your Mind (20th anniversary ed.) McGraw-Hill.

Schultz, D. E. and Kitchen, P. J. (2000). Communicating Globally. Palgrave Macmillan.

Zinderman, C. (2009). A Grown-up Emma Watson Models for Burberry. International Business Times. [online] available from <http://www.ibtimes.com/contents/20090715/grown-emma-watson-models-burberry.htm> [March 22, 2011]

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