Luxury Strategy- Case Studies -Burberry By Emily Chen, Oct 06 2009

1. Marketing of Luxury & Differentiated Products Prof . Vincent Bastien Student: Yu-ting(Emily) Chen, @HECParis, Luxury Branding Strategy Course Oct 6h, 2009

2. Strategic Moves Luxury Strategy 1940s: film icons, Audrey Hepburn/ King Edward VIII) 1998~Rose Mary’ Bravo:Combination of Heritage/Prestige Luxury, Fashion and Premium Premium Strategy: 1856~1930s British Army “For safety on land, in the air or afloat, there’s nothing to equal the Burberry coat” Fashion:1970~1990s Japan Licensing. World-wide market. Loss of Exclusivity

3. Revival What ? Goal: Accessible Luxury Who : Rose Marie Bravo When : 1997~ Why-What went wrong? Corporate Image: Stodgy looking&conservative: Skewed old customer base Parallel Trading”-disrespect to the brand image in Prices, Distribution Channel

4. Revival Why-What went wrong? Over-Licensing Loss of Exclusivity Inconsistant Quality Proposition Product Range (from wallpaper to chocolate)

6. Profit vs Brand Image: total sales in retails=rest of the world!

7. Now: Direct Imported London Int’l Accessories ProductsBurberry Blue Label (Women,Men,Accessories) JAPAN: Burberry Black Label (MEN) Non-Licensing : control from design to manufacturing & distribution.

8. Revival: Product II. Brand Architecture

9. Revival: Product III. Brand Architecture Product lines: Re-classified: continuity / Fashion-Oriented Range: Womenswear, Menswear, Accessories,

10. Revival: Product II. Brand Architecture Expanding the Brand portfolio: Prorsum

11. Revival: Price Pricing ($ Up, gross margin up) Apparel: Polo Ralph Lauren & Giorgio Armani Accessories: Coach & Gucci (P.19, Ex. 15): Trench Coat as the Luxury Product Entry accessories product for potential clients

12. Revival: Price Trench Coats

13. Revival: PlaceDistribution model Evolution Distributors: Buying (Spain,Korea,Taiwan) , Ending, Renegotiating (Japan) Solid Multi-channel Distribution: Retail, wholesale, and Licensing channel New Flagship Stores: London ,Barcelona, NY, Japan 2004, Imported int’l London Collection Accessories Singapore 2009 Story-sharing: Lafayette vs Le Primtemps

14. Revival: Publicity Renaming: Strong message of discontinuity while cultivating the rich past heritage of the brand

15. Revival: Publicity Ads Campaign: Modernity vs Classism 1998 Stella Tenant(Classism) 1999 Kate Moss (Modernity)

16. Referece Material by Prof. VicentBastien Burberry 2008-09 Annual Report http://www.topclassmagazine.com/articolo.aspx?idArticolo=76&idCategoria=37 http://www.theage.com.au/lifestyle/fashion/facing-a-chill-burberry-bets-on-bags-20090403-9ofr.html http://www.fashionunited.co.uk/News/Leads/Burberry_increases_revenue_200804155469/ http://www.independent.co.uk/life-style/fashion/features/best-of-british-why-burberry-has-the-fashion-business-all-wrapped-up-1784394.htmlhttp://web.mit.edu/wwinnie/www/papers/burberry.pdf http://www.uwlax.edu/URC/JUR-online/PDF/2004/nguyen.pdf

17. Comment by Prof. VB, Oct-06,2009 Potato vs Roots Burberry’s Potato King Edward VIII, British Army, UK Classical: Rain, Umbrella, etc

18. Strategic Moves II. From Luxury SKU mgt to Fashion SKU mgt then reform it back to Luxury SKU For obtaining new customers, to gain awareness, but not for profit-orientation

19. Licensing Strategy Non-luxury strategy, not the best strategy but Strategy in the beginning: Good for entry a new market Fix a deadline: Have to Purchase back someday Eg. Ralph Lauren, licensing in Japan Q: But what if it requires special skills? Buying back might cause more costs on learning.

20. Luxury vs Positioning? Accessibility? Positioning: start from the product itself, then: where is my competition? Accessibility: dangerous for exclusivity Entry product Chanel: Not fashion strategy