Burberry Branding Strategies Essay Example

BURBERRY BRANDING STRATEGY IN THE GLOBAL FASHION INDUSTRY

Chapter 1

The Burberry Company was established in Britain back in 1856. However, the company established itself as a global fashion player from 1910. The company has a well spread roots in US, Europe and Asia. Since then, the company has been in a due course to achieving a wide scope of market dominance. However, the company has also been experiencing various challenges often related to the internal management problems. For instance, in 1990 the company experienced repercussions of poor strategic directions. Consequently, this led to a sharp decline in the profit margin of the company towards the end of 1998 fiscal year (De Kare-Silve 2011).

In particular, the profit margin decreased by £37 million from the previously recorded £62 million. This therefore prompted the company in search of a strategic redefinition of its objectives in order to upgrade to the previous iconic status. The company underwent various dynamisms in its management which saw the improvement in its performance. An incredible achievement was recorded in 2011 fiscal year through a diverse restructuring of its business models in market communication, commodity development and the entire manufacturing process. In particular, this saw a rise in profit to £295.7 million and a total rise in revenue to £1.5 billion (De Kare-Silve 2011).

The company has been operating under the main strategy of enhancing brand assets as well as high integration with respect to global organisations through a talented team working procedures. This was done in order to guarantee sustainability as well as profitable growth and to become an outstanding icon known as British Luxury Company. In addition, the company employs a corporate level strategic plan that has set forth to deal streamlining both the mission and scope of the organisation. The strategic adoption of new business operation has also seen the re-invention of the company’s status from outerwear cloth manufacturer to an inspirational and luxurious routine brand. Burberry launched the trendy fashion items in addition to its regular trading items. Its strategic re-invention was followed by the company’s expansion of its scope through the establishment of new-fangled stores within the contemporary markets as well as the steady widening to other prospective business precincts in South Asia and Asia Pacific (ShōNo & Uchiyama et al. 2009).

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Focus on the Historical and Branding Perspective

Branding is a strategic mode of promoting the market orientation of any given company. It makes the various commodities from different, though related commodities appear differentiated. This also enables the consumers to have an easy identification of one commodity at the expense of the other. According to the American Marketing Association (AMA), a brand refers to a name, symbol, term or design as well as the optimal combination of all means used by any producer to ease the process of identification of the commodities considered by a particular seller, so that they distinguish them from the commodities of other producers. Consequently, branding is not oriented on the target markets over the competitors but is aimed at the attainment of prospects. This enables one to identify himself or herself as the singular provider of the certain solutions to specific problems. Therefore, a good brand name is bound to help the business enterprise achieve various objectives within the scope market. These include clear delivery of the marketing messages, motivation of the buyers and confirmation of credibility as well as emotional connection of the target prospects of the enterprise (Vejlgaard 2008).

In line with the above mentioned analysis of branding, this paper intends to provide a wider analysis of the branding strategies used by the Burberry Shops International. Burberry is a luxury fashion house in Britain. The business enterprise is charged with the distribution of clothing besides other fashion accessories. In addition, the company has also engaged in licensing fragrances within its jurisdiction. The company has been an outstanding performer in the fashion industry, making it the most imitated trademarks worldwide. To be precise, the company is a renowned producer of the trench coat which is the one of the most enticing brands in the fashion industry due to its highly distinct tartan pattern (McNeil & Karaminas 2009).

It is worth mentioning that trench coat was initially branded by Sir Thomas Burberry, the co-founder of the enterprise. This corporation encompasses a series of branded stores as well as franchises besides other prominent selling concessions through the effective approach of the third party stockpiles. Due to its market excellence, the company has become one of the trading partners listed within the London Stock Exchange. The Business Weekly release of 2009 claimed Burberry Corporation to be the 98th most invaluable brand worldwide (Syrett & Devine 2012).
Traditionally, branding was an engagement that many individuals and groups aimed at grossly protecting the identity of the particular producers. For instance, this aspect was exercised in the branding of animals through the establishment of distinct marks on the animal skins. Furthermore, brands were a pivotal sign in the identification of the origin of Olive Oil in the traditional Amphora of Greece which was important for the attachment of significant values in the sight of the buyers through widening producers’ and co-distributors’ reputation. The existence of any brand within the market is pegged on the power of the brand to influence the market effectively. Consequently, this necessitates the enhancement of a competitive advantage of the producer over its competitors. As a result, SWOT analysis of the company is an important tool used to discuss the means that help analyse a company’s branding competitive strategies (Stevenson & Kaafarani 2011).

Problem Statement

Strategic branding has been one of the most used methods of sales promotion of the Burberry Corporation. In particular, the company has been able to use its brands, distinctive in the fashion industry, to exercise dominance over its immediate competitors. Thus, this paper intends to analyse the position of Burberry in the global fashion industry and speculate the various elements that help maintain the company’s position within the market.

Research Questions

  • What strategic policies does the Burberry adopt in the move to sell its innovative brands?
  • What are the new approaches to strategic fashion used by the Burberry Corporation?
  • What are the scale and scope of global branding of Burberry?
  • What are the social, cultural and aesthetic factors that distinguish the brands of Burberry on the global scale?
  • What is the dynamics of the Burberry in relation to the global fashion industry?

Research Objectives

  • This research aims at establishing a prospective analysis of the business scope of Burberry Company with the respect to its strategic branding and the effect on its role as a global fashion player.
  • The research will identify various mechanisms that play a key role in maintaining a strong brand title.

Significance of the Study

The analysis of this study will form a milestone in understanding the Burberry’s direction of business, considering the fashion in the global fashion industry. In addition, the analysis will act as a stronghold in understanding of the various elements that contribute to a strong and effective brand that persists through the globally competitive market environments besides giving an analytical perspective of the establishment of market dominance by virtue of product differentiation.

Chapter 2

Theoretical Literature

Branding has become a key element in the formulation of the latest business strategy by Burberry Company. This company has been on the upscale in the enhancement of standards besides keeping the commodities eminently distinctive within the scope of the global fashion industry. Furthermore, the company has been on the forefront in re-inventing creative market positioning strategies. In line with Porters’ five forces model with respect to competitors, Burberry’s SWOT analysis shows that it has been enjoying a huge strength in the manipulation of market of entire industry. To specify, the company operates under a commodity engagement with a short term product lifecycle. In addition, the company has a well-established fashion products, well-designed to fit the global trend in fashions. Consequently, this aspect enables Burberry to assume a unique market position which varies accordingly, targeting both trendy and classic clients. The company uses the model of ‘functional luxury’ to target its customers. In practice, this company attains a high competitive advantage over its immediate competitors such as Gucci, Coach and Polo. These competitors are among the topmost cream of brands within global fashion industry and UK in particular. However, the main Burberry’s competitors in the fashion industry are Coach and Gucci (Turner 2008).

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Empirical Literature

Burberry Company is actively involved in the enlargement of the market through their extensive acuity on the market segmentation with respect to demographic and geographical positioning of its respective clients. Indeed, with the onset of Globalisation, the company has been alert through the vigorous diffusion of dynamisms in the fashion industry that has been accelerated by the aspect of globalisation. Within the fashion industry, globalisation is basically the quick reshaping of the trends in the perception of fashion with respect to pre-existing designs. There are various theories that have been developed to describe the aspect of globalisation which is a key player in the market trend of a global organisation. These include: World Polity theory, World System theory, world Culture theory as well as Theodore Levitt theory among others (McDermott 2002).

According to Levitt theory, globalisation is a key contributor to the increased interplay between the global corporations and the multinational corporations. Consequently, there has been an extensive homogenization of the community and racial differences. Thus a change in the perspective of commodity preferences took place. As a result, the fashion markets have also been on the verge of change due to the fast transformation of the global outlook that necessitates the adoption of strategic marketing techniques in the Burberry marketing strategy (Mayer 2003).
As a matter of fact, Levitt states that the global corporations have a wider perspective in relation to market divergence in not only home but also in many other major countries. On the other hand, multinational corporations cling to one major country and establish minor links with other countries for market and supply. In particular, Levitt used the fox and hedgehog imageries to demonstrate the two aspects respectively. From this aspect of the multinational corporation dominance in a widespread scope of the market, Burberry Company has not been spared either (McColl & Moore 2011).

On the contrary, Burberry has been experiencing various challenges that emanate from the market diversity due to the ability of its competitors to venture into a wider scope of the world fashion market. As a result, Burberry has undergone a complete restructuring of not only its production processes, but also its marketing strategies. Furthermore, Levitt, in his Theodore theory of globalisation, advocated for the companies’ strategic response to globalisation through the strategic migration from a multinational to global corporations (Smith & Milligan 2011).

Consequently, this aspect enables the company to enjoy high economies of scale over its competitors. The company can therefore offer high quality and standardized product at the relatively low costs with respect to production, management, marketing and allotment. Levitt states that national tastes and variants do not have any far reaching implication once the company has globalized. In addition, the latter has insignificant effects on the reduced costs and the resultant progress with regard to global products and brands. As a matter of fact, people in transit from one country to another by virtue of globalisation intend to have increased desire to purchase new products from other countries (Pegler 2007).
According to Levitt’s theory, effective operations based on the open market with standard products and globalised marketing as well as multinational corporation must assume a corporate philosophy. Levitt states that this philosophy must, however, be capable of maintaining a balance amidst the wide scope of multinational organisations worldwide. Levitt derives this aspect from two main theoretical assertions that Japanese and American companies have ancient and varied conceptual origins. In particular, American corporations are seemingly analytical while the Japanese are more holistic. The holistic philosophy is however considered as more viable corporate philosophy for the global multinational corporation advocated by Levitt (Clegg & Bailey 2008).

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On the other hand, World Polity theory describes globalisation as the growth and development of world culture through diversification and homogenization. A polity is an adaptable procedure of creating worth of commodity by means of universal Conferral of power. This mechanism constitutes legal frameworks or models that envelop entities within the respective polity. In this regard, the world polity that resulted from the aspect of globalisation contains no singular actor that can dictate the course of the world market direction. Indeed, it refers to a mutually applicable global model that shapes up individual identities as well as people’s lives (Levin 2001).
As a matter of fact, the world polity theory takes into account the world culture that in its turn considers origin with respect to the European traditions and particularly the contextual component of Medieval Christendom. The successive diffusion of the world culture along the entire spectrum of world sees the spread of variances and the consequential adoption of favourable features of the changing tastes and preferences while considering industrial products. Burberry has been a victim of the changing fashion tastes and the ever dynamism in the world culture (Helland 2007).

This has therefore necessitated the company to adopt new strategic modules of advertisements as well as refurbishing its production process to conform to the demands of the market and attain a competitive advantage over its respective competitors. The world polity therefore is responsible for the enactment of the worldwide business frame and the consequential entrance of the globalisation through the institutional similarities within diverse worldwide locations. This therefore necessitates sets the importance of branding as a means of retaining identities and self actualization of the various products by the respective countries (Sandra & Gwen 1992).

Other Approaches to Strategic Fashion Marketing Options

Other than the regular expansion of the business enterprise and the opening of more stores in the Middle East and Europe, the company has further employed other creative strategies that have seen the increment of their fashion sales across their subsequent client base. Among these means are the unveiling of the digital approach in line with the interactive campaign. An advancement of technological use of the company and the abovementioned campaign enabled Burberry to considerably increase its sales of autumn-winter collections through online sales, which is the newest approach in its market interventions. In addition, the campaign is set to run across other widely used digital platforms worldwide such as social media. Consequently, this aspect is intended to beef up its sales and the resultant profit generation (Dicken 2007).

In addition, the company has had recently launched a new brand strategy commonly called, ‘run to reality strategy’. By virtue of the application of this strategy, the VIP consumers can easily buy fashion products including runway collections through the iPad application. Such diversities in the application of technology through the various technologically driven approaches are invaluable interventions that set to reimburse the reputation of the company in the global fashion industry. Technology has been a major variable in the advancement of the company and the subsequent recovery from low profit making to high profit making through the ease of effective management (Adler & Pouliot 2011).

Scope and Scale of Fashion Branding in the Global Context

The fashion traders are consistently seeking for a variety of features that best place them over their competitors by up scaling of their differential advantage. Thus fashion marketers are in constant engagement through perception, planning and are consistently checking the product positioning in their respective markets. Careful and consistent studies of the market trend are one of the preferential engagements that enable the business to carry out viable market segmentation. The main aim of market segmentation is to give way for the business sales initiatives to pay attention to subset of prospects with the highest probability of buying the respective business product. This also makes it easy to demarcate the areas that need special attention as well as the viable market base for specific business’ products (Packard 1982).

Market segmentation is an important aspect of marketing that plays a central role in the ensuring unveiling the target market of a business and therefore helps in the making of viable production decisions with respect to the quantity and quality of production commodities. It enables the organisation to satisfy their most invaluable clients to the utmost level possible. In reality, marketing segmentation depends on the organisation’s ability to successfully identify the most invaluable consumers, satisfy their individual needs while making profit as well as being able to undertake viable implementation concepts and giving rise to manageable solutions. Burberry is one of the companies that has extensively engaged relevant mechanisms in the identification of viable business orientation and the contemporary trends in the fashion industry. Furthermore, the company has further enhanced its scope on world fashion market (Michman 1991).

Social, Aesthetic and Cultural Variance in the Brand on the Global Market

There is quite a varying perspective in the culture and social values in different parts of the world. Consequently, this further dictates the tastes and preferences of people in different regions, at various levels. Diverse geographical conditions are specific determinants of the preferences of varying fashions. For instance, the Europeans cold climatic region influences the designs of cloths that are most likely to be sold as opposed to the Middle East region that is relatively hot. Therefore, this aspect brings about the variants of tastes in global fashion. As a result, fashion companies ought to conduct market survey, considering the aspects of climate as one of the distinctive variables that dictates the preference of one differentiated designs with variance in climatic zones (Kotler & Armstrong 2012).

Dynamisms of Burberry Brands under the Charismatic Time Period

The company has been experiencing various challenges in its business. This includes uncertainty which led to the development of strategic approach to combat the uncertainty. Some brands, such as the open brands, are well-known to take a land slide thrive over charismatic periods of the economic coercion. These times are well-defined by real-time series of performances with due regard to proximity and physical involvement of the specific business enterprise. However, despite this feature, open brands is not a luxurious class and therefore cannot retain a stunning core, perpetuated by due accessibility and dynamism of the brand itself. With respect to Burberry, it assumes an instructive capacity and a luxurious brand which then contextualizes innovative prowess arising from a balance between its exciting business core and digital access to relevant market base (Woodside 2010).
Additionally, the success of the company depends on the communication strategy it employs. Communication strategy entails both internal (within the organisation) and external (with other stakeholders’ outsides) the organisational settings. Consequently, thy result into the changes in the brands with change in the communication strategies in order to suit the targeted population (Shin & Cho 2009).

Chapter 3

This research analyses the operational level of the Burberry Fashion Company and focuses on the various parameters that dictate the measures and the extent of dynamisms that confronts the brand with respect to varying factors in the global market. This is however made easier through effective market segmentation that helps focus on particular issues that directly affect the sales of the brand. The research further takes a review of various theoretical exchanges that plays a significant role promotion and spread new brands such as digital campaigns involved.

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Research Design

Due the wide scope of the fashion industry and the successive spread of the fashion products worldwide, this research will adopt face to face interview with the respective clients of Burberry Fashions and designs. This will help identify the most viable means through which the new fashions are accessed by the respective clients, particularly those of Burberry. This will enable the identification of the most viable means through which fashions diffuse worldwide.
Furthermore, the research will also use some secondary resources, such the specific company’s website, in order to access the progress that has been realized through the involvement of modern technology or technology-aided diffusion of fashion and the specific company provisions with regard to the latest fashion. Additionally, the research will also use questionnaires as means of collecting information. Such questionnaires will be sent worldwide electronically through emails and as hard copies by means of the local precincts.

Results and Recommendations

Fashion is one of the fast diffusing aspects of human origin and so is the industry. Consequently, the firms enshrined within the industry should always be alert to keep in touch with the latest trends in the market not through observation but rather using creativity in order to maintain their reputation as the top creams in fashion within particular time span. Indeed, there are various factors that are irrefutably main contributors of easy diffusion of fashions worldwide such as the aspect of globalisation. In particular, globalisation has been a key player in the Burberry’s choice of fashions increased similarities of firms producing similar products. Consequently, this has necessitated constant review of their fashions in order to maintain a differential advantage over their respective competitors through distinctive branding (Gordon, Carrigan & Hastings 2011)
For the company to maintain high quality of products defined by distinctive branding, it should conduct a global scale fashion survey in order to have a clear picture of the world respective clients and consequently be able to conduct effective market segmentation. Furthermore, the company should also employ technology aided methods of production as well as enhancement of the recent online sales that would therefore boost its market scope in the long-run.

Conclusion

Burberry has recently become a global player in fashion. Huge efforts have been made and consequently scaled to greater height. There have been various indicators of this irrefutable progress such the late 2011 award given to the company for having surpassed a 10 million limit of clients on face book. This was a mile stone in the path to a fitful technologically aided point. The fateful seizure of technology has also made it one of the most successful branding companies worldwide.