Lost Cachet of Burberry ----- the royal fashion house of trench coats

  • View
    10.018

  • Download
    2

Embed Size (px)

DESCRIPTION

 

Text of Lost Cachet of Burberry ----- the royal fashion house of trench coats

  • Marketing Project The Re-incarnation of the Lost Cachet of English Fashion - BurberryLecturer: Richard SmallPREPARED BY:Arittra BasuMBA Term 2-MBA2510-L-A2UWL ID: 28001438Word Count: 6116 1
  • ABSTRACT:The British fashion brand of the Victorian era, Burberry was founded by Thomas Burberry a 21year old drapers apprentice in 1856, Basingstoke Hampshire England. It has been a patent namein the fashion statement of the English people since the inception with the accolade of beingawarded as the Royal Warrant by the Royal family and carrying the heritage of 150 years in thefashion business. But as all business experiences the boom and bust in their operating cycle thesimilar sequence happened along with Burberry due to lack of concentration on the changingpattern and taste in the fashion industry with the modernization of fashion trends and designs. Inthe 21st century there is a lot of emphasis been given on the fashion statement of every individualwith designer brands becoming more pertinent in the wardrobe and fashion industry becoming avery volatile market to exist? Innovation and adaptation of the modern taste is the fundamentalrequirement for the retail fashion business to exist in the competitive market. However, there hasbeen some problems in the strategic decision making level of the Burberrys business and owingto that financial year ending 31st March 1998, they have experienced a major profit margin dropfrom 62m to 25m. Instead of disposing of the sinking business the proprietor, Great UniversalStores (GUS), the British consumer and retail conglomerate appointed Ms. Rose Marie Bravo asthe new chief executive for Burberry in 1997, after which significant improvements happenedwithin the business increasing their profitability aspect. However, in this project the mainobjective is to justify the statement that Burberry has found a missing link in the fashion industryabout the esteem of a national brand and utilized intelligent re-cycling of their glorious heritageto transform the image and brand identity of Burberry. Particular reference would be taken fromtheir re-positioning strategy, merchandising, distribution strategy, brand management, productdesigning and sourcing, licensing strategy and advertising strategy. The entire project aboutBurberrys business model redesign would be based on secondary data available from theresearch work done by business analyst and academics in the field of fashion marketing andbusiness development. Furthermore, information would also be taken from newspaper articlesalong with the Initial Public Offering (IPO) Prospectus of Burberry where clear illustrations andcritical analysis about the developmental strategies were discussed. 2
  • TABLE OF CONTENTS: Page Numbers1.0 Introduction..4-52.0 Chronology of Burberry..5-63.0 Problem Recognition of Burberry......6-94.0 Implementation of Re-Positioning Strategy.........94.1 Brand Management.........9-114.2 Marketing Communications...11-124.3 Product Design and Resourcing.12-144.4 Brand Distribution Strategy...14-165.0 Critical Discussion and Recommendations...16-186.0 Conclusion........................18-197.0 References....20-22Appendix:1. Latest Adverts of Burberry .....232. Marketing Communications Strategy: Diagrammatic Representation...24 3
  • 1.0 INTRODUCTION:The viability of success for a particular business is reliant upon the efficiency and effectivenessof the management responsible of making strategic decisions for the prosperity of the business[Jackson & Haird (2003)] Managers in specific organizations may develop a series on initiatives,modifications or innovations in their present business model to implement change in the existingmodel to reconstruct the business strategy taking consideration of the customers, partners,organizational feedback, field responses and predictable alteration of the competitors businessmodel [Johnson (2007: 66)] Moreover, Jackson & Haird (2003) in Moore & Britwistle (2004:412-422) suggests that there are several examples of various brands in the market who hasflourished or emaciated due to the reactions of the business models deployed by the managementin the sight of attaining their strategic or non strategic objectives. Reference would be taken fromthe case of Gucci, the Italian luxury brand whose success was in the platform of peak in the1950s and was an exclusive brand for the silver screen beauties in the Hollywood and EuropeanSociety. Although, the brand suffered a loss of prestige and a high volume profitable venturescored massive losses, which was the result of a strategy Gucci applied where they reduced thecontrol of management over product development and distribution taking into account thewholesale licensing agreements but diluted the authority of the brand as an exclusive anddesirable fashion brand.However, Moore & Fernie (2004) discussed about the business model redesign after Gucci gothold of Tom Ford, who adopted an interactive model of increasing internal controls with respectto product sourcing, brand infrastructure and supply channels. The essence of the model was tosynergising the logistics, fiscal planning and real estate management to reduce cost andutilization of the supplied resources effectively which is a back-end strategy whereas the frontend puts emphasis on evaluation of competitive risk by forming a portfolio of distinctlypositioned fashion brands in the market. Additionally, emphasis was also given to themaximization of internal resources and discarding of licensing agreements for the companyowned and company controlled manufacturing and distribution outlets. [Gucci, (2001), (2002)] 4
  • Similarly, adaptation of unfavourable business model in accordance with the companys progresshas resulted in diminishing the brand identity of the English pioneering brand, Burberry. [Cowe(1998)] The major shove came into the business when their turnovers plunge from 62m to25m which was observed in the financial year close of 31st March 1998 and the leadingfinancial analyst of the country described the business as an outdated business with a fashioncachet of almost zero. [Finch & May (1998)] The proprietor of the Burberry brand GreatUniversal Stores (GUS) instead of selling the business taken an initiative to appoint Rose MarieBravo as the new chief executive of the company which turned out to be a massive success forBurberry. She sought after to re-position the brand by implementing internal control overmanufacturing and distribution, expansion of product portfolio to embrace an extensive customerbase and adaptation of a multi-brand positioning strategy, which are significant strategic moveshappened within other premium fashion brands like Gucci, Ralph Lauren and Prada. [Moore &Fernie (2004)] The objective behind this strategy is to modernize the brand image, repossessionover distribution and product development keeping the traditional heritage of Burberry alivewithin the apparels and accessories thus regaining the cachet of a premier English fashion houseand the traditional customer base with emphasis to attract new and more conscious clientele.2.0 CHRONOLOGY OF BURBERRY:Since the foundation of Burberry in 1856 by Thomas Burberry the reputation of the company ispreserved through Burberrys development of the gabardine fabric which was resistant totearing, weatherproof and breathable at the same time. [Burberry (2002)] This particular fabricwas meeting the requirements of the military needs and lead Burberry to develop and designofficers rain coat which eventually became an integral part of the British army officers serviceuniform in the early 1900s. Burberry used to produce the officers rain coat but modified it byadding some new magnitude such as epaulettes, straps and D-rings which later took the name ofTrench Coat due to its association with military wardrobe. Moreover, they also developed theunique Burberry check as a lining for the product. Apparently, due to its alliance along with themilitary dress code Burberry outwears was readily used by leading explorers like Captain Scottand Sir Earnest Shackleton on their mission to the Antarctic expeditions. [Moore & Britwistle(2004: 412-422)] 5
  • Along with the prosperity of Burberry, the first radical step was taken in 1891 when it opened itsfirst store in London and thus entered into the retail and wholesale market of fashion.Subsequently, in 1910 Burberry also opened its first international store in Paris at the BoulevardMalesherbes. Burberry entered into supplying the foreign market in early 1900s with the footstep of Thomas Burberry who began to supply products to retail stockists based in New York,Buenos Aires and Montevideo. Later in 1920 Burberry entered into the Japanese market bywhole sale distribution licence in coalition with Japanese retailers. The relationship went strongwhen Burberry signed up with Mitsui for distribution system of their outerwear products in Japanin 1964 along with the addition of Sanyo as their licensee in 1980. [Adams (1995), Sherwood(1998), Burberry (2002)]However, along with the growth of the Burberry brand in national