01

Burberry Marketing Strategy: Failure and Revitalisation

Burberry Marketing Strategy: Failure and Revitalisation

Group Members:051750406252840625290051959305256070509508

Group Members:051750406252840625290051959305256070509508

• Objectives, Background – Arafat

• Mistakes in Marketing Strategies,

Brand model, Ansoff Matrix – Inga

• Failures – Anna

• Revitalisation, Lifecycle – Rashid

• Maintaining Success – Stacey

• Regional revenue, marketing strategies – Tim

• Conclusion – Arafat

04

ContentsContents

• Identify the mistakes in Burberry’s marketing strategies/what went wrong

• Identify the measures that could have been taken to preclude problems that were experienced

• Define possible actions to maintain the position in the market

02

ObjectivesObjectives

• British Luxury brand established in 1856 by Thomas Burberry

• 1920 ‘trench coat’• Endorsed by

royalty, politicians and celebrities

• Now operates in Europe, North America, Asia

03

BackgroundBackground

• A desire to appeal to a wider audience

• Change in design

• Reduction in price

• Product diversification

• Excessive check usage on the products

• Non-strategic distribution locations

04

MistakesMistakes

http://www.emeraldinsight.com/Insight/05

The Burberry product/brand modelThe Burberry product/brand model

Market PenetrationClassic garments for existing target market

(Trench coats, outwear, etc)

Product Development Burberry Accessories i.e. stadium hats, handbags, toys, fragrances etc.

Market DevelopmentDiffusion ranges in mid 1990s for wider audience (Younger Consumers)

DiversificationN/A

Ex

isti

ng

Mar

ke

tsN

ew

Ma

rke

tsExisting Products New Products

06

Ansoff MatrixAnsoff Matrix

• Brand “Hijacking”: Association with hooligans and “chavs”

• Counterfeits

• £37m Decrease in sales

in 1997

07

Failure: Lost Brand IdentityFailure: Lost Brand Identity

• 1997- New CEO

• Returning to Traditional Garments

• Celebrity Endorsement

• Reduced Exposure: Limited Advertising

• More Selective Distribution

08

RevitalisationRevitalisation

09

Retail LifecycleRetail Lifecycle

Burberry Retail Lifecycle (UK)

0

100

200

300

400

500

Year

Sales

in m

illion

4 P’s: • Product: Maintain Prestige, Push Product Beyond Plaid

• Price: Keep premium pricing

• Place: Selective location / Limited Distribution

• Promotion: Continue to Place Advertisement in Exclusive Channels e.g. Fashion show

• Maintain Good Media Relations

• Clamp on Fraud

• Continue to research target market

10

Maintaining Success: RecommendationsMaintaining Success: Recommendations

11

Regional Revenue Regional Revenue Burberry's Revenue across nations from

2006-2007

0

50

100

150

200

Euorpe (notinclude Spain)

Spain North America Asia Pacific(not include

Japan)

Japan

Nations

Rev

enue

20062007

• More than two thirds of sales - abroad (unaffected by company’s problems in the UK)

• Overall sales growth abroad – 11%

• Biggest markets – Japan and Spain

• Popular with young adults

• Marketed by keeping it British

12

Summary International SalesSummary International Sales

UK:

• Continue to identify product values and attributes.

• Balance between accessibility and status

• Target audience: those who best meet Burberry’s overall objectives.

• Continue market penetration and invest in product development

13

Overall Marketing Strategy Overall Marketing Strategy

Market PenetrationWinning customers and expanding value-added partnerships

Product Development New offerings i.e. in accessory market

Market DevelopmentConvert upper-class non-users

DiversificationN/A

Ex

isti

ng

Mar

ke

tsN

ew

Ma

rke

tsExisting Products New Products

14

Ansoff Matrix (UK)Ansoff Matrix (UK)

Abroad:

• Continue frequent flow of new products

to Burberry’s stores.

• Investment in high potential markets

• Continue to represent British culture,

history and tradition

15

Overall Marketing StrategyOverall Marketing Strategy

Market PenetrationWinning customers; upgrading distribution channels

Product Development Developing niche accessories for e.g. in 2005 Burberry successfully extended their apparels to include golf wear in Korea

Market DevelopmentInvest in high potential markets abroad i.e. Eastern Europe

DiversificationN/A

Ex

isti

ng

Mar

ke

tsN

ew

Ma

rke

tsExisting Products New Products

16

Ansoff Matrix (Abroad)Ansoff Matrix (Abroad)

• Burberry - one of the most successful British fashion

brands.

• Has struggled to cleanse its brand image, after years

of association with “chavs”, through various

strategies.

• This transition has allowed a gradual sales growth in

the UK.

• Has managed to revive as a prestigious and exclusive

brand, departing from its “downmarket” brand image

17

ConclusionConclusion

18

THANK YOU FOR YOUR TIME!THANK YOU FOR YOUR TIME!

Any Questions?

• Adcock, D. (2001) Marketing Strategies for Competitive Advantage. Chichester: John Wiley & Sons

• Anonymous (2007) Burberry; Mining the Past to Seize the Future, Business Week, Iss. 4045; pg. 58

• Barraclough, E. (2007) Fighting the Trade in Fakes [www] Available from: http://www.managingip.com/Article.aspx?ArticleID=1377400 [Accessed 22nd October 2007]

• Bothwell, C. (2005) Article: Burberry versus The Chavs [www] Available from: http://news.bbc.co.uk/1/hi/business/4381140.stm [Accessed 8th October 2007]

• Bryant, B. (2004) Burberry's Improved Marketing Strategy Results in Increased Sales at Home and Abroad [www] Available from: http://facweb.furman.edu/~dstanford/ibnotes/39cases04/bryant.htm [Accessed 23rd October 2007]

• Burberry PLC (2007) Company overview and strategy [www] Available from: http://www.burberrygroupplc.com/brby/ [Accessed 7th October 2007]

• Burberry PLC (2007) Financials: Key Financials [www] Available from: http://www.burberryplc.com/brby/fin/kfinancials/ [Accessed 19th November 2007]

• Burberry PLC (2005) News & Features: Burberry launches golfwear in Korea [www] Available from: http://www.burberry.com/AboutBurberry/NewsArticle [Accessed 23rd October 2007]

• Burberry PLC (2007) News & Features: Burberry Opens First Store in Prague, Czeck Republic [www] Available from: http://www.burberry.com/AboutBurberry/NewsArticle [Accessed 23rd October 2007]

• Burberry PLC (2007) News & Features: Burberry sees sales growth [www] Available from: http://www.burberry.com/AboutBurberry/NewsArticle [Accessed 23rd October 2007]

• Burr, J. (2005) Brand Hijacking [www] Available from: http://www.limitedlanguage.org/discussion/index.php/archive/brand-hijacking/ [Accessed 8th October 2007]

ReferencesReferences

19

• Daily Mail (2006) Met's Operation Burberry causes fury at fashion house [www] Available from: http://www.dailymail.co.uk/pages/live/articles/news/ [Accessed 9th October 2007]

• Fashion United (2006) Burberry not a ‘chav’ brand according to new boss [www] Available from: http://www.fashionunited.co.uk/news/burberry.htm [Accessed 7th October 2007]

• Gasbarre, D. and Stansell, C. (2007) Company History: Burberry Ltd [www] Available from: http://www.answers.com/topic/burberry-2?cat=biz-fin [Accessed 29 th December 2007]

• Gusto Mondial (2007) Burberry [www] Available from: http://www.gustomondial.ch/bodegas/burberrys.html [Accessed 8th December 2007]

• McGoldrick, P. J. (2002) Retail Marketing, 2nd ed. London: McGraw-Hill• Mintel (2007) Burberry (Europe): Company Profile [www] Available from:

http://academic.mintel.com/sinatra/oxygen_academic/search_results/ [Accessed 19th November 2007]

• Moore, C. M. and Birtwistle, G. (2004) The Burberry business model: creating an international luxury fashion brand, International Journal of Retail & Distribution Management, Vol. 32, Iss. 8; pp. 412-422

• O’Brien, D. (2003) When Imposters Knock Off Profits [www] Available form: http://www.brandchannel.com/features_effect.asp [Accessed 22nd October 2007]

• RNS (2007) Article: Burberry Group Plc – Trading Statement [www] Available from: http://investing.reuters.co.uk/news/articleinvesting.asp [Accessed 23rd October 2007]

• Times Online (2006) Article: New Boss Must Step Up the Luxury at Burberry [www] Available from: http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/ [Accessed 8th October 2007]

• Walker, R. (2005) The Good, the Plaid and the Ugly [www] Available from: http://www.nytimes.com/2005/01/02/magazine/ [Accessed 22nd October 2007]

• http://www.youtube.com/watch?v=-VfuRcDrK3I

20

References contReferences cont