Patricia AraujoPatricia Araujo Orsolya Fogas Myriam Mizouni Julie Tan Tiffany Yu Ying XinOrsolya Fogas Myriam Mizouni Julie Tan Tiffany Yu Ying Xin

While the Gucci girl is swigging shots While the Gucci girl is swigging shots of tequila in the back of a nightclub of tequila in the back of a nightclub wearing a miniskirt and halter top…wearing a miniskirt and halter top…

the Prada girl is reading the Prada girl is reading Proust in a cafe.Proust in a cafe.

Mario Prada – Humble BirthMario Prada – Humble Birth

• 1913, Milan - Mario Prada started leather goods company

• Prada label as the « Fratelli Prada » located in Galleria Vittorio Emanuele II

• Frequent traveller (exploration of new techniques & materials)

• Handbags, shoes, trunks

• Suitcases of walrus skin turned to be too heavy waterproof light materials and concentration on leather accessories

Miuccia Prada – The MuseMiuccia Prada – The Muse

• 1950 - Birth of Mario Prada’s granddaughter

• 1970 - She designed the Black waterproof backpack out of a nylon fabric (“Pocone”)

• Five years studying at Milan’s Teatro Piccolo

• Had a PhD in political science

• 1978 - She took over the company – Miuccia married Patrizio Bertelli, who

became the business manager of the company

Prada Empire under MiucciaPrada Empire under Miuccia

• Miuccia Prada turned the label towards haute couture and internationalization

• 1985 - Classic Prada handbag (parachute nylon) and a line of women footwear

• 1989 - Prêt-à-porter collection (RTW)

• 1992 - MiuMiu debuted

• 1993- Fondazione Prada– Won the Concil of Fashion Designers of

American International Award for clean and stylish design, fine materials and exiquisite craftsmanship

Corporate Portfolio

PRADA GROUPCEO: Patrizio Bertelli

Star Designer: Miuccia Prada

Prada Helmut Lang Jil SanderMiu Miu

Prada’s positioningPrada’s positioning

• Mario Prada’s initial collection of high-quality, functional travel accessories

• Miuccia Prada’s creative vision (unbounded by former institutional training) and passionate exploration for fabric and design innovation: (i.e. fashional/functionable; simple;elegant)

• Transition into the world of Haute Couture

• High prices that create a sense of exclusivity

• Classic and elegant collections while other fashion houses concentrated on sexuality

• Modern innovation through experimentation with unconventional fabrics and artistic backdrops in Prada retail stores

PositioningPositioning

• Target– Cultural creatives, intellectualists, innovators.– Affluent customers willing to spend more than most.

• Fashion Content: Fashion

• Price Range: High price products

• Style– Contemporary classic, subtle and subdued– Symbolic and evocative elements (art)– Comfortable, pure, graceful and minimalistic

Positioning (cont.)Positioning (cont.)

• Product Categories– Womenswear and menswear– Core business of accessories (hand bags,

suitcases, shoes, wallets, belts and sunglasses)– Beauty and fragrance

• Life Occasions– Special occasions, business travelers– Functional hand bags for daily use– Prada Sport for casual and leisure wear

• Long-term Brand Identity

Brand DefinitionBrand Definition

The Prada brand is defined by a system of attributes:

• Physical Attributes:– Silver “Prada” symbol recognized throughout Europe and North

America– Muted colours and modern lines emphasized through

unconventional, yet luxurious fabrics

• Intangible Attributes– Basic colours and clean lines that contribute to an understated, yet

powerful (confident) look– Prada customers are viewed as classic, intellectual individuals who

are unafraid of expressing a creative and artistic side of themselves– The brand creates a lasting impression with its classic style, but its

modern touch also keeps it fashionable every season

Brand DifferentialBrand Differential

Brand Equity, Branded

Differential

Customers are willing to pay a premium price for popular Prada products because of the status associated with the brand. Prada consumers are considered to be intellectual, creative and artistic with a flair of elegance. Over time, Prada has developed itself into a luxury brand with strong brand equity to warrant higher prices.

SALES

TIME

Stylistic Identity & CodesStylistic Identity & Codes

• Colors– Basic: black, green, brown, cream, grey

• Fabrics– Innovative, creative, luxurious– Eg. Parachute nylon “Pocone,” crunchy polyester,

leather, synthetic fabrics, sequences

• Lines– Elegant, simple and clean to create functional, yet

fashionable pieces

• Stylistic Symbols– Classic Prada handbag (nylon bag made of “Pocone”)– Distinct silver Prada symbol

Retail IdentityRetail Identity

• Stores create an experience for the consumer that includes a radically new, creative and artistic landscape– Use of cutting-edge technology and 21st

century customer service to revolutionize the luxury store concept

– 180 DOS with sales accounting for 54% of company’s revenues

• Enlisted talents of architect, Rem Koolhaas, to design retail space– Prada Epicentres located in Soho (New

York), Aoyama (Tokyo) & Beverly Hills

• Lack of products on display characterizes to the exclusive nature of the brand– “It's an enormous empty space and a

small selling floor space.” - Bertelli

Communication IdentityCommunication Identity

• Prada advertisements are:– Classic– Cultural– Minimalistic– Conservative– Implicit– Confidence– Graceful

• Consumers are able to interpret the ads personally and adopt as means of expressing their individualities: simple contemporary form of beauty.

Brand Identity ModelBrand Identity Model

Contemporary Classic,Culturally Elegant

Creative use of fabrics & basic colours to

create simple modern lines; nylon bags and silver Prada symbol

Innovative, creative and artistic

landscapes with an exclusive layout

Classic, cultural, confident,

minimalistic, conservative and

implicit

Inward-directed, understated luxuryHistory of

functionality and elegance in travel accessories and

hand bags

•Maintain their brand image without compromise.

•Adaptation to changes in various customers’ needs and desires through brand/line extension.

• Seek ways to attract younger generation consumers

Prada SWOT AnalysisPrada SWOT Analysis

Strengths

• Made in Italy – allure of century old craftsmanship

• Strong leadership under Patrizio Bertelli in commercial side of products and retail strategy

• Strong brand identity- high-quality

• Unique heritage under Miuccia Prada

Weaknesses

• Shorter heritage compared to competitors such as Chanel, Christian Dior

• Private company – difficulty in acquiring funding; ongoing battle with corporate debts

• No active website, no ecommerce participation

• Multi-brand portfolio restructuring

Opportunities

• Global markets growth -Asia esp. China

• Outsourcing production

• Utilize internet as marketing and sales tool to offer convenience and availability to customers

• Potential IPO talks in later year 2005

Threats

• Transparency of Internet lead to price consistency or “Burberry effect”

• Online presence lack in-store experiences

• Existing competitors (LVMH) and rising fashionable catwalk copycats (H&M, Zara)

• Capture the younger generation consumers

STRENGTHSSTRENGTHS

• Italian brand – conveys “made in Italy” quality

• Prada’s heritage – creative force is part of the family lineage, establish (Miuccia Prada)

• Strong leadership under Patrizio Bertelli– MiuMiu brand tapping in markets outside Europe– Launch Prada men’s fragrance in 2006– Expand product lines such as Prada Sport denim collection

• Strong brand identity and heritage of consistent high quality and standardized service– Retail expansions: end of January 2005 180 DOS with sales accounting

for 54% of the company’s revenues

WEAKNESSESWEAKNESSES

• Shorter heritage than competitors Louis Vuitton, Hermes, Chanel

• Ongoing battle against corporate debts at Prada SpA Group subsidiary and parent ITMD Investments

– Jan. 2005 Prada SpA Group’s debts came to 818M euros, with 420M euros owed to holding companies elsewhere in Prada structure

• Private company – Seek funding through real estate properties sale, reliance on bank creditors,

selling minority stake in its Church’s brand

• No active website, no e-commerce, no online customers

• Multi-brand portfolio restructuring– Relying on Prada and MiuMiu brands for profit– Turning around smaller brands such as Jil Sander and Helmut Lang post

OPPORTUNITIES

• Utilizing the internet as marketing and sales tool (e-marketing)– Allows extensive distribution – Reaching more customers where physical retail stores are not

possible– Emphasizing brand identity while online by informing product

launches or new season ranges

• Expanding global markets further – reaching to Asia, especially China with the rising class of wealthy, willing-to-spend consumers– Japan 15% 2004 Sales, rest of Asia 14% (still room for growth)

• Outsourcing production: cost advantageous processes

• Potential talks about IPO in later year 2005 (alleviate Prada’s financial burdens)

THREATSTHREATS

• Growth means competition with other multi-brand focused companies or conglomerates such as LVMH

• Rising rivals such as Zara and H & M pressure with their inexpensive but fashionable copies of catwalk designs

• Transparency of internet – difficult to maintain price differences among regions : late comers to the e-commerce market

• Burberry effect: decreasing exclusivity can “cheapen the brand”

• Online opportunities will not match the level of service and attentiveness provided by in store personnel – Recapture and offer the in-store experience

• Maintain congruence & appeal of brand heritage to the perceptions of younger generation consumers

Introducing a new form of beauty in the modern day….one that of paradoxical nature, “a girly edge, but in the end it is nasty” – Miuccia Prada