MARKETING STRATEGY

2017

Hult International Business School

Student Name: Sadia Boda

Instructor: Mike Berry

Course: MKT365 - Marketing Planning and Strategy

Submission Date: July 23 2017
 TABLE OF CONTENTS


Executive Summary

History

Burberry As a Brand

Burberry Today

Market Overview

Analysis

Recommendation

Conclusion

Reference

 EXECUTIVE SUMMARY

Burberry is one of the world's top fashion luxury brand. Thomas Burberry founded Burberry in 1865. The brand has been highly

recognized due to its authentic British heritage which has defined the brand as unique and luxurious. This paper outlines a five-year

marketing strategy for the incoming CEO of Burberry, Marco Gobbetti.

The paper mainly focuses on analyzing the internal and external factors of the business, by a SWOT analysis, pestle analysis, BCG

matrix among other types of analysis that will help the business grow in sales and re-build the brand through different channels such

as digital and traditional channels.

 BACKGROUND- HISTORY

Burberry is a global luxury brand, which manufactures men's wear, women's wear, children's wear, fashion accessories, fragrance,

and cosmetics. However, what makes this brank unique and exclusive is its ''Authentic British Heritage.'' Burberry was founded in

1865 by Thomas Burberry and the first Burberry store was opened in Hampshire, England.

Burberry is known by:

1. British style;

2. Luxury positioning;

3. Craftmanship; and

4. Trench coats, Prorsum Knight logo, and Classic Burberry check.

Burberry's ''Trench coat'' was invented during the First World War and the Burberry check, which is encompassed by the colors red,

white, and black was designed in the 1920’s. Today Burberry is an internationally distributed luxury fashion house.
 BURBERRY AS A BRAND

Brand Mission

The brand's mission statement is to focus mainly on the integrity by protecting, exploring and inspiring highly distinctive people

carrying the British identity.

Brand Value

Burberry's brand value has restyled over the years. During the First World War, Burberry clothing was manufactured to adapt daily

life. However, presently the brand has different values. Today Burberry is all about luxury, fashionable and effortless style while

providing high quality, long-lasting garments, and accessories for their customers. In the other side, the company firmly believes in

social, ethical and corporate responsibility to enhance and protect their brand and their employees.
 BURBERRY TODAY

According to Bloomberg, Burberry Group Plc needs to get back into fashion on two fronts. The luxury brand is suffering a

slowdown in sales in the following countries the United States, Hong Kong, and the Middle East. Due to this shares have plunged by

8% because of local factors such as tourist limitations and low oil prices. , However, in the United Kingdom Burberry has an excellent'

performance where visitors are benefiting from the low value of the pound stserling .

On July 2017, Christopher Bailey former Chief executive and Chief creative officer said: “In an uncertain environment, we continue

to take action to strengthen the brand and reposition Burberry for growth. The outperformance of fashion and the strong customer

response to new products underline our renewed creative momentum ... As we build on our progress so far, we remain confident about

Burberry’s prospects in the longer term (The Guardian). He will hand over its position to Marco Gobbetti former Céline boss, to fresh

over and restyle the brand.

 MARKETING OVERVIEW

Marketing Success and Failures

Burberry's success

• Brand Differentiation;

• Exclusiveness;

• Getting globally, Expanding to emerging markets

• E- Commerce.

Burberry Failures

• Brand association with the "Hooligan" and "The Chavs.";

• Counterfeits

• Lack of digital presence ( social media).

Target customer

Burberry's target costumers are men and women, who can afford luxury goods. Lifestyle oriented and fashionable costumers between

the ages of 17 to 45.

Marketing Mix

The marketing mix is to analyze the four Ps of the brand, which is product, price, place, and promotion.

Product: Burberry is a globally recognized brand, with high-quality craftsmanship and exclusive luxury standards. The primary

products manufactured by the house are menswear, women's wear, non-apparel, children's wear and home. Burberry is identified by

its classic style, which is a quite old school, Millennials and Youngs are looking for a trendy, eclectic and fun brand.

Place: The fashion house has around 498 stores in 50 countries. Their products are sold through departmental stores, international

franchises, outlets, boutiques and online stores. Burberry has an excellent distribution channel and very well placed store locations,

making easier and accessible to premium customers.

Price: The brand uses prestige price strategy to sell their luxurious products. Their marketing team is responsible for the pricing by

evaluating the market demand, competitors price, and market research while having consistent prices around the world.

Promotion: The most important factor of business is promotion, which is necessary to highlight a product or service offered by the

brand. Burberry has mainly emphasized on promotional activities such as ads in high-class magazines, celebrity endorsement, joint

promotions with luxury retailers, sponsorship and digital media, which had led the brand to a global platform.

Channel Mix - 2016 2017

The fashion house sells its products to its high-end costumer through retail, which is offline and online, and whole sale channel

(Burberry plc).

The Retail channel includes sales in flagship stores, concessions such as department stores, e- commerce and outlets.

- Retail has an £ 2,712 M revenue

- 3 % underlying growth
Wholesale channel includes distributors, sales in department stores, and franchises.

- Wholesale has £614 M

revenue.

- 14% revenue declined

which is mainly from

beauty product.

Licensing includes small fashion accessories such as

watches, jewelry, and eyewear.

- Licensing revenue of £25 M.

- 48% revenue decline.

- In 2017, Burberry partnered with one of the global leading beauty company Coty for its beauty

products.
 Regional Mix

Burberry's controls three regions - Asia Pacific, Americas, and Middle East, Europe, India, Africa. (Burberryplc)

Americas: Represents 25% of the sales

§ Revenue is £681 M

§ Underlying revenue of 18%

Middle East, Europe, India, and Africa: Represents 36% of

the sales

• Revenue of £991 M

• 3% revenue up

Image: Burberry
Asia Pacific: It represents £1,06 Plc.com
 ANALYSIS

SWOT Analysis
Strength

• Brand awareness and brand heritage: Listed by Forbes and Interbrand as one of the most valuable luxury brands.

• International Presence: Burberry has a total of 498 stores in 50 countries that include concession within department stores,

flagship stores, and outlets.

• Digital Leader: Burberry made history by streaming world's first live catwalk show in 3D during London Fashion Week. It was

ranked as 2nd in fashion brands listed as digital IQ score by L2 ThinkTank.

• Exclusiveness: Not an accessible brand for working class level.

• “See now, buy now”: A new strategy in which customers can purchase new products as soon as they see them on the runway.
 Weakness

• Brand Overexposure: The brand has been associated with Chavs and Hooligans, also the brand faces counterfeit issues.

• Low couture presence: Burberry is very accessible to the high street.

• Product: Burberry has turned to an old school classic brand.

Opportunities

• Celebrity and Influencers endorsement

• New product development - Rebranding

• Digital Presence in social media

Threats

• Competitors re-branding, they have more social media engagement and up to date products.

• Counterfeits

• Economic environment: Countries that are suffering a recession, low oil prices or tourist restrictions.
 Pestle Analysis

For a business to be tuned with the environment, it is recommended to conduct a Pestle analysis. Looking through the political,

economic, social, technological, legal and environmental factors of the business, we can make appropriate strategic responses.

Political: These include taxation policy, government stability, and foreign trading policy. Burberry must consider all of these factors

while opening a new store or sourcing new products.

Economical: These include factors such as money supply, interest rate, inflation, economic recession and unemployment. Currently,

the fashion house is facing an economic problem in several countries due to falling oil price and economic downturn as well as

inflation.

Social: Factors like income distribution, consumerism, lifestyle, income inequality and population geography and demographics

comes under social factors. The brand is recognized because of its British heritage and luxury position.
Technological: Digital presence, social media, and e commerce are included in this factor. The fashion house has been recognized

due to it excellences in e- commerce and digital presence.

Environmental: Every organization should consider taking care of the planet and being eco-friendly. Burberry is partnered to recycle

its waste.

Legal: Competition law, licensing law, copyright law and employment law are included in the legal factor. Burberry as all other

luxury brands face a problem of copycats or counterfeiters. According to International Business Times in 2012 Burberry won the

counterfeit war, awarded £63 Million in damages.

 BCG Matrix Analysis

Stars: Burberry's growth is due to the fashion accessories such bags and scarves, these products have high relative market growth

and high market share. Currently, accessories represent a 38% of wholesale and retail revenue.

Question Mark: Beauty is Burberry's question mark, which has a revenue declined by 18% underlying, this product has a low market

share in a high growth segment.

Cash cow: Burberry's women's wear such as trench coat has a high market share but low market growth. It represents 29% of the

revenue.

Dogs: Burberry's children's wear has 4% of income, which it accounts for a low market share.
 Marketing strategy - Recommendation

After analyzing the brand, I have come up with the following recommendations and marketing strategies that Mr. Marco Giobetti

should implement to the fashion house for Burberrys business growth. For the brand to stay on top and drive sales, it must create

brand awareness in the following ways:

1. Burberry website redesign

Burberry should freshen up its website to more young and trendy style. Implementing new colors and design to its website. All

though, the fashion house is considered as the top digital luxury brand, ranked as a top digital think tank L2’s 2015 Fashion Digital

report in which lists fashion houses by their success and failures in digital marketing and digital commerce.
2. Publishing Image driven content:

Burberry has always projected British

heritage and luxury. Burberry should keep

up with their social media. Social media has

become one of the most important ways to

advertise and sell products. Burberry's

Instagram should have visually rich images

by publishing image driven content

compared to luxury fashion house Gucci

which has more Instagram followers due to

this strategies.
2. Brand awareness:

Burberry should create brand visibility by celebrity and influencers endorsements. The brand is currently facing an 18% decline in

beauty products. Partnering with young beauty influencers such as Zoe Hugg, Michelle Phan, and Huda Kattan, Burberry is the top

influencer of 2017 according to Forbes magazine. They can drive sales growth in beauty products by creating celebrity endorsement in

pop culture.
3. Collaborating with Instagram followers and artists:

The fashion house should consider making an Instagram contest in which followers and artist around the world can participate to

create a new pattern or design for the brand while using creative and trendy ideas with British heritage. This strategy will attract more

youngster and artist to create master pieces freely by visual culture.

4. Rebranding:

Burberry is recognized by its classic check style and Prorsum horse. Burberry should consider refreshing the brand to more

fashionable and trendy catering to younger generation.

 CONCLUSION

Burberry world leading luxury fashion house should consider this analysis to effectively compete in the current market. Burberry

should explore new opportunities to enhance the brand and its product lines such as children wear and beauty products, which have

shown a decline in the last years. However, the brand expansion around the world has affected the company’ profitability and growth.
 REFERENCES

1. "Annual Report 2016/17." Annual Report 2016/17 - Burberry. Burberry England, n.d. Web. 23 July 2017.

2. Fested, Andrea. "Burberry's New Fashion Directive: Get On Trend With Pay." Bloomberg.com. Bloomberg, 12 July 2017.

Web. 23 July 2017.

3. McGrath, Maggie. "Burberry - Pg.4." Forbes. Forbes Magazine, 26 Nov. 2013. Web. 23 July 2017.

4. Rawi, Maysa. "London Fashion Week: Burberry Makes History with World's First Star-studded Catwalk Streamed Live in

3D." Daily Mail Online. Associated Newspapers, 24 Feb. 2010. Web. 23 July 2017.

5. Reporter, Staff. "Burberry Wins Counterfeit War, Awarded £63 Million in Damages." International Business Times UK. IB

TIMES, 21 May 2012. Web. 22 July 2017.