CHANEL

6-1-2021 Psychology applied to Marketing:

BDM group

Marieta Alonso, Paula Martinez, Lola Roldan

Index:
1. Introduction
2. Advertising agency presentation
3. Product presentation
4. Consumer report
5. Two last ads analysis
6. Chanel vs Competitors
7. Marketing strategies used are appropriate?
8. Compare them with the chosen competitors
9. Improvements to put into practice
10. The use of neuromarketing
11. Bibliography

1
1. Introduction
We are going to analyse the psychological factors of consumers and create a strategic
for the marketing department of Chanel, in order to develop a new campaign based on
Chanel´s consumer behaviour.

2. Advertising agency presentation

Chanel S. A., is a French fashion brand, created and carried out in Paris from its
beginnings by Coco Chanel, whose original name was Gabrielle.
Chanel is distinguished by the manufacture of high fashion items such as cosmetics,
perfumes, clothing, among many others.
Currently the private company belongs to Alain Wertheimer and Gerard Wertheimer,
grandchildren of the first partner that Coco Chanel had. It has stores, also known as
boutiques, around the world in different commercial districts and conducts its shows
both in cities and major fashion countries. The Chanel brand is distinguished by its
double C logo. This brand is one of the most recognized in haute couture.
The most common clients of Chanel are obviously the loyal followers of the brand, it is
true that this brand has certain economic limitations, which is why it is so exclusive.
Both the clothes and the cosmetics as well as all the products and services that Chanel
provides are of high price, that is why not everyone could afford it, therefore the sector
that this clientele covers decreases and includes the middle and mostly the upper sector
of society.
So the clients in which this luxury brand focus its attention is in consumers who can
afford this prices and way of life. They are qualified as elegant, classy, flirty and more.

3. Product Presentation:
We are going to focus, among all the products that Chanel offer, in the most famous
fragrance in the world: Chanel nº 5.
Coco Chanel commissioned Baux (who was an important perfumer) to create a perfume
that described her past life, both were unaware that this fragrance could tell the story of
many decades, of numerous stories of love, war, rebellion and debauchery, of actresses,
queens and even commoners among many other experiences and changes in humanity.
In 1921 it began to be sold exclusively on the Rue of Cambon, Gabrielle´s main idea
when creating this perfume was only to be able to give it to her 100 best clients. They
were of a refined character, that is the reason why Coco thought about them due to they
could experience in the perfume the fresh and floral smell and sensation that would
bring back memories of the Parisian Woman.
Ernest Beaux introduced Coco numbered lab compartments. She picked nº 5 since it
was her favourite number, yet in addition since it contained aromas of orange, jasmine,
rose, sandalwood, vanilla and vetiver, among many others, that helped to remember
Gabrielle adolescence in the fields of Grasse al South of France. To this nº5, Beaux had
added another natural segment, without the need to add more essence.
In 1924 it was the first occasion when that Chanel No. 5 was publicized in the New
York Times, with a calm picture of the aroma and a life sized model.

2
 The first time Gabrielle posed to promote her perfume was for Harper´s Bazar in 1937,
starting in 1957 les perfumes de Chanel began to advertise with images of very famous
and attractive celebrities.
Since then the history of this perfume has only grown, four more types have been
created in based on it and today it continues to be one of the most famous smells in
history.
The main competitors of Chanel are Estee Lauder, Christian Dior, LVMH, Gucci,
Armani, Prada, L´Oreal and Burberry.

Positioning perceptual map:

+PRICE

-QUALITY +QUALITY

-PRICE

4. Consumer report

The consumption of luxury cannot be understood without considering the consumers of

luxury brands and their characteristics. There are many characteristics of luxury
consumers that influence their consumption decisions (Ghosh & Varshney, 2013).
Those that are most relevant will be explained below. Based on the study by Dubois and
Duquesne, (1993) Ghosh and Varshney (2013) stated that, in addition to the consumer's
income level, there are three other 18 decisive factors that influence an individual's

3
luxury consumption, and these are: consumer culture, individual group perception and
self-care. In addition to the study by Dubois, Laurent and Czellar (2001), which
confirms that culture has a great deal of influence on the degree to which luxury is
purchased, Hauck and Stanforth (2007) verified that there is a difference in the
perception of luxury according to the market segment in which the consumer finds
himself. Finally, according to Vigneron & Johnson, (1999) the level of concern of each
consumer plays an important role in the consumption of luxury goods.

The cultural level is an essential factor in consumer behavior, since the cultural level is
the body of knowledge that we have at certain specific times, i.e., the higher our cultural
level (we know more things) the greater the opportunity we have to choose and
consume. Taking into account the culture that each person has, it is very important to
mention the subcultures that exist in each country and that are achieved thanks to
immigration that favors the mixture between residents of different countries so many
live and learn different customs and lifestyles. Living with people from different
cultures gives the opportunity to know their habits and this causes in some cases that
people feel motivated and encouraged to make unusual purchases. Social class is a very
important aspect in the consumer's purchase decision because as we know in all
societies there are individuals who are divided into groups depending on their economic
level, studies, type of work among others, each social class has a different way of
making the final purchase, but the vast majority of times have to make a purchase
decision trying to imitate the social class that is above them to somehow get some social
recognition.

Veblen pointed out that individuals try to emulate the upper class of society, and that
this type of consumption is related to so-called visible consumption (Veblen, 1899).
This same concept is defined by other authors:

"Consumption by status can be defined as the motivational process by which individuals

strive to improve their social position by visibly consuming products that confer and
symbolize status in two directions, to the consumer's environment and to the consumer
himself" (Eastman, Goldsmith, & Flynn, 1999, p. 41).

This theory has been used to understand and measure the tendencies of individuals to
purchase goods and services to achieve a certain status "that they can afford" (Eastman,
Goldsmith, & Flynn, 1999, p. 52). The hedonistic and perfectionist motivation defined
by Vigneron and Johnson (1999, 2004) defines a group of individuals whom they call
"hedonistic" consumers. For Veblen, the effects of "snobbery" become evident with
consumers perceiving price as the most important factor; a higher price indicates greater
prestige (Veblen, 1899). There are also some social factors that radically determine the
profile of a consumer among them are family, reference groups, roles and status, on the
other hand are the personal factors where the consumer's age, occupation, lifestyle,
economic circumstances and personality are located, finally there is the group of
psychological factors where the motivation, learning perception and attitudes of
consumers are studied

4
Why do you buy? is one of the most frequently asked questions that allows us to
analyze consumers in depth. In short, people buy because there is a need for something
specific to something that they do not have but they want and that disappears once they
get that something. On the other hand, there is the desire, which is the means to satisfy
the need.

The psychologist Abraham Maslo affirmed that all human beings are perpetually
desiring, and that their needs are psychological and social, from this affirmation he
established a hierarchy of needs and determined that as those of a lower order are
satisfied, others of a higher rank arise. In this way he came to identify five groups of
basic needs and built the famous Maslow pyramid. For example, as illustrated in the
graph, the needs put in context in Chanel
Physiological Emotional
Dress up Get pretty
Protection Status
Comfort Elegance
NA Social acceptance
NA Prestige

The number of people who consume products and services categorized as luxury has
tripled in the last two decades. From an estimated 90 million consumers in 1995, it has
risen to 330 million by the end of 2013. It is expected that each year 10 million new
customers will be added.

The race of the brands to get them is increasingly intense. While firms are succeeding in
attracting numerous customers from new markets, they are also losing some of their
regular customers from mature markets, and he warns that luxury customers are
becoming increasingly heterogeneous, and that brands that want to win them over will
have to update their strategies in order to recognize and react to the growing diversity of
demand.

Brands that continue to do the same as always will run the risk of being left behind.
According to the report Lens on the worldwide luxury consumer firms are managing to
attract numerous customers from new markets, are also losing some of their regular
customers in mature markets, and warns that luxury customers are increasingly
heterogeneous, and that brands who want to win them will have to update their
strategies to recognize and react to the growing diversity of demand. Brands that
continue to do the same as always will run the risk of being left behind.

IADA Model
 Attention: this is the first stage that the model was, in this section what is
achieved is to obtain the "attention" of the consumer, in the case of Chanel the
attention is captured through the commercials where their authors are recognized
actors and celebrities.

5
  Interest: It is based on generating an interest for the product, in this part of the
model Chanel uses it through the history that the brand has, through the history
many people feel identified and are interested in acquiring the product.

 Desire: in this section it is fundamental to fulfill the needs of the consumers, in

the consumer of Chanel it is very important to create the expectation of
exclusivity towards the client, this generates a desire on the interested one in
wanting to be unique in front of something, in this case to acquire this product
generates him a status in the society.

 Action: This is when the consumer finally decides to acquire the product,
however in this last stage it is fundamental to continue calling the customer's
attention and making him/her see the multiple benefits he/she acquires by
wearing the product. Chanel does this through the prestige, status and
exclusivity that is one of its main characteristics.

5. Two last ads analysis:

The two advertisements we have chosen are from 2019 and 2020.

- Product value promise:

In both ads the product is presented as something unique and not very accessible, this
fact makes it even more attractive in the eyes of consumers.
The perfume Nº 5 is an expensive product justified with the quality, the valuable and
expensive raw materials used, details, designs, time and processes spent for the
excellent result.
As the ad shows, It is obvious that this fragrance is made for people that are willing to
pay high prices in order to get satisfaction.
- Product communications strategy:
Currently, Chanel´s communications strategy is driven by exposure to the masses and
appealing to customer aspiration.

In the first advertisement, the product strategy is based in the history of the product
since its beginnings. It represent the exact moment in which Coco Chanel created the
perfume and selected the number that in the future would be the name of one of the
most famous perfumes in the world. So it is like a reproduction of how the name of
Chanel nº 5 was selected.
This strategy reflects the advancement and improvement that channel´s perfume has had
over time. Is the best way to show how this brand and specially the perfume has endure,
and this fact could cause consumers and people who see this ad to wonder: ¿why this
product, which was created many years ago, is still successful? The answer is clear, if
you don´t try it, you won´t know it.

In the second advertisement the fragrance is presented as a romantic and unique scent
that goes beyond the reality. This product surpasses both the limits of love and those of

6
imagination, this is why the ad is developed in the moon. Also reflects the elegance and
glamor that this fragrance represents with the background music, the colors and the
clothes of the woman and man.
The communication strategy of this ad involves rousing curiosity and romanticising its
offering, also is focused on the elegance of the product, offers the perfume as a romantic
and supernatural fragrance with the essence of the seductive behavior of both
characters.

- What media channels does the company use for product communication?
Chanel, in spite of being exceptionally old brand, has profoundly modernized its image
status through social and has at last become an expert of online video. Its substance is
normally of high creation worth and substance procedure has been painstakingly made
and based on record.
The company of Channel posses the most social followers, more than 57 million
globally, and is the leading luxury brand on almost every platforms, except from
Facebook, where Louis Vuitton is first but with a close difference.
Many years ago, the most common channel that luxury brands used to use were
magazines, paper ads, newspapers, telegrams, etc.
Nowadays the main media channel that our company uses are social networks and TV
advertisements, where everything is more visual, and accessible for everyone.
Chanel has posted a larger number of recordings and created in excess of 300 million
perspectives on both YouTube and Facebook, more than some other industry pioneers.

Inside the main extravagance brands area, video substance can be isolated in the
accompanying principle classifications:
• Campaigns/commercials: for the most part 30 seconds or not exactly a moment long
for a dispatch
• Behind the brand: atelier visits or maker profile.
• Runway and design shows: gushing of live occasions and in the background

Its social video procedure is, obviously, one upheld by paid advancement – which
doesn't really convert into a greater after.

Although it is one of the most prestigious brands in the world, Chanel's efforts to
dominate not just the luxury retail and apparel sector but also social media demonstrates
a true power brand in market.

-Identify motivation and needs involve in the peroduct communication

The needs of the woman who identifies the first ad would be the need to feel
feminine ,free, powerful ,elegant, independent and unique.
Another need would be to make an exclusive gift for Christmas and motivate people to
give this perfume.

The second ad seems to focus on a woman who is striving to achieve her dreams, and
that is where the power of the fragrance lies, the brand values are maintained, the
woman is very feminine, powerful and elegant, in this case accompanied by a man who
guides and supports her by seducing her in an elegant dance full of imagination, this
represents beauty as a bet of joy and equality.

7
 -Insights

From users' opinions we extract the following insights linked to this fragrance

-"Wearing Channel number 5 gives them a sense of elegance"

-"cannel n5 is a product that does not go out of fashion "
-"The most famous perfume named and sold in the world"
-"A Channel Number 5 is sure I'm going to succeed."
-"Unique and exclusive product"
-"aspirational product linked to celebrity and the desire to belong to a luxury brand"
-"Two drops of Channel and I feel sexier"
-"Product to give to exclusive people"
-"A dream come true"

In conclusion, users definitely reflect a sense of elegance, security, luxury and well-
being when they use

In conclusion, users definitely reflect a sense of elegance, security, luxury and well-
being when they use

-Elements of perception used in product communication

As for the first ad, it gives us a Christmas image centered on the brand values, focusing
the scenery on the logo and the product and the elegant woman in a totally Christmas
atmosphere (Christmas music, snow, golden and silver red colors) She is inside a
snowball that reflects the magic of Christmas, so the product is perceived as the best
Christmas gift.

In the second announcement we return to a Christmas scenario but with a different

concept, in this case is a short film that tells a story, she is in a European city, seems
Paris, the city is snowed in the cold of winter and in this scenario a story occurs.
The characters are her, the moon and the man she dreams about. The golden perfume is
again the main color, the moon with golden sparkles her golden dress, much brightness
and glamour. The music also accompanies all this dance of brightness and glamour,
with an exceptional elegance.

-Wich factors are used to atract customers attention

In the first ad to attract consumers the brand uses the perfume and logo of great
dimensions, turning the perfume into a whole scenery of great dimensions as if the
protagonist were in the city of channel inside a snowball and giving all the importance
to the logo and perfume.
The protagonist is elegantly dressed reflecting the essence of the perfume.

In the second ad to attract the attention of the consumer they use a love story that begins
with a dream that comes true with some magic.

8
 -What kind of attitudes are used by the brand to create favourable attitudes
In the first ad through the protagonist, the brand reflects that part of the perfume it
aspires to. She is very elegant and refers to the perfume as her favorite, for her the most
incredible gift.
In the second ad we see a woman whose face lights up when the reflection of the
huge one is looking at her, and there she is on the moon dressed in a magnificent dress
with the man who is waiting for her. The woman and the man guide and support each
other, seducing each other in an elegant dance and full of imagination.

-Personality and lifestyle

The personality of the first ad is feminine, it reflects the elegance of women and
femininity as well as power and freedom.
The personality reflected in the second ad is elegance, imagination, effort to achieve
dreams and equality.

https://www.youtube.com/watch?v=-ipg-X8i3gY 2019
https://www.youtube.com/watch?v=qeMqcApmS7g 2020

6. Chanel vs Competitors
Chanel vs Dior

Dior and Chanel are two companies that were born in haute couture and ready-to-wear,
both aimed at a public with high purchasing power. Their designs are known all over
the world and are worn in great events of cinema and television, turning them into
prestigious and recognized brands. Another aspect that both brands have in common is
that both decided to enter the cosmetics and perfume sector, with a unique brand
strategy, as explained above, which has facilitated their entry into these markets because
they are two of the main firms synonymous with luxury and distinction in the fashion
sector. However, taking into account their brand identity, we can find other similarities
between them, but also notable differences.

Firstly, from the personality of the Dior brand, we can see a brand focused on luxury
and splendour. It seeks to make women elegant, but attractive. The opposite of its
competitor Chanel, who sees elegance in simplicity and plainness, flees from the
ostentatious and overloaded looking for sophistication. This is perceived through the
differences in the communication strategy of the brands, specifically in their
advertising. Although in their ads both have chosen personalities from the cinema and
television who are a sign of elegance, the context is different. While Chanel showed an
independent and elegant woman, Dior shows a "golden" woman, surrounded by luxury.

This same difference between both brands is shown in their culture. Dior's cosmetic and
perfume products are described as a jewel that complements that elegant woman,
something that can be seen by the golden, pink and black colors of the perfume bottles
and cosmetic boxes. Unlike those of Chanel, which as explained above chooses more

9
austere lines in their packaging. Something both brands do have in common is that they
follow the same price and distribution strategy.

The prices of their products, although they are more affordable than those of their suits
and dresses in the fashion sector, are within the sector of cosmetics and luxury
perfumes. As with Chanel, in Dior also the prices of their perfumes are among the
highest, but their cosmetics are more expensive than Chanel. The products are marketed
either in their own stores, or in the establishments studied in the observation and Dior
also has no online sales, like Chanel.

Regarding the image that consumers have of themselves, in Dior, as it happened in the
Prism of the Identity of Chanel, coincides with the personality of the brand, getting their
customers to acquire the personality that the firm intends to show, every time they
consume their products. Therefore, we could say that despite being two brands that have
much in common, their personality, their culture, the image that consumers have of
themselves when they consume their products, are different.

On the other hand, the physical element of the Prism of Identity, as explained above, in
Dior the products are understood as a jewel, while in Chanel they are a complement.

Chanel vs Lancôme

Chanel and Lancôme are two brands that only have in common the sector in which they
compete, that of perfumery and cosmetics, and the public they target, women with a
high purchasing power, since although the prices of the products in this sector are more
affordable, both are in the market of luxury cosmetics and perfumery.

In fact, in Spain, the company Chanel is in second position in perfumery and beauty,
according to the magazine Vogue Spain, behind Lancôme. So in this sector, they are
direct competitors. Chanel, is a designer brand that launched collections of fragrances
and makeup. However, Lancôme is one of the brands belonging to L'Oreal that was
born only as a cosmetic brand. Therefore the differences between the identities of both
brands are remarkable, as you will see below.

The personality, of the Lancôme brand is more focused on getting out of the ordinary,
being a transgressive brand for beautiful women. This is the main difference between
Chanel and Lancôme. This is a beauty brand and that is its main objective, unlike
Chanel, where its perfumes and cosmetics are an accessory to the woman's look. This is
perceived through its communication strategy, in its advertising. Lancôme, like Chanel,
uses the image of film personalities to star in its ads, but in the case of Lancôme, these
actresses symbolize beauty and show an optimistic attitude in the face of the passing of
time

Regarding culture, Lancôme's main objective is to achieve excellence, to be the main

beauty brand. That's why its products are innovative, they are continuously reinventing
themselves. This brand stands out mainly for its face creams and skin care. We must not
forget that this brand belongs to the L'Oreal group, a group whose sign of identity is

10
precisely skin care. Therefore, their cosmetics also have that connotation of care. As for
their perfumes, they aim to convey the idea of optimism and happiness as a path to
beauty, and so they advertise from their various communication campaigns. Unlike
Lancôme's culture, Chanel, as already explained, based its culture on simplicity and
austerity as a sign of elegance. The pricing strategy is also different between Chanel and
Lancôme.

While in the first one the prices in perfumery were higher than in cosmetics, as it was
exposed before, in Lancôme the opposite happens, the perfumes have a lower price than
their competitors, but the cosmetics are kept in the same level of prices as Chanel, and
even in products with a higher price, staying among the luxury brands, due to their high
quality and innovation cosmetics, as it has been possible to obtain from the observation

Regarding distribution, both companies agree that their products are found in the same
establishments, studied through observation (see APPENDIX), mainly because the two
brands are in the same luxury market segment, and therefore are aimed at a target
audience with the same purchasing power. However, this brand, unlike Chanel, does sell
online. The concept of mature beauty is still emphasized on the image itself, on the
contrary, in Chanel the image itself was that of an elegant woman. As for the physique
in Lancôme products, a more modern and innovative packaging stands out. Its perfume
bottles allude to the happiness or romanticism that these fragrances want to transmit to
their consumers.

So finally, we could conclude that although Lancôme and Chanel are direct competitors
in the same market, their way of doing it is very different. Their identities are focused
on different aspects. While we can see how there is this use for the cosmetics and
perfumery sector of the positive image that Chanel has in the fashion market, using their
perfumes and make-up as accessories. Lancôme is dedicated exclusively to the beauty
sector, and therefore its main sign of identity is to generate "beauty" among its
consumers.

7. Do you think that the MARKETING STRATEGIES USED are appropriate?

I think that the strategies they use are very appropriate. This strategies create loyalty,
and also commitment to the brand of the actual clients. They attract aspirational buyers
through the magic that the brand radiates. They also reinforze their image without
promoting their products directly , instead they try to use their icons and their
inspiration to involve customers in the evolution of them over time.
We live in such a changing world that it has become difficult to keep the classics alive.
But there are definitely some that persist and such is the case of Chanel perfume No. 5
of which you can never have enough. This is because of several reasons ,they always
maintain the essence of it with the geometric and transparent simplicity of a rectangular
bottle, The icon has endured through the 20th and 21st centuries and has subtly
transformed its silhouette into a constant balance of shapes and proportions and to
create more expectation, they also reinvent doing things like for example a limited
edition of Channel N°5 tinted and 55 numbered pieces of red glass. The color red comes

11
with its strength and power to present something classic but that gives the feeling of
mystery and seduction that definitely can not miss in any collection. Also, as far as this
perfume is concerned, it has the support of different celebrities like Marylin Monroe,
who said that the only thing she used to go to sleep was "a few drops of Chanel No. 5".
But the list of celebrities who love this fragrance is long and includes such important
female symbols as Nicole Kidman, Nigella Lawson and Melanie Skyes.
Channel also has the “identity" of their brand which its what distinguish the brand over
time they develop their promises to customers and define the partnerships it aspires to
obtain.
Its also important to mention that is one of the few brands in the cosmetic that does not
have an association with a larger group, it only markets its cosmetics and perfume
products, independently.
One of their most successful strategies was when they added to their haute couture
collection a prêt a porter collection that will remain to this day, as well as their perfume
and cosmetic lines. This strategy has been followed by several of Chanel's competitors
in the luxury fashion sector, such as Dior or Yves Saint Laurent. With the creation of
the perfume and cosmetics lines, they have managed to reach a younger target audience
with a lower purchasing power, thus being able to expand their customer segment.

8. COMPARE THEM with the chosen competitors.

9. IMPROVEMENTS to put into practice, after the psychological analysis

10. The use of neuromarketing.

Neuromarketing is the discipline that, in view of a logical report, permits discovering
strategies to upgrade the change of a brand's items and administrations because of a
more noteworthy comprehension of client conduct in the buy cycle. Henceforth,
knowing how the psyche works in this sense is vital to chipping away at improving the
client experience.

Through the application and investigation of what neuromarketing is, we can break
down the degree of consideration and tangible reactions of the purchaser to various
boosts.
Through these reactions we can see how the brain responds to the upgrades of our
promoting effort and, consequently, the conduct and considering consumers and clients
who see it.
The use of neuromarketing as a marketing strategy has proven effective in many other
companies, as well as in the case of Lay's. Lay's was unable to increase its sales in the
female sector, therefore, it analyzed the reasons why it was not an attractive product and
made the pertinent decisions in order to change it so that women could try the product.

12
In the case of Chanel, the Chanel No. 5 perfume is a product that is focused on a high-
class society, usually due to its high prices, therefore, to further expand the sales sector,
they could analyze the behavior of the lower sector of the society and create a campaign
that goes according to these and their disposable income

11. Bibliography

 Ghosh, A., & Varshney, S. (2013). Luxury Goods Consumption: A Conceptual

Framework Based on Literature Review. (Vol. 2). South Asian Journal of Management.
 Dubois, B., Laurent, G., & Czellar, S. (2001). Consumer Rapport to Luxury: Analyzing
Complex and Ambivalent Attitudes. Consumer Research Working, 736.
 Veblen, T. (1899). The theory of the leisure class New York: The New American
Library.
 Goldsmith, R. E., Lafferty, B., & Newell, S. (2000). The Impact of Corporate
Credibility and Celebrity Credibility on Consumer Reaction to Advertisement and
Brands (Vol. 3). Journal Advertisements.
 https://www.chanel.com/es/perfumes/femeninos/c/7x1x1x30/n5/
 https://franciscoseveri.com/historia-chanel-5/
 https://www.bbc.com/mundo/noticias/
2011/05/110526_0021_perfume_channel_numero_5_historia_dc
 https://brandstrategymanagement.wordpress.com/2014/11/27/chanel-no-5-advertising-
strategy/
 https://gillsrob8.wordpress.com/2017/04/02/chanel-promotional-strategy/
 https://www.luxurysociety.com/en/articles/2017/08/how-chanel-became-most-social-
luxury-brand/
 https://cpb-eu-w2.wpmucdn.com/blogs.brighton.ac.uk/dist/3/3398/files/2018/05/
SWOT-Analysis-of-Gucci-Competitors-1w9ekxl.pdf

13
14