CUSTOMER SERVICE PRINCIPLES (CSM451)

GROUP:
NBS9A

INDIVIDUAL ASSIGNMENT
“CASE STUDY OF GUCCI: TRANSFORMATION OF LUXURY
BRANDING”

PREPARED FOR:
MRS. RAHAYU BINTI HASANORDIN

PREPARED BY:
RAMLAH BINTI DARWIS (2017457612)

DATE OF SUBMISSION:
15th JANUARY 2022
Answer all questions.

1. Based on the information collected (current situation of the organization) provide

analysis about the SWOT; strength, weaknesses, or threats face by the company and
what are the opportunities identified for the company. 2 points each (ie, strength 2
points, weaknesses 2 points etc). Each point is explained in one complete sentence.
Present your answer using SWOT analysis template.

SWOT ANALYSIS
STRENGTHS
-Gucci has the abilities to change
problem into profits by innovate their
own idea using leather to produce their
items, being strategic by hiring
professional managers@ smart
businessman to run the grand plans
that benefit customer and change
customer’s perspective, having Ford
and De Sole that build up the brand,
being iconic model for the brand itself,
and using variety of methods to
maintain quality throughout its network
(pricing, marketing, product,
manufacture and distribution.)
WEAKNESS
-Internal conflict between Aldo and
Rodolfo Gucci and Maurizio lacked
business and analysts skill to rebuild
company, the investorcorp force
Maurizio to step down because sales
dropping
-The company’s supplier relationships
had been severely damaged due to
Gucci’s inability to pay. Tom Ford and
Domenico De Sole parted with Gucci
group when they failed to agree with
PPR over artistic control of the
company.

-Gucci’s directly operated stores were

accounted for 66% of sales and others
stores such as 60 franchised stores, 54
duty-free outlets, and 301 department
stores accounted for rest of the sales.
Distribution means representation of
the product to customers because that
becomes the shopping experience
 OPPORTUNITIES
-By 1999, luxury goods were a $60
billion industry, with sales growing 6%
per year and fashion houses have
become global, the changed their
products from classic to fashion
conscious.
-De Sole and Tom picked Tuscany as
their “DNA” of the company due to its
high artistic capacity and small
independent factories. That was their
competitive advantage against Prada
and Louis Vuitton and to compete with
LVMH, they first bought two luxury
companies – Yves Saint Laurent (also
YSL beauty) and Sergio Rossi to
create a luxury house
THREATS
-Customer perception where valued
less. Customer hard to see Gucci as
luxury brand even the price competing
Chanel and Hermes and economic
crisis, not return in investcorp and
entire industry suffering from economic
crisis
- In 2004, parting from Gucci due to
internal conflicts with PPR, Gucci faced
a challenge by losing its iconic star of
Gucci Group. What happens when
there is no more Tom Ford in the
company? Star-designer strategy is
risky since it is hard for the companies
to forecast the effect on the brand
image after the absence of star-
designer

2. Based on the case study, describe the major business issue/problem face by the
business and elaborate its main cause.

The major business issue/problem face by business are:

1) Maurizio failure to lead the company.
- Maurizio did what any businessman would do to bring up the company again. He
raised price, reduce and control distribution, and bought back franchises to reduce
overexposure. Despite his grand plan, Maurizio lacked business and analytical skill
to rebuild the company. Prices were too high. The price points of the products were
competing against Chanel or Hermes; however, customers valued less. Gucci’s
reputation was severely destroyed that it was hard for the customers to see it as a
luxury brand. Maurizio missed one critical aspect which was the customer’s
perception.
 2) Internal conflict and losing iconic star, Tom Ford.
- In 2004, parting from Gucci due to internal conflicts with PPR, Gucci faced a
challenge by losing its iconic star of Gucci Group. Without Tom Ford, Gucci will
always have a big hole in their brand image. Among the “fashion people” Gucci lost
a lot of respect after Tom Ford departed the company

3. “Gucci’s reputation was severely destroyed that it was hard for the customers to see it
as a luxury brand. Maurizio missed one critical aspect which was the customer’s
perception.” Refer paragraph 4.
Explain perception. Based on your opinion why learning about customer’s perception
is important to organization, when it has destroyed Gucci reputation.

Perception is the way that we see something based on our experience. Learning about
customer’s perception is important to organization as it will affect the power to buy from
customers. When company unable to meet customer’s perception in term of
satisfaction, needs, requirements, demands, it will lead to unhappy customer and the
products will be unsold. Whereas, when company keep in touch with customers and
fulfil customer’s need, requirements and satisfactions in all aspects, it will make the
products will be sold even in high price. Satisfaction recognizes the difference between
customer expectations and customer perceptions. Satisfaction may develop quickly or
may be cultivated over a period of time. Customers have many concerns; our job is to
reduce as much of the customers’ stress as possible and to create a pleasant customer
experience, while also providing current information and helping to solve customers’
problems. Satisfaction may be a customer’s afterthought. The customer may think back
on the experience and realize how pleasant or unpleasant it was.

4. Another critical marketing strategy for Gucci was to “make Tom Ford a star”. Tom Ford
happened to fit the new image of Gucci at that time which was edgy, sexy, feminine
and trendy. He got great physical appearance, handsome and, he was the star behind
the new Gucci. Tom Ford’s lifestyle was exactly cohered with Gucci’s new image and
Ford became the iconic symbol for Gucci.
In Gucci’s marketing plan, there were many risks involved with making Tom Ford a star
of the company. Some questions to consider when developing their “star-designer
strategy” – “what happens when there is no more Tom Ford in the company? And “was
Ford given to much power and publicity?”. Tom Ford became a huge star of the
company..
Refer to the above statement, give your opinion on making “star-designer strategy” in
marketing your brand to customers. Relate the strategy to businesses in Malaysia as
it becomes a trend to business owners to come to be the star of their business or brand;
promoting/over-exposing themselves carrying and using their products/services.

In my opinion, making “star-designer strategy” in marketing your brand to customers is

a very effective and fast way of marketing. This is because, customers find it easier to
trust the product we sell whether it is a tangible or intangible product through the
example shown by the seller of the item. Since the culture of selling online is
increasingly practiced by Malaysians and economic pressures, many product founders
have emerged and market their own products either offline or online. For example noir
cosmetic products. Where the founder of this product uses this product himself and
makes testimonials before and after using the Nior cosmetics. This way of marketing is
more convincing and attracts more customers to try because it puts high confidence in
the founder of the product. The Nior founder being the iconic success of self-brand
cosmetics where she sells what she used. Follow the new technology trends where
people from all range of ages slowly become technology expert where information are
easily access. This Nior founder using this platform to get connected with her
customers by making online live and chat with her customers in the most pleasant ways
and share her personal life with her customers so that it will strengthen the connection
between founder and customers and meet customers’ perception and satisfaction.