Hermes Luxury Product Development

Alison Kowalski Kathryne Beck FMD 510 April 23, 2019

Luxury Product Development - Hermès vs Russia Authentic luxury stands at the very core of the Hermès brand and represents what they stand for in our rapidly growing fashion market. In this current age of fashion, consumers are now demanding authentic brands, experiences, relationships and products more than anything.

That being said, authenticity has been proven to be a challenge for luxury brands and difficult to keep up. Hermès does this strategy right, by using already brand loyal purchasers to give their authentic testimony of the brand’s extraordinary value (Danziger, 2018). The Hermès brand will succeed when it comes to displaying a rich combination of heritage, craftsmanship, an eye for detail and overall high levels of quality and professionalism. The company values uniqueness of traditions and designs, and production of prestigious luxurious products.

As a family-owned company for generations, the brand is completely about following set traditions and staying true to their founding roots (Roll, 2018). The original founder, Thierry Hermès, was a very skilled harness maker and is recognized as being an achiever of highest quality in the luxury industry. Originally started in 1837, It was Hermès son who brought it to the brand to retail and made it grow to where it is today. The brand has followed this brand extension strategy over the years to provide a variety of products such as elegant clothing, perfume, fashion accessories, tableware and leather bags (Hermès Analysis, 2018). When it comes to discussing the brands physique, Hermès signature and most iconic items often include

the Kelly and Birkin Bag, as well as their delicate and intricate silk scarves. The Kelly and Birkin leather bags are at the top of the mind among fashionistas all over the world and the brand is perceived as the beholder of the most desirable handbags and leather products (Hermès Analysis, 2018). Distinguishing factors that make Hermès stand out when compared to its competitors includes its in-depth culture, brand equity, and brand DNA. Additionally, Hermès uses strategic collaborations with independent artists to heighten visibility of its products. When the luxury brand first began, it was used to serve the needs of European noblemen by providing saddles, bridles and other leather riding gear (Roll, 2018). Émile-Maurice, Thierry Hermès son, was the first to be granted the sole rights of the zipper while visiting the U.S. during the first World War and began using it when it came to manufacturing clothing and leather goods. He soon became the first designer to introduce the zipper device in France and surrounding areas, further laying down a foundation for the brands future.

Hermès iconic typographical logo directly relates back to the brands culture, authenticity and DNA of the company. It features the brands name, as well as the Duc-carriage with a horse graphic to represent the period when they originally began with creating saddles. This brand has been around since 1837, but its current logo was not introduced to the public until the 1950’s.

The Hermès logo may appear without any inscriptions; however, the brand will typically opt to use the French version of the name to emphasize its country of origin. The “Hermès Orange” main hue featured in their products and packaging was introduced after WWII. It has become a signature element for the brand because it is iconic, memorable and offers brand awareness to its customers. Hermès has aimed to only use the best, most natural and organic materials, while their competitors have shifted their efforts to working with man-made materials. Hermès has been known to introduce new exotic materials to the market including alligator, crocodile and

ostrich. Additionally, the brand focuses on using the most innovative and iconic design when it comes to the creation of their products (Hermès Analysis, 2018).

In relation to the brands relationships with consumers, Hermès has continued to build its brand on inaccessible values, which mean that not everyone is able to participate in owning their luxurious products. Because of this, the reputation of the brand will increase a social status among an exclusive group because it is symbol of class worldwide (Hermès Analysis, 2018). The long waiting list is the greatest marketing strategy of Hermès. ‘Things will get more valuable if it is rare’ (Birkinboutique, 2010). Hermès has produced a global product which means that it has created just single design including products packaging, material, shape, form, color and other elements in the same way. Furthermore, the customers are enabled to choose the material, color and the kind of hardware and then when it finished, it’s your bag and your style (Needles, 2009).

Additionally, Hermès has introduced “patience” as its main principle when it comes discussing their brand strategy. To expand on this, customers cannot walk into a store and simply a purchase one of their products. Instead, they will have to place an order before it is ready and follow the planning process (Roll, 2018). This strategy has been able to gain competitive advantage of its business by protecting brand image, reducing cost production and inventory cost and creating customer loyalty because of the same qualities of products which have made higher reliability.

All products of Hermès have made completely under the company name which will guarantee the durable qualities of its luxury goods to its customers and competitors. This strategy has been able to gain competitive advantage of its business by protecting brand image, reducing cost production and inventory cost and creating customer loyalty because of the same qualities of products which have made higher reliability (Hermès Analysis, 2018).

This luxury brands helps its customers with achieving a surreal dream value but will often do this by rejecting celebrity endorsements. Instead, the brand uses already loyal purchasers to give authentic testimony of the brand’s extraordinary value. Hermès will strictly limit production and distribution of its products, with the very explicit intention to enhance demand, not to meet demand (Danziger, 2018). Typically, when referring to a luxury product, the higher the demand, the higher the cost. This has proven to be a significant strategy to attract high-end shoppers in the fashion market by creating exclusive, rare and unique values of its products. Even the richest or the most famous person in the world would have to wait at least 2 years on the Hermès waiting list (Hermès Analysis, 2018). Additionally, Hermès high-end position of its products enables the company has set its price and avoid competitive influence.

The customer base of Hermès typically features those in high-end societies or celebrities.

However, the middle-class customers around the world also want to reach this brand for boosting their high social status. Therefore, the demand of Hermès products has significantly increased in each year. Customers wearing Hermès are bold, individualistic and eccentric. They are welleducated, of a high-social standing and want to show off their wealth. Their self-image in their identity prism is a lifetime purchase of exclusiveness. Customers will often be proud to own these products and will try to show them off every chance they get (Arhin, 2019). Hermès is desired among women because of its special identity and for the chance to be contemporary, idolized and wealthy (Essays, 2018). Additionally, Hermès will always treat its customers very attentively and with the utmost respect. The customer service of Hermès is completely different from other luxury brands. Each customer has to order a bag from display, then they are able to specifically choose their own unique style such as colors, materials and other options. Therefore, the bag is your bag and your creation. Furthermore, when the customers would like to get a

recondition of their leather items, they are able to bring its goods back to any Hermès store which can deliver their leather goods to the factory in Paris for repairing, and their bag will be fixed by the same hand-craftsmanship who made its bag (Hermès Analysis, 2018). This strategy has been able to gain competitive advantage of its business by protecting brand image, reducing cost production and inventory cost and creating customer loyalty because of the same qualities of products which have made higher reliability. In regard to their VIP clients, Hermès has been accused of giving preferential treatment to VIP in the past. In order to be considered a VIP client, consumers typically need to purchase an estimated five to six limited edition bags each year.

Additionally, there has been claim that while popular items may be out of stock and require its lower-end customers to be waitlisted, that VIP customers has access to these items.

According to Maslow’s Hierarchy of Needs, Hermes would follow under the selfactualization element. They work to portray their brand as an egoistic need, while their positioning allows them to display the ego of being sophisticated, classic and timeless (Arhin, 2019). The Hermès’ brand philosophy can easily be summarized as being focused on “quality” and “refinement”. Because of these, the brand has stayed away from mass production, manufacturing lines and outsourcing their materials. According to Hermès, each of their products coming out under the brand’s name should reflect be able to reflect the hard work put into it by its artisan (Roll, 2018). Artisans are required to train for two years until they can begin working on any of Hermès products. According to current CEO Axel Dumas, the main strength of the Hermès brand is the love for craftsmanship. Hermès strengths includes their prestige and inaccessible products, strong brand values and controllable distribution uniqueness of know how.

Hermès heritage has more than 170 years under its belt (Essays, 2018), and continues to be a desired luxury brand sought after by high net-worth individuals, celebrities and day trippers.

When discussing the brands character, Hermès features specific design features that can be noticed on all of the products. Besides using the heavy use of their signature orange hue, all of their products cannot be replicated by a machine. It takes two needles simultaneously passing through the same seam to produce correctly. If done correctly, the saddle stitch will never unravel and will continue to be durable, efficient and loved. Bags that feature the horseshoe stamp denote that the bag is special ordered and gives the consumer a significant experience (Koffsky, 2018). Additionally, both the Birkin and Kelly bags are among the most counterfeited handbags in the world. To spot the authenticity, you should be aware of the size and weight of the bag, making sure the colors match and relate to Hermès usual color schemes and look for brand stamps. Additionally, handbags should always be wrapped in a dust cover and correct packing, never in plastic, as it will allow the leather to suffocate and may crack or damage the material (Hermès & Chanel Authentication Guide, 2019).

Hermès culture allows its customers to feel warm and welcomed to a family-owned luxury brand. They are set on the values of pride, tradition, determination and quality. To base their behavior, customers will often become educated upon the traditions and unique process of how Hermès creates each product and will become self aware of each products name and unique characteristics. Through following its already set traditions and continuing to follow the brand prism will allow Hermès to continue to grow as a brand in the luxury market.

Hermès for Russia Russian clients are a major factor in the fashion industry. The Russian market is attractive for the luxury fashion industry, because these clients are loyal and love to show off their brands.

Moreover, they love to show off their wealth by having extravagant accessories and large recognizable logos. Unfortunately, Russian clients do not have as much disposable income as other countries, so they look for products made to last and a brand they can stay loyal to (Wordbank). Furthermore, only 16% of Russians enjoy shopping, which is less than the global average. This means that encouraging Russian clients to pursue a brand, means “emphasizing the high-end, long lasting products” for them to use and reuse (Wordbank). So, to appeal to Russian consumers, Hermès should emphasize the product value and quality. For Hermès, showing off the quality of their product is not hard because they take craftsmanship very seriously and include many years of practice before a handler is allowed to create pieces for sale. Russian consumers would love Hermès for their quality and craftsmanship, which would keep them loyal to the brand.

To stay true to the brand, this new line will incorporate classic and iconic symbols that Russian clients can relate to and show off. These pieces will also be flashy and extravagant so the clients will want them to show off their wealth and extravagance. Incorporating these two elements will attract the Russian crowd because showing themselves off to everyone is attractive.

Also, this middle price range will be accessible to the Russian client because it won’t be too expensive. Furthermore, the quality of the craftsmanship will be enough to keep them loyal to the brand. The new line consists of a saddle shaped bracelet, a chain necklace, a clutch, and an artsy tote. The new line is called jeweled. This is because each item incorporates jewels that are sure to wow the Russian clients. The jewels attract attention along with the repeated iconic color

of orange to allow consumers to recognize the brand that comes with the ideal high-end level of craftsmanship.

The Saddle Bracelet is an eye catcher that is all silver, with orange jewels alongside the outside of the piece that will dazzle the Russian clients and add to the price factor to draw in the dream value of the item. This Saddle Bracelet incorporates the saddle that Hermès is known for, so the rich DNA will be a part of this collection and this piece. The orange jewels and the iconic saddle are sure to please the wealthy Russian consumer. The Chaine d’ancre with Jewels, is a necklace that will give the consumers a dream value. The iconic symbol of the chaine d’ancre is sure to attract attention because of its known qualities of Hermès. This necklace has been changed from previous pieces to incorporate the orange jewels to add flare that the Russian clients will love. Usually Hermès is a minimalist brand that does not normally incorporate all the jewels and flashy items, but when advertising to the Russian consumer, the jewels will ignite the passion for Hermès products.

Next, the Scarf Clutch was inspired by the scarf’s motif using the bridal from a horse.

This motif is commonly used in the scarves and pocket squares that Hermès uses for their silk items. So, when incorporating the design into a small handbag, the motif is sure to be recognized and appreciated. Furthermore, the chaine d’ancre symbol is incorporated using jewels to outline the shape and add to the front aesthetic appeal to the bag. The jewels are also used as the strap to the bag to add to the wow factor that Russian clients love. Overall, this bag will be an attention grabber for the Russian people, and they will get the attention they dream of with the bag at their side.

Last, the Artist Tote is a very unique piece that is sure to draw attention. This bag is no regular tote, because it incorporates an artist’s touch. Marcia Baldwin creates paintings with

horses that follow right along with the Hermès history. This piece incorporates artification into the line that adds a new and innovative touch to the Hermès tradition. Using artification in this line can help attract more attention to the brand which will entice Russian clients to be more attracted to it since they love the attention the brand brings when they purchase those items. This line still follows the iconic pictures of a horse onto the bag which means it will still be easily recognizable with the Hermès brand.

This line of products is at the mid-price range level. To get Russian consumers interested in this higher price range of products, the emphasis must be put on the level of craftsmanship that was incorporated into each piece. This will ensure that consumers will have the product for a long time, and it will be of high quality. The Russian consumer will value the reliability of the brand and will continue to shop at Hermès. Because of their limited disposable income, Russian consumers value price, quality, and brand reputation in making their buying decisions. But once you’ve won their loyalty, they’ll likely stick with you for years, and introduce their family to your brand as well.

This line is different from other middle price range products because of the jewels and the dream factor it brings. Catering to the Russian client adds the right amount of flashy jewels to the already iconic Hermès. By incorporating the jewels, the line adds to a brand that is usually simplistic. Furthermore, this makes it easy to communicate to this new market, because they are already looking for something to make them stand out, and a brand that will last. However, Russia does have high priced items because of import taxes and laws like that, so, to cater to this new market, products will be sold in a different country, likely France, where the taxes are cheaper and as part of the experience, the Russian clients could be flown there. This enhances the dream value of the experience, but also relates to the somewhat cost-conscious Russian client.

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