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Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

Gucci  

Target: Their target market seems to be the affluent, middle to upper class, fashionable, hip, thirty and above individuals who invest in fashion as either a treat or a lifestyle. Twenty year olds also buy and wear Gucci; however, they are still experimenting with other brands meaning that those who are older are more loyal to the brand. Positioning: Gucci’s strong heritage is built on key critical foundations of uncompromising quality, superior craftsmanship and made in Italy. The Creative Leadership strengthened the focus on iconic brand symbols (Horse bit, Bamboo, GG logo, Green/Red/Green web, Flora), re-inventing them in a modern and luxurious way. Their understanding and appreciation for the brand’s heritage, together with the extraordinary talent in providing a fresh and modern interpretation, drove Gucci to the excellent results during the years. Gucci has thus confirmed its outstanding growth potential in its main product categories and regions worldwide, through the creative and innovative appeal of its offering, underscored by the increased emphasis on communication policy and the development of exclusive goods. 1. Context – what’s happened before? What’s the history? Born in 1881, craftsman’s son Guccio Gucci founded the House of Gucci as a saddler shop in Florence in 1906. Guccio's first talent was his craftsmanship in leather goods. He started out selling leather bags to horsemen in the 1920’s and progressed to luxury luggage as his clients graduated from equine transportation to horseless carriages. In 1938 Guccio Gucci opened their first retail shop on the Via Condotti in Rome. In 1947 the immediately recognizable Gucci icon, the leather bag with bamboo handle, is created. During the 1950’s the trademark red striped webbing is introduced, taken from its original form place on a saddle girth. This became an emblem much as the leather moccasin with leather bit. Guccio Gucci created many of his classics early during the 1950’s; products such


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

as luggage, ties, shoes, and the famous handbags sporting the bamboo handle. After his death in 1953, his family was able to take the enormously successful company to new heights by opening stores in Paris, Beverly Hills, London, Palm Beach, and Tokyo. The 1960’s brought increased fame to the Gucci Empire. Such Hollywood stars as Grace Kelly, Peter Sellers and Audrey Hepburn made the name Gucci synonymous with “chic”. Jackie Kennedy helped by being photographed with the Gucci shoulder bag, which subsequently became known as the “Jackie O”. The company adopts the “GG” logo. But with the fame and recognition of the brand name came some turmoil. While Gucci goods were considered a status symbol of the times, management and inner family seemed to disagree. Brother Maurizio Gucci took an apparently ailing business over from his founding brother, who in turn sold it to an Arab concern in the 80’s. In the 1990’s, Tom Ford, Gucci’s newest executive head, has brought Gucci back to the center of chic, and now commands a varied line of products including leather fashions, perfumes, colognes, cosmetics, shoes (including the moccasin with the distinctive Gucci snaffle-bit), the "Flora" foulard created for Grace Kelly by Rodolfo Gucci, suitcases, watches, jewelry, silk scarves, sports articles, belt clasps (the one with the Guccio Gucci initials, was introduced 1964), ties, and eyeglasses. Designers throughout the years: • 1923 - 1989, Guccio Gucci (GuccioGucci); • 1989 - 1992, Richard Lamberson RichardLambertson), fashion design and creative director • 1990 - 1991, Tang Meiluo (DawnMello), United States nationality designer • 1994 - The Tom Ford (TomFord). • 2002 - Frida Giannini 2. Environmental Scan – what are the key factors that will affect its success? What is the media saying? The luxury goods carry premium products designed for very wealthy individuals. This demanding market spares on expense to get the best product in terms of quality, style and design. Price, therefore, is not a basis of competition in this kind of industry. Competition largely exists on how potent and valuable the brand image has become. This is the focus of Gucci’s thrusts. Its competitor Louis Vuitton may have made its mark in size with more than 50 luxury brands in its belt and sales but it is not exactly the single dominant player in the market.


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

This is because in the luxury products market, companies can carry several brands and business segments which could change their positions depending on the segments such as leather & shoes, cosmetics, jewelry & watches, wine and spirits and others. Competition is also effectively minimized by the intense rivalry of established luxury goods. New firms would definitely find it next to impossible to penetrate such an exclusive market. The cost of maintaining and promoting this image are also prohibitive. Companies are forced to invest huge money in brand promotions in order to maintain their image. Expenses such as advertising and marketing expenses, acquisition of competitors, control of the distribution channel and other strategies take the bulk of company’s operating budget. The barriers to exit in this industry are low which means that survival is for the fittest. If the company cannot compete with other players in the industry then it has to fold or sell to other bigger firms which make exit quite easy and quick. In this industry, the barriers to entry are really high and the barriers to exit are low, therefore only the select few can maintain their position in the market, while others could give up altogether or are bought by bigger firms. Also, luxury goods do not have direct substitutes like other ordinary goods but the threat could come from imitation. Counterfeits often penetrate the market. This could take away a portion of the sales that should go to luxury goods companies. There is also the threat of substitutes to contend with. These are products that are considered ordinary or the medium brands but can eventually expand their product lines to premium brands in the future such as Zara and Gap. Internal threat could also come from French holding company Pinault-PrintempsRedoute (PPR) who currently owns 68% of Gucci’s stocks. 3. Objectives – what does it want to achieve? They want to maintain their Creative design, product quality and brand image. They will achieve this through rigorous management of brand image, tight communication policy, outstanding product quality and a carefully controlled distribution network. In fact, Gucci Group has succeeded in strengthening and reinforcing its brands’ leading status over the past few years. The goal of the communication activities, which combine fashion shows, advertising campaigns, public relations, special events and store displays, is to maintain the brands’ exclusive image while ensuring high profile and consistent visibility and reinforcing their market positioning at the international, national and local level. Gucci’s


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

long term goal is to be one of the best luxury brands with global E-commerce capability. They want to enter high potential growth markets in Asia, particularly in China. Finally, they are looking for the consolidation of other brands in order to build competitive advantage in different business segments. 4. Strategy – where are they going and why? Gucci’s growth strategy emphasizes three main areas of action: capitalizing on its state-of-the-art positioning in fashion, innovation and product quality; maintaining the strong momentum in leather goods and shoes; exploiting new opportunities in jewelry, ready-to-wear and watches, as these product categories have recorded improved results. Gucci operates in 55 countries, and thanks to strong global brand recognition the brand is successfully developing its presence in the emerging markets. The global balance of the revenue breakdown by geographical area ensures that future results will come from a combination of continued growth in the major markets (Europe, Japan, and USA) and exploiting opportunities in fast growing new markets, such as China where Gucci currently owns thirty stores. 5. Audiences –The key audiences for this brand are women from 35-55 years of age, with a high social status, high income, Independent or married that look for goods that will enhance all of these aspects and reinforce their social status though a bag or other accessory that proves to have a strong heritage and offers quality and exclusivity. Gucci looks for women that are confident and sexy to wear their products. 6. Messages – what are they saying about the announcement? Currently Gucci has launched a unique ad that shows its new fragrance “Guilty”, the ad has been done with the latest technology. It has special effects and it clearly attracts attention. 7. Tactics – how are they implementing their strategy? Gucci has been able to have different important individuals such as celebrities to represent their brand and be the face of their new ad campaigns. In fact, this is a strategic way to maintain their tactics on hand since consumers are able to connect and relate with these individuals and through them they are having a connection with the brand. This is extremely important because the opinion and contribution of the celebrity gives out credibility to consumers. Moreover, an example of this is Jennifer Lopez; she is recently the new face of the ad campaigns for Gucci’s new spring/summer collection.


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

Customer Analysis Emerging trends- The current trend for this upcoming season at Gucci is mainly focused on showing an explosion of vibrant colors. Current creative director Frida Giannini explained that she was drawn to the aesthetic pictures of Guy Bourdin and David Bailey, circa 1976-1978. Colors such as turquoise, orange, blue, gold, bronze, greens, a mix of neutrals, jewel tones and rock & roll are shown. Compelling needs- Comfortable, sophisticated pieces of clothe that reflect a confident, secured personality that shows a chic side as well an elegant and sexy look. Motivation- The brand’s strong name, as well as the latest trends and style. In addition, audiences want the best and what motivates them to buy are all the classic and new looks they see. Segmentation- The main individuals that purchase this brand have a unique sense of style and basically love fashion. High society class men and women acquire these products in order to show off their economical position or just simply because they enjoy it. Internal Analysis strenghts and strategies- Gucci Group has appointed ZenithOptimedia to handle its media in the UK, France and in most markets in Asia. The move follows an international review process that began on 2009 and had already seen ZenithOptimedia land the $45m US Gucci account. ZenithOptimedia will now handle media planning and buying in the UK, France and markets in Asia excluding Japan for Gucci brands including Yves Saint Laurent, Bottega Veneta, Alexander McQueen and Stella McCartney. This is definitely a strategy because Gucci knows that having the same company as other luxury brands to handle their media is an advantage for their own benefit. In addition, Gucci’s overall strengths include the brands strong name, their strong presence in the international market, their diversification strategy with a large portfolio of brands, and more control over the distribution channel.


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

Brand heritage-Founded in Florence in 1921, Gucci built its reputation by specializing in the creation of high-quality leather goods. As Gucci Group’s flagship brand, it is now one of the most prominent and profitable brands in the luxury goods sector. Gucci manufactures and markets leather goods (handbags, small leather goods and luggage), shoes, ready-to-wear, silks and jewelry. The products are sold exclusively through directly-operated stores and through exclusive Gucci franchise stores, department stores and specialty stores around the world. In addition, Gucci manufactures and distributes watches through Group-owned Gucci Group Watches in Switzerland. Licensed distributors manufacture and distribute Gucci brand eyewear and fragrances. Existing branding; values- Uncompromised craftsmanship, more than 1,000 Gucci employees in Casellina dedicated to manufacturing. Approximately 6,000 people working for the suppliers in the surroundings, and a strong know-how in the Florentine area. “Made in Italy”, this shows its strong heritage and overall values. They will continue to produce in Italy; it’s their trademark. They have an outstanding quality as a result of the perfect combination of modern technologies together with artisan heritage, strong internal know-how, continuous innovation and research, passion, commitment and devotion of Gucci employees and partners. Competitor Analysis: Some of Gucci’s main competitors within the luxury industry include top brands such as; Louis Vuitton, Versace, Dolce and Gabbana, Chanel, Hugo Boss, Giorgio Armani, Emporio Armani, Marni, Lanvin, Chloe, Jean Paul Gaultier, Burberry, Alberta Ferreti, Roberto Cavalli, Fendi , Bulgary and Prada. strengths and strategies: Louis Vuitton uses similar tactics as Gucci, they have a pretty good pricing strategy which consists on high markups and limited availability. This causes consumers to buy this product quickly, and it definitely benefits the company. Brand image- Louis vuitton also has a strong heritage it has been out in the market since 1854 Vulnerabilities- Produces the same products, such as bags wallets, clothing, belts, shoes, luggage, etc. They enhance their personnel differentiation; their staff is one of the highly paid staff; who is motivated to produce the products with highest standards of quality. Positioning- It has one of the top positioning in the entire world, and they are related to their top-sale product; the monogram bag.


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

Functional Analysis (relation between Brand image and Product): Gucci brand has been known to produce highend luxury products. Whether it is shoes, bag, or clothing, they both have "a symbol of status and wealth of the" brand image of a wealthy upper-class consumer favorite. Furthermore, their success comes from a combination of these three elements, thanks to their advertising campaigns and their superior quality the brand maintains its position in the market and will continue to expand.

Economic Analysis (Prices-Motivation): Gucci generated circa €2.2 billion worldwide of revenue in 2008 according to Business Week magazine and climbed to the 41st position in the magazine's annual 2009 "Top Global 100 Brands”. Gucci is also the biggest-selling Italian brand. Gucci operates about 278 directly operated stores worldwide (as of September 2009) and it wholesales its products through franchisees and upscale department stores. Relational Analysis Media appearances- The Gucci fashion label is the most coveted designer brand in the world, according to a survey by market research firm The Nielsen Company. One in five consumers said that they would buy Gucci products if money weren't an issue, according to a survey of 25,000 online consumers in more than 48 countries that was conducted by The Nielsen Company and obtained by Bloomberg News.


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

Collaborations- Gucci has had a partnership with UNICEF since 2005. Gucci stores worldwide donate a percentage of the sales for special collections made specifically for UNICEF to go toward the United Nations Children's Fund. The annual Gucci Campaign to Benefit UNICEF supports education, healthcare, protection and clean water programs for orphans and children affected by HIV/AIDS in subSaharan Africa. For the campaign in 2009, Michael Roberts promoted a children's book, "Snowman in Africa" with proceeds going to UNICEF. In five years, Gucci donated over $7 million to UNICEF. Gucci is the largest corporate donor to UNICEF's "Schools for Africa" that was established in 2004 by UNICEF, the Nelson Mandela Foundation, and the Hamburg Society. Its goal is to increase access to basic schooling for all, with a special emphasis on children orphaned by HIV/AIDS and children living in extreme poverty. In 2008 Rihanna appeared on Gucci’s ad campaigns for this collaboration, and for this year 2010-2011 Jennifer Lopez is the new face for the campaign. In 2009 Gucci sponsored the movie “HOME”, a film exploring world environmental and social challenges through aerial photos taken in more than 50 countries across the globe. In fact, Gucci took advantage of this and their creative designer Frida Gianini designed a T-shirt using 100% organic cotton, natural dyes and recyclable packaging. The design integrated the film's HOME logo with Gucci's well known "GG" symbol. The back of the shirt listed the countries shown in the film. Each T-shirt was available in both men's and women's sizes, and came with a matching canvas tote. I was priced at $195; a portion of this was going to GoodPlanet.org, a non-profit created by HOME director Yann Arthus-Bertrand.

Morphologic Analysis

Design and brand image- The former creative designer of Gucci is Frida Giannini. She was born in Rome in 1972 to an architect father and art history professor mother. Giannini studied fashion design at Rome's Fashion Academy, then went on to apprentice at a small-scale ready-to-wear house and in 2002 she became the designer of all the accessories at Gucci.


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

Photography and video- The latest director has been Riccardo Ruini. The video he has done is a 60-second cinematic ad will be shown at the MTV music awards on 12 September. A trailer for the ad, seeded by The 7th Chamber, will be available through YouTube and luxury blogs. In fact, this is very beneficial for Gucci as it will cause great attention to individuals as well as the media.

Publicity / advertising-The latest ad by 'Sin City' director Frank Miller stars 'Fantastic Four' actor Chris Evans and Hollywood actress Evan Rachel Wood. It is set in Rome and shows Wood blazing through an urban night in a 1953 Jaguar C-Type with Depeche Mode's 'Strangelove' playing in the background. It is very attractive and seductive, it has special effects as I mentioned earlier, and it is completely out of the ordinary for this brand to launch an ad that is completely modern and intriguing. In fact the Gucci group has appointed ZenithOptimedia to handle its media in the UK, France and most markets in Asia.

Identify communications tasks: Creative design, product quality and brand image are closely linked in the luxury goods industry. Through rigorous management of brand image, tight communication policy, outstanding product quality and a carefully controlled distribution network, Gucci Group has succeeded in strengthening and reinforcing its brands’ leading status over the past few years. The goal of the communication activities, which combine fashion shows, advertising campaigns, public relations, special events and store displays, is to maintain the brands’ exclusive image while ensuring high profile and consistent visibility and reinforcing their market positioning at the international, national and local level. Defining their audiences: They look for a sophisticated audience, one that is willing to wear sexy, but casual clothe and that have an important social life. Clarify brand strategy: Diversification Strategy with a large Portfolio of Brands

Creating visibility: Recognition, unaided recall, top of mind status; they enhance their products quality, style and design, re-enforcing their exclusivity. Differentiation-keys of a strong brand: their brand heritage and their product quality.


Ambar  Morales-­‐Bermudez  Boza   19/01/2011   Brand  Analysis    

Customer relationships: Interests: Politics, fashion, art, design, sports, and travel. Lifestyle: Their lifestyle is full of trips, parties, special events, and a handful of more “fancy” celebrations, however, they most likely have more than one house, a maid and are working individuals. Possessions: Expensive art pieces, antiques, modern furniture, expensive and luxurious accessories such as jewelry, and outrageous automobiles.

Bibliography: • • • • • •

http://www.brandrepublic.com www.wikipedia.com http://www.supereco.com/news/2009/06/02/gucci-comes-home-to-green/ http://www.mediaweek.co.uk/news/1023757/Gucci-embarks-viral-campaign/ http://simonmainwaring.com/future/gucci-group-how-big-brands-fast-track-theirway-to-social-media-community-and-new-customers/ http://www.nytimes.com/2008/02/27/style/27iht-gucci.10479736.html


GUCCI PROJECT