TIFFANY & CO. THIS IS HEIRLOOM TIFFANY SMART RING LUXURY MARKETING STRATEGY PROJECT ON TIFFANY & CO.
LXFM 730 MARKETING OF LUXURY GOODS PROFESSOR: ALESSANDRO CANNATA BY: LEONARDO FONSECA WEIHAN PARISA ARYAMANE BRITTANY BARNWELL
TIFFANY & CO. NEW YORK SINCE 1837
TABLE OF CONTENT
Products and Value Proposition
Tiffany & Co. holds the leading position in the fine jewelry industry with a deep history since 1837. The company is worth more than $5.4 billion and has become one of the most well known companies in the world, ranked 76th top best global company. For over 170 years, the name of Tiffany & Co. has been synonymous with romance, style, quality and luxury; and has stayed successful in the fine jewelry industry continuing to expand its consumer market by offering a wide range of luxury goods. Regarding the fine jewelry industry, brands have been confronted with both challenges and opportunities when implementing technology in fine jewelry. With wearable technology growing at a fast rate, a high-tech digital ring concept has been developed to provide Tiffany’s with a competitive edge for 2025, leveraging their identity as a lifestyle brand and offering a product for tech-savvy consumers without compromising superb quality. This new ring will allow users to keep track of their heartbeat and record their personal story and feelings, manifested through a canvas crafted by Tiffany’s. An integrated marketing communications strategy was formulated, detailing the processes needed to debut this new product known as the Tiffany’s Heirloom Collection. The report will be comprised of the company research, industry research, target market analysis, productdevelopment process and the marketing plan, granting Tiffany’s with a chance to achieve economic growth and expand to an evolving market.
Tiffanyâ€™s is a public company worth $5.4 billion (2014) and has become one of the most well known companies in the world. For over 170 years, the name of Tiffany & Co. has been synonymous with romance, style, quality and luxury. Although the company has been staying successful in the fine jewelry industry, being the cause of 92% of their sales, it continues to expand its consumer market by expanding its product. Tiffany has broadened its merchandise mix to include key chains and other items that sell for much less than the typical Tiffany price tag. Many products are packaged in the company's trademarked Tiffany Blue Box. The company sells its goods exclusively through 275 Tiffany & Co. Stores and boutiques worldwide, its website, business-to-business accounts, and catalogs. Tiffany & Co. has long been renowned for its luxury goods, especially jewelry, and has sought to market itself as an arbiter of taste and style. The most important asset of the company is the strong, well-defined brand. Beyond the trademark name and the Tiffany Blue Box, the brand has developed into one of the best- known symbols for quality, prestige and value in retailing, and the value of this brand is expected to continue to increase over the long term.
IN-DEPTH HISTORICAL REVIEW
PERIOD OVERVIEW AT FOUNDATION
In 1837, John P. Young and Charles Lewis Tiffany opened its doors in New York City as Tiffany & Young, then adding J.L. Ellis as a partner in 1841. Its specialties were fancy goods and stationery, while initially carrying costume jewelry. They also sold watches and clocks, a variety of ornaments and bronzes, perfumes, preparations for the skin and hair, dinner sets, cuspidors, moccasins, belts and belts. They soon expanded their business to fine jewelry imported from Europe.
When the French monarchy was overthrown in 1848, Young turned up in Paris for a buying trip whilst France’s second revolution raged. Nobles, loyal to King Louis-Phillipe and desperate to flee Paris, sold their diamonds to Young at heavily discounted rates and in large quantities. He purchased some of the crown jewels and also a bejeweled corset reputed to belong to Marie Antoinette. Tiffany was quick to exploit this opportunity and presented a gem-studded miniature silverfiligree horse and carriage as a wedding present to Tom Thumb, a dwarf who achieved great fame as a performer under circus pioneer P.T. Barnum and his wife.
In 1850, Tiffany opened an office in Paris at 79 Rue de Richelieu. Its presence in Paris allowed the firm to keep abreast of the newest trends from Europe. Young introduced sterling silver to the United States in 1852 and in 1853, Charles Lewis Tiffany gained sole control of the firm and changed its name to the more familiar, Tiffany & Co. Tiffany's prestige reached a new level when it won the gold medal for jewelry and grand prize for silverware at the Paris Exposition in 1878. Soon it was serving as a jeweler, goldsmith, and silversmith to most of the crowned heads of Europe. Its real clientele, however, came from the burgeoning ranks of America's wealthy, many with far more cash than taste. Tiffany & Co. purchased a 287.42 carat rough yellow diamond from South Africa and had it cut in Paris resulting in the largest flawless yellow diamond to that date. hereafter diamonds were an integral part of Tiffany’s stock. In 1889 their Paris Exposition George Kunz assembled a collection of rare minerals and gems for exhibit at the Paris Exposition along with the jewelry made by Tiffany & Co. Tiffany’s began to introduce an American collection of jewelry and ornaments inspired by American art and resources such as Tennessee Pearls, Montana Sapphires, Arizona Garnets, Colorado Rock Crystal, Mexican Opal. Their Tiffany & Co.’s enamel orchids displayed at this Exposition inspired a revival of enamel jewelry. In 1893 World’s Colombian Exposition Tiffany exhibited more American influenced pieces with colored stones along with internationally influenced items. The 1900 Paris Exposition Tiffany exhibited American made jewels with American and historical motifs. Charles Tiffany died in 1902, leaving an estate estimated at $35 million. He was the only Tiffany to run the company. Louis Comfort Tiffany, his eldest son to survive childhood, was an accomplished artist who sometimes made jewelry for Tiffany's but was best known for his Art Nouveau stained glass windows and lamps.
Tiffany's was an emporium for military supplies during the Civil War in 1862, producing swords, uniform laces, epaulettes, medals and badges, caps, rifles and shoes. Their main problem was not selling jewelry but finding enough to satisfy the demand. By then it also had established dominance over the American silverware market and profits enabled Tiffany & Co. to return to making jewelry and silverware after the war as a major player. In 1879, Tiffany & Co. presented their Tiffany Diamond. This influenced Tiffany & Co. to purchases 24 lots of Empress Eugenie’s diamond jewelry from the French government a year later. Previously, diamond rings were set in bezels. In 1886 they developed the six prong setting to hold a diamond – known ever after as the “Tiffany Setting”, also named after the popular engagement ring, as we know today. But Mr. Tiffany’s ring was designed to highlight brilliant-cut diamonds by lifting the stone off the band into the light. To this day, it is the most sought-after symbol of true love. This priceless gem is symbolic of a heritage based on the highest standards of quality and design excellence. These standards have made Tiffany & Co. One of America’s great institutions, a world-renowned jeweler with over 200 stores worldwide, and something more: the trusted maker of gifts that will be treasured for a lifetime. During 1956, Walter Hoving, who soon became chairman and chief executive officer of Tiffany's. He immediately put his stamp on Tiffany's by conducting the first bargain sale in the firm's history to clear out merchandise he considered gaudy or vulgar. He dropped diamond rings for men for that reason and discontinued leather goods, antiques, silver plate, brass, and pewter as not worthy of Tiffany's attention. To broaden the base of its clientele, the store added high-quality but lower-priced goods such as silver key rings for $3.50.
CURRENT STATUS MISSION STATEMENT â€œSeek to enrich the lives of customers by creating enduring objects of extraordinary beauty that will be cherished for generations "
• • • • • • •
High quality brand name and recognition in the market of luxury jewelry and timepieces. Large retail stores are present in high human traffic locations that result into growth of sales. Company share in the international market is always on the rise. Product differentiation. Implementation of a strong distribution strategy Wide range of products. Strong ecommerce presence through an interactive and informative website and a simple navigation system. • Leader in Corporate Social Responsibility in the jewelry industry.
•Products are sold only at the Tiffany stores limiting customers. •Product assortment tarnishes brand image. •Large number of company sales are generated during shopping season •No brand presence in emerging economies.
• • • • •
Growth in international markets Growth in internet sales Expansion into retail outlets Growth in men’s luxury Growth in wearable technology
• • • • •
More designs in seasonality Future economic recession Counterfeit of products New competitors Changes in cost of diamonds or reduced supply availability.
BRAND EQUITY PYRAMID
• • • •
• • • • •
No Logo Diamonds Sterling Silver Blue Box
RELATIONSHIP • • • •
Trust Timeless Journey Prestige
Romantic Elegant Approachable Playful Extrovert
• American culture
TIFFANY & CO.
• Robin egg blue box and white ribbon packaging • True love-warmth, happiness and nostalgia • Luxurious and refined
• Great quality • Expertise in category, credible reputation • Dedication to superiority
SELF-PROJECTION • High quality • Traditional
• Rich • Elegance • With high social position
• • • • •
Romantic Elegant Dignified Innovative
UNIQUE REVOLUTION Tiffany has set itself apart from the other jewelers abiding by its core principles which remains the foundation of their success. Their extraordinary design, impeccable craftsmanship and excellent customer service are strongly incorporated in Tiffany’s brand strategy. Tiffany seeks to cater to the changing needs of its clients and is therefore actively involved in investing into new product developments, innovations, new design collections, line expansions. The standards of quality and craftsmanship are matched by the company’s tradition of introducing designs that capture the mood of contemporary fashion and define American luxury with impeccable customer experience in their stores and online.
BELIEF SYSTEM Tiffany strives to enhance its customer’s experience with superior customer service through engaging store environment. The physical stores, typically found on the high street and luxury mall locations, reinforces the brand’s luxury connotations through association with other luxury brands. These stores showcasing its fine jewelry in a retail setting exude a simplistic elegance. The online store experience, on the other hand, is enriched by an intuitive, elegant and simple navigation system. Tiffany & Co. has successfully established a link between high service standards that are synonymous with its Tiffany & Co. brand.
BRAND RITUALS The Tiffany & Co. brand is the single most important asset of Tiffany. The strength of the brand goes beyond trademark rights and is inherent in consumer perceptions of the brand. Tiffany’s management monitors the strength of the brand through focus groups and survey research. Tiffany’s management believes that consumers associate the brand with high-quality gemstone jewelry, particularly diamond jewelry; excellent customer service; an elegant store and online environment; upscale store locations; “classic” product positioning; distinctive and high-quality packaging materials (most significantly, the “blue box”); and sophisticated style and romance.
The Blue Box The world has been enthralled with the distinctive Tiffany Blue Box since the very beginning. It was Charles Lewis Tiffany who mandated that the coveted boxes could only be acquired with a Tiffany purchase. As reported by the New York Sun in 1906, "Tiffany has one thing in stock that you cannot buy of him for as much money as you may offer, he will only give it to you. And that is one of his boxes. Glimpsed on a busy street or resting in the palm of a hand, Tiffany Blue Boxes make hearts beat faster, and epitomize Tiffany’s great heritage of elegance, exclusivity and flawless craftsmanship.
The Tiffany Setting A Tiffany mount or Tiffany setting is a set of prongs that hold a gemstone and attach it to a plain band ring. It is a common setting for a diamond solitaire engagement ring. It is named after Tiffany & Co., who popularized it.
The Yellow Diamond Tiffany’s expertise in exceptional yellow diamonds dates back to 1878 when Charles Lewis Tiffany purchased the 287.42-carat Tiffany Diamond. Cut into a cushion-shape brilliant weighing 128.54 carats, this priceless stone is one of the most important yellow diamonds in the world, drawing thousands of visitors to the New York flagship each year.
LUXURY JEWELTRY & TIMEPIECES
The jewelry and watches market include jewelry made from gold, silver, platinum, precious stones, pearls and semiprecious stones.
Mainly concerns devices and apparel/textiles. Glasses, jewelry, arm-wear, wrist-wear are included and the business is large already.
THE SIZE OF THE MARKET
LUXURY JEWELRY MARKET The global jewelry & watches market had total revenues of $290.4bn in 2014, representing a compound annual growth rate (CAGR) of 6.9% between 2010 and 2014 Jewelry sales had the highest value in the global jewelry & watches market in 2014, with total sales of 247.9bn, equivalent to 85.4% of the market's overall value The performance of the market is forecast to follow a similar pattern with an anticipated CAGR of 7.0% for the five-year period 2014 - 2019, which is expected to drive the market to a value of $407.5bn by the end of 2019. 31
WEARABLE TECHNOLOGY MARKET Wearable fitness market will top $1.15 billion in 2014 The smart watch market is expected to tally a modest $177 million in 2014 According to the CEAâ€™s research, wearable fitness devices owners are predominantly male (60 percent) and often young (56 percent are under 34).
THE TREND OF THE MARKET The wearable tech market will rise from $24.2 billion this year (2015) to $74 billion in
2025, tripling in ten years.
By 2025, the report estimates that $25 billion will be invested in the development of materials in the wearable tech market. there would be 101 million smart watches globally 2020 According to Tech-Sci Research report “Global Smart Wearable Market Forecast & Opportunities, 2020”, the global market for smart wearable is projected to generate a revenue worth USD37 billion by 2020. The Americas market is expected to grow at the highest CAGR during forecast period
TREND OF THE PRODUCT Wrist wear segment is expected to dominate the wearable technology market during the forecast period Some future features: • • • • •
Charge it Baubles andbangles Don't just stand there Tractable couture Get off the sidewalk!
• • • • •
You Looking' at Me? Sounds That Carry A Sock With a Message Close to the Heart Light It Up
DIRECT COMPETITOR: TOP GLOBAL LUXURY JEWELRY BRANDS
GROUTH POTENTIAL AND OPPORTUNITIES
The growth potential and opportunities for the technology market are limitless. According to the Business Wire, at the CES 2016, more than 3,600 companies including Fit Bit, NBC Universal, Samsung and YouTube are launching products across more than 2.4 million net square feet of exhibits for the current year. A wearable tech product that looks nice & fashionable is as important as the functions it can bring, and this is what we believe where the biggest opportunity lays, for technology and fashion brands to collaborate to come up with wearable tech products that our consumers truly desired
INDIRECT COMPETITOR: CO-BRANDS, FASHION BRANDS
INDIRECT COMPETITOR: TOP WEARABLE TECHNOLOGY BRANDS
700,000 units shipped in 2Q15 3.9% global market share
4.4 million units shipped in 2015 24.3% global market share
MARTINE: GUESS CONNECTED
3.6 million units shipped in 2015 19.9% global market share
FITBIT-TORY BURCH BRACELLET
HERMES APPLE WATCH
600,000 units shipped in 2Q15 3.3% global market share
3.1 million units shipped in 2015 17.1% global market share
KEY SUCCESSKEY FACTORS SUCCESS FACTORS
COMPETITIVE ADVANTAGES STRENGHTS COMPETITIVEDIFFERETIASION ADVANTAGES ADVANTAGES DIFFERETIASION ADVANTAGES
Luxury jewelryLuxury industry: Tiffany: Tiffany: 1)"Lifestyle brand" jewelry industry: Tiffany: Tiffany: 1)"Lifestyle brand" 1)Exellent quality 1)Exellent quality 1)Exellent quality 1)Exellent quality 1)Exellent quality 1)Exellent2)Wide qualityprice range 2)Wide price range 2)Exellent Design 2)Exellent Design 2)Exellent Design 3)Story telling 3)Story telling 2)Exellent Design 2)Exellent Design 2)Exellent Design 3)Ancestral heritage and personal history 3)"Lifestyle brand" 3)Ancestral heritage and 4)Special packaging 4)Special packaging 3)Ancestral heritage and personal history 3)"Lifestyle brand" 3)Ancestral heritage and 4)Craftsmanship 4)Wide price range personal history 5)Uniqueness: Blue box 4)Craftsmanship personal history 6)Exclusive contracts with5)Uniqueness: Blue box artists 5)Story telling ads.4)Wide price range 4)Craftsmanship 4)Craftsmanship 6)Exclusive contracts with artists 6)Ancestral heritage5)Story and telling ads. 5)Involvement: to design collections. 6)Ancestral heritage and 5)Involvement: to design collections. Consumer: personal history TIffany App: Engagement Consumer: personal history ring finder TIffany App: Engagement 1)Involvement 7)Apecial packaging ring finder 2)Pleasure and1)Involvement deep interest 8)Craftsmanship 7)Apecial packaging 6)Customization 3)Sign of value2)Pleasure and deep interest 9)Uniqueness: Blue8)Craftsmanship box 6)Customization 10)Exclusive contracts with artists Blue box 3)Sign of value 9)Uniqueness: to design collections.10)Exclusive contracts with artists 11)Involvement:TIffany App: Wearable Technology Industry: to design collections. 1)Power efficiency Wearable Technology Industry:Engagement ring finder 11)Involvement:TIffany App: 2)Customization 12)Customization 1)Power efficiency Engagement ring finder 3)Security 2)Customization 12)Customization 4)Simplicity smaller wearable devices 5)Lesser cost 3)Security
4)Simplicity smaller wearable devices 5)Lesser cost
DEMOGRAPHIC • • • • •
Gender : Male & Female Age : 25-45, Generation X, Older Millennial Average Income: High Net Worth Individuals Earning $150,000 Annually Education: College Degree or Higher Family Life Cycle: Single or partner couple LIFESTYLE/PSYCHOGRAPHIC
• Geography: New York City, Paris, China • Profession: They hold positions in corporate, finance, entertainment, legal, computer. • Leisure activities: They keep a balance between professional life and leisure. They socialize in bars and clubs, visit art galleries and museums, watch movies and go for gatherings. • Interests: Fashion, Shopping, Luxury products, Technology
CONSUMER BEHAVIOR • Technology: The age-range consumers are tech savvy and are well informed about the advanced technology as most of them have been introduced to technology in their childhood. They crave for high end technology as they have had a long affair with tech products. • Media Consumed: Social media platforms such as Pinterest, Instagram and Facebook • Magazines: Cosmopolitan & Vogue and GQ • Shopping Habits: Our target consumers shop at high end luxury malls and high streets which have an array of luxury brands. They want premium products and are ready to pay high prices for them. 43
PRODUCTS AND VALUE PROPOSITION
GOALS AND OBJECTIVES
• To enhance customer awareness of the TIFFANY & CO. trademark (the "Brand"), its heritage, its products and its association with quality and luxury. • Elevate the concept of love and romance. • Giving birth to a new tradition • With an engaging brand campaign which focuses on marriages in all sexuality. • Provide with a unique post purchase experience. • Provide impeccable design through innovation and craftsmanship • To enhance the customer experience with superior customer service and through engaging store environments. • To selectively expand global distribution without compromising the value of the Brand. • To increase store productivity. • To achieve improved operating margins. • To improve asset productivity and cash flow.
STRATEGY OVERVIEW Our product is synonymous to the brand equity of the Tiffany which is build upon love and relationships. It is aesthetically rich but still giving the owners an experience that can be forever cherished. Our strategy is to give birth to a new tradition by promoting the engagement rings for men which will also cover the same sex marriage profiles as our target markets. We aim to develop relationships with them digital media.
UNIQUE SELLING PROPOSITIO (USP) Our ring aims to redefine the tradition, and the Tiffany Heirloom setting with its superlative diamonds with technology to captivate the world and find a place at the heart of the greatest love stories.
MARKETING MIX (5 P)
PRODUCT AND PRICE
The Tiffany Setting was created over a century ago and has been the world’s favorite engagement ring since. The legendary Setting presented in the celebrated Tiffany Blue Box is part of the world’s greatest love stories. Tiffany’s artisanal craftsmanship and fine jewelry will be fused with cutting edge technology to develop a new type of hi-tech marital ring. This new ring will have an integrated heart rate monitor that will keep track of the user’s heartbeat and allow them to record their own personal story and feelings, manifested through their own personal canvas crafted personally by Tiffany’s. When a heartbeat is recorded and converted into visual form, the sound waves from that recording generate a unique and distinct image. Through the collaboration of Oura Inc., a start-up company that specializes in wellness technology, Tiffany’s has mastered this visual conversion process by allowing the user to track, select, and upload their heart activity during special moments of their life such as engagements, weddings, pregnancy milestones, among others. Tiffany’s has provided an opportunity to allow individuals to create a one of a kind piece of art and solidify it in history. The prototypes of product will be available at the store for customer convenience. They will be able to see the process from PRODUCT TO PRINT and pre-orders can be made. Due to the technological aspect of the product, the ring will be priced at $20,000. Costs will include a lifetime warrantee for the ring, software and hardware updates and unlimited submissions for their canvas art.
PROCESS OF THE PRODUCT
The product will be sold initially in Tiffany stores in United States and will then be distributed in the rest of their 289 stores worldwide.
3 months prior to the launch of the product, print and digital advertisements of the campaign for billboards will be placed in locations close to Tiffanyâ€™s stores. Also the same ads will be present in magazines and their digital counterparts that the target customers might be exposed to. These will include Vogue, Cosmopolitan, Elle, and Vanity Fair for women, and Esquire, GQ , Times, New Yorker. Additional magazines will be relevant to the jewelry and technology industry such as Technology Review, Wall street Journal, Wired and Jewelry Artist.
Digital Media • The advertisements will also be presented in Tiffany’s website and social media pages. • Social Media: To emphasize the new products, the company’s Facebook cover photo will include the campaign to capture the viewer’s attention immediately. Short videos, photos and the official commercial will also be implemented in their Facebook, Instagram, Twitter accounts, and Snapchat. The social media accounts will contain an link that will lead to a microsite which will be dedicated completely to the product, offering information about design, development, features, services and pricing. • Tiffany’s Website: The main page will have the products advertisement and will contain a link that will direct them to the product page which will provide information about the design, development, features, services, and pricing of the product.
Public Relations • The aim of public relations is to inform Tiffany’ customers, prospective customers, investors, partners, employees and other stakeholders and anticipate, analyze and interpret public opinion, attitudes and issues that might impact the product launch and operations. Events • A press release and press conference will be scheduled 6 months before the launch of the product to notify all media outlets of the Tiffany’s new product and be present in more media outlets. • A launch party will be coordinated to present the Tiffany’s innovating product to the public. By invitation only, guests will be able to have a first look at the product and create a buzz to attract customers.
PROMOTIONAL ACTIVITY MAP
"Wearable Technologies." Wearable Technologies. N.p., n.d. Web. 08 Mar. 2016. http://iln.cite.hku.hk/com/1401/users/kyleung6/26191
F&dataset=balanceShee t&period=A¤cy=native http://investor.tiffany.com/management.cfm http://www.adweek.com/news/advertisingbranding/how-tiffany-s-iconic-box-became-world-smost-popular-package-160228 http://www.bain.com/publications/articles/globaldiamond-report-2013.aspx http://www.bbc.com/news/magazine-27371208 http://www.businessweek.com/stories/2006-08-
08/cartier-taps-culture-to-polish-its-brand57 http://www.hoovers.com/company- information/cs/company- profile.Tiffany__
Co.cd5fb5e6ec14dd01.html http://www.instant.ly/blog/2013/02/mobile-strategy- at-tiffany-co/ http://www.instant.ly/blog/2013/02/mobile-strategy- at-tiffany-co/ http://www.livescience.com/42542-why-jewelry-must- be-sustainable.html http://www.luxurydaily.com/tiffany-michael-kors-are- most-purchased-luxury-brandsby-ultra-affluent- women-the-luxury-institute/ http://www.slideshare.net/yunrufeng/tiffany-co-brand- audit?related=1 http://www.wikiwealth.com/swot-analysis:tif https://prezi.com/4h3aprqhqpq3/copy-of-tiffany-co/58 https://www.scribd.com/doc/127238452/Social-
Co www.Tiffany.com www.Wikipedia.com
This is a marketing strategy for the Tiffany smart ring named Heirloom. Heirloom is a new line of engagement ring that can detect the heartb...
Published on May 31, 2017
This is a marketing strategy for the Tiffany smart ring named Heirloom. Heirloom is a new line of engagement ring that can detect the heartb...