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Branding Case Study: Burberry


Introduction

Burberry store is more than 150 years old. It had gained success and became a luxurious brand in Britain. However, in the 1990s, the company experienced challenges related to consumer perceptions, retail stores, and brand image. As a result, sales declined and profit dropped.

Elements of the Brand building factors used by Rose Mario Bravo since 1997 to rebuild Burberry brand

In 1997, Burberry brought in a new CEO, Mario Bravo to run the company. Bravo took a company that had lost its position in the market and had an old brand image. However, the new CEO had the required experience to transform Burberry to profitability (Moore and Birtwistle, 2004).

Bravo’s first approach was to introduce a young designer, Minechetti to change the clothes range at Burberry. Menichetti had to remodel Burberry’s raincoats and other conventional clothes by giving them a new image and making them striking to a new generation of emerging consumers. In addition, the young designer also had to introduce new clothe items for children, blue jeans, bikinis, watches, personal products, shoes, and home wares.

This approach aimed to re-establish Burberry among modern, young, and trendy consumers. As a result, Bravo managed to restore Burberry’s name in the market. This strategy also aimed at attracting new markets and increasing the company’s sales base. Bravo also appointed Christopher Bailey from Gucci.

Bailey would reinforce the brand name by designing heritage and classic clothe lines and presenting young, hip, modern, and fashionable clothes at the same time. This retained Burberry’s vision of heritage and classic to reflect its many years in the industry. All these strategies worked to restore Burberry in the market.

Bravo also focused on building the brand image in the market. As a result, she hired an advertising firm and a photographer, Mario Testino alongside models to shoot images that would change the old brand of Burberry. She would later work with other famous models who appeared in Burberry’s different commercial advertisements.

Burberry operated in an increasingly competitive fashion industry. As a result, it needed a greater focus on the brand image improvement in order to attract new consumers. Bravo noted that a well-developed advertisement message could play a significant role in developing Burberry brand image across its distribution channels and at all levels.

The advertisement served to restore the company’s brand image by informing customers about the “functional abilities while simultaneously imbuing the brand with symbolic values and meanings relevant to the consumer” (Meenaghan, 1995). The two major focuses were to inform consumers about new clothes range of Burberry and transform their opinions about the company. All these elements led to consumer persuasion.

Consumers analyse the brand advertisement message and associate it with certain aspects. For instance, Bravo brought in famous celebrities like David Beckhams and Jarvis Cooker in order to associate Burberry brand with celebrities in the minds of consumers. Hence, Burberry brand became functional and expressive among its potential consumers (Meenaghan, 1995). This led to building the brand perception among consumers.

Consumers are responsible for creating a company’s brand perception because of how they perceive a brand eventually defines it. A company may have a positive brand promise, but this does not count since customers may perceive it in a different manner. Bravo worked with Kate Moss to create striking images for Burberry brand. This image had positive effect on consumers and it improved the company’s sales growth.

The brand perception helped the company to understand how consumers perceived its clothes and specific items within different market segments. The company was able to understand elements, which influenced consumers when they were making purchase decisions, sources of their information, and consumers’ thoughts about Burberry.

It is also imperative to note that Bravo recognised that creating a successful brand image and perception involved several elements, such as value to customers, visual images, brand relevance, and its ability to engage the target audience’s attention (Diller, Shedroff and Rhea, 2006). Clearly, Bravo invested in professional advertisement agency, skilled photographer, and well-known personalities in order to create a working brand image and perception for Burberry. Burberry became distinct and unique among competition in the industry.

In order to build Burberry brand, the new CEO also had to work with the company’s distribution channels. Bravo closed all unprofitable shops and focused on developing retail stores in strategic locations. This was to create a market position, which would reflect the new Burberry. For instance, the company positioned the brand as prestigious and luxurious by working with retailers located in the high-end markets.

Consumers would then associate the brand with luxurious, high-end prices. As a result, the company was able to increase its sales revenues from 20 percent to 25 percent and profitability. Bravo also managed to persuade other retail stores to stock various items for Burberry.

For instance, distributors who were only selling raincoats also added high-end accessories. This branding strategy established Burberry as a potential gift store with affordable luxury items. Burberry stores distribution channels were spread across different locations. Hence, consumers could buy products at various points.

Finally, Bravo decided to establish Burberry as an international brand by selecting strategic locations in New York, London, Spain, the UK, and Japan to expand the business. The aim was to increase Burberry’s growth by venturing into critical international markets and establish the brand identity. Burberry had potential markets and good reputation in these regions for many years. Bravo understood the perception of consumers about Burberry and that it could deliver its products to the market and meet rising demands.

It is imperative to recognise that several factors influence a company’s brand development. These may include the logo, advertisement, and media among others. In addition, brand managers must note that it takes time and financial resources to create a reputable global brand. As a result, consumers can immediate recognise the brand, identify its promise and product benefits.

Challenges that Burberry could face as it builds a global brand

Burberry experienced rapid growth and it had to adopt a new business model for the international market. The company would then strive to expand its operations globally because of the apparent success in the domestic market. On this regard, it must ensure that the business would still realise its primary goals in the overseas markets. It will have to maintain quality standards and delivery products as required by local consumers. Moreover, Burberry must meet cultural expectations of different people globally.

One major challenge could be product delivery. Burberry will have to ship its products to the new markets. However, different countries have different laws regarding imports or even manufacturing products locally. This could present a potential challenge for Burberry in its international expansion strategy.

On this note, it is imperative for the company to ensure that it would satisfy and meet the local demands through product reliability and consistency in delivery. In addition, Burberry will also have to understand local laws for business operations and employment regulations. All its products must meet quality requirements in different countries in terms of components, labels, and even packaging.

Packaging laws differ from one country to another. Burberry will have to understand packaging regulations in its potential target markets. This must happen before venturing into the new markets to avoid business setbacks. For instance, some countries have banned the use of plastic packaging, or they impose heavy taxes on users and manufacturers of such materials.

This would increase costs of running business in such countries. Customers’ requirements with regard to packaging also differ. Burberry may also use more than a single language on its packaging materials and include all product details to all consumers globally. Therefore, it is important to understand local laws on packaging and consumer preferences before shipping products in order to avoid unnecessary costs in running business operations.

Burberry could also experience challenges related to building awareness of the brand in the new markets and enhance sales and profitability. It would not be possible for the company to succeed in new markets if it follows the same techniques applied at home to reach new customers and communicate.

The company will have to develop relevant messages to specific market segment in specific geographies, which highlight their needs and wants and the brand promise. Moreover, the channel of communication will also differ significantly, more so in emerging markets. The company must identify receptive channels for different target markets in order to allow potential consumers to understand and relate messages to their needs.

Burberry must develop the message carefully in order to account for diversity in the global market. It must engage in thorough research and possibly enlist the help of a local firm to assist in branding in the new target market.

It must evaluate what other firms and competitors do in the market to reach customers. Humorous or charming message in a different geographical location could be misinterpreted and misunderstood in another location. Burberry must also evaluate how consumers perceive old companies in its target new markets.

Burberry has been operating in developed nations since its inception. The company will have to understand the target markets, consumer habits, lifestyles, and find the right answer by conducting thorough research. The company will have to consider the right manner of communication, which is culturally acceptable.

This should account for tone and choice of words. Consumers can identify such elements in packaging, advertisement, and even through to employees. In addition, it will have to adopt a favourable sales policy in new markets. Ultimately, the company must project its brand at all levels in the international markets.

It is not simple for a multinational corporation to maintain its reputation across different markets globally. The company may be focused on developing an international brand and ignore other critical aspects of brand reputation. For instance, Burberry had spent a huge portion of its revenues on protecting its brand from counterfeit and association with hooliganism and violence.

In the Far East, the company could run into similar challenges, particularly with counterfeit and cheap imitations. Hence, the company must protect itself by educating consumers and communicating the right message to them. Protecting the brand reputation in every market is critical for a global firm. The challenge becomes worse as the company grows into several subsidiaries with many employees globally.

A brand acts like a promise that Burberry delivers to its potential customers. The company must ensure that customers have positive experience in all its stores with products and employees. This aspect also covers product delivery, product quality, and services rendered to consumers. The CEO must understand how to lead the organisation as it grows rapidly.

It is imperative to protect the company from any possible bad experiences with customers. As a result, a company needs to keep constant vigilance in most critical departments at all levels. It is also important to have an employee manual with the code of conducts and ethics. Moreover, the company will have to invest in employee training and engage in constant checks regarding growth and market activities in order to deliver the brand promise.

There would also be cultural differences for Burberry in new geographical locations. The company will face several obstacles, including languages and customers’ habits. Hence, it is important to work with local firms to help in building the international brand and gain a share of a foreign market. In extremely difficult cases, Burberry may consider working with local distributors or forming strategic partnership with local firms. Cultural or geographical differences may also influence customers’ needs.

Burberry price and competition will also have to consider both price and competition. The company has been operating only in developed economies. However, it will venture into emerging markets where consumers may perceive luxury items as too expensive and out of their reach. This implies that Burberry may review its prices downwards in order to cater for the middle class and few high-end markets. In addition, it will also face fierce competition from established brands in such markets, especially local brands.

“Opening more stores and adding new product lines can potentially dilute the Burberry brand”. A critical examination of this statement and recommendations for Burberry’s future operations

Brands have significant roles to play in global expansion strategies. Hence, firms must use a coherent international branding strategy in order to introduce new brands and open more stores. Burberry should show concern about adding more stores and new product lines.

Available studies on negative impacts of additional stores and brand extension or new product lines on the brand are few and their results are not consistent. Previous studies did not establish any significant impacts of dilution on the brand name through introducing new products, including unsuccessful ones (Romeo, 1991).

On the other hand, some studies show that dilution may take place when new product lines or stores are inconsistence with brand and brand belief (Singh, Scriven, Clemente, Lomax and Wright, 2012).

Hence, a brand failure may result from “difficulties to relate with the parent brand, a lack of product and brand familiarity and similarity, as well as poor integrated marketing communication messages” (Singh et al., 2012). A study on Johnson also showed that launching “a new product in same parent brand category have high chance of success while in different category is risk” (Ahmad, Mujeeb and Rajput, 2011).

Generally, some failures in new product lines can dilute brand equity, especially if the brand is integrated. In this case, dilution affects the new product and the original brand or parent brand. Any failure in stores or new products make consumers to develop pessimistic opinions about the brand or develop a different perception, associate the failure with the main brand, other products, and eventually lose sense of the brand and its uniqueness.

A failure in new products can affect either the general brand image or the product brand image. However, a strong brand like Burberry would not suffer much from a failed product, specifically on its general brand image. Overall, the dilution would greatly affect the product brand image. Consumers may hold their perceptions about the general brand image and attitudes towards the company. Nevertheless, a new product has ability to dilute the brand image and transform consumers’ beliefs and perception.

Any successful new product can attract massive revenues for Burberry. On this note, brand managers should spend their resources to understand the product before launching, understand the market and maximise the product message, and enhance awareness.

Technically, any flagship product will record the highest sales, revenues, and awareness. Today, consumers are critical and use social media to attack products, which do not meet their needs. Not all strong brands suffer from dilution because of a failure in a new product.

A dilute impact could affect other products instantly and eventually affect the whole company. However, the impact may not be severe for a parent brand. The outcome of dilution could be temporary and consumers’ perceptions may not diminish at all. Burberry should establish strong brand equity in the parent company through aggressive marketing campaigns and brand management.

The company should focus on establishing long-term brand equity across the world and evaluate all its business strategies and their potential impacts. Usually, any failure, even if it appears to be insignificant, could result in a great brand failure. Hence, the company should evaluate how consumers react to its new stores and new product lines.

It is imperative for Burberry to understand how consumers perceive new products. Consumers collect information, categorise, and associate them with either success or failure of a product. In fact, they would evaluate major differences between the main brand and new product lines from their experiences, other competing brands, and facts about the company and its brand.

The company should develop effective brand message for its new products and target markets. It must ensure that messages and communication are clear in order to develop a strong brand image. A negative result from a new product or a store can potentially harm Burberry brand.

On this note, brand managers and marketers should ensure that they develop consistent brand messages throughout the product life process. In some cases, negative outcomes from new product lines could be extensive and permanent, particularly in cases where the product message diluted the brand at all levels.

While few studies exist about stores or new product lines and their effects on the company’s brand, clearly any poor approach to branding and brand management could lead to a brand failure (Martinez and de Chernatony, 2004).

Burberry must also note that new product lines or stores may fail to generate increased revenues or develop brand equity as expected. Hence, it is a risky strategy for developing a brand or increasing sales because of the unexpected outcomes. Thus, brand managers must evaluate potential impacts of more stores or new product lines before launching them to consumers.

Reference List

Ahmad, M, Mujeeb, E and Rajput, A 2011, Does Brand Extension Impact Parent Brand: A Case Of Johnson, UK,

Diller S, Shedroff, N and Rhea D 2006, Making Meaning: How Successful Businesses Deliver Meaningful Customer Experiences, New Riders, Berkeley, CA.

Martinez, E and de Chernatony, L 2004, ‘The effect of brand extension strategies upon brand image’, Journal of Consumer Marketing, vol. 21, no. 1, pp. 39-50.

Meenaghan, T 1995, ‘The role of advertising in brand image development’, Journal of Product & Brand Management, vol. 4, No. 4, pp. 23 – 34. DOI 10.1108/10610429510097672.

Moore, C and Birtwistle, G 2004, ‘The Burberry business model: creating an international luxury fashion brand’, International Journal of Retail & Distribution Management, vol. 32, no. 8, pp. 412 – 422. DOI 10.1108/09590550410546232.

Romeo, J 1991, ‘The effect of negative information on the evaluation of brand extensions and the family brand’, Advances in Consumer Research, vol. 18, pp. 399-406.

Singh, J, Scriven, J , Clemente, M, Lomax, W and Wright, M 2012, ‘New Brand Extensions: Patterns of Success and Failure’, Journal of Advertising Research, vol. 52, no. 2, pp. 234-242.

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