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Burberry Online Research Paper

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Updated: Jan 14th, 2020

Introduction

The global luxury goods market is multi-billion industry and Burberry wants to take a major slice of it. The Burberry brand is a well-known British brand that has been in business for more than 150 years (Burberry 2011). The company leaders that comprise the Burberry brand realized that in a highly competitive environment, success can only come if the company will think beyond the borders of the United Kingdom or even Europe.

They will have to expand overseas and target emerging markets. They needed to have a presence in the World-Wide-Web and build an online store. But this is not the only thing that the Burberry business leaders are counting on.

They also believed that the company will only succeed if it will utilize effective marketing strategies such as: product strategy; pricing strategy; promotion strategy; and product distribution (Gitman & Daniel 2009). The following pages will take a closer look at the strategies employed by the Burberry brand and how effective were these strategies in increasing profit and their market share.

Product

Burberry’s product strategy is based on the idea that the Burberry brand is a successful UK and European brand for many decades. This is an iconic brand and easily recognizable. However, it is not enough to simply rely on the past. The consumers of the 21st century are more sophisticated; they are looking for products that are of great value.

Nevertheless, a company like this one can never stay in business for more than a century if there are no loyal customers. Aside from that the global luxury goods market requires the company to create products that will cater to high-end clientèle.

Since the Burberry brand is well-known all over the world the only way to radically enhance its image and to capture a fair share of the market is to develop product strategy in relation to an effective segmentation strategy. This means that the corporate leaders of the company had cannot simply mass produce products, advertise and then sell it in their stores and hope that their customers would come.

Looking at their website it is clear that the company was able break down their potential market into groups of people that share similar needs, characteristics and aspirations. Burberry studied the target market in order to give their potential customers what they really wanted. They were not preoccupied with mass marketing.

Burberry therefore create a product and brand hierarchy. There is the Burberry Prorsum, Burberry London, Burberry Brit, and Burberry Sport (Burberry 2011). The Burberry Prorsum is the high-end of all three. The target market are those people who can afford luxury goods. These customers do not really mind the cost for they are after high-quality goods. They are also fashion conscious and these are the types people with meticulous tastes.

The second tier is labelled as Burberry London and it is comprised of apparel that are priced in the mid-range and in addition these are designed to be used in week day or work wear. Obviously this is more affordable than the Prorsum line but it caters to people that wanted quality but less expensive clothing that can be used in the offices or in their businesses.

It has to be smart and yet at the same time with enough substance and style to capture a particular segment of the market, specifically the professionals who needed a work wear that is of high-quality and yet more affordable than those found in the Prorsum product range.

Aside from the quality and the price of the products found under the Burberry London product range, there is also more choices for the middle-class consumer. For instance in the Prorsum line, women’s wear division there are only three groups of products that a shopper can chose from and these are: coats; dresses; and accessories.

In comparison to the Burberry London women’s wear division there are more types of products on sale. In addition to coats and dresses, this product range also sells: jackets; trousers; shirts; and sweaters.

The segmentation of the market also prompted the firm to delineate the biggest apparel segment and thus giving rise to Burberry Brit which is a product range that caters to those looking for more casual wear. In the case of the Burberry Brit the company decided to be more innovative and thus created a more contemporary version of their iconic product designs.

It can be said that they company is trying to attract a new group of consumers that are new to the brand. This is why in addition to what can be found in the Burberry London product range, the Burberry Brit product range carries other items such as denim and jerseywear.

There is another product range on the list and it is simply labeled Burberry Sport. There seems to be a limited offering under this product range and this could possibly mean that the company is still trying to develop and expand this product range even more.

The type of product that the Burberry Sport line seems to focus on is sports jacket or similar-type products that were designed for outdoors activity. For instance the online store is selling biker’s jackets, field jackets, ski jackets, etc. Aside from jackets and coats the Burberry Sport product range includes fragrance for men and women.

It can be said that there is a conscious decision from top leaders to acknowledge their heritage and this can be seen in their website. However, the company must have realized the urgency to transform the company and as a result the firm will not only be known as a producer of trench coats and apparel linked to British culture. This time they came up with different products such as men, women, and children’s wear. They also sell shoes, perfumes, and accessories like handbags, leather goods, and scarves.

Pricing Strategy

The corporate leaders at Burberry realised that it is not enough to produce a high-quality product like the Burberry check; there is a need to determine the correct price and the proper way to market it so that the people who can afford will go out of their way to buy their products. Their pricing strategy is based on the way they created product ranges as mentioned earlier.

Thus, the most expensive products are those that can be found in the Prorsum product range. The prices are almost comparable to the luxury goods that their competitors sell but an overview of the luxury goods market will make one realize that although the Prorsum line is at the top of the Burberry’s price range, the products are less expensive as compared to other luxury brands.

Nevertheless, those who are on a budget will never even consider checking what is in store for the Prorsum line because they know that they could never afford it. For example in women’s wear, one of the most expensive item on the list is a black coat and the price is a staggering $7995 – close to eight thousand dollars for one item.

This simply means that the company is well-aware of its target market and they knew that these type of customers will never think twice buying fashion-forward apparel such as these.

For those who wanted more quality and yet less expensive items the company’s creation of the Burberry London product range is the answer. For example the most expensive black coat under the women’s wear division is only $2495. There is a huge difference with the one in the Prorsum line mentioned earlier. The message that it seems to communicate to the buying public is that there is a way to gain access to the high-fashion world of Burberry without having to spend thousands of dollars on one purchase.

The company did not stop with only two product ranges. The most affordable product line is the Burberry Brit. For example, in the women’s wear division under the Burberry Brit line one can purchase a wool coat for only $695. This is not cheap but the middle-class consumers can have a piece of the Burberry brand. By creating these differences in prices the company is assured of increasing their slice of the market share.

Promotion Strategy

When it comes to promotion strategy the company utilized digital marketing schemes using Facebook, YouTube, and podcasts. They also launched the social networking website. This is where people come to share photos of themselves wearing the Burberry’s trademark trench coat. They also have their own YouTube channel and developed an iPhone app that allow their customers to buy online.

In the short-term the company has already seen a 60% growth in e-commerce. This means that there is tremendous potential but much has to be seen in later years of the company is able to capitalise on new technology and new way of marketing their products using the World-Wide-Web.

Distribution Strategy

The distribution strategy is to make the Burberry brand available worldwide. This is perhaps the reason why they developed four product ranges and with significant quality, types of products as well as major differences in prices.

The Burberry brand is present in the Europe, the Americas, Asia Pacific and even as far as the Middle-East. There are numerous stores in China as well as in Japan. Aside from the capability to ship products ordered from an online store, walk-in customers can visit stores located in far flung countries like Bahrain and Lebanon. There is even a store in Mongolia.

Recommendations

The firm has to continue looking into improving the way they delineate their products to be able to take a bigger slice of the fashion industry. This means that when it comes to the Prorsum line they should create luxurious items that will give them the ability to make in roads into the market currently dominated by brands like LVMH and Gucci.

At the same time they should create products that would allow them to improve their casual product lines. There is also a need to take a closer look at their digital marketing and determine if they are converting website visits into actual sales. It is simply too early to celebrate victory in terms of the way they were able to increase awareness of their products. The bottom line is still the only reliable measuring stick for success.

Conclusion

The leaders of the company understood the full value of strategic marketing and they were able to employ it and experienced considerasble success. The creation of four product ranges will attact more customers and at the same time make the Burberry brand accessible to as many potential customers as possible. The company is made relevant by the use of the Internet and social networking tools to increase their reach and exposure to their target market.

Finally, they were able to translate all these marketing tools into profit by creating a reliable online store that allow shoppers to buy from the comfort of their home or. Aside from that, Burberry made a significant investment when it comes to building stores all over the world. There is even one in Mongolia.

References

Burberry. (2011). Burberry – Iconic British Luxury Brand Est, 1856. Retrieved from:

Gitman, L. & McDaniel, C. (2009). The Future of Business: The Essentials. Mason, OH: South-Western Cengage Learning.

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