0 Participants: ★ Wei Miao ★ Manyu Wu ★ Yuanyuan Sun ★ Aashish Bhagavatula ★ Joseph Kim May 4, 2011 BRAND STUDIED: BUS 371 MARKETING PLAN

CHANEL

2 Situation analysis of external factors Social Economic Technological Competitive Regulatory TRENDS IDENTIFIED A Wider gap of wealth B Personalized demand for luxury C More people prefer online shopping A Rich’s luxury spending increase(2011) B Other consumers concerned about jobs and income due to the recession in 2008 A Better mechanized technology, less reliance on crafters B Better online shopping experience C Better security for online shopping due to PayPal A Higher expectation to luxury from the customers B LVMH expands its varieties of products quickly C Participation of new brands A Luxury tax increase ENVIRONMENTAL FORCE OPPOR- TUNITY Y N Y N Y N Y N THREAT N Y N Y N Y N Y

3 Situation analysis of competitors ★ Total Market estimate: $ 1.2 Billion

4 Situation analysis of competitors LV Hermes Gucci ★ High quality leather products ★ Has its own store ★ High quality leather products ★ Has its own store ★ High quality leather products ★ Has its own store SIMILARITIESDIFFERENCES ★ Appeals to the businessman and woman’s need for luxury especially regarding suitcases and other travel goods. ★ Lowest Price ★ Has the reputation of the highest quality ★ Hard to find in the U.S. for consumers if not in large cities ★ Most expensive items of all ★ Relatively low promotion, makes sales more on reputation ★ Adding a children’s line ★ More favorable view among wealthy women

5 Customer analysis and target market Primary target market ★ Demographics: Upper class, Urban area ★ Other: classic style; black and white color; fashion Needs that our brand is fulfilling ★ A: basic demand of handbag and wallet with good quality ★ B: show good taste of fashion ★ C: show high social class Our brand is different for this group because unique history and top designer from Coco Chanel to Karl Largerfeld Sources of influence on the consumer purchase decision ★ Marketing mix influences ★ Psychological influences ★ Sociocultural influences ★ Situational influences

Customer analysis and target market ★ Sources of influence on the consumer purchase decision ★ Psychological influences Personality: a person’s consistent behaviors and personal taste. personality characteristics = self-concept / self -image

★ Psychological influences Lifestyle: An attitude is build by a person’s core value as well as belief and shapes a person’s lifestyle. is a kind of lifestyle !!! Lifestyle can be depends on income and self-confidence, etc Customer analysis and target market

★ Situational influences ★ The purchase task: depends on social visibility or for own use. ★ Social surrounding: purchase decision may be influenced by other peoples. ★ Physical surroundings: Location, indoor environment, Decorator Pattern ★ Antecedent states: Paying by credit cards or cash can influence purchase behavior and choice. Customer analysis and target market

★ Sociaculture Influences ★ Personal Influence a. Opinion Leadership: Spokesperson – Blake Lively b. Word of month: conversation / online ★ Reference Group a. Membership group: A group of membership must have some same habits or attitudes. b. Aspiration group: Support their idols or wish to be a member of group. c. Dissociative group: Wish to maintain a distance from the differences in values or behaviors

Customer analysis and target market ★ Sociaculture influences ★ Social class People share similar values, interests and behavior in the same social class. ★ Culture and Subculture ★ make up a person ’ s buying behaviors. ★ different values, ideas, brief and attitudes. ★ Asian ’ s buying behavior.

11 Brand positioning and differentiation ★ Perceptual map High craft Technique /Quality Low Price High Price Low craft Technique /Quality LV Gucci Chanel Hermes

12 Brand positioning and differentiation Chanel has a unique Brand identity that takes advantage of the enigmatic personality of the firm’s founder, the famous Coco Chanel. She has added significant value to the company since its founding by captivating the fashion world with her unique and elegant designs, such as the “little black dress” which is a must have in any women’s closet. Although she has since passed away her legacy lives on in new Chanel designs that appeal to high income women who demand luxury goods. The new chief designer Karl Lagerfeld has also added to the brand’s value by creating unique designs that have also since captivated the fashion world with his attention to elegance that would make Coco Chanel herself proud. To a target group of : - Women from different ages with wealth - who needs classic and elegant style products Brand Chanel offers: - Different luxury products with high quality and good taste The reason why is: - Unique history and design - Current world-famous designer Karl Lagerfeld - Top luxury manufacture Tech. in the world. Thus, brand Chanel is unique - Design, history and luxury manufacture Tech.

Flap Bag Market-Product Focus

Large Shopping Bag

Clutch

Bowling bag

Drawstring bag

Market-Product Focus

Financial Report

Marketing program: 4 Ps - Product Main products ★ Bag ★ Belt ★ Wallet

Marketing program: 4 Ps - Product ★ Overall benefits versus competition Focus on Women Leather products of Channel --- HANDBAG For Example: THE FLAP BAGS OF CHANEL 1.Soft Leather The materials they used are more soft than most of the products of Hermes, which brings the soft tactility to consumers.

Marketing program: 4 Ps - Product ★ Overall benefits versus competition 2. Unique bag strap One obvious character of the Flap bags is that The strap is combined the metal chain and leather together, which makes the bag strap more gorgeous, durable and flexible. 3. Ingenious button The ingenious design for the button is a special point, which can guarantee the safety of bag and highlight the logo of Chanel.

★ Compare overall image Compare images with some classic handbags of Hermes, Chanel, LV and Gucci Marketing program: 4 Ps - Product Mighty feeling with the harder lines More suit for a successful career woman Fashionable & Elegant It ’ s suitable for party or gorgeous occasions Leisurely & Casual Be more suitable for daily activities

Marketing program: 4 Ps - Product ★ Consistency with positioning statement According to the positioning statement : It aimed a target group of women from different ages with wealth, who needs classic and elegant style products. Brand Chanel offers different luxury products with high quality and good taste. –hole in the product offer (Compare Hermes, Chanel, LV & Gucci ) ★ Complete kinds ★ Various categories handbags with all sizes ★ Almost no hole in the product ★ Hole--the soft leather used in products is easy to be worn.

Marketing program: 4 Ps - Product ★ hole in the product offer versus the brand positioning statement Product Fashionable Young women Elderly women lack of suit for

Marketing program: 4 Ps - Price ★ Prices versus competition Use the similar design of handbag to compare the prices of the four brands. ★ Price of Clutch

Marketing program: 4 Ps - Price

★ Consistency with positioning statement According to the positioning statement of Chanel, the price of it is consistent with its positioning. Medium Expensive Less expensive LV & Gucci Chanel Hermes

29 Marketing program: 4 Ps - Place ★ Three types of retailers where your brand is making most sales ★ Place versus competition Place can be bought: Off-line own brand store VS. Department store ★ The greatest difference among Chanel and competitors Launched on-line store: skincare, makeup, fragrance items Not launched on-line store: Leather goods => Handbag/purse ★ Shopping experience ★ boutiques all over the US, but limited location. ★ For example: Chanel store in Michigan Ave eleven employees assistant Selected based on gender, age, and cultural interested IF - Target: young women age from 20 to 32?

Promotional activity 1: Who (is the target audience) Females - interested in fashion, - fashionistar” What (are the promotion’s) objectives -very dark on sides, -white on center with the logo What (are the) kinds of promotion used - Public Relation Where (is the promotion run) Paris Fashion Week Fall/Winter 2011/2012 at the Grand Palais in Paris When (is the promotion run) Paris fashion week - 10 th of March Marketing program: 4 Ps - Promotion Promotional activity 2 : direct Women -different ages(20-49) with wealth Keep their focus on Chanel as person to person Advertisement, - put Ad. on direct - sale Special items – new arrivals – limited items -offer new arrivals on both on-line, and off-line - inform the selective customers before posts ★ List of all the promotional elements in the USA Public relation, Advertising, and Direct marketing.

31 Marketing program: 4 Ps - Promotion ★ Advertising ★ What form of ad is it Competitive (of persuasive) Ad. ★ Who is its target audience 23~49(young to mid-aged) year old selective women a rich father /a rich husband - love luxury and enjoyable lifestyle. ★ What is the message content content of Chanel: “ elegant, fashionable, but not necessarily follow all the trends ”, more focused on - young to mid-aged women, not old women. ★ On which media does it appear Media - luxurious magazines: Vogue, GQ, and Esquire.

32 Estimated P&L P&L expressed as % of Sales Net Sales 100 COGS (Including Labor) 18 Gross Margin 82 Marketing 15 Sales 10 Contribution Margin57 Comments All figures are based on estimates gathered from information on total market size and share

33 Thank you! BUS 371 MARKETING PLAN