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Marketing Management can be described as the process of managing different marketing components, considering the multi-dimensional factors of the dynamic business environment, and creating and delivering the marketing strategy in order to get a maximum turnover and effectively meet the customers' demands and expectations (Adams et al., 2019). This marketing report is focused on analysing and evaluating the present marketing strategy of the British Luxury Fashion Brand, Burberry Plc, considering the business environment of the luxury fashion industry. The report has been carried out from the perspective of the Marketing Director of Burberry with the aim of delivering effective recommendations for improving the marketing scenario and leading the company towards a better result.
Burberry Plc is the leading name in the global luxury fashion industry, which is committed to maintaining the heritage of British fashion with innovation. The brand was established in 1856 by Thomas Burberry in Basingstoke, UK. Presently the brand has 421 stores around the globe. The brand value of Burberry is £3.9billion as of 2021. As per the annual report for 2021, the brand earned revenue of £2,826million, and most of its revenue was generated from the Asia Pacific Region (Burberry Corporate Website., 2022). In this report, the focus mainly has been given to providing effective recommendations for improving the marketing scenario of the brand in its home market UK, based on the evaluation of its present marketing strategy within the changing market dynamics. Burberry is consistent with its marketing effort in the digital and also the traditional field of marketing. Within a highly competitive market of luxury fashion, it is crucial to stay highly reactive with the market dynamics for effectively grabbing the opportunities underlying in the market and maintaining as well as enhancing the market positioning and performance.
Figure 1: Burberry Revenue over the years
(Source: Burberry Corporate Website., 2022)
Figure 2: Revenue by Region
(Source: Burberry Corporate Website., 2022)
External Business Environment Analysis for Burberry
PEST Analysis
Political
Burberry operates globally, so the political factor of the individual countries along with the global political scenario have a major political impact on its activities. Focusing on the political scenario of the UK, it has been found that Brexit being a major political factor over the past few years, which put Burberry within an uncertain scenario, which also influences its marketing decisions such in terms of distribution and promotional events (Ardley., 2020). In 2019, the brand said a no-deal Brexit would cost it nearly ten billion pounds in tariffs and majorly dispute the movement of raw materials, fabrics and final products between its manufacturing centres, suppliers and stores (Výstupová and Almahrouq., 2019). After the Brexit, the brand has gradually adapted to the new political equation between the EU and UK through it has to bear the cost of higher tariffs in terms of movement of its product and raw materials.
Economic
The state of the economy plays a major role in influencing the strategic decisions of business organisations. The UK is the fifth-largest economy in the world and has a major influence on the global economy. The back-to-back events of Brexit and the Covid-19 pandemic disrupted the stability of the UK economy. The economic factors are severely dynamic and possess a multi-facet impact on the businesses. For instance, as a direct impact of Brexit, Burberry has to face an increase in its distribution cost, but in a reverse way, it weakens the pound, which causes an increase in demand level in the international market as the price of British products drops which ultimately increase the turnover of the brand by 5% (Olteanu., 2020). In the present scenario, the condition of the pound is quite stable, and the brand needs to consider the economic trends in terms of making improvements in its marketing strategy.
Social
The social factors, including education, wealth, culture, income class, demographics and many others, are largely responsible for determining the effectiveness of any marketing strategy. On the other hand, the brands develop a marketing strategy targeting a particular social segment so that it influences their purchasing behaviour in a positive manner towards the benefit of the brand (Al-Zyoud., 2020). Burberry is a premium brand which targets the upper-middle class and upper-class segment of the society. As the brand's USP is British luxury fashion, influencing the targeted population of the UK is quite direct, though due to cultural diffusion and globalisation, the taste and preferences of people in the UK are changing. Burberry is guided by the belief of 'harnessing tradition with innovation'. It is crucial for the brand to stay updated with the fast-changing fashion dynamics in the world of luxury fashion.
Technological
According to Silvano (2020), the modern, technology is the core of changing all other market dynamics. In terms of marketing, the opportunity in the technological field is huge. The UK is also highly advanced in terms of technology; 91% of the land area of the country is covered with a 4G network. The fashion industry of the country and also internationally has made a significant shift towards e-commerce as a direct impact of the Covid-19 pandemic (Borsboom et al., 2021). Burberry prominently started its e-commerce journey by partnering with the online fashion retail platform Fartech in 2018. In terms of the technological field, digital marketing is a huge opportunity for the fashion giants like Burberry. Digital adverting allows the brand to run highly targeted and optimised marketing campaigns along with an analytical report of the effectiveness of such campaigns. Burberry is already using an effective digital marketing strategy with consistent and engaging campaigns, but the continuous advancement in the technological fields like AI, Big Data, and Analytics enlarges its scope of data-driven marketing strategy, which could further drive its positioning in the highly competitive market place (Chang et al., 2021).
Buyer’s power: Burberry is a premium brand with a distinctive British sensibility. The brand targeted the high-income segment, who inclined toward high-fashion and British luxury fashion. Being a premium brand, the targeted segment of customers is quite limited who have differentiated themselves from the lower segment of the society. So the brand has to maintain its exclusiveness in order to ensure its unique positioning in the market. On the other side, its limited product line restricts it from expanding its customer base (Mandal., 2021). The buyer’s power is moderate for Burberry, and the challenge for the brand is to enhance the customer base by optimally blending innovation and heritage in the product line.
Supplier’s power
The brand has successfully built a large-scale supplier network which allows it to keep a hold on the supply side. The scale of operation of the brand is huge, which enables it to purchase good quality raw materials at a reasonable price (Brugger., 2020). So the weak supplier's power has limited influence on the marketing decision of the brand.
Substitution threat
In the competitive field of the fashion industry, finding a substitution is not hard. But Burberry is known for its exclusive British heritage in all its product lines. The signature checks are the USP of the clothing line of the brand, which holds the heritage of British fashion and cannot be substitutable. The fashion dynamics are changing significantly; the fashion enthusiastic people are trying and exploring different dimensions of fashion which enlarges the scope of the fashion industry (Kumar et al., 2020). So the threats from substitution are moderate for Burberry.
New entry threats
The fashion industry is one of the easiest industries to make an entry into, though while it comes to luxury fashion, the most crucial factor is brand name and image. As Burberry is a heritage brand, the threat from new entrants is limited. But still, with the continuous change in dynamics of fashion and taste and preference, the scope of a new entrant in the competitive luxury fashion world cannot be ignored (D'ambrosio, and Wang., 2020).
Competitive rivalry
The marketplace of luxury fashion is significantly competitive. Burberry faces significant competition from the premium brands like Ralph Lauren, Michael Kors, Zara, Gucci, Armani, Prada and so on. In the luxury fashion market, each brand holds a specific position in the market and attracts customers with their USP of unique product line and experience (Rovai., 2020). Though the advent of online shopping is impacting the luxury fashion market, as fashion brands with innovative and inexpensive product lines are offering similar experiences compared to the luxury brands, reducing the marginal propensity to buy.
Figure 3: Market shares of major players in the Luxury Fashion Market
(Source: Rovai., 2020)
Evaluation of the Overall Marketing Strategy of Burberry
Kotabe and Helsen., (2020) have defined marketing as a long-term game plan to achieve the goals of the company by understanding the customer needs and creating a distinct sustainable advantage. The goal of Burberry is to get the customers to purchase its products and enhance the brand image of its luxury British heritage brand. Initially, the brand targeted only female audiences with a high level of disposable income as its main focused product line was premium women's wear and accessories. Later the brand re-targets its audience of both sexes, with high disposable income. The brand targeted fashion inclined people from all the age group but the most directly focus age group is 19-39.
Analysis of the branding strategy, providing an insight into the positioning of the brand
Branding strategy is a crucial part of marketing strategy, which is used for creating a specific image for the brand in the minds of the present and potential customers and ensures the unique market positioning of the brand (Lalaounis., 2020). Burberry has been a British luxury fashion brand since 1856. The branding strategy of Burberry has effectively projected its USP of luxury and heritage British fashion and successfully positioned the brand in the mind of the customers as the British luxury fashion brand. Burberry is a historic brand, and the brand effectively uses its historical heritage to build a brand image. The iconic check and trench coat of the brand is a signature in the luxury fashion market, which never gets old-fashioned (Demangeot., 2021).
The branding activities of Burberry revolve around its positioning aspect of the British heritage luxury fashion. Under the branding strategy, Burberry highly focuses on the brand ambassador strategy. Brand Ambassadors play a vital role in creating the brand image among the targeted audience (Mandal., 2021). In the present digital age, communication between the brand and its targeted audience is significantly instant and personalised. The brand ambassadors act as the bridge between the brand and its target audience. They are crucial for creating trust, driving traffic and creating buzz. In simple terms, the brand uses the image and influence of the brand ambassadors to boost its image in the marketplace and connection with its customers. Under the brand ambassador strategy of Burberry, it singed sports and entertainment celebrities at the international and country level. The present brand ambassadors of Burberry are Cara Delevingne, a popular British actress; Marcus Rashford, the popular Manchester United football player, Heung-Min Son, a popular football player and Golden Boot winner of 2021-22. The brand effectively selects brand ambassadors who can complement the image of the brand and enhance its positioning as luxury heritage British fashion. Speaking regarding the partnership with Burberry, Heung-Min Son said, "As an athlete from Premiere League, it an honour for me be a partner which the brand rich in British heritage" (Forbes., 2022).
Image 1: Cara Delevingne as Burberry Brand Ambassador
(Source: Burberry Corporate Website., 2022)
Image 2: Heung-Min Son as Burberry Brand Ambassador
(Source: Burberry Corporate Website., 2022)
Image 3: Marcus Rashford as Burberry Brand Ambassador
(Source: Burberry Corporate Website., 2022)
The creatively designed marketing campaigns of Burberry are effectively integrated with its branding strategy. Gaustad et al (2019) have stated that brands which make an effort towards enhancing brand awareness and brand preference able to create long-term positioning within the market along with a sustainable competitive advantage. Burberry takes active participation in launching and running new campaigns and events both on the physical and digital platforms, which enable it to connect and engage with its audience. The Instagram campaign of Burberry partnering with its brand ambassador Marcus Rashford, "Voices of the Future'', was highly successful for the brand. The campaign was designed to encourage young people to speak their minds. Through this campaign, the brand made an effort to bring a positive change in the young culture and bring the communities together (Mandal., 2021). Such effort of the brand is highly effective in building a positive image of the brand along with creating positive brand awareness.
The pop-up store strategy is another crucial aspect of its branding and positioning strategy of Burberry. A pop-up store strategy is effective for connecting and engaging with the customers and informing them regarding the newly launched product and services. The trendsetting pop-up store of Burberry, using a kiosk-like rollout for introducing its products to the customers at specific locations, is proven highly effective in terms of boosting its brand awareness (Silvano., 2020).
Image 4: Burberry Store Display
Evaluation of the Present Marketing Mix (4Ps)
Product
Burberry's main product lines of business include clothing, cosmetics, fragrances, sunglasses, and accessories for men, women, and children. The luxury fashion brand's marketing mix includes all of these products as part of its product strategy. The greatest things for first-time buyers are accessories, which also have a longer shelf life than garments, which must be sold within four months or else go out of style. The market for soft accessories like scarves is expanding for the brand. Trench coats, the signature product of the bran, have a substantial market share (Guercini et al., 2020). Burberry also offers additional easy-to-sell accessories like purses that may be purchased without trying them on. Burberry has licensed its watch market to Fossil Group, which has a slowdown in its market share. In the industry of luxury fashion, the product line is required to be effectively differentiated. The brand effectively differentiates its products by integrating the British heritage. Under its product strategy, the brand gives specific attention to the brand's aesthetics and fashion style in the product design and manufacturing. Every product of the brand has its own story and demonstrates British heritage.
Based on the analysis, it can be said that Burberry has an effective product strategy. The brand approach of blending heritage with innovation enables it to make effective positioning in the international market.
Price
The price is the most direct determinant of demand. Being a heritage fashion brand, Burberry takes huge pride in its product-development culture. The brand significantly invests in research, product development, and prototyping in order to offer the best product for its customers. In order to value the quality and intrinsic value of its product range, the brand follows the premium pricing strategy (Rovai., 2020). The premium pricing strategy is also effective, as the Burberry products are made for the high-class elite zone. Burberry is one of the most expensive fashion retailers in the world.
In the luxury product industry, a premium pricing strategy is crucial. In this industry, the competitors never compete in terms of price; rather, the parameters of competition are product quality, branding and distribution. Due to the Veblen effect, the targeted elite segment of customers prefers to purchase higher-priced products as they simple judge the quality of the product with its price.
Place and distribution
In more than 50 countries with 421 stores, Burberry has a significant presence. The number of stores in the UK is 23. The majority of the businesses are situated in densely populated locations, which ensures a steady flow of customers for the business. Burberry's target market includes a sizable number of residents of these places. Thus, increasing profits through such cities are to be predicted (Huang and Kim, J., 2020). Additionally, the new Burberry stores offer more cutting-edge customer service and are more technologically driven. A considerable portion of traffic is made up of consumers buying online from burberry.com at the same time (Refer to figure 4). Since the bulk of Burberry's stores is owned directly, the company consistently achieves high levels of client satisfaction. Burberry doesn't lag behind in showcasing its clothing at stores and shops, although there aren't many of them. The distribution channel is quick and effective as a result. The Burberry online store offers the brand's whole product line for purchase. Though the technology-driven approach of the brand, its e-commerce sales hold only a small segment of its total through it has increased considerably after the Covid-19 pandemic. The shares of sales through the e-commerce channels have risen from 12% to 22% within the span of two years, 2019 to 2021. The brand aims to accelerate its online sales by 30% by 2025 (Burberry Corporate Website., 2022). In order to achieve this aim, the brand is required to extensively focus on improving and promoting its online distribution channel.
Figure 4: Website Performance of Burberry
(Source: Burberry Corporate Website., 2022)
Promotion
In the fashion industry, promotion is the most crucial aspect of keeping the brand trending in the fashion world. Burberry effectively uses the traditional as well as the digital mode of promotional channels (Vinerean., 2019). In the traditional channel, the brand places its advertisement in high-class magazines to target the fashion enthusiastic of the elite zone. Besides that, the brand also relied on outdoor, print and commercial advertisements. The brand has a significant presence on the social media platform and holds an effective communication strategy. The brand is consistent with its digital events and campaigns, which allow it to engage its targeted customer segment. The brand conducts frequent fashion shows and uses the tools like live streaming, short videos, and stories to make the audience engage with such activities. Besides that brand ambassador strategy of Burberry is effective. Burberry come-up with innovative promotional ideas, such as launching the TikTok brand filter. Such high-tech innovation in the field of marketing enables the brand to influence its customer base in a more positive manner. In July 2021, to mark the launch of Summer Monogram Capsule, Burberry released an interactive AR brand filter on the popular social media platform TikTok, which gets 4.5billion views (Burberry Corporate Website., 2022). So it can be said that Burberry has an effective promotional strategy, and it needed to keep this innovative approach to stay on the trending list of the digital media fashion world.
Recommendations for Further Improving the Marketing Strategy
From the entire evaluation of the marketing strategy of Burberry, it can be said that the brand has effectively positioned its British heritage through its innovation-led approach. In the present market scenario, technology is one of the most influencing factors creating immense opportunities in the field of the luxury fashion industry. Burberry is known for its technology-led innovation in every field of marketing, from product development to distribution to promotion (Antoniadis et al., 2019). The following recommendations are given to add value to the marketing strategy of Burberry to boost its performance to the next level.
Promotion of e-commerce segment
The brand is recommended to launch a campaign to boost its e-commerce sale in order to achieve its goal of enhancing its e-commerce sale by 30% by 2025. Burberry has a significant level of traffic on its website (refer to figure 4), but the online sales conversion rate is low. The brand is required to proactively boost its online sales through active promotion. The launch of a social media campaign is the best way for that. The launch of the social media campaign, 'order from Burberry' (#orderfromburberry), creatively engaging the brand ambassadors and the top fashion influencers of the UK is an effective way to boost online sales. Under this campaign, the brand will provide special offers on online shopping (through the website or Burberry mobile application) and also encourage the customer to share their online shopping experience with Burberry. Under this campaign, the brand also should focus on promoting the mobile application of Burberry, which enables the brand to offer the online customers a more personalised level of experience. In order to give the recommended campaign a success, one of the crucial aspects is to strengthen the online distribution segment of the brand. The boost of online shopping will require the brand to ship the product to the various remote locations all over the country, so the brand is required to build an effective product delivery network with an effective shipment tracking system. In order to boost online shopping, the brand is also required to provide the customer unique Burberry shopping experience in an effective manner.
Instagram Brand filters
Similar to TikTok filter, Burberry is recommended to develop an Instagram brand filter. Instagram is one of the most popular social media platforms and it is the hub of influencer marketing. For launching its upcoming collection, the release of an interactive AR brand filter on Instagram can allow the brand to create a new social median trend. In order to success for this strategic move, the brand required to integrate the influencer marketing. Burberry should involve the brand ambassadors in the promotion of the filter as a part of its new collection marketing strategy. For the initial stage it recommended that, the strategy implemented for the UK region. After tracking the performance, the initiative to worldwide execution of the strategy will be taken. Under this strategy, 100 top fashion influencers and fashion content creators of UK will be contracted, so the brand filter and the collection could gain its ultimate popularity. Burberry is known for its high-tech innovation for creating high impact experiences. The strategic move of launching Instagram brand filter will enable it boost its innovative approach and also it to lead its popularity further in the social media platforms.
Further incorporation of Big Data and AI to enhance the result of digital marketing and sales
Burberry has integrated AI and Big Data in its operation for booting its sales and level of customer satisfaction. Analysing the present scenario of continuous technological advancement, it is recommended to the brand that, it required to further up-grade its AI and Big Data applications for optimise the marketing results and in turn boosting the sales and customer experience. Presently, the brand utilise the AI and Big Data for providing the customers personalise recommendations based on the records of their past purchase or search history (Chang et al., 2021). Presently the brand is relied on the Big Data analytics technology like SAP HANA, which is significantly effective and lead a huge level of customer satisfaction by making effective personalised recommendation. But the technology is evolving at a significantly fast pace, the brand need to think the up-gradation of its new AI and Big Data technologies in the coming year, as it will be a big investment and required effective planning.
Conclusion
The role of marketing is continuously enhancing and reshaping in the modern day businesses. An effective marketing management strategy is crucial for every business to effectively control the complex set of marketing activities, so that it could effectively position itself in the highly competitive and dynamic market place. As a Marketing Director of the British Luxury fashion brand Burberry, this report has been carrier out to evaluate its marketing strategy considering the external business environment of the brand and the luxury fashion industry. For the success of any marketing strategy, the consideration of the external environmental factors is necessary as such factors have massive potential to influence the expected result of the marketing decisions. Though, the external environment factors are highly uncertain, the Burberry holds an efficient approach in its efficient and integrated marketing strategy. Burberry holds an efficient mix of the marketing elements. Under the product strategy, it ensures that every product offered by the brand hold the Burberry aesthetics. The premium pricing strategy contributes its positioning as a luxury fashion brand. The wide and effective distribution network including high-tech stores of the brad ensure its accessibility and high level of customer experience. Through the brand required to improve its e-commerce segment. The promotional strategy of Burberry is highly innovative and engaging and enables the brand to stay trending the fashion world. Based on the evaluation of the marketing strategy, as the Marketing Director of the brand, three recommendations have been provided considering short-term and long-term vision of the brand.
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