Table of Contents
An opening
Environmental Analysis
Governmental
Finances
Interaction
Tech-related
Environmental
Within the law
The concept of branding and its importance in the marketplace.
Resonance:
Feelings:
Judgement:
Imagery:
Performance:
Salience:
Vibration
Verdict
Emotions
Execution
Visual representation
Salience
Competitive Branding Strategy
Upcoming Fashions
In conclusion
Sources
This is the beginning
Luxury is different than necessities. Needs are not essentials, they’re just desirable. The society determines exclusivity, and upper-classes are the ones who decide on desirability. Global luxury is still growing. Mintel reports that luxury goods sales in the international market increased to 299 trillion in 2018, with a 4.3% increase in 2019. Gucci increased its sales by 1.3 billion over 2018. Its revenue grew 16.2% to 9 628.4 Million in 2019. Branding is a tool used by marketers to create and enhance brands. A brand is usually a name or symbol that the consumer can quickly recognize. Gucci’s logo is the double “G” and is very popular among consumers. This report uses the PESTLE brand resonance and PESTLE branding model to critically evaluate Gucci’s China marketing strategy.
Environmental AnalysisPolitical
China has an environment that is stable.
China is a country with little political freedom.
China is an important destination for Foreign Direct Investment (FDI).
The Chinese government supports e-commerce development strongly.
Economical
China is a second-largest economy in the entire world.
China is the largest consumer market in the world.
The gap between rich and poor is wide.
Chinese Government reduces standard corporate tax rate
Interaction
China is home to the largest population in the world, with a population of 1.438 billion.
China’s focus is on eliminating poverty.
The population is ageing.
China has an individual culture.
Technologic
China has around 840 Million online users, the largest population on the planet.
China focuses on science and technology development.
Taobao has been a major e-commerce website for many years, with sales totaling about 3.1 trillion Yuan.
Environmental
Water and Air Pollution
Wasted Resources
Deforestation
Climate Change
Lawful
The import tariff law has been amended.
The regulations of “Daigou”, a type of transaction that can be seen as an exchange between Chinese consumers and shoppers from abroad, are becoming increasingly strict.
Gucci has a reputation for high-end products that are fashionable and of excellent quality, at a price that is not cheap. These luxury items represent Italian craftsmanship. In order to position itself in the Chinese marketplace, it employs a selective strategy that targets a select group of clients. Gucci engages in positive campaigns around the world, and interacts closely with its customers to gain competitive advantage. Kapferer said that social, cultural and economic changes have made it hard to define luxury brands. When a brand’s image is weak, for example, it won’t be considered a luxury brand. Ko, Costello, Taylor and others propose that luxury brands are branded products or services with high quality and premium prices, plus added value. They also suggest that they have a positive image with consumers and an enduring resonance. This five-point list is also what makes up a premium brand.
Resonance:
Brand awareness
Brand loyalty
Feelings:
Status symbols
Confidence, pride and confidence
Judgement:
Premium price
Be worthy
Imagery:
In black-and-white
Keep it short and simple
Performance:
High Quality
Be durable
Salience:
Luxury Brand
High Recall Rate
Brand recognition
ResonanceGucci – a luxury label that is well known in the industry, has long been present. As long as the symbol is visible, the brand can be recognized.
Many consumers cannot afford to purchase luxury goods at such high prices. Gucci products are only purchased by those who have the money and desire luxury. Gucci’s products can be easily identified as they are a sign of luxury.
FeelingsGenerally, owning luxury products like handbags and clothes will make people feel more confident. Owning a more expensive luxury item is equated to a better social standing. Most people think this way.
PerformanceThe Gucci trademark ensures that customers are assured of the high-quality products and after-sales services. Online shopping allows people to buy products and test them at home.
ImageryThe Gucci brand logo demonstrates the elegance and simplicity of its designs. The interlaced, curved letters are perfect for the modern style. The logo reflects the rich history of the brand as well as its high-quality craftsmanship.
SalienceGucci enjoys a high recall rate and is well-known in the luxury fashion industry.
Competitive Branding StrategyGucci positions the brand as luxury and its product as refined workmanship, leading fashion. The brand has a high equity due to its strong association with the brand and favorable public opinion. Brand equity is the value added that results from products and services with a brand. Consumers’ perceptions could reflect brand equity. A brand’s competitive advantage makes it a vital element.
Gucci’s marketing strategy has focused on making its brand more accessible through social media platforms. It collaborates with bloggers via Facebook, Instagram, YouTube to promote its new collections. Gucci also has an app that allows you to view the collection and catwalk shows.
Social media platforms such as Instagram or Weibo can be used to further boost brand equity by maintaining the close relationship between brand history and contemporary design.
Future TrendYoung consumers are becoming more influential, and they will be the main engine for the next few years. The luxury market is boosted by young people. According to a report, millennials born between 1980-2000 accounted for 62% of Gucci sales in 2018. In this digital age millennials have a greater tendency to use their phones to make purchases online. This has led to changes in the ways that sustainability, personalization, and digitalization are approached.
Digitalization helps and supports the development of new business model, allowing for social media rentals through subscription models. Internet can be used as a tool to help share models flourish, and consumers will engage with luxury brands more. They would release small numbers of limited editions as part of their marketing strategy to create a feeling of exclusivity. Supreme is an example of a fashion industry case. Supreme, a brand from the United States that sells clothing and skateboards. Supreme releases a new collection each week, and posts photos on social media such as Instagram three days in advance. This gives customers time to choose their favorites and also draws attention from the public. Online or offline, customers can buy items. Gucci can use this technique when releasing certain collections or participating in festivals. Social media has a huge influence on retailing, especially with the trend of digitalization.
Digitalization is considered as a support to the Chinese Market in order to develop physical stores. It also helps brands who do not have physical sales. It improves delivery efficiency, while also improving customer service. Retailers can focus on micro segmentation. Online shopping cannot provide the same experience as physical stores. Online fit and sizing technologies continue to improve as e-commerce increases. This is due to the use of 3D visualizations, which reduces online returns. Gucci’s App already uses this technology, which allows consumers to try products on via their phones. However, some items such as sunglasses, lipsticks, hats and sneakers cannot be tried. Gucci needs to improve its official website and App.
ConclusionIn conclusion, Gucci is superior to its competitors in China and has a close relationship with its customers. This was achieved by adopting a promotion strategy that built its brand equity. Gucci could improve its app and online marketing strategy for future development.
Citing
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Business Wire recently released a statement stating that they have updated their services.
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