Created during the reign of Louis XIV in the seventeenth century, the luxury industry has grown over the years. Under the leadership of the Sun King and his minister Jean Baptiste Colbert, the best artists and craftsmen of Paris were assembled to produce premium quality goods. Over the decades, French companies have been able to exploit this heritage dating back several centuries to emerge as one of the most renowned luxury economies.
The concept of brands have been around for a long time, as they originated with early trade and were primarily used to authenticate the origin of products.The rise of brands coincides with the development of mass markets and marketing campaigns in the first half of the 20th century in the United States, and from the 1950s in France.
Chanel, founded by Gabrielle Chanel aka "Coco Chanel" in 1909, is a French couture house specializing in luxury goods including ready-to-wear clothing, perfumery, cosmetics and handbags. Following Coco's death in 1971, German designer Karl Lagerfeld, who had been working with fashion house Chloe, took over as chief designer of Chanel in 1983.
The luxury market is a competitive industry, where large groups like LVMH and Gucci have dedicated fan bases and hold major market shares. To avoid a fate similar to that of French designer house Christian Lacroix, owned by the Falic Group, a duty free retailer, which went bust partly due to the economic downturn as well as consumer reluctance to splurge on luxury goods, it is important to remain competitive. We can therefore ask ourselves the following question:
How will Chanel ensure its growth in the highly competitive luxury market?
We will address an internal as well as external analysis of the French luxury market to arrive at a suitable solution for this question. Subsequently, we will examine the branding used by Chanel and the ensuing publicity. Finally, we will issue some recommendations that will enable it to remain competitive.
Since its inception, Chanel has enjoyed immense commercial success and has seen its customer base grow exponentially. However, other fashion houses have sprung up over the years, each claiming their own signature styles and defending their values. Within such a competitive sector, Chanel must learn to differentiate itself to stand apart from the crowd. We will highlight the threats and opportunities of the luxury market by conducting an external analysis, following which, we will discuss the strengths and weaknesses of the house.
After analyzing various factors, we can say that the luxury market represents various threats and opportunities. Companies already active in this sector must be cautious to adapt and remain sustainable in this highly competitive market.
In fact, it is a market where stiff competition is posed large groups and family businesses that realize substantial profits by their financial means and know-how. Faced with these well-established couture houses, the small companies find themselves with less financial clout and less brand presence. New designers are also emerging, and choose to position themselves in niches so that they are not overshadowed by big businesses and can develop more independently.
Tags: Chanel's strategy, luxury goods market, haute couture
[...] Psychoanalysts perceive it as a way of "warning young girls against the young wolves" in the figurative sense.However, in the Chanel advertisement, the wolf that tradition stigmatized as an evil and dangerous animal, finds itself relegated to a mere pet. Is this a way of telling women that they possess the power? A video reminding us of the prejudices we all carry? Sensuality, elegance and glamor are marked here in the figure of the Little Red Riding Hood, the naïve young girl turned into the tamer of wild animals. [...]
[...] The originality of the style of the Chanel brand since its creation can be rightly perceived as the cornerstone of the company's success. A widely acclaimed and recognized company in the luxury sector, it continues to offer products that contribute to its strong reputation. In order to make some of its products accessible to a wider consumer base, Chanel offers accessories including watches, jewelry, perfumes and cosmetics. Thus, the company can transcend the elite segment it normally caters to and can gratify a different class of people eager to "adopt the French elegance." Unlike other companies in the luxury market, Chanel was able to differentiate itself in its approach to communicating its products. [...]
[...] The communication strategy adopted by Chanel features the convergence of the artistic elements of the designer products and the world of cinema. The dissemination of a perfume product, or rather its marketing may seem very difficult in the sense that one can not feel its fragrance through a television screen or an image. This is where the artistic element of Chanel comes into play: create a scene, a story, breathe life to a character or rather the "muse" that allows customers to visualize the product in an effective way. [...]
[...] Branding is the development of a business strategy focused primarily on the brand; branding exists in various forms. Multi-brand strategies help position each of the brand's product on the market. As an example, one can cite the Procter & Gamble group, which appears in various categories, from “Pampers” (baby care), Delicate” (detergents) or “Pantene” (hair care). While the advantage of such a strategy is the brand's presence in all market segments, the company incurs massive expenses, both in terms of distribution and communication. [...]
[...] Competition Presence of large groups, which purchase several brands and invest in each of them to satisfy the customer more effectively, claiming their expertise and manipulating "Made in France" image. Presence of family business: solid investments that allow them to expand internationally. Presence of small firms, which operate on smaller funds and are more difficult to acquire by large groups.Consumers may not be aware of the presence of such small brands as they lack the means to advertise. Presence of new creators established on highly profitable niche segments. [...]
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