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Chanel global strategy: Mix marketing

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  1. Introduction
  2. Chanel's Global Strategy
    1. Chanel towards competitors
    2. The company's global strategy spread
  3. Global Product Strategy
    1. Global product design issues
    2. New product development and launch
    3. Managing products and brands across borders
  4. Global Pricing Strategy
    1. The main pricing strategy
    2. High prices for high levels of quality
  5. Global Distribution Strategy
    1. Factors which influence channel decisions
    2. Selective sales distribution
    3. Global retailers over the countries
    4. Short channel length
    5. Strategy framework
  6. Global Advertising Strategy
    1. Advertising (local, national and global)
    2. Global advertising
    3. Public relations
    4. Personal selling
  7. Conclusion

The Chanel fashion house, more commonly known as Chanel, is a French fashion house founded by Gabrielle Chanel (1883-1971) called "Coco Chanel". At a time when many famous and luxury fashion houses were created, Chanel has maintained its independence. Since 1924, Chanel has belonged to Wertheimer Brothers, a family business.

Between private capital and continuous innovation, Chanel has created a unique business model. Since 1983, Karl Lagerfeld has held the position of artistic director of Chanel Fashion House. Chanel follows a global brand strategy, since it sells all its products under one name. The advantage of this strategy is to give the reputation of a brand to all its products.

Nowadays, Chanel is a worldwide reference in the domain of perfumes. The company originally introduced its range in developed countries with populations enjoying high purchasing power, which is only logical regarding the brand's luxury reputation and its prestigious history. Chanel now has to face the growing globalization phenomenon, which forces the company to settle in new markets and expand its reputation towards tough competitors.

[...] Prices charged are the same in all shops for the simple reason that Chanel France selects its retailers and decides the price of all products. It is clear that in order to maintain the image of a top-quality luxurious product, Chanel must offer its products at top-scale prices. This describes clearly the strategy of "more for more?. A Chanel product is not likely to be found discounted or available as a special offer as this would not be consistent with the image at all. [...]

[...] Sales distribution in Canada (20 points of sale in Toronto) Perfumes are sold in Chanel boutiques, but also in some Canadian distributors such as The Bay, Luwinna Fashion & Cosmetics, and Sears (which are all fragrance, makeup and skincare distributors) Marketing channel length Chanel uses a short channel : Distributors such as Marionnaud, and the Chanel store Strategy framework In every country it operates in, Chanel has signed a franchise with local renowned distributors (sephora, Marionnaud) but has also established local Chanel stores. [...]

[...] Global retailers over the countries In 1985, the group counted 250 persons for five Chanel shops. Today, the number of employees has gone up to 1800 with over 200 Chanel point of sales in the world. The group has five dispatching nerve centers across the globe, to manage its international expansion as effectively as possible. Chanel's market reveals important disparities: - New zones of consumption (Asia except Japan, the Eastern Europe, and Latin America) increase the growth of the market. [...]

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