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 Advantages of campaigns The advantage of the international campaigns of Chanel in relation to these fragrances is that it's easy to convince customers to buy (mainly cosmetics): because of the celebrities who represent a kind of guarantee, and the aura of the French-style luxury. Chanel does not try to reduce the costs; Chanel tries to develop the loyalty of the clientele. Chanel sells quality and the communication reflects the effects of it: purity, lightness, sexuality, and French-style dandy spirit. [...]
[...] II) Product management issues for Chanel worldwide Global product design issues Nowadays, Chanel is a worldwide reference concerning perfumes. The company has introduced its range into developed countries with populations having high purchasing power, which should be logical regarding the brand's luxury reputation and its prestigious history. Chanel has had to face the growing globalization phenomenon, which forces the company to settle in new markets and to expand its reputation towards tough competitors. However, Chanel needs to keep its reputation by imposing its range to each new market that has been chosen. [...]
[...] Managing products and brands across borders Today, Chanel is reviewing its whole marketing strategy, especially in the context of globalization. It is now easier for people who have less purchasing power than the traditional Chanel consumers to buy these luxury products. So to deal with this trend, Chanel has chosen vertical extension in order to become closer to their new clients. By down marketing its range, the company is offering products with less prestige to the middle class, but that still bear the famous logo. [...]
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