We have decided to study Chanel for our university case study because it is an internationally well-known brand; one of the most famous and notorious in the luxury industry.
Today Chanel belongs to the Wertheimer brothers who are the grandchildren of one of Coco's associates. The company was created by Gabrielle Chanel in 1909. The Wertheimer brothers, whose fortune, worth 3, 5 billion Euros (year 2009), is the 10th largest in all of France, have placed all their capital in Switzerland.
In this document, we are going to answer the following question:
How has Chanel managed to remain the mystical brand of choice?
We have established the following plan, to present the company, its history, 4 P's and SWOT analysis, so that we can explain the existing strategies of the brand. Also, we will propose recommendations for Chanel to keep its position of leadership on the luxury market.
[...] After her return from Switzerland, Coco Chanel found a France passionate about the "New Look" of Christian Dior, a fashion contrary to the feminine sobriety that Mademoiselle had known how to reflect. Aged 71, Gabrielle was back under the spotlights. In 1954, the Fashion house of Cambon Street reopened, and a new collection was born. Critics were harsh, but Chanel was back in spite of them. 1955-1970: the total look Chanel From the end of the 50s, the codes of Chanel house were refined. [...]
[...] Place Chanel should continue to develop its distribution strategy which is selective. The brand shouldn't sell its products on the World Wide Web, in order to maintain its exclusive service. The company should keep in mind that its selective strategy does not set a wrong example. Too much selectivity of the points of sale could be harmful facing a growth of uncertain markets. Chanel must develop its presence in Asia and mostly in China, which is a rapidly expanding country, that appreciates luxury products, and also Russia, the Middle East and especially Brazil where is a dearth of opportunity. [...]
[...] The design was inspired by both the cover of Chanel n.5, and and the shape pf the Place Vandôme's. Nowdays Chanel presents new collections of mens and ladies watches every year. II. Place Chanel owns over 200 boutiques all over the world. It is well represented in Europe, Asia, Noth and South America, Australia etc. Also, the brand can be found in department stores, malls and duty free shops. The latest event was the opening of the flagship store of Chanel in Shanghai, in December 2009. [...]
[...] At the dawn of 100 years of existence, Chanel has never been in such good condition. THE 4 Ps I. Product The Company's annual revenue is estimated at - 2 billions Euros. La Haute Couture: Chanel Haute Couture is well known for its quality and attention to every little detail. The Chanel fashion show is the event not to miss during the Fashion Week in Paris. Below: Chanel Haute Couture show for Paris Fashion Week spring/summer 2010. Ready-to-wear: The famous Chanel Little Black Dress: Coco Chanel designed the first real `Little Black Dress' in the 1920s, and we can say with certainty, that this event caused quite a revolution in the world of women's fashion years later, it's still young, stylish and fashionable as ever. [...]
[...] Swot analysis Strengths -At a price level: -Price is in line with the image that Chanel wants to transmit -Some prices are not too high and are accessible: customers' width -At a product level: -Chanel follows the market trends and adapts itself to the demand -Modern products and conservative products -Permanent innovation -Numerous mystical and cult products -Clothes are comfortable and practical while being luxurious -Good quality of raw materials and products Men clothes market which is not negligible diversified and wide range of products -Possibility of personalizing the clothes -Innovative segments (skis, under wears) -Creation of limited collections: customer loyalty -Annual Price of the “Perfume of the year” to Coco Mademoiselle in 2002 -Important efforts in packaging -At a distribution level -Chanel doesn't sell its products on the Internet to avoid image deterioration: selective distribution -International distribution -Chanel owns its shops, and selects the sellers -At a communication level: -Important budget for important campaigns -Use of celebrities -Knows how to use the Media and be valued by them -The Karl LAGARFELD presence in a large section of the Media -Theatrical fashion shows -The Chanel website: www.chanel.com -Chanel doesn't want to promote its image through other sites -Chanel promotes its image during important events Nijinsky Awards) -Innovative advert (Chanel awarded by the UDA (Union des Annonceurs) in 2002 -Adverts produced and created by famous people Luc Besson, Jean Paul Goude) -The Gabrielle CHASNEL image is still used today and is not old-fashioned -Chanel appears on professional events jewelry forums etc.) Weaknesses -Price: -High prices: customer segmentation -Product: -Few fragrances sold in Japan -Recent markets such as the Ski market -Absence of a product range adapted to African skin -Distribution: -There is no possibility of buying on the net, as the brand does not have a commercial site -Communication: -The image of Chanel sometimes appears as and “distant” Opportunities -Technologic environment: -Use of innovative and new raw materials and products -Economic environment: -Recovery can be fast and easy -Market: -The luxury market is the second more important in the world. [...]
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