A Case Study Burberry

implications for the performance of the business if such a move is successful?

From the case study, it could be noted that Burberry desires to reposition itself in the luxury sector through extension of the prices while scaling back the sales to the lower-end wholesalers and retailers. Burberry further desired creating new luxury accessories as leather goods for the new high end customers. The added strategy of moving upscale seems to be similar to other designer brands. The simple understanding of an up-market revolves around goods and products said to be of high quality and target rich people (MINTEL 2018). The characteristics of an up-market are more desirable for exporters because of the high profits that they gain from the sale. In this case, positioning and repositioning remains relevant and important as far as Burberry is concered (Ren et al. 2017). Brand positioning is regarded as a significant element and a process considered by marketers as they determine the best means of communicating the attributes of the brand to the target customers based on the market needs.

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Positioning is relevant and important to Burberry’s mission of going up-market because it enables the marketer to establish target communication channels. This starts with determination of what the competitors are offering and how the business can reach out to the target audiences (Bussière et al. 2015). Positioning allows the marketer to learn and dictate significant characteristics that would tap into targeted market. Such characteristics include the price, the level of customer service linked to the product and quality. Perceptual maps are essential used to reflect the brand position and the suitability of the accompanying characteristics. On the other hand, adoption of repositioning means that the marketer is moving the brand or product to different places across the minds of the consumers (Zhechev 2016). Apparently, there must be reasons as to why Burberry has to reposition the product with reference to the current performance.

Burberry, while repositioning the products or brand, enjoys from addressing changes in terms of the consumer needs. This can be in terms of the lifestyles, tastes, and preferences within the luxurious market. Burberry can equally exploit a new market segment, evade strong competition, and improve the quality of the product, which can attract a fresh scale of consumers (Wirtz and Chung 2015). There are significant implications for performance in case the business successfully moves upmarket. First, Burberry would stand a chance of business growth because of the new customers. The luxurious market is not entirely driven by the forces of demand and supply (Bussière et al. 2015). However, it is driven by other factors including cultural, social, financial, and psychological factors. The market is further driven by the emotional perspective, which indicates a great potential of willing customers.

Burberry positioned itself as one of the players in the luxurious market. While Mulberry showed a better performance, the market almost went flat compelling the company to re-strategize while appealing to the market. As Burberry wishes to change tact, the market conditions seemed favourable with the significant reception of the Bridle and Buckle bags despite the full-price sales. This means that the company is moving from a mass market to an exclusive market while targeting high prices (MINTEL 2018). With the new intend of extending the price and scaling back the sales, it remains evident that Burberry is more interesting in the quality of the brand rather than the extent of the market or size of the market it would attract at the end of the day. While Coach is still struggling with challenges of moving up-market, players such as LVMH Celine, Mulberry, and Givenchy have already shown the interest of moving the products into a more luxurious market where price is not a determinant factor of demand (Straker and Wrigley 2016).

The position map for Burberry, therefore, attracts two major characteristics. First, the company wants to serve an exclusive market characterized by rich people. The latter are found in exclusive zones and may comprise of the celebrities, business people, and other high profile people who like it when it is expensive. On the other hand, Burberry focuses on high prices. Such high prices may not appeal to competitive markets where forces of demand and supply remain influential. Gucci and Primark area also other companies that can appear on the Burberry’s positioning map (MINTEL 2018). Gucci has reworked on its aesthetic and removed discounts, which means that it equally upholds high prices. However, Gucci seemingly attracted the young customers who must have shown interest in fashion and the new styles. Youths form part of the massive market. Primark, on the other hand, provides trendy brands at relatively low prices. Consumers are attracted to bulky purchases because of the friendly prices, which are more reasonable when compared to the bar set by Gucci and Burberry. The positioning map shows the position of Burberry, Gucci, and Primark based on their possible performance in the market.

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Two methods give companies a chance to reposition in the market. The first method is by increasing the actual value, which includes enhancing the quality of the products and services. The brand repositioning strategy involves value addition that attracts large investments while lead to substantial long-term growth thereby outweighing the investment (Cassia et al. 2015). Some of the strategies engaged in boosting the actual value include redesigning the premium features, sourcing quality materials, and delivering quality service among other things. Technology and fashion companies, like Burberry, are commonly known for value addition via premium rebranding, rapid innovation and evolution at the same time. In essence, a company like Burberry can equally enhance value through partnerships where investments are huge. In other circumstances, Burberry can still rework on the quality of the products before releasing them to the market (Chironi et al. 2017). The second method is through the perceived value, which is normally one of the most popular strategies deployed by businesses. This method for repositioning is more advantageous in terms of reduced on-going capital investment as well as upfront loading. The rebranding strategy used in this case targets convincing customer perception with the purposes of creating a different image of the product. Some of the methods engaged under perceived value include changes in the brand names, product repackaging, shift in brand messaging, brand association and affiliation (Cassia et al. 2015). When using this strategy, Burberry stands a better chance of reaping more profits compared to the actual value.

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References

  • Ren, L., Chen, P.J., Zhao, J. and Wang, P., 2017. The reverse model of repositioning: A case study of the Howard Johnson hotel chain in China. Journal of Global Scholars of Marketing Science, 27(4), pp.227-242.
  • Zhechev, V., 2016. Integrated marketing communications of hotel chains. The Routledge Handbook of Hotel Chain Management, p.274.
  • MINTEL. 2018. MINTEL fashion accessories report – UK. Excerpt.
  • Wirtz, J. and Chung, L.M., 2015. Singapore: Macro Trends and their Implications for Consumer Marketing. In Proceedings of the 1997 World Marketing Congress (pp. 441-443). Springer, Cham.
  • Bussière, M., Hoerova, M. and Klaus, B., 2015. Commonality in hedge fund returns: Driving factors and implications. Journal of Banking & Finance, 54, pp.266-280.
  • Straker, K. and Wrigley, C., 2016. Emotionally engaging customers in the digital age: the case study of “Burberry love”. Journal of Fashion Marketing and Management, 20(3), pp.276-299.
  • Cassia, F., Ugolini, M.M., Cobelli, N. and Gill, L., 2015. Service-based vs. goods-based positioning of the product concept: effects on customer perceived value. The TQM Journal, 27(2), pp.247-255.
  • Chironi, S., Bacarella, S., Altamore, L., Columba, P. and Ingrassia, M., 2017. Study of product repositioning for the Marsala Vergine DOC wine. International Journal of Entrepreneurship and Small Business, 32(1-2), pp.118-138.

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