Burberry Fashion Industry

Topics: Branding, Brand, Brand management Pages: 14 (4211 words) Published: February 27, 2012
World Leading Fashion Brands
Burberry, Louis Vuitton, Gucci, Prada, Calvin Klein, Christian Dior, Chloe, Emporio Armani, Ferragamo & (Appendix 4) are some of the numerous global luxury brands. They all have experienced abundance in sales growth and margin profits within the last decades, but they almost shutter in between world financial crisis (2008 up to date). They even see themselves included in several financial products such mutual funds, ETFs or be part of financial Indices (Appendix 2). Economists strongly propose that when it comes to long term investments we all should distribute our investment portfolio in a way that will consist to a certain extent from luxury brands. They claim that since customers’ income has the tendency to increase long term, luxury goods value will raise as sales increase. Consumers buy more luxury goods today than before for either emulating richest lifestyles or based in some hedonic grounds (Truong et al. 2008). Prior economic downturn luxury market had grown 8% per annum (Passariello et al. 2009). In 2009 fashion world experienced a 9% decrease. The global luxury sector is estimated to be an approximately 150bn to 200bn market (Table 1). Table 1 Global Luxury Sector Retail Value

Source: Burberry (2010)

Burberry’s Roots & Structure
Thomas Burberry

Thomas Burberry a 21 year old draper’s apprentice, in 1856 opened up a small shop in Basingstoke Hampshire in England introducing his first outwear garments for sports. Burberry was the original name and it meant to bond it with its trademark gabardine which embodied total British elegance and lifestyle. Later on (1924), the Burberry check was introduced as a lining to its trench coat before immortalized by Peter Sellers in The Pink Panther. Burberry also accompanied adventurers producing special garments for aviators and expitiditionists. Nowadays, Burberry operates in international luxury business for which, designs, sources, manufactures and distributes high-quality apparel (outerwear is a clear authority in this category), for women, men, children and non apparel fashion products. Its global distribution network includes licensing agreements particularly in Japan (Burberry 2011). Geographically, Burberry is predominantly a European based company (44% of sales), 27% of sales take place in US and 24 % in Asia (Table 2). Income turnover stems also from Japanese Licensing. Licensing agreements’ revenue in 2010 counted 8% of total revenues. During financial crisis experienced a slower pace in sales growth but even in 2010 he managed to end up with a slight increase of 1% (Table 3) which in comparison to its competitors is quite satisfactory (Burberry 2010).

Table 2 Geographic Sales Distribution at 2009

Source: Burberry (2010)

Table 3 Revenue Growth per annum

Source: Burberry (2010)

Its products are distributed under all possible channels, retail and wholesale. Specifically in 2010 Burberry was accountable for 131 stores, 262 concessions within department stores and 47 outlets supplemented by digital commerce in more than 27 countries (Burberry 2010). Franchisees operate 97 stores mostly located in emerging markets. Retail holds 58% of total income (Table 4). Table 4 Revenue by Channel

Source: Burberry (2011)

What is the Role of Multiple Branding?
Multiple Brands are the in core of Burberry operations. They all created for succeeding multiple connections; certain characteristics, for certain customers. This idea delivers basic goal, for obtaining new customers while retaining old. For example Burberry London is the core product line. Thomas Burberry is similar in its purpose of diversification but is offered in Spain & Portugal (Table 5).

Table 5 Multiple Brands & Segmentation
Multiple Brands| Segmentation|
Burberry London| Core Product Line Associated with the Trench| Burberry Brit| Fragrance Association/Casual Women’s & Men’s apparel line| Burberry Prorsum| luxury...

References: 1. Aaker, D. A. and Keller K. (1990), “Consumer Evaluations of Brand Extensions”, Journal of Marketing, 54 (January), 27-41
3. DeBono, E. and Kenneth G. (1987), “Investigating the Social Adjustive and Value Expressive Functions of Attitudes: Implications for Persuasion Processes”, Journal of Personality and Social Psychology, 52(2)
5. EBSCOhost, 2009. Why Do Consumers Buy Counterfeit Luxury Brands? Available from: http://web.ebscohost.com(Accessed 12 April 2011)
9. Fashion Industry Network, 2009. Luxury brands & building social networks. Available from:www.fashionindustrynetwork.com/profiles/blogs/luxury-brands-and-building Accessed 14 April 2011
11. Financial Times, 2010. Burberry looks to win over friends online. Available from: http://www.ft.com/home/europe (Accessed 12 April 2011)
13. Nielsen, 2008. Consumers and designers brands, a global Nielsen report. Available from: http://id.nielsen.com/news/documents/GlobalNielsenLuxuryBrandsMay08.pdf (Accessed 13 April 2011)
15. Red Luxury, 2010. Coach, Gucci, Juicy, Burberry have lion share of luxury web visits Available from: http://red-luxury.com/2010/10/27/coach-gucci-juicy-burberry-have-lion-share-of-luxury-web-visits/ (Accessed 12 April 2011)
17. Slideshare, 2009. Deeper luxury report. Available from: http://www.slideshare.net/Claudiodiniz/deeperluxuryreport-1500091
19. Solomon, M., Charbonneau, J., Hughes, A., Chitty, B., Marshall, G., and Stuart, E. (2009) Marketing Real People, Real Choices. Pearson: New Zealand
21. Truong, Y., Simmons, G., McColl, R. and Kitchen P.J. (2008), “New Luxury Brands: Between Status and Conspicuousness”, Journal of Strategic Marketing, Summer/ Fall ed., 16(3): 189-203
23. Vigneron, F., and Johnson, L. W. (2004), “Measuring Perceptions of Brand Luxury”, Journal of Brand Management, 11(6), 484-506
25. WWF, 2009. Deeper luxury. Available from:www.wwf.org.uk/deeperluxury ( Accessed 12 April 2011)
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