Burberry case assignment question

Q1. Compare Burberry’s market position relative to that of its competitors,

including Coach, Armani, and Gucci. Is Burberry’s competitive position
sustainable over the long-term? Why or why not?

Burberry has positioned its brand in the minds of consumers to be “functional luxury.” Their
products fall into one of two main categories: fashion or continuity. Burberry also has three
primary collections: womenswear, menswear, and accessories. With so many different
products offered in different collection and the fashion vs. continuity of Burberry products
the product mix is very great. This contributes to the positioning of the Burberry brand.
Burberry has received awards for the Contemporary Design Collection of the Year and the
Classic Design Collection of the Year. Therefore, the market positioning for Burberry can
appeal to the hip 25-year-old man or 65-year-old man. However, many Burberry ads feature
younger models. Burberry is targeted towards many different segments of the population
with one common theme, functional luxury. Burberry has many competitors that include:
Coach, Polo, Armani, and Gucci. Relative to that of Burberry’s competitors, they have
positioned themselves very well in the minds of consumers. Coach primary positioning is on
handbags. While Coach also carries other accessories including from watches and shoes to
scarves and dog collars, Coach remains primarily in the accessory end of fashion. Coach is
just simply more affordable and more accessible to the general population.
Polo’s marketing is more towards clothing. The Polo brand has great brand loyalty and is
very well established in the minds of consumers. Armani, another competitor or Burberry,
While Armani really only focuses on apparel the brand still maintains a strong luxury
position in the market. Gucci also placed in the luxury goods. Gucci’s marketing position is
towards luxury accessories having highest priced brand for accessories. Coach and Gucci
focus more on accessories and Armani and Polo focus more on the apparel market, Burberry
has succeeded in both the accessory and apparel market as a luxury good. Burberry has also
succeeded is positing itself between brands such as Polo Ralph Lauren and Armani in
apparel, and between Coach and Gucci in accessories.

Q2. Because demand tends to be unpredictable in the world of fashion, the

fashion business is inherently risky. In this context, consider the various
changes Bravo made upon her arrival at Burberry. To what extent have
these changes aggravated or mitigated Burberry’s risk planning?
Bravo’s goal was to transform Burberry a tired outerwear manufacturer into a luxury
lifestyle brand that was inspirational, stylish and innovative. She began by bringing in a top
management team made up of A-‐list industry talent who succeed in retail environment,
people who knew what customers wanted, what price point people wanted, where the gaps
were.
 Change of company’s name from Burberry’s to Burberry. A number of strategic decisions
Bravo made are repositioning the brand, updating the product line, expanding the brand
portfolio, advertising, increasing the popularity of the brand among non-‐target consumers.

She extends the market from older age group to both older age group and younger age
group. She establishes designs both with the role of check and various designs without it.
She updated the product line by slashing the number of product-‐stock-‐keeping units from
100,000 to 24,000 to eliminate outdated designs and pave the way for a consistent look
across products. Bravo hire a new design team and redesign traditional products and
extend new range of products. Burberry now had three primary collections: menswear,
womenswear and accessories.
Prices have been raised to reflect the brand’s new positioning; gross margins were now
56% compared with 47% in 2000. Net profits may not be as high because of renovation
and human capital. Bravo have raised the price that is good enough for company to cover
the expenses of renovation, hire of human capital, hire of redesigning, but not as high that
would deviate pool of customers from switching to other brands like Coach and Gucci.

Q3. The case notes that Bravo’s team has managed to elevate the overall
status of the Burberry brand. How has it managed to accomplish this?
Bravo’s goal was to transform Burberry a tired outerwear manufacturer into a luxury
lifestyle brand that was inspirational, stylish and innovative..”

she repositioned the brand. Her goal was not only to attract the younger customers but also
to retain the core customer base. Bravo found out a niche between labels such as Polo
Ralph Lauren and Giorgio Armani in apparels, and between Coach and Gucci in
accessories.
she updated the product line. She eliminated the outdated designs and pave the way for
consistent look across products. Bravo also hired a new design team to redesign Burberry’s
traditional products and to extend the Burberry image to a range of new products. All
products were now classified as continuity or fashion-‐oriented. Burberry now had three
primary collections: womenswear, menswear and accessories. Some immediate changes
made to Burberry to help accomplish this and elevate the overall status were cosmetic. This
included changing the company’s name from Burberry’s to Burberry and introducing a
contemporary new logo and packaging, attracting younger customers.
She expanded the Brand Portfolio. She introduced Burberry Prorsum. The main core label
is Burberry London. Prorsum is a label used by Bravo team to Burberry products with
luxury market. Prorsum collections were hand-‐tailored.

She advertised using professional famous models and photographers. Bravo and her team
had hired a famed team that included photographer Mario Testino, whose work had
appeared in Vogue, the Face, the Vanity Fair, and creative director Fabien Baron and
advertising agent David Lipman. The trio was given a £10 million advertising budget to
produce a new advertising campaign.

Q4. Should Burberry be aggressively transitioning to a more

restrained use of the check? What effect will this decision have on the
long-term sustainability of the brand?
The Burberry check has been used for one hundred and fifty years now, from the
lining of its very first garment to the current garments on the shelves now. Burberry
has gone through many changes, especially in the past ten years, to transform itself
into a luxury lifestyle brand that is stylish and innovative, but at the same time
traditional. Throughout these style transformations, the check has remained prevalent.
Because of the continuous years the check has been used, it has become increasingly
distinguishable for one of any demographic. Elderly men that know it from coat
linings to young teenage girls that wear the perfume and want the handbags recognize
the check. Burberry should take advantage of using the check on its merchandise
when two very different people can relate to the brand and both have a positive
opinion of Burberry displaying luxury.
The above are all factors that will contribute to the lasting power of Burberry as a
luxury brand. We feel that there is no reason to cut back on the use of the check for
these reasons. Until the check displays a continuous decrease in sales, Burberry
should not restrain the use of their check. With continued use of the check we think
that it will only increase the likelihood of Burberry’s long-term sustainability because
they are keeping their brand known. For example, if customers are walking by and see
the Burberry check on a perfume bottle, they have recognized the brand, therefore
having a reminder that Burberry is there.

Q5. Describe Burberry’s customer base. Who is Burberry’s target

customer? How could Burberry’s popularity among non-target
customers affect the brand? How should Burberry respond to this
popularity?
Originally in 1856 the brand started by Thomas Burberry opening a draper’s shop in
England. There he created gabardine, which is a fabric that waterproof and breathable.
This created the customer base of anyone who ventured out into extreme conditions.
Burberry’s trench coat was the official coat of the British Army in World War I,
which went along with the previously stated customer base.
In the 1920s and 30s, Burberry check pattern was introduced as lining but soon
became the signature trademark. This changed the customer base into politicians,
celebrities and famous adventurers. Burberry’s designs and quality were even
favoured among the British royalty, which created the luxury image for the brand and
opened it into upper crust following.
Between 1955, when Great Universal Stores Plc. (GUS) bought Burberry, and up until
1990s, Burberry had been licensed to a variety, the customer base during these times
was all over. Due to the different licenses the brand was sold at all different locations
and prices that attract different followings.
when Rose Marie Bravo who changed Burberry from an outerwear manufacturer into
a luxury lifestyle brand. Her goal was to reinvent Burberry. One of Bravo’s first
decisions was to reposition the brand and attract a new customer base that was
younger while keeping the current one.
Burberry’s target customer is someone who wants luxury while being functional. The
brand’s point of difference with other luxury brands is that they could be luxury,
aspirational, and functional. Burberry decided they were going to reach these
customers from Bravo identifying their niche between labels of Polo Ralph Lauren
and Giorgio Armani on the apparel side, and between Coach and Gucci on the
accessories end. The Burberry team priced the products between these price points to
reach consumers. Burberry wanted to create the image of accessible luxury.
Burberry wanted to target younger consumers to create a following and a loyal base.
They used the example of wanting their men’s products to appeal to a 25 year-old
male going on his first interview and wanting to something hot while still appealing to
a 60 year-old banker that wants quality and a modern, classic appearance.
Burberry being popular among non-target customers can affect the brand positively
and negatively. Burberry is starting to find out that their brand is becoming very
popular in the hip-hop.
Becoming popular with non-target customers is a positive. This goes along with the
desire to reposition Burberry to a younger customer base while keeping their loyal
customers.
Some negatives involved in this recent popularity are pushing away Burberry’s core
customers and changing the brand’s image. If Burberry’s goal of becoming
‘accessible luxury’ is attracting consumers that are not desirable it can be negative in
every aspect.
One possible idea is for Burberry to create a new line for the youth, while sticking to
the brand’s position and lifestyle.
It also helps create a nice flow between product categories within the brand. Burberry
is in the works to create a children’s line ,so if a youth category were created then it
would create clothing for all aspects of life for the next generation. This translates into
a new core customer base and the possibility of attainable longevity of the company.
Q6. Should Burberry be launching Brit, the new perfume line? What other
product categories should Burberry be entering?
Yes, Burberry should be launching Brit, the new perfume line. This line can prove to be
extremely profitable due to the product category. Perfume is a category that crosses all
customer bases.
Burberry Brit is a new perfume line featuring a bottle with check design. According to the
company, Burberry Brit personified a woman in her 30s, English and charismatic.
The perfume line could also create new customers for Burberry. This will also help with
brand loyalty among consumers. This is created by the fact that no longer will they have to go
somewhere else for their signature scent, they can now purchase perfume along with their
favorite clothing and accessories. Attracting women that are already set in life and have their
signature scent are not going to switch perfumes now at this stage.
We believe Burberry should expand on their current categories. For example, Burberry’s
accessory line could add new products like the handbags can add new and different types of
bags; the perfume line can add not only Burberry Brit for women but include a men’s line.
This line of perfume should also include different scents; a wise decision for Burberry is to
venture into other beauty products like lotion, etc with their scents.
it was mentioned that Burberry was looking into a children’s line. Loyal customers of
Burberry would want their children to follow suit and dress in their favourite fashions, and
other consumers would want the luxury of Burberry for their children. The line would be
very successful and profitable for Burberry.
Another area that can be successful is home design. We didn’t find mention of products that
can be used in home décor. Adding items such as bed linens, curtains, napkins, pillows, etc.
could add to those numbers.