Case study of Gucci

Submitted By – Ankush Dhar

Roll No 0601520

Department – MBA (Marketing and Supply

Chain Management)
Table of contents
Executive summary 1

Introduction 1

How do consumers perceive this brand? 2-3

What is this brand doing right to keep their 3

brand evaluations high?

Why consumers end up purchasing this 4-5

brand?
EXECUTIVE SUMMARY
Gucci has been considered as one of the most influential brands in the world of
fashion since it was created in 1921. Moreover, thanks to its good positioning, the
Italian brand can boast of being a leader in the luxury fashion market. The
Company knows how to form a clear idea in the minds of its consumers, providing
clothing and accessories of luxury and quality, at a price that the average
consumer cannot afford. Hence, the exclusivity of the brand, and its approach to
people of the upper or upper-middle class. Likewise, the fact that it offers not
only a product, but also a service, (with the treatment of the salespersons), and a
feeling (exclusivity and acceptance), is key to understanding the high degree of
loyalty that consumers have for the brand. Gucci has been able to adapt to its
target market, and achieve the perfect combination of tradition and innovation in
its designs. In addition, to market their products, it uses influencers and
celebrities, that are becoming the best marketing tools of the moment. However,
the world is constantly changing, and new opportunities for the brand are
emerging. Among these, we highlight three: tap emerging luxury markets in
emerging economies like India and China, create a competitive advantage in
different business segments, and target youth segments.

INTRODUCTION

Gucci is an Italian luxury brand of fashion and leather goods, part of the Gucci
Group, which is owned by the French holding company Kering. Gucci was
founded by Guccio Gucci in Florence in 1921. Gucci used to work in big hotels
and he had always be amused by the lifestyle of their clients and the kind of
luggage they carried. This interest was the main reason to start working with
Tuscan artisans in the creation of leather bags to horsemen that were later on
converted into luxury bags being this one the beginning of a brand that has last
for almost a century. Currently, Gucci is the most expensive brand in the luxury
goods market operating more than 500 stores worldwide.

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 a) How do consumers perceive this brand?
In order to have the perception of something, what our brain does first is to give us
immediate information by using our senses. That is to say; when we get in a Gucci store the
first thing that comes to our minds is: how spacious the shop is, the illuminated shelves with
the purses on theme, how comfortable seats look, the power sensation thanks to the man
who usually opens the door for you... and much more things that can come up to our minds
in time of seconds by just using our senses. This is the raw data that our brain needs to have
a sensation of how the product/brand is, which at the same time is the first step to create
our perception. The sensation that we get, is created thanks to the stimulus exposed to us
when we for example: get in a Gucci store, touch a Gucci purse, smell a Gucci fragrance,
watch and ad on TV, magazine… And all those stimulus to which we are exposed (on
purpose) are there, so we all have the image of the brand that the marketers and the own
brand itself wants us to have. But in order to do that, marketers have to overcome the
sensory thresholds, so in the end they have our attention. So, what Gucci has done over the
years is to keep the brand classical, but at the same time changing so the customer is in a
permanent exposure state (thus capturing younger consumers as well), that is to say; they
have kept their logo equal over the years as well as their distinctive colours, (thing which is
shocking because the classical style is still giving benefits) but it has also kept up with the
trends and engaging partnerships with other brands, celebrities. And after all this, once
Gucci has our attention; they ensure that we keep paying attention to every single
movement they do. Thus, accessing to our needs of giving an image of us to others that the
brand through its products can provide us.

After that, we interpret that brand according to all the stimulus we have been exposed to:
when watching the ad, when getting at the store, when smelling a fragrance, when buying a
purse… And what we finally do to get our perception is to organize it. Cause as natural
human beings, our brain tends to organize all using the associative networks according to
what we already know, because of similarity, closure and figure and ground. So, regarding
the examples named before, we can say that when an employee opens for you the door in a
place it reminds you of a famous or important person, of someone who has power. Thing
which, at the same time remained to one of our interviewees to when she got into tiffany's.
Furthermore, when you see the big space and well-organized manner of the stores, there’s
something completing that feeling, that tells you that you have a wide range of products to
choose. we can say that customers perceive Gucci as a luxury brand. For their customers,
Gucci is art printed into something they can actually wear. They see beauty, personality and
good taste in all the designs the brand releases each season. They perceive freshness as well
as tradition in every piece, cause as we can see Gucci has always kept loyal to its style and
colours that characterize the brand through the years. Gucci also shows power, as well as
independence and empowerment sense to all the business women out there.

As said before, Gucci is perceived as a luxury, as something you don’t really need to live, but
which actually you can afford and have cause you have got the money and you are not using
it to pay your bills...but instead, to buy something trendy and unique. Something that
everyone cannot afford; reason why although the majority of their products are prêt-à-
porter, that’s to say in the retailing world; ready to use…not everyone can buy it or have it
due to its price and exclusiveness. Furthermore, it can be said that they perceive Gucci as
something valuable, something in which they trust to spend their money on, cause it
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actually worth it, and they know that the purse they just bought is not going to be broken or
whatever, cause every of their products is made out of good quality raw materials. And also,
regarding this last fact we can add that many years can pass, but a Gucci purse will always
be a Gucci purse, and therefore it will always have a good value. Cause as Aldo Gucci said
“Quality is remembered long after price is forgotten." All of these statements can be
translated into the many reasons why, in the end these rich people, brand ambassadors,
celebrities like to wear Gucci designs. Because they make feel and think they have all the
characteristics and features that the brand has and that we have explained above.

b) What is this brand doing right to keep their brand evaluations high?
Gucci is not only a brand for its customers, it is a lifestyle, it is seen as a way of dressing in
the 21th century attracting them at the same time to the rebel vision from finals of the 20th
century. This nostalgic way of clothing that brings back the 90’s to our era catch young
customers that want to fit in this aesthetic trend. So, in one side we have young customers
that are appealing to feelings and to a nostalgic trend mixed with a new-rebel vision of
freedom of expression in the society; that means that Gucci knows how to camouflage
between new generations. Young customers give high brand evaluations to this brand
because it is offering them what they want: luxury, quality and a lifestyle that even models
wear in their day to day. Nevertheless, not all Gucci’s customers are 20 years old, there are
customers from the X & Y generations that appreciates the brand and buy its products too.
They are not following more this new rebel vision that is being showed in social media, they
are more influenced by the advertisements shown in the streets and a point of view gained
over time, following a more critical view of the quality and durability of products instead of
the feelings that can overcome that. These generations dress Gucci’s clothes not because off
they are following famous people lifestyle; they buy these products due to they belong to
the middle-up/high class and they have enough incomes to afford the prices. Gucci’s
trajectory through the years is linked to a search into what want their potential customers in
the society; instead of being part of the new trends as their competitors, it is creating and
changing fashion trends to increase their profits and brand evaluations, what impacts in
their revenues and their future marketing movements. Definitely, customers of all ages are
being attracted to Gucci’s lifestyle, what represents all what they want to imagine in
different ways; you can go to a ball as you can go to the job or cinema with Gucci’s clothes,
that is because these clothes offer versatility in a lot of ways. This huge wardrobe that the
Italian brand offers helps it to get more good evaluations. Furthermore, Gucci is reinventing
itself every day to be more innovative than the competence, even when they are sponsoring
singers, those who are not being in contact with the brand are buying their clothes because
are in the top of luxe and high-class life. Besides that, the international expansion that Gucci
is performing in Asia is not changing the ‘soul’ of the brand, in fact it is providing to these
new markets the occident vision of energy and luxury that was explained before. We can say
that Gucci, to keep their brand evaluations high is getting into the minds of its clients,
knowing they needs and providing them their solutions. However, if customers are getting
bored of the way that the clothes are being made Gucci is signing contracts with
contemporary artists or brands that are not direct competitors but can help the company to
change the game and continue being at the same time elegant and rebel. We can say that
Gucci’s customers are not only one-buy clients, they keep being loyal to a company that is
giving them novelty and quality since 1921.

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 c) Why consumers end up purchasing this brand?
The behaviour that individuals have toward the products and services that the market
offers has a great influence over consumers’ decision on buying a product of a brand or the
service offered by a company according to if such products or services satisfy their needs
and desires. We could infer that the main reason that leads consumers to buy Gucci is the
high quality of its products. Right now, Gucci’s products are one of the most luxury ones and
with one of the highest quality which makes more difficult for the competitors to copy its
standards. However, if we pay attention to the kind of consumer it is trying to satisfy, we
could come up with a different answer. It is true that another reason that push consumers
to purchase from the brand is the wide range of products that it offers, its portfolio
comprises since its famous handbags until mugs and other household accessories being all
the time diversifying and offering customers new products. But we still think that the main
factor that attracts consumers from the brand is, as we have pointed out before, the fame
of the product and the exclusivity sensation projected by those who buy it or wear it. It is
due to the type of consumers Gucci is dealing with: high-end clients, since they tend to have
a more emotional and symbolic connection with the brand. The sensation of exclusivity that
the product make feels to its clients could be related with the term animism, as it means
when people attribute to objects qualities that make them feel special. Why do we think
that this is a main factor? The answer is very clear, people often buy products not for what
they do or the quality they offer but for what they mean. To be more precise, people choose
that brand that has an image and personality that goes with their needs; people choose the
brand that best represents its character and lifestyle. What many brands do to create that
distinctive personality that fits with the ones of the customers is to study the traits of
individuals and groups in order to create the image that they want that consumers have of
them, this way they can address directly to a specific group where they know they are going
to fit in and achieve its brand loyalty at the same time as standing out from its competition.
The decision to use a product it is also determined by the social and physical surroundings
as everything that encloses a person affects its choices and motives to buy the product and
once it has bought it to have a positive feedback about it. An example of social surrounding
nowadays could be the fact that everything spin around social media and influencers so
people just want to copy them in order to feel they could be a little bit like them. The
decision to purchase is not just influenced mainly by the meaning or appearance that the
brand can give you through its products, in the last years has being gaining importance the
treatment that clients receive in the physical shops by the staff. Gucci knows how important
that is for the loyalty and satisfaction of its customers that’s why Gucci makes great
emphasis to its staff to provide a personalized treatment to each of its customers making
them feel unique and important.

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 BRAN
D
PERS
ONAL
ITY
RANGE OF
PRODUCTS

QUALITY

TREATMENT
In the pyramid represented above we can see how are arranged the characteristics that
make customers to purchase this brand according to their order of importance. In first
place, and as we have mentioned before, we would have the personality of the brand, what
Gucci’s products make customers feel; in second place we find the wide variety of products
that Gucci offers to its clients that goes from handbags until beauty products ensuring this
way that customers have all they need in just one brand; in the third place we find the
quality of the products it offers positioning it as one of the brands with the highest quality
right now in the market specially between the luxury brands; finally, in last place and with a
small influence in the customer decision to purchase the brand we find the personalized
treatment that each customer receives on the part of Gucci’s staff. To sum up, if we put all
these factors together, we find one of the most luxury brands right one being a strong rival
for its competitors who have to make great efforts to achieve the standards and results that
Gucci has right now. At the same time, we have found out with these components which are
the main reasons that influence in the decision of customers to choose Gucci among the
rest of brands.