Hult International Business School

Crafting Elegance Across Cultures: Hermès' Strategic Mastery in the

Global Luxury Landscape

Ashvik Shaganti

Feb 11th 2024

MKT - A

Word Count: 2915

Table of Contents
Introduction .............................................................................................................................................3
Cultural Analysis of the French Market ...................................................................................................4
Cultural Analysis of the Chinese Market .................................................................................................5
Marketing Strategy ..................................................................................................................................6
Influencer and Partnership Marketing: ...............................................................................................7
Online and Offline Presence: ...............................................................................................................7
Product and Communication Strategy: ...............................................................................................8
Target Market Profile for China ...............................................................................................................8
Conclusions ..............................................................................................................................................9
Recommendations .................................................................................................................................10
References .............................................................................................................................................11
Introduction

Established in 1837 by Thierry Hermès as a harness workshop in Paris, Hermès initially catered to the
European nobility, crafting some of the finest wrought harnesses and bridles for carriage trade. Over
the years, the brand has transcended its humble beginnings to become synonymous with
unparalleled artisanry, timeless elegance, and the epitome of luxury. Known for its iconic Birkin and
Kelly bags, sumptuous silk scarves, and exquisite leather goods, Hermès represents a dedication to
quality and a legacy of style that has endured for nearly two centuries.

Hermès' evolution from a specialized saddlery and equestrian accessories manufacturer to a global
luxury powerhouse is a testament to the brand's innovative spirit and commitment to excellence.
This transformation was marked by significant milestones, such as the introduction of its first leather
handbag in 1922 and the launch of the iconic silk scarf in 1937, which have since become integral
elements of the brand's identity.

Today, Hermès stands at the forefront of the luxury goods industry, with a diverse product range
that includes leather goods, ready-to-wear fashion, accessories, perfumes, and home furnishings.
The brand's enduring appeal lies in its relentless pursuit of perfection, a deep respect for tradition,
and an inventive approach to design. Hermès continues to captivate a discerning clientele that
values the brand's heritage, artisanal quality, and creative ingenuity.

In this report, we will delve into how the cultural values of two distinct markets have influenced
Hermès' marketing strategies, providing a critical evaluation of the brand's approach to engaging
with its diverse consumer base. Through an in-depth analysis of Hofstede's cultural dimensions and
their impact on fashion consumption, this report aims to offer insights into how Hermès can further
tailor its marketing strategies to resonate with the unique cultural nuances of each market.
Cultural Analysis of the French Market

In analysing France's market through the lens of Hofstede's cultural dimensions, we can glean
insights into the French cultural landscape that significantly impacts consumer behaviour,
particularly in the luxury fashion sector where Hermès is a key player.

Power Distance

France scores moderately high on the Power Distance Index (PDI), indicating a society that accepts
hierarchical order and inequalities in power and wealth as a cultural norm. This acceptance of
hierarchy influences French consumers' attitudes towards luxury brands like Hermès, which are
often seen as symbols of status and prestige. In marketing, Hermès can leverage this cultural aspect
by emphasizing the exclusivity and elite status of their products, appealing to consumers' aspirations
for higher social standing.

Individualism vs. Collectivism

France has a high score in Individualism (IDV), reflecting a society that values individual freedom,
personal achievement, and autonomy. French consumers tend to make purchasing decisions based
on personal preferences and self-expression rather than collective opinions. For Hermès, this means
focusing marketing efforts on how their products highlight the individuality and unique style of the
wearer. Personalized services, limited editions, and bespoke products can resonate well in this
cultural context.

Uncertainty Avoidance

The French exhibit high Uncertainty Avoidance (UAI), demonstrating a societal preference for clear
rules, regulations, and a structured life to avoid uncertainty. This cultural trait influences French
consumers to Favor established and reputable brands like Hermès, known for their consistency,
quality, and heritage. Marketing strategies in France could, therefore, highlight Hermès' storied
history, artisanry, and timeless designs to appeal to this aversion to uncertainty and change.

Masculinity vs. Femininity

France presents a balanced score on the Masculinity vs. Femininity dimension, suggesting a society
that values both competitive achievement (masculine traits) and quality of life and caring for others
(feminine traits). Hermès can capitalize on this by balancing marketing narratives that not only
emphasize success and exclusivity but also the brand's commitment to sustainability, artisanry, and
the artistry behind each product.

Long-term Orientation vs. Short-term Normative Orientation

With a moderate score in this dimension, the French culture blends respect for tradition with
openness to innovation and change. Hermès can use this to their advantage by blending traditional
elements with innovative designs in their products and marketing, appealing to a consumer base
that appreciates the brand's rich heritage while seeking modern and forward-thinking fashion
statements.

Indulgence vs. Restraint

France scores moderately on the Indulgence scale, indicating a society that enjoys life is pleasures
and has a relaxed attitude towards enjoying life. Hermès' marketing can tap into this cultural
characteristic by portraying their products as not just luxury items but as essential components of a
desirable lifestyle, emphasizing joy, pleasure, and indulgence in fine artisanry.

Hermès' marketing strategy in France must navigate a complex cultural landscape that values
individualism, is cautious of uncertainty, respects authority, and balances traditional and modern
values. By tailoring their approach to reflect these cultural dimensions, Hermès can further solidify
its position in the French luxury market, appealing directly to the unique values and attitudes of
French consumers.

Cultural Analysis of the Chinese Market

In exploring China's market dynamics through Hofstede's cultural dimensions, we uncover the
intricate fabric of Chinese societal values that significantly influence consumer behaviour,
particularly in the luxury market segment where Hermès operates.

Power Distance

China scores high on the Power Distance Index (PDI), reflecting a societal acceptance of hierarchical
order and inequalities. This cultural trait underscores the Chinese reverence for authority and
established social structures, which translates into the luxury market as a preference for brands that
signify status and hierarchy. Hermès, with its heritage and prestigious brand image, is well-
positioned to appeal to this aspect by emphasizing its exclusivity and elite clientele in its marketing
narratives.

Individualism vs. Collectivism

China's low score in Individualism indicates a collectivist society where individuals are expected to
prioritize the group's interests over their own. This collectivism influences Chinese consumers to
make purchasing decisions that align with social norms and familial expectations. For Hermès, this
means crafting marketing strategies that highlight the brand's role in enhancing social standing and
fulfilling familial duties, such as gifting luxury items during important festivals or family events.

Masculinity vs. Femininity

China's moderate score in this dimension suggests a society that values success, competition, and
achievement (masculine traits) while also recognizing the importance of quality of life and caring for
others (feminine traits). Hermès can leverage this by balancing its marketing message to reflect both
the prestige and success associated with owning Hermès products and the brand's commitment to
artisanry, aesthetic appeal, and emotional satisfaction.

Uncertainty Avoidance

With a moderate score in Uncertainty Avoidance, Chinese culture shows a pragmatic approach to
uncertainty and risk. Consumers may prefer well-established brands with a proven record of
accomplishment of quality and reliability. Hermès can tap into this preference by reinforcing its
heritage, history of artisanry, and consistent quality in its marketing efforts, assuring consumers of
the brand's stability and trustworthiness.

Long-term Orientation

China's high score in Long-term Orientation reflects a forward-looking perspective, emphasizing

perseverance, thrift, and adapting traditions to modern contexts. Hermès can align with these values
by highlighting the brand's ability to innovate while maintaining its traditional artisanry and by
highlighting the enduring value and timeless appeal of its products.

Indulgence vs. Restraint

China's lower score in this dimension indicates a society that leans towards restraint, where there is
a control over gratification of desires. Hermès' marketing strategy can subtly address this by focusing
on the intrinsic value and quality of the products rather than overt indulgence, portraying Hermès
items as wise, long-term investments rather than impulsive luxury purchases.

Understanding these cultural dimensions enables Hermès to navigate China's complex luxury market
landscape effectively. By tailoring its marketing strategies to resonate with the deeply ingrained
cultural values and societal norms of Chinese consumers, Hermès can enhance its brand appeal and
deepen its market penetration in China.

Marketing Strategy
Influencer and Partnership Marketing:
Hermès' marketing strategy, particularly in the realm of influencer and partnership marketing,
highlights a blend of tradition, artisanry, and modern innovation, which has been a cornerstone of
the brand's approach in both France and China.

In France, Hermès maintains its exclusivity by not having a traditional marketing department, relying
instead on the brand's inherent values and the creativity of all its members. This unique approach
ensures that every aspect of Hermès, from product creation to customer experience, reflects its
ultra-premium luxury positioning. The brand's commitment to quality and uniqueness is evident in
its meticulous artisanry, with products like its silk scarves being produced entirely by hand, ensuring
that each item remains exclusive and highly desirable.

Hermès has also embraced modernity through strategic collaborations that bridge the gap between
traditional luxury and contemporary culture. Notably, the partnership with Apple to create the
Hermès Apple Watch and with Nike for a range of sneakers exemplifies how Hermès successfully
integrates its high-quality artisanry with modern design and technology. These collaborations not
only highlight Hermès' adaptability but also enhance its appeal to a broader audience by merging
luxury with everyday utility.

In China, Hermès leverages the digital landscape to engage with its audience, particularly through
the WeChat platform. The brand has innovated with unique marketing campaigns like the vinyl
record pop-up event in Beijing, which combined the tactile allure of Hermès scarves with music and
technology, offering a highly interactive and personalized experience. This campaign, supported by
WeChat's Mini Program, significantly increased engagement, and showcased Hermès' ability to
integrate art, technology, and luxury in a way that resonates with the affluent Chinese middle class.

Through these strategies, Hermès not only reinforces its heritage and artisanry but also embraces
innovation and digital engagement, ensuring its continued relevance and appeal in the luxury market
across diverse cultures and generations.

Online and Offline Presence:

Hermès has adeptly adapted its online and offline presence to cater to cultural preferences in both
France and China, highlighting a blend of tradition and modernity in its approach. In the digital
realm, Hermès has seen significant growth, with a notable increase in online customers, many of
whom are new to the brand. This surge in e-commerce activity highlights Hermès' successful
integration of digital strategies without compromising its brand exclusivity and heritage. The brand's
online channels, especially in China, continue to flourish, offering a wide array of products from their
iconic bags to fragrances and shoes, attracting a diverse customer base seeking luxury and
exclusivity.
In the physical store experience, Hermès has demonstrated innovation by launching unique pop-up
events that blend luxury with contemporary lifestyle trends. For instance, in Chengdu, China,
Hermès opened its first offline pop-up fitness centre, offering an immersive brand experience that
combined luxury fashion with fitness activities like square scarf yoga and belt stretching. This
initiative not only catered to China's growing fitness trend but also offered a creative platform for
customers to engage with the brand in a new and exciting way. Such experiences underscore
Hermès' commitment to creating meaningful connections with its customers, transcending
traditional retail concepts, and embracing lifestyle-oriented marketing strategies.

These strategies illustrate Hermès' adeptness in balancing its storied heritage with innovative
approaches to marketing and customer engagement, ensuring its continued relevance and appeal in
both traditional and emerging markets.

Product and Communication Strategy:

Hermès tailors its product and communication strategies meticulously, ensuring they resonate
deeply with local cultural values in both France and China. The brand's philosophy, deeply rooted in
quality, artisanry, and exclusivity, is evident in every aspect of its operations, from product creation
to marketing communications. Each Hermès product, such as their iconic silk scarves, is crafted with
an unwavering commitment to quality, often involving hand-made processes by skilled artisans,
which aligns with the cultural appreciation for luxury and artisanry in both markets.

In France, Hermès emphasizes its heritage and artisanry, which aligns with the local culture's
appreciation for artistry and history. The brand's strategy of maintaining exclusivity and not diluting
its ultra-premium luxury image caters well to the French market's discerning luxury consumers.
Hermès does not employ traditional marketing departments, relying instead on intuition and
creativity from all team members, which allows for a more authentic and culturally resonant brand
presentation.

In China, Hermès has adapted by leveraging digital platforms to expand its reach and engage with a
broader, tech-savvy audience. The brand's significant online growth, especially post-pandemic,
indicates a successful adaptation to China's digital landscape. Hermès' strategy in China includes
innovative digital campaigns and the utilization of platforms like WeChat to connect with younger
consumers. This digital engagement strategy is complemented by unique offline experiences, such as
pop-up events, which blend luxury with contemporary lifestyle trends, such as fitness, appealing to
the local cultural context.

Hermès' approach in both markets highlights its ability to blend traditional values with modern
marketing tactics, ensuring the brand remains relevant and appealing across diverse cultural
landscapes.

Target Market Profile for China

Hermès' target market in China demonstrates a sophisticated blend of heritage appreciation,
exclusivity, and digital engagement. The brand has successfully attracted both male and female
consumers, recognizing their distinct purchasing behaviours and preferences for luxury. Notably,
Hermès does not solely focus on women, despite the luxury sector's traditional emphasis on female
consumers. This balanced approach has allowed Hermès to provide a more personalized customer
experience, catering to the unique desires of both genders.

Hermès' strategy in China is marked by a commitment to exclusivity and artisanry, aligning with
Chinese consumers' growing interest in heritage and artisanal quality. The brand's products,
celebrated for their timeless design and durability, resonate with consumers seeking investment
pieces that transcend seasonal trends. This focus on classic, high-quality items align with the shifting
consumer sentiment towards sustainable and meaningful purchases in the post-pandemic era.

The brand's success is also underpinned by its strategic approach to store openings and digital
presence in China. Hermès has been cautious not to saturate the market, opening stores at a
measured pace to maintain exclusivity. Each flagship store is a beacon of French savoir-faire,
enhancing the brand's allure. Furthermore, Hermès' adept use of digital platforms, particularly
WeChat, has allowed it to connect with a tech-savvy younger audience, ensuring the brand's
relevance in the digital age.

Hermès' target market in China is characterized by affluent consumers who value exclusivity,
artisanry, and heritage. The brand's strategic store placements, coupled with its innovative digital
marketing efforts, have solidified its position in the Chinese luxury market, appealing to a discerning
clientele that prioritizes quality and timeless elegance over fleeting fashion trends.

Conclusions

The analysis of Hermès' marketing strategy in the contexts of France and China provides valuable
insights into the luxury brand's adeptness at navigating diverse cultural landscapes. Hermès'
unwavering commitment to artisanry, exclusivity, and heritage, coupled with its innovative
approaches to marketing and customer engagement, has solidified its position as a leader in the
luxury market.

Cultural Adaptation: Hermès has successfully adapted its marketing strategies to resonate with the
cultural values and consumer behaviours in both France and China. In France, the brand leverages its
heritage and artisanry, aligning with the French appreciation for artistry and luxury. In China, Hermès
has embraced digital platforms and innovative marketing campaigns to engage with a broader, tech-
savvy audience, ensuring relevance in a rapidly evolving market.

Product Strategy: The brand's focus on timeless, high-quality items, rather than seasonal trends,
aligns with the shifting consumer sentiment towards sustainable and meaningful purchases,
especially post-pandemic. This approach has proven effective in attracting consumers who value
investment pieces that offer longevity and exclusivity.
Digital Engagement: Hermès' strategic use of digital platforms, particularly in China through WeChat,
has allowed the brand to connect with younger consumers. This digital engagement is
complemented by unique offline experiences, such as innovative pop-up events, that blend luxury
with contemporary lifestyle trends.

Market Positioning: The brand's careful and measured approach to store openings and its emphasis
on exclusivity through limited production have helped maintain Hermès' allure. This strategy has
ensured that demand for Hermès products remains high, reinforcing the brand's elite status.

Recommendations

Enhanced Digital Experience: Hermès should continue to invest in its digital platforms, ensuring a
seamless and engaging online experience for consumers. This includes enhancing e-commerce
functionalities, offering virtual consultations, and utilizing augmented reality to allow consumers to
experience products virtually.

Sustainability Focus: With growing consumer interest in sustainable and ethical luxury, Hermès
should amplify its efforts in sustainability. This could involve greater transparency about sourcing
and production processes, initiatives to reduce environmental impact, and lines featuring
sustainable materials.

Personalization and Customization: Offering more personalized and customizable options can
further appeal to consumers' desire for exclusivity. Hermès could expand its bespoke services and
personalized experiences both online and in-store to cater to individual consumer preferences.

Cultural Collaborations: Continuing to collaborate with artists and designers, particularly from local
markets, can enhance Hermès' cultural resonance. These collaborations can lead to limited-edition
collections that celebrate local heritage and artisanry, further solidifying the brand's status in diverse
markets.

Consumer Insights and Analytics: Leveraging data analytics to gain deeper insights into consumer
preferences and behaviours can enable Hermès to tailor its marketing strategies more effectively.
This can involve personalized marketing campaigns, targeted product recommendations, and
enhanced customer service initiatives.

By adhering to these recommendations, Hermès can continue to navigate the complexities of the
global luxury market, maintaining its esteemed position while adapting to the evolving preferences
of a discerning clientele. The brand's ability to balance tradition with innovation will be crucial in
ensuring its continued success and relevance in the luxury landscape.

By adhering to these recommendations, Hermès can continue to navigate the complexities of the
global luxury market, maintaining its esteemed position while adapting to the evolving preferences
of a discerning clientele. The brand's ability to balance tradition with innovation will be crucial in
ensuring its continued success and relevance in the luxury landscape.
References

Roll, M. (n.d.). Hermès - The Strategy Insights Behind the Iconic Luxury Brand. Martin Roll Business &
Brand Leadership. Retrieved from https://martinroll.com/resources/articles/strategy/hermes-the-
strategy-insights-behind-the-iconic-luxury-brand/
Epipod. (n.d.). Hermes Marketing Strategy and Campaigns. Epipod Blog. Retrieved from
https://www.epiprodux.com/hermes-marketing-strategy-and-campaigns/

Ecommerce Strategy China. (n.d.). How luxury brand Hermès leverages WeChat marketing in China.
Ecommerce Strategy China. Retrieved from
https://www.ecommercestrategychina.com/marketing/how-luxury-brand-hermes-leverages-
wechat-marketing-in-china

Luxury Society. (2020, September). Hermès Online Channels Are Booming. Luxury Brands Should
Take Note. Retrieved from https://www.luxurysociety.com/en/articles/2020/09/hermes-online-
channels-are-booming-luxury-brands-should-take-note/

Dao Insights. (2021, May 26). Hermès opens its first pop-up fitness centre in Chengdu. Retrieved
from https://daoinsights.com/news/hermes-opens-its-first-pop-up-fitness-centre-in-chengdu/
Ashvik
Business Model: Edeniste's business model focuses on
creating well-being-enhancing fine fragrances, in
collaboration with top perfumers and neuroscientists, to
positively impact mood and emotions. Their range, featuring
scents for Energy, Happiness, Relaxation, Seduction, and
Wellbeing, is showcased at premium venues like Harrods,
underlining their luxury standing. They also offer discovery
sets, enabling customers to find their perfect emotional and
aesthetic match, aligning with the luxury sector's shift
towards personalization. This strategy not only meets
individual preferences but also sets a new standard in the
luxury fragrance market.
Pranav
Challenges:
Firstly, sustainability is no longer a choice but a necessity. Edeniste is committed
to embracing eco-friendly practices and ethically sourced materials. The
challenge here is to maintain the high quality and efficacy of our active wellbeing
fragrances while adhering to these sustainable practices. It's a delicate balance,
but one we're dedicated to achieving.
Another significant challenge is consumer education. The offerings are at the
forefront of innovation, combining luxury fragrances with active wellbeing
benefits, backed by scientific research of neuroscience. Educating consumers
about these benefits and the science behind the fragrances is crucial for broader
acceptance and appreciation.

Opportunities:
On the brighter side, the global trend towards wellbeing products opens up vast
opportunities for Edeniste. There's a growing consumer demand for products
that go beyond their primary function to offer emotional and physical health
benefits. Our focus on fragrances designed to enhance emotional wellbeing
places us in a prime position to meet this demand.
Moreover, technological advancements present exciting avenues to enrich the
customer experience. Imagine using augmented reality to simulate fragrance
experiences or offering personalized online consultations to help customers find
the perfect scent for their emotional needs. These are not just ideas but tangible
opportunities we're exploring to connect more deeply with our consumers.
Ashvik
The luxury perfume sector is evolving, with a focus on sustainability,
personalization, and experiential retail. Consumers prefer brands
that are ethically responsible and offer unique, personalized scents.
Technology enhances online experiences, and social media plays a
vital role in brand promotion. Consumer choices are influenced by
sensory appeal, emotional resonance, and the desire for products
offering psychological benefits. Brand reputation and aesthetics are
important, but personal experiences and recommendations are
crucial. Marketing strategies hinge on storytelling, influencer
partnerships, and digital engagement, emphasizing authenticity and
a personal connection to the brand's values and story.
Pranav
Our primary research, including in-depth interviews and focus group
discussions, revealed on how people choose perfumes found that personal taste, how
a perfume smells, and its price are important. People are eager to try new brands,
showing they like new things in luxury items. They find out about new perfumes
through social media, friends, and especially by trying them in stores, so having a good
presence online and offline is key.
People enjoy trying new perfumes directly, showing the value of being able to test them
in stores. While a brand's reputation suggests quality, how a perfume is packaged also
attracts buyers. What really convinces people to buy is not just how good the perfume
smells, but also the feelings it evokes.
Advice from friends and family is more influential than famous people or online reviews.
Changing seasons and special events also encourage people to try new scents, giving
brands chances to market their perfumes effectively at these times.

Pranav
Combining these primary insights with our secondary research, we see a clear
picture: luxury perfume buyers want more than just a scent; they're searching for
perfumes that have a personal meaning, evoke memories, and enhance their identity
and well-being.
For brands like Edeniste to succeed, they need to create real, captivating stories around
their fragrances that connect with this search for meaningful experiences. Using a mix of
online storytelling and engaging in-store experiences will help meet these needs. Also,
there's a rising interest in custom-made and unique perfumes, offering new ways for
brands to stand out and grow.