Fin

HOMEWORK #4

FASHION BRAND MANAGEMENT

Project Report

Course: Clothing Production and Management

Course Code: TEK 504E

Submitted By,

Shahrukh Shahbaz

Student No. 503131814

Date: May 06th, 2015

Istanbul Technical University, Istanbul, Turkey

Table of Contents1. INTRODUCTION...................................................................................................................................3

a. FASHION BRAND MANAGEMENT:...................................................................................................3

2. THE FASHION SYSTEM.........................................................................................................................3

3. CLASSIFICATION OF FASHION INDUSTRY.............................................................................................3

4. THE LUXURY FASHION INDUSTRY........................................................................................................4

5. LUXURY FASHION BRAND MANAGEMENT...........................................................................................4

a. BRAND POSITIONING.......................................................................................................................4

b. BRAND IMPLEMENTATION..............................................................................................................5

c. BRAND MONITORING......................................................................................................................5

d. BRAND GROWTH.............................................................................................................................5

6. BRAND EQUITY....................................................................................................................................5

7. CASE STUDY.........................................................................................................................................6

a. BRAND STRATEGY............................................................................................................................6

b. BRAND PORTFOLIO..........................................................................................................................6

d. HISTORY OF HUGO BOSS:................................................................................................................9

e. REVIVAL OF BRAND..........................................................................................................................9

f. CURRENT BRAND POSITIONS.........................................................................................................10

g. FUTURE BRAND POSITIONING.......................................................................................................10

h. BRAND GROWTH...........................................................................................................................11

i. DESIGN STRATEGIES.......................................................................................................................11

j. THE KEY TO SUCCESS.....................................................................................................................11

8. REFERENCES......................................................................................................................................11

FASHION BRAND MANAGEMENT

1. INTRODUCTION

a. FASHION BRAND MANAGEMENT:

In consumer marketing, brands provide the primary points of differentiation between competitive offerings, and as such they can be critical to the success of companies. It is important that the management of brands is approached strategically for long term goals

2. THE FASHION SYSTEM

Societies evolve along with fashion. Focusing on Western luxury fashion companies, we observe the importance to differentiate in order to preserve growth. Companies operating in the fashion system face a product life cycle whose length is shorter in comparison with other industries.

The implementation of changes in fashion are usually related to seasonal motives and more often product life cycle is modelled by “Planned Obsolescence” which pushes firms to control their product turnover. Nowadays, it’s not uncommon to notice how High Street stores propose a new collection on a monthly basis. The total look collapsed and fast fashion is increasingly assuming importance on a global scene.

3. CLASSIFICATION OF FASHION INDUSTRY

MODEL SEGMENT COMPETITORS MISSION

Affordable Fashion Woman, Apparel, Accessories

There is no competitors’ predominance

Codification of fashion tendencies

Premium Brand Man, Casual and Jeans, Accessories

American & Northern Europe Brands

Value for Money

Exclusive Luxury Man, Elegant Woman, Accessories

French Luxury Affirmation of Brand Heritage

High Fashion Woman, PAP, Accessories

International Designers

Imposition of new tendencies

The mentioned four classes are classified according to the degree of luxury contained. Starting from “Affordable fashion” brands and moving on to “High fashion brands”, there is an increment in terms of quality, price premium and brand image importance. Here’s an attempt to classify some famous brands into the four competitive models mentioned above. “Affordable fashion” includes names such as Diesel and Miss Sixty. “Premium brands” are Geox and Replay. An example of “Exclusive luxury” is given by Armani and Zegna. Prada and Gucci are part of the “High Fashion competitive model”.

4. THE LUXURY FASHION INDUSTRY

Here it is worth explaining what luxury means to set a clear picture of the idea. Luxury specialists have attempted to give a clear definition of what a luxury brand is, but this is not an easy task. “Luxus” is the Latinism for “indulgence of senses, regardless of cost”.

The “Rarity Principle” suggests that when everybody is able to purchase a specific brand, the luxury component is eroded.

The global luxury market has a high share with an annual growth rate of 8-10%. This is consistent with people’s desire to show off which fosters the demand for goods with status conferring characteristics. Therefore, in comparison with other goods presenting comparable functions, luxury goods are able to charge a price premium.

Luxury fashion industry is increasing in complexity and the real challenge for companies operating in this environment is currently acquiring the capabilities to manage these challenges.

5. LUXURY FASHION BRAND MANAGEMENT

The major steps of Brand Management are as below:

Brand Positioning

Points of DifferenceBrand Identity

Brand Implementation

Brand BuildingBrand Resourcing

Brand Monitoring

Measuring Performance

Brand Growth

Expansion

a. BRAND POSITIONING

In the first place, it is worth mentioning how luxury fashion firms take advantage of the so-called country branding. Just like Versace reflects Mediterranean lifestyle, Hugo Boss can brag that it’s “Made in Germany” label is a symbol of innovativeness, precision and elegance.

The country of origin (“Made in”) serves two main functions:

• It allows brands to better develop their internationalization processes due to the intrinsic quality owned by products coming from particular places.

• On the other side, this label also helps protect national product consumption.

Fashion designers want their brands to be clearly positioned in customers’ minds. There are four main components creating brand identity;

Heritage Style Retail & Distribution Channels Communication

b. BRAND IMPLEMENTATION

Whether launching a new brand or rebranding an existing one, brand implementation is one of the toughest exercises a company can go through. Extraordinary levels of detailed information are gathered in order to build an effective implementation plan.

The design stage is the least expensive but most glamorous aspect of a (re)branding process. It emphasize the internal communication about the project.

c. BRAND MONITORING

A business analytics process concerned with monitoring various channels on the web or media in order to gain insight about the company

Main Benefits:

Identify and address infringers Addressing competitor and consumer reactions

d. BRAND GROWTH

The analysis of gradual growth of a business in terms of number of consumers and the revenue.

6. BRAND EQUITY

Brand Equity is the expression of the relationship between customers and brands in the marketing literature.

The total value of a brand as a separable asset when it is sold, or included on a balance sheet-----BRAND VALUE

A measure of the strength of consumers' attachment to a brand-----BRAND LOYALTY A description of the associations and beliefs the consumer has about the brand-----BRAND

IMAGE

7. CASE STUDY

This study aims to explore some dimensions of Hugo Boss’s luxury brand management strategies as one of the successful firms operating in the luxury fashion industry. The analysis of its organization, products and business model will help to define the roots of success for this German luxury fashion brand.

a. BRAND STRATEGY

Developing and marketing high-end products. Each brand in the HUGO BOSS brand architecture clearly targets different consumer groups. The individuality of consumers based on superior and luxury quality & designs and a perfect

standard with regard to fit and workmanship.

b. BRAND PORTFOLIO

c. BRAND IDENTITY

The brands Supervised by the HUGO BOSS have a clear segregated market which is able to serve the consumers according to their desired requirements. The brand identities are shown in the form of pictures.

BOSS black:

BOSS ORANGE

BOSS GREEN

d. HISTORY OF HUGO BOSS:

Hugo Boss was founded in 1923 in Metzingen, Germany and since the sixties it has built its brand image around men’s suits. Currently it is known worldwide for its wide range of high quality products, which combine European design and fibers coming mainly from Italy.

Hugo Boss fits best under the “Premium Brand” whose quality is mirrored in the premium price. However, gradually, Hugo Boss tends to show some features typically owned by “Exclusive luxury and High fashion” brands in order to enlarge the customer base and evolve into the next level of the luxury scale.

e. REVIVAL OF BRAND

Though Hugo Boss was always a producer of high-quality clothing but it lacked flair till 1970. In early 1970s, when the sons of Hugo Boss’s brother became the co-CEOs, annual revenues were just 4 million deutsche marks. They started the brand building by sponsoring Porshce in formula one races to capitalize their brand equity on Porsche’s strong exclusive image and international presence. Later on the brand also took on sponsorship of international tennis, golf and ski competitions. Their strategies worked out and in 1980 the sales revenue of the company topped 100 million deutsche marks. Later on it increased tenfold during 1980s. Currently the company has the unprecedented presence in the global fashion shows along with the sponsorships of well-known exhibitions through sponsorships. These strategies have worked well in maintaining the strong brand image. In year 2013 the annual group sales of the company was increased by 6% to €2432.1 million.

f. CURRENT BRAND POSITIONS

There are several sub-brands operating under Hugo Boss. Following is a visual representation of current brand positioning of different brands under the umbrella of Hugo Boss.

g. FUTURE BRAND POSITIONING

The current brand positioning shows how Hugo Boss brands overlap and this would have negative consequences by confusing costumers. The company is working on changing the current situation because it might result in the cannibalization of Hugo Boss own brands. In order to succeed the company has aimed to redefine its marketing mix and generated its future brand positioning as below:

h. BRAND GROWTH

As a “Premium” luxury brand firstly in Western Europe, Hugo Boss has now spread throughout the world. The dynamics of fashion and globalization pushed Hugo Boss towards the exploration of new unexploited markets. Globally the brand has around 800 retail stores and 5600 point of sales including which are segregated as American, European and Asia/Pacific markets.

i. DESIGN STRATEGIES

The fashion products are developed from Germany, Italy and Switzerland which are followed by the production houses that are operational in Italy, Turkey and Poland. The main constituent of Hugo Boss’s global strategy is efficiency which is forced by the importance of implementing a consistent brand image throughout.

j. THE KEY TO SUCCESS

Hugo Boss authorizes the success of their company with their well balanced portfolio of clearly differentiated brands and their brand communicating power to drive premium and luxury brand image. Apart from these the retail and controlled space have also helped in elevating the brand presentation.

8. REFERENCES

Erich Joachimsthaler and David Aaker, Harvard Business Review on Brand Management, 1999. Hugo Boss Annual Report, 2008 Christoph Auhagen, Brand Strategy, Hugo Boss Investor Day 2012 Conference, December 6,

2012 Management Report, Hugo Boss Annual Report, Hugo Boss, 2013