Burberry's Marketing Strategy Analysis

1. Summary of the market research

The report considers the research analysis regarding the mix-marketing strategy model of Burberry with its market segmentation comprising Gen X and millennials. The report identifies the rationale behind this strategy behind improvising the existing strategy to cover Gen X. This report will review the research analysis of Burberry to highlight the specific selling points of GEN X and the millennials and their influence of product and price positionings. It will review the actions and responses of Burberry against their considering of profitability and maintaining its luxury brand status.

2. Rationale behind strategy

The mix model is based on the rationale that Gen X is trendy and they have more spending capabilities than the millennials. The millennials are more likely to save in the coming future after the pandemic and forecasted recession. Thus, Burberry’s new marketing mix strategies target both the millennials and GEN X. The strategy is to retain the focus on the millennials while improving the existing strategy to extend it over to Gen X. This new mix strategies focus on Gen X as the new target consumer group.

3. Mission Statement

Burberry believes in continuous innovation catering to diverse range of customer ranging from the highly exclusive to the accessible luxury product lines.

4. Marketing Objectives

The objective is to shape the product lines as well as influence the targeted customers towards the selected categories of products.

5. Target Market

There is a new perspective to the meaning of “luxury clients” that cannot remain confined to those who: i) have millennium money; inherited old money or earned a fortune; or ii) belong to the upper middle class (Chevalier & Mazzalovo, 2012).

‘Luxury’ is based on the utility and characteristics defined by users of the product. It signifies individuality; a mix style inculcating foreign ways of life; a strong social presence and experimental characteristics of the users; and their physical, mental and emotional vitality (Chevalier & Mazzalovo, 2012).

Luxury items have a distinctive mix of the dimensions of functionalism, experientialism and symbolic interactionism (Vickers & Renand, 2003). This mix should be formulated in the target market of Burberry, which is based on the differentiating terms of the brands being luxury, aspirational, and functional.

Segmentation, Targeting and Position

The targeted customer groups are the most valuable market to whom the corresponding products and marketing messages, which are functional and luxury, are offered.

7. Positioning Strategy (new consumer and followers)

The mix-model strategy will provide an integrated marketing strategy that will allow catering to characteristics of customers, fashion trends, new segments of customers and also to new fashion innovation keeping a continuity in terms of Burberry’s branding, meeting new fashion demands and competition.

Mixed customer segmentation: Target Gen X as the absolute customer segment by retaining millennials as the aspirational and accessible customer segment. Targeting Gen X is to maintain exclusivity of the brand since they have more buying capacity. Maintaining the millennials will enable retaining a larger customer base that is conscious about purchasing luxury items. The product categorisation mentioned above reflects on this aspect. They have targeted both the Gen X with higher spending power and the millennials who are the existing customer base ranging from customers from upper class segment to the social and famous people and professionals to youngsters with middle income.

Special characteristics product lines: Luxury marketing strategy is regarded as either the peak of high-end strategies or a strategy differentiated by special characteristics, such as the distinctive mix of the dimensions mentioned earlier (Chevalier & Mazzalovo, 2012; Vickers & Renand, 2003). The Prorsum as a product category targets the individuality demands of both the Gen X and Millenials. The Prorsum, as a luxury item, will indicate a range of outcomes, including ‘more value for less money’; ‘more money for value’; ‘money for value strategy’ or ‘good value for small money’. The focus may involve engineering, art, culture or high touch. The key ability is to deliver the real experiences of ‘high end’ in both the general and luxury product lines (Wiedmann & Hennigs, 2012).

Distribution channels through retails and a mix of wholesale and licence: Burberry should adopt a multi-channel distribution strategy through retail, wholesale and licensing. The primary focus should be on retail stores, which should make up Burberry’s largest distribution channel that should enable full control of the brand presentation as well as direct access to its customers. It can effectively position its brand. Burberry should also adopt the wholesale channel to distribute its products to customers who do not have a Burberry store nearby or who shop in multi-brand channels. It should adopt a franchise system, enabling Burberry to access customers in areas where it does not invest. It can adopt a licensing system to access a small segment of the market with the purpose of minimising production input.

8. Visual elements of Branding

9. Recommended Marketing Strategy

The mix strategy of Burberry aims to introduce a sustainable beauty line for both millennials and Gen X.

9.1. Pricing Strategy

9.2. Place/retail

The interactive online strategy bases its rationale on a real luxury experiences for the customers. Both Gen X and millennials have grown up in the age of digital technological advancements, the eCommerce retailers take advantage of the digital market. Burberry can offer personalised shopping experience through selected memberships. It can offer delivery, trial and return provisions or other preference-based shopping experiences (Columbus, 1999).

Burberry can offer pre-order services before the products become available (Lojacono & Pan, 2021). Segmented customers can be targeted with select sales or early shopping opportunities and highlighting consumer individualism with customer support (Khosrow-Pour, 2009). It can offer cross sell advantages with recommended products to consumers based on their previous choices (2019, 2019).

Customers can be provided in-person service, such as customised products. There can be a partnership with logistics to transport customers to the nearest store. responding to trends into

E-commerce can provide a one-stop shopping with focus on safety measures, speed and responsiveness regarding delivering products into the hands of consumers. It can adopt “smart clothing” concepts into new products and branding strategies (Zhao & Kim, 2021).

Virtual showrooms allowing customers’ participation and access can be made using high-resolution imagery and interactive user interfaces (Zhao & Kim, 2021).

9.3. Promotion Strategy

Marketing should be interactive and should go beyond the confines of the transaction-based effort to a two-way conversation-based marketing (Baines, et al., 2017). Digital marketing is one such route to manage such interactive marketing (Baines, et al., 2017). This should allow richest content and exceptional online experience for customers by appealing to senses and influencing perceptions (Okonkwo, 2010). For example, luxury brands follow a home sharing of their universe with potential customers through ‘fashion videos’ through their websites, YouTube or Twitter (Tungate, 2012).

The strategy can be a mix of measures. A good relationship with the local government should be built (Zhao & Kim, 2021). Burberry is working with the British government regarding initiatives in the luxury industry and seeking solutions regarding environmental, socio-economic and governmental issues.

Focussed on building an agile supply chain (Zhao & Kim, 2021), Burberry has applied in 2019/2020 for an AEO status that represents its role in securing an international supply chain with adherence to customs controls and necessary regulation. It will facilitate in acquiring a simplified customs proceeding faster shipment rights and safety and security policy adherence.

It should make decisive investments in digital channels to overcome difficulties and identify new opportunities (Zhao & Kim, 2021). Burberry has built R World direct messaging platform that facilitates a real value interactive online experience.

It should conduct robust branding and unique products to position the company to keep loyal customers (Zhao & Kim, 2021). It may include diligent taxation compliance contributing to support local communities and economies, and partnership with local NGOs on community programmes.

10. Conclusion and rationale

The expanded definition of ‘luxury’ has shifted the marketing strategy and market segmentation regarding luxury brands from focusing on merely buying capacity to a mix of functionalism, experientialism and symbolic interactionism. The mix model allows a brand/company to position itself competitively and achieve its business goals and objectives.

The rationale for a mixed model lies in its flexibility driven by the constant change in market demands and in socio-economic structure that influences the buying capacity and indulgence of the customers. This change drives innovation in the products and its range. Burberry should remain true to its vision and ideology to retain and further enhance the perception of the ‘luxury’ brand.

Take a deeper dive into A Journey into Strategic Marketing Excellence with our additional resources.

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