Consumer and buyer behavior Gucci case PDF

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Summary

Gucci analysis regarding the consumer and buyer behavior ...

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TABLE OF CONTENTS

Executive summary

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GUCCI

Introduction

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How is the typical customer of this brand?

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How do consumers perceive this brand?

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A. What does brand do so that consumers successfully associate the product

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with the product category, and differentiate it from other players in the market?

What is consumers’ attitudes towards this brand?

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A. Based on Fishbein model,what is the consumer attitude towards this brand in comparison to its competitors in the same category?

B. What is this brand doing right to keep their brand evaluations high?

Why consumers end up purchasing this brand? A. Which Consumer Needs Does This Brand Satisfy?

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15 18

B. How does this brand successfully gets into the “consideration set” of consumers who want to satisfy that need? C. How does the brand successfully close the deal?

Appendix

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Graphs explanation

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References

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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,

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providing clothing and accessories of luxury and quality, at a price that the average consumer can not 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

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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. A) Who is the typical customer of this brand? To identify the consumer of the brand that we are analysing we need firstly to divide this customer in different areas to know him in all the aspects. The most important areas are: Socio Economic, Geographic, Demographic and Psychographic. It will be explained one by one.

Socioeconomic: Linking customers to their habits and their salaries is the best way to define Gucci’s path and loyalty to them. So, we should take in account that Gucci’s target market is related to celebrities and the upper class, including the wealthy and fashionistas. However, nowadays Gucci has reached the middle and upper-middle class thanks to its marketing campaign, based in sponsoring young musicians, models and film stars and showing them to the public wearing their brands and exhibiting a wild/elegant trend style, that impacts in the social life of this classes that want to follow their idols, dressing and acting like them. Now, in 2017, it doesn’t mind if a famous bomber costs €900, what is important is that you have it.

Geographic: Gucci’s market studies are very specific, the countries that it is going to locate must have potential customers that appreciate the great quality and the exclusivity of its products. Gucci’s geographical segmentation ignores emerging markets and focuses countries in Europe and America where customers are more accustomed to luxury and quality; particularly in France, US and Italy of course. Nevertheless, Gucci is expanding its geographical barriers trying to reach the Asian-Pacific market (excluding Japan), in concrete China and Indonesia.

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Nowadays, Gucci is looking for opportunities in Latin America, especially Chile, Mexico and Brazil. To be more competitive they need to reach every potential customer in the globe.

Demographic Gucci is focusing in a market that embraces males and females between twenty and fifty years old. So, the Italian company zooms in the lifestyle of this potential customers and creates the clothes that fit in their day to day. In this last years, Gucci has added a new collection that allows it to enter in a new target market: children. This strategy gives Gucci the possibility to reach parents and their children at the same time, which obviously increase their revenues and grants a new image for the brand.

Psychographic: In 2005, due to the global recession, Gucci’s customers were more cautious of their buys and spends on luxury products, reducing their impulse buying acts; what is the opposite that is happening nowadays. However, the desire of emulating the lifestyle of aristocrats and famous characters is one of the main important bullet points of the brand; social influence has been always for Gucci (having account other aspects) its strategic marketing campaign, people will buy if their idols show them how to be like them. Presently, thanks to the social media Gucci has the best channel to promote their clothes, not only Instagram, Twitter or Facebook; sponsoring artists in Youtube can make the brand reach the millennial market that doesn’t mind spending a lot of money in just one clothe. Now, this behavioural segmentation is proved thanks to the loyalty of customers; quality and durability of the clothes make Gucci’s customers to continue buying its items. Being experienced in different dimensions allows Gucci to expertise in what customers need and adapt the prices to their correspondent quality. Over the years, the factors that drove Gucci’s psychological segmentation were economical factors as bigger disposable incomes, lower unemployment and growing healthy class among others.

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Forecast of customers in the long run: How we have seen Gucci has clearly segmented its customers in different areas, however the Italian brand is trying to reach more markets to increase its revenues and profits. Thus, in next years Gucci is going to try to attain more millennial market, to expand their products in the Asian-Pacific region and to increase its marketing campaign respect its children market; all this having account that the company has to maintain its philosophy of luxury and quality, trying in its best way to difference from its competitors.

B) 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...

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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. (perceptual vigilance). 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.

And finally when you see one of their ads (this example) dominated by the ground, it remains you of their logo (previously

seen

in

the

store) and it also remains you to gold, which has power attached to it.

Here

is

an

associative

network of how a person's associate some of the examples presented before as well as our interviewees told us when showing and explaining theme some of the examples. Having made this analysis and being the organization the last phase of the

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Gucc i

Man is the process by which people select, organize, and interpret these perception which Ad openin g the sensations door in order to give them meaning” (Solomon, M.R. (2018) Consumer Behavior Buying, Having, and Being. Pearson).Reason why now, we can say that g B Importa Pow Exp G ol customers perceiveensi Gucci aso a luxury brand.For their customers ,Gucci is art printed nt ir er d see beauty, personality and good taste in y wear.They into something theyve can actually l Handsome Cele all the designs the brand releases each Mo season. They perceive freshness as well as classy brity Mo Exclu tradition in everyRi piece,Clas cause as we canne see Gucci has always kept loyal to its style sive ney s y ch and colors that characterize theBeautiful brand through the years. Gucci also shows power, val Tre classy Busi as well as independence and empowerment sense to all the business women out ua ndy ness ble there. Lu Man xu woman As said before, Gucci is perceived as a luxury, as something you don’t really need to ry sensations. “The study of perception, then, focuses on what we add to these raw

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 it’s 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 actually worths 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.

a. What does brand do so that consumers successfully associate the product with the product category, and differentiate it from other players in the market?

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Even Though Gucci has almost 100 years of history creating unique and luxurious retailing pieces, it was not the first one getting into the market.By that time LV,chanel,Hermes and Prada had been a few years in the market and so they had more experience besides choosing what place they wanted in the market. So when Gucci arrives some years later what they had to do was to find out associations with what they wanted to do, that is to say; with the selling of luxury and unique products.Then they had to analyze the market and see what gaps remained left so that they could take advantage of it and create a unique brand position different to the other ones. As seen in the previous question, Gucci has successfully achieves that part but what they exactly did was this: Taking their competitor and writing down some associations related with what they wanted to create .Apart from that the company also made a list of the remaining associations which could be necessary for the brand.

LV-Tradition, high quality, expensive, luxury Channel- Daring, adventurous, independent women,high quality Hermes- Heritage,exquisite, luxury, eye for detail Guess-Mass market,less luxury Prada-Luxury,elegance,chic Friendly environmental,stop using fur,Trendy,young After seeing the main characteristics (they wanted to have) as well as its competitors, they evaluated the remaining gaps by making a perceptual map:

As clearly shown above, the gap that Gucci decided to take and make its own was the one that combined tradiction (as explained in the first question) as well as innovation and trendiness to capture those young consumer and not just focus on the older ones.

Luxury Hermes

? (1)

LV Traditional

Chann el Innovative

Prad a

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Guess Affordability

After having chosen a position in the market they started to produce high quality products,with a high price so it was perceived by luxury.Furthermore in order to be in the middle of the perceptual map what they did (and still keep doing ) is keep their style classical as well as adapting to the new upcoming trends in the market, so they can capture those young teenagers who are looking for that and an independent style in what they’re wearing. With all those procedures they also gained the exclusiveness, due to the fact that not everyone can access to what they have to offer. So yes, this is the procedure by which they have achieved to be related with the overall category as well as; creating their own brand, with their own style based in the position they decided to take. C) What is consumers’ attitudes towards this brand? How we have seen, Gucci’s customers are divided in different segments, but all of them have in common the feeling of what they want from the company: luxury, quality and sense of fulfilling. These consumers are seeing Gucci nowadays as one of the top upper-class brands, and they buy its products following their social needs; they want to be accepted in the high-class community and the underground style (it depends of the customer) as copying the lifestyle of famous characters, following the trend that is being developed during the past years and is perfecting day by day. As we are going to see in the next sections, Gucci’s customers demand all type of products in different domains and the Italian brand gives it to them, satisfying their needs and rebounding in a better attitude towards their image as a luxury brand. a. Based on Fishbein model,what is the consumer attitude towards this brand in comparison to its competitors in the same category?

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Fishbein model of consumer behaviour (also called theory of planned behaviour or theory of reasoned action) attempts to explain the rationality of choice of the product by the consumer by using measure of his overall attitude towards object. This model helps to understand consumer decision making process and suggest different ways to influence it. Fishbein model distinguishes three basic variables: •

customer attitude towards particular object (Ao),

•

beliefs that this object has certain attributes (benefits, values, features), it is

result of prior knowledge, advertising, etc (Bi). •

subjective evaluation of this attributes and positive outcomes, benefits from

acquiring this object (Ei). Symbolically, above variables can be presented in following formula: Ao=∑i=1nBiEi https://ceopedia.org/index.php/Fishbein_model Following the steps of the Fishbein model, and knowing that the Gucci competitors are brands like Zara, Chanel, Christian Dior or Burberry. Why the consumers choose Gucci and they do not choose its competitor? The Fishbein model explain how the consumer choose a brand. So, developing the equation, we have (Bi), which are the attributes of Gucci. These are, the high-quality leather products and hand-making shoes, the charisma of its products, its strong brand image, its control of the distribution channels, the collaboration with UNICEF as a part of SCR initiative, the associations with automobile companies like Ford, Fiat, General Motors, added brand value and finally, the great advertising and marketing which has made Gucci a top of the mind fashion brand. Regarding the second part of the equation (Ei), the people who buy in Gucci evaluate its products like a high-class who gives them a high status. Obviously, there are brands cheaper (Zara) where the clothes quality are good, but Gucci gives to the customer the opportunity of dream. Many of the people when see a Gucci store start thinking about if they can someday enter in that shop and buy one of its products, because they want to be seen like high-class people, and that is why it is like a dream. Comparing Gucci with other high-quality brands like Chanel, Christian Dior, etc. the

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customers choose Gucci normally because of the loyalty that Gucci have generated because of its marketing, that is Gucci’s high-end image is built on the two pillars that are typical for most luxury brands, that is, handiwork and heritage (patrimony), what distinguishes the brand from its competitors is its sensual character and the fact that...