Harvard Case - Burberry
"Burberry" Harvard business case study is written by Youngme Moon. It deals with the challenges in the field of Marketing. The case study is 20 page(s) long and it was first published on : Oct 1, 2003
At Fern Fort University, we recommend Burberry implement a multi-pronged strategy to revitalize its brand, regain market share, and achieve sustainable growth. This strategy focuses on:
- Redefining Brand Positioning: Shifting from a purely luxury brand to a more accessible, inclusive, and digitally-driven brand while maintaining its heritage and craftsmanship.
- Elevating Customer Experience: Creating a seamless and personalized customer journey across all touchpoints, from online to offline, to build deeper engagement and loyalty.
- Optimizing Marketing and Distribution: Leveraging digital marketing channels, social media, and influencer marketing to reach a wider audience, particularly Gen Z and millennials.
- Driving Innovation and Product Development: Introducing new product lines that appeal to a broader customer base, focusing on sustainability and inclusivity.
- Expanding Global Reach: Targeting emerging markets with tailored marketing strategies and product offerings.
2. Background
This case study examines Burberry, a British luxury fashion house facing declining sales and brand relevance amidst changing consumer preferences and a competitive landscape. The company is struggling to appeal to younger generations, who are increasingly drawn to more accessible and digitally-driven brands.
The main protagonists are:
- Angela Ahrendts: CEO of Burberry from 2014 to 2019, who implemented a digital-first strategy and focused on expanding the brand's reach.
- Marco Gobbetti: CEO of Burberry from 2017 to 2022, who aimed to revitalize the brand by focusing on product innovation and a more inclusive approach.
- Jonathan Akeroyd: Current CEO of Burberry, who is tasked with continuing the brand's transformation and achieving sustainable growth.
3. Analysis of the Case Study
SWOT Analysis:
- Strengths: Strong brand heritage, global recognition, high-quality products, established distribution network.
- Weaknesses: Perceived as elitist and outdated, declining sales, lack of innovation, inconsistent brand messaging.
- Opportunities: Growing demand for luxury goods in emerging markets, increasing digitalization of retail, potential for sustainable and inclusive product lines.
- Threats: Increased competition from both luxury and fast fashion brands, economic uncertainty, changing consumer preferences.
PESTEL Analysis:
- Political: Global political instability and trade tensions could impact supply chains and consumer spending.
- Economic: Economic recession could lead to decreased demand for luxury goods.
- Social: Growing awareness of sustainability and ethical sourcing, increasing demand for inclusivity and diversity.
- Technological: Rapid advancements in e-commerce, digital marketing, and AI offer opportunities for innovation and customer engagement.
- Environmental: Growing concerns about environmental impact and sustainability, creating opportunities for eco-friendly products and practices.
- Legal: Regulations on advertising, product safety, and data privacy can impact marketing strategies and operations.
Marketing Analysis:
- Brand Positioning: Burberry's traditional luxury positioning is no longer resonating with younger generations. The brand needs to redefine its image to be more inclusive, modern, and digitally-driven.
- Target Market: Burberry needs to expand its target market to include younger generations, particularly Gen Z and millennials, who are more digitally savvy and value sustainability and inclusivity.
- Marketing Mix: Burberry needs to optimize its marketing mix, leveraging digital marketing channels, social media, influencer marketing, and experiential marketing to reach its target audience effectively.
- Distribution Channels: Burberry should continue to invest in its online presence and expand its reach through strategic partnerships and pop-up stores in key locations.
4. Recommendations
1. Redefine Brand Positioning:
- Shift from Luxury to Accessible Luxury: Maintain the brand's heritage and craftsmanship while making it more accessible to a wider audience. This can be achieved by introducing new product lines at lower price points, collaborating with influencers and artists, and focusing on sustainable and ethical practices.
- Embrace Digital and Inclusivity: Leverage digital marketing channels, social media, and influencer marketing to connect with younger generations. Showcase diversity and inclusivity in all marketing materials and product offerings.
2. Elevate Customer Experience:
- Seamless Omnichannel Experience: Create a seamless and personalized customer journey across all touchpoints, from online to offline. This includes offering personalized recommendations, convenient delivery options, and exceptional customer service.
- Loyalty Programs and Community Building: Develop loyalty programs and online communities to foster engagement and build a sense of belonging among customers.
3. Optimize Marketing and Distribution:
- Digital Marketing Dominance: Invest heavily in digital marketing, including social media, influencer marketing, search engine optimization (SEO), and paid advertising.
- Strategic Partnerships: Collaborate with key influencers, retailers, and brands to expand reach and increase brand awareness.
- Pop-Up Stores and Experiential Marketing: Create engaging pop-up stores and immersive experiences to connect with consumers and generate buzz.
4. Drive Innovation and Product Development:
- New Product Lines: Introduce new product lines that appeal to a broader customer base, including sustainable and ethically sourced options.
- Collaborations and Limited Editions: Partner with artists, designers, and other brands to create exclusive and limited-edition products that generate excitement and drive sales.
- Focus on Inclusivity: Develop products that cater to a diverse range of body types, skin tones, and styles.
5. Expand Global Reach:
- Tailored Marketing Strategies: Develop targeted marketing campaigns for specific regions and cultures.
- Local Partnerships: Collaborate with local influencers and retailers to build brand awareness and drive sales in emerging markets.
- Product Localization: Adapt product offerings to meet the specific needs and preferences of different regions.
5. Basis of Recommendations
These recommendations are based on a comprehensive analysis of Burberry's strengths, weaknesses, opportunities, and threats, as well as the changing consumer landscape and industry trends. They are aligned with Burberry's core competencies, mission to create timeless and desirable products, and the need to attract a wider customer base.
The recommendations are also designed to enhance customer experience, optimize marketing and distribution, drive innovation, and expand global reach. They are expected to improve brand perception, increase sales, and achieve sustainable growth.
6. Conclusion
Burberry has a strong brand heritage and a loyal customer base, but it needs to adapt to the changing consumer landscape and regain its relevance. By redefining its brand positioning, elevating customer experience, optimizing marketing and distribution, driving innovation, and expanding global reach, Burberry can achieve sustainable growth and become a leading luxury brand for a new generation of consumers.
7. Discussion
Other alternatives not selected include:
- Maintaining the Status Quo: This would likely lead to further decline in sales and brand relevance as consumer preferences continue to shift.
- Focusing Solely on Digital: While digital marketing is crucial, a purely online strategy might alienate existing customers and limit the brand's ability to create engaging experiences.
- Aggressive Price Reductions: This could damage the brand's image and reduce profit margins.
The key assumptions underlying these recommendations are:
- Consumer preferences will continue to shift towards more accessible and digitally-driven brands.
- Burberry can successfully reposition its brand and appeal to a wider audience.
- The global luxury market will continue to grow, particularly in emerging markets.
8. Next Steps
Timeline for Implementation:
- Year 1: Redefine brand positioning, launch new product lines, optimize digital marketing strategy, and expand global reach.
- Year 2: Elevate customer experience, implement loyalty programs, and further develop sustainable and inclusive product offerings.
- Year 3: Continue to innovate and expand global reach, focusing on emerging markets and new customer segments.
Key Milestones:
- Q1 2024: Launch new product line targeting younger consumers.
- Q2 2024: Develop and launch a digital-first marketing campaign.
- Q3 2024: Open pop-up stores in key locations.
- Q4 2024: Partner with influencers and artists to create exclusive collaborations.
By implementing these recommendations and monitoring progress closely, Burberry can successfully navigate the changing consumer landscape and achieve sustainable growth in the years to come.
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Case Description
In 2003, Rose Marie Bravo, Burberry's CEO, is debating how to maintain the currency and cachet of the brand across its broad customer base, while entering new product categories and expanding distribution. In the past five years, the brand has become one of the hottest luxury brands in the world. But Bravo now faces a number of key decisions, including (1) which new product categories to enter, (2) how to deal with the appropriation of the brand by nontarget customers, and (3) how prominent the company's famed "check" pattern should be in its advertising and clothing. Includes color exhibits.
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