Abstract
Gucci, being a successful fashion brand, must evaluate its business situations to make effective business strategies. Effective business strategies are lucrative for future success and sustainability. The brand with a strong brand image and financial capability has expanded in different countries successfully. Business success and sustainability is to be shown through a comprehensive context analysis. Most important elements of the context analysis are business context, customer context, external context and internal context. Segmentation, awareness, involvement, media usage, and decision-making unit are discussed in the customer context. Gucci made good strategies with time, and it indicated its remarkable evolvement. The marketing strategy and a robust competitor analysis mention that the firm is way ahead of many top fashion brands in the global fashion industry. Digital marketing communication or an effective marketing strategy is not a single factor regarding success. The internal business process is also a cause of victory in the external business environment. Organization values, beliefs, and culture are reflected in the brand personality, and it shaped the customer behavior. The external context mentioned some critical stakeholders of the company. Customers and employees and digital media partners are the primary stakeholders of Gucci. Employees are putting their efforts into coming up with creative and bold designs to meet the needs of customers.
On the other hand, customers perceive the brand according to expectations. Thus, market share, sales, revenues, and profitability are increasing. Gucci always intends to improve its business process, and it is essential in the competitive landscape of the global fashion industry.
Introduction
Marketing communication is essential for every brand to enhance its attraction and positioning. Effective marketing communication is imperative to streamline products and services to increase sales, revenues, and competitive advantage. In this study, the emphasis is on context analysis. Through context analysis, the firm can derive several aspects of the branding process for guiding the campaign development. Customer context, internal context, business context, and external context are the main elements of the content analysis. The focus will be on a particular luxury fashion brand. The purpose is to obtain the improved branding process, which is associated with context analysis.
Context analysis is a practical approach to analyze the business environment of the firm. Navigating the internal and external business environment is essential, as it can help a firm to come up with crucial strategic decisions.
The Brand: Gucci
Gucci is an Italian luxury brand of fashion and leather products. The company was founded in 1921 by Guccio Gucci. Gucci operates in different regions with 278 stores. Franchising has become a critical international business strategy to expand business in different areas or markets (Kapferer & Bastien, 2012). The brand has successfully retained its place in the Forbes valuable brand lists. High-quality fashion products of customers have helped to create a positive perception of the global fashion market. According to 2016 financial reports, the revenue of the company is US$ 4.3 billion.
The context analysis of the firm can help to obtain key marketing traits and strategies. The customer communication process is excellent, which allows us to emerge as one of the top fashion brands in the world.
1. The Customer Context
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Segment Characteristics
The management has divided customers into four segments. These segments are Demographic, Geographic, Psychographic, and Behaviouristic
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Demographic
Sex and age are the main elements of the demographic section. Gucci targets both males and females in the market and sells relevant products. Also, it targets children, teenagers, and adults. People aged 15 to 40 are the primary targets. Targeting young customers is a crucial customer strategy that increases sales and revenues. These customers are assertive and willing to pay more for quality, design and the latest fashion trends (Easey, 2009).
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Geographic
Gucci aims to exist and expand in countries which depict market potential. For Instance, the firm wants to operate in Italy, the United States, and many other countries where people want to pay more for brand image and quality. Germany, France, and Belgium are key target markets for this brand. Critically, business expansion in developing countries is poor. Still, many areas or markets are pending to serve customers (Choi, 2014).
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Psychographic
This segment has played a vital role in brand success. Hitting the lifestyle of people in different regions has worked, and it increased sales and brand image drastically. Aristocrats and celebrities from the music and film industry are targeted effectively. It became the status symbol of societies. (Hines & Bruce, 2007) Emulating lifestyle of celebrities and create an influence on target customers has helped to get an edge over other fashion rivals (Gill et al., 2012).
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Behaviouristic
Favorable customer behavior is a critical success driver. Customers usually intend to depict a certain attitude. Due to the high quality and differentiation process, customers aim to make repetitive buying decisions. Gucci has set several quality standards and differentiated its products to shape the favorable customer behavior. Now, it owns an immense range of customers in the fashion market (McDonald, 2004).
Level of awareness, perception, and attributes towards the brand organization
Gucci’s brand awareness is remarkable. For Instance, it has focused on products, which can improve the lifestyle. In the different advertising campaigns, the firm depicts its fashion products, which can change perception and create awareness. Making a comparison with other brands has helped customers feel the difference. Brand awareness, brand association, and brand advocacy are three main attributes towards the brand organization. Marketing communication, primarily through social media channels, has been used by the company to make people aware. Emotional and sentimental attachments with customers are the right approach to build the relationship with customers. The loyal customer of Gucci increased word of mouth People’s interactions and reviews powered up the brand strategy in an effective manner (Jackson & Shaw, 2008).
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Levels of involvement and types of perceived risk
The level of perceived threat is high. For Instance, in the competitive fashion market, other brands may take initiatives to reduce the switching cost. It can cause uncertainty in the decision-making process (Givhan, 2015). Due to new fashion trends, customers can change their preferences. Gucci has a high level of customer involvement. Gucci customers come up with a deep understanding of their needs. Customers make confident buying decisions by navigating new fashion trends (Pan, 2017). They are attentive and aware of quality, design, and look to feel the difference. It goes in favor of Gucci because it can meet these needs and retain them for the long run.
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DMU characteristics and issues
The decision-making Unit revolves around influencers, buyers, initiators, gatekeepers, deciders, and users. Gucci played the role of the influencer in the competitive landscape. It depicted the persuasive role (Lerévérend, 2018). The firm, through pertinent and well-structured marketing communication, can help customers to make decisions. Gucci’s marketing team interacts with customers in different tough points to shape their behavior and enable positive buying decisions. They provide knowledge regarding product quality and the latest fashion trends. If the information works for customers, the firm reinforces it effectively with the time (Marketingteacher.Com, 2014).
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Media Usage
Implementing the media strategy is one of the most important things for this company. The firm wants to position better in the minds of customers through spreading the message. However, product-specific, customer-oriented and target market research is necessary. Regarding the product, the company aims to design products which cannot be imitated in the fashion market by other brands, and it is one of the prominent needs of the customers. Also, Gucci hits the psychological motives of customers to develop and shape products. The strategy of “never before texture” has hit this motive of customers successfully (Vasudev, 2016). For Instance, customers want to increase their social status by wearing Gucci shirts. Thus, making it different for customers is the right decision, and it compels them to pay more (Ong, 2017).
Gucci transformed its media strategy (Berardinis, 2018). It used digital media to reach customers and enhance the attraction. Its redesigned and launched the website to demonstrate the Gucci’s life of men and women. It wanted customers to perceive and admire this world (Danao, 2017). On the website and many other social media channels, it posted image-driven content. It seems an excellent media usage, which also justifies the elitism and luxury touch. Knowing what works in social media and collaborating with visual artists have successfully justified the remarkable use of media (Danao, 2017).
2. The Business Context
· 1 Brand: Gucci
Gucci is a prominent fashion brand. It contains a broad product portfolio for customers. Apart with clothes, it offers or sells perfumes, watches, and many other leather products to customers. The comprehensive product portfolio has been shaped to meet the needs of customers.
· 2 (a) Industry and market level
Gucci operates in the global fashion market. The market is competitive, as many international brands emerge in the global fashion landscape. The global revenue share of Gucci is increasing from 2012 to 2017. For Instance, it has been revealed that North American depicted 21 % of Gucci’s global revenue (Statista.Com, 2017). Latest fashion industry trends are in the limelight. These most recent fashion trends may shape the marketing and brand strategy as well. Companies are going online to tipple sales, enhance the customer traffic, and acquire other fashion giants to increase the market share (Reuters, 2018).
· 2 (b) Conglomerates
Gucci belongs to the conglomerate. The association with the global brand Kering is quite visible. This company sells different fashion products, including Balenciaga, Alexander McQueen, Gucci, Boucheron, Brioni, Pomellato, Yves Saint Laurent, and Bottega Veneta. On the other hand, LVMH is an excellent luxury conglomerate (DeMarco, 2013).
· 3 Potential competitors
Louis Vuitton, Armani, Prada, Bulgari, Versace, Chanel, Burberry, and Hermes are the main competitors of Gucci. Gucci has a market share of 5.3%. Ralph Lauren and Michael Kors are ahead of Gucci with 19.2% and 18.55 respectively (Obaninternational.Com, 2017). LVMH depicts a 9.5% market share (Obaninternational.Com, 2017). The market share compared with other top competitors can be described in the figure below.
· 4 (a) Marketing Communications Activity
Past data reveal that Gucci used both traditional and social media channels to communicate with customers, promote products and service (Ellis-Petersen, 2017). For Instance, TV commercials, banners, fashion magazines, and sponsorship are different ways to get the brand in the limelight and intact with customers (Indvik, 2012). However, effective communication with customers is quite visible on various social media channels such as Facebook, Twitter, Instagram, and many others. Developing the app in eight different languages is a remarkable idea, which has been implemented recently (Milnes, 2017).
· 4 (b) Customer Conversation
Millennials are the main target customers and they cause 50% of sales. Thus, the dream team of Gucci has told customers that they design future products instead of spreading outmoded ideas.
· 4 (C) Theme & Relevancy to Time
The classic GG logo was quite visible to enhance the attraction at Gucci stores. However, it became controversial due to tampering allegations. However, it seemed the best time to shape the different theme and lead the industry (Danziger, 2017).
· 4 (d) Message Consistency
The message to customers on both social and traditional media channels is consistent. Stay it with Gucci is one of the brand messages, and it justifies the message consistency.
3. The Internal Context
· Financial Constraints
Kering is driving sales, profitability, and revenue growth For the Gucci brand. For Instance, Gucci depicted 44% revenue growth despite a big struggle in the second quarter (Mau, 2018). Due to the emergence of another brand and lack of development in developing countries, comparatively, some financial constraints such revenue and profitability are quite visible.
· Organization Identity
High-quality craftsmanship a perception, bold product design and innovative ideas have helped people identify this brand. The brand personality is linked with contemporary, romantic and eclectic elements, and it makes it different from other fashion brands (Michele, 2017).
· Culture, Values, and Beliefs
Gucci shaped the culture of purpose. The purpose of Gucci’s organizational culture is to create the space for talent, enable togetherness, and be transparent. These are some essential cultural values as well. Gucci still believes that nothing is finished yet. The management team knows that it must move to develop different ways (Bof Team, 2018)
· Marketing Expertise
Marketing Expertise is purposeful as well. For Instance, the company has a digital marketing team that engages and digitally connects with the next generation, called Millennial. It helped the firm to get back on track in the competitive fashion industry (Enskog, 2016)
· Agency availability and suitability
The creative agency King and Partners has worked with many fashion brands to power up the digital strategy. It is also suitable for Gucci, as it is willing to accelerate digital operations. The digital process of Gucci must be creative, and the agency is available to make the difference (Milnesp, 2016)
4. The External Context
· Key Stakeholders & Importance
Main stakeholders of the company are customers, employees, suppliers, media partners, digital creative agencies, investors, and strategic partners like Kering. These are important because these stakeholders drive business success, enable business growth, and increase profitability (White & Denis, 2018).
· Communications Needs
The prominent communication need is the integrated communication system. Frequent communication with these stakeholders is imperative to sustain the business and integrate with new trends and retain an edge over rivals.
· Social, Political, Economic and Technological restraints and opportunities
Due to political stability in developed countries, the firm can expand its business. In the developed economy, the firm can make additional customer segments due to high- or moderate-income level. The big technological transformation is digitization, and it is to be demonstrated and sustained in the marketing process. Technological restraints are in the limelight in the industry. However, collaboration with creative ad agencies can enhance marketing communication through modern technology (Europeanceo.Com, 2016).
Conclusion
In the end, it is to conclude that Gucci has gained success due to the right execution of strategies at the right time. The context analysis provided some key insights, which indicated the current business and competitive position of the company. Customer business, internal and external context is examined to portray the current business situation. Depending on this context analysis, some productions can be presented.
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