Gucci has been admired for selling the highest quality of leather goods and various types of accessories. With the economy in dire need, Gucci created Gucci For Us to sell their 100% genuine leather products and make them affordable for all buyers and consumers. Buyers who would be attracted to the GFU Product-line would be those of the high-end retailer products such as, Prada, Baby Phat, Louis Vuitton, and Roca Wear. These retailers include companies such as Citi-Trend, Marshalls, Macy's, Niemen Marcus, Bloomingdales, and Parisians. These retailers would purchase merchandise from GFU because the products are still of Gucci influence and economical. The buyers for the retailers previously mentioned would be excited about informing the retailers about GFU because they would be purchasing the products at a lower price. These retailers would also benefit from the products because they will be able to purchase more of the products; therefore, building their clientele substantially. Unlike counterfeit Gucci hand bags and accessories, GFU can guarantee their merchandise through warranties to both their buyers and consumers. However, these products are unauthentic and this is why GFU stays ahead of the competition.
For many years now celebrities, millionaires, and other wealthy individuals have been known to be the only consumers able to purchase Gucci products. However, this is not the case currently since GFU has repositioned couture pieces very affordable. Many low market vendors sale knock off products which leaves many consumers feeling swindled and used. However, with GFU the products are 100% guaranteed and comes with warranties. This factor alone puts us ahead of the competition. Other factors such the look, style and cost determines if consumers will purchase products from certain companies. Fortunately, GFU products come direct from Italy ensuring style and quality; furthermore, the price is what will help GFU become a leader in their respective market.
Impacts on Marketing Strategy
The consumer preferences that affect the buyers of GFU will play a direct role in the implementation of the Company's marketing strategy. As previously discussed, the organizational buyers of GFU are influenced by economically priced merchandise, design quality and brand-name. Since the targeted markets of GFU are consumers looking for luxury products at reasonable prices, Gucci's marketing strategy will need to capitalize on affordability. For years, the Industry leader has been an unreachable commodity for many women, the marketing tactics for this product-line must play on consumers wants and desires to have what only the high-society can afford. First, Gucci has to influence the buying habits of their newly sought after consumers since the typical purchase patterns of this leave brand loyalty and lean heavily towards the competitor brands such as Coach. Advertising messages must reposition the Gucci brand to attract new customers.
"When it comes to marketing strategies, most people think spontaneously about the
4Ps (Product, Price, Place, Promotion) and maybe extended by three more P's - People,
Processes, Physical Existence" (Why Segmentation). However, for GFU seeking to:
expand their markets and gain better servicing of customers, sustained customers'
relationships, target communication, higher profits, increased market share, opportunities
for growth and stimulating innovations, a bold, unique option available. Marketing
segmentation is a potential "win-win" marketing strategy that allows the customer and
the Gucci For Us to win. This valuable strategy is the basis for customer orientation,
distinguishing and value-added services (Why Segmentation).
To capitalize on such an opportunity, GFU must be familiar with the definition,
criteria of segmentation marketing and detailed knowledge about the customers'
preferences. Such valuable data can be used to create new lines as Hewett-Packard (HP)
did in the printing and photo industries (Marketing) Market Segmentation is the method
of dividing a market by a strategy directed at gaining a major portion of sales for a sub-
group. Stated another way, market segmentation intent is to do the following: (1) Identity
the customer's needs, wants, demands and market segments; (2) Develop profiles or
plans of the resulting market segments to satisfy the customer (Why Segmentation).
For success, GFU must choose the variables which are relevant for segmenting
the market for a particular product. Use of a limited number of variables is
strongly suggested in order to avoid splitting the marketing budget into too many
ineffective parts and risk confusing the customers. Effective segmentation characteristics
should also: (1) Be Measurable (2) Be Relevant (3) Be Distinguishable and (4) Be
Feasible. Today, GFU has the same opportunity as HP when Photo Smart became
preferred by photographers in lieu of photo processing because HP's printer offer a
simple, new way to get pictures on paper. This outcome has increased their market share
and profits because two out of every three printers now sold are HP( Why Segmentation).
Through this planning process, our target market for GFU are customers with less
disposable income than the Gucci originals and classics market. The pricing will be
approximately 1/3 the cost of the Gucci originals. The target market will be for those
with moderate income with available disposable income to fulfill their desire to own their
first GFU product. The Geographic target will be global and metropolitan; demographics
ages 40 and under, single income of $40,000 or married with two incomes of $60,000;
psychographic target shall be aggressive professionals, social climbers and sports
enthusiasts; behavioral will include clients of classical Gucci and their associates, clients
and customers of competitors, such as Ralph Lauren and Calvin Klein.
For success, marketers must choose the variables which are relevant for
segmenting the market for a particular product. Effective segmentation characteristics
should: (1) Be Measurable (2) Be Relevant (3) Be Distinguishable and (4) Be
Feasible. An example is found with Hewett- Packard's success in using the knowledge
of the different segments of the consumers to create and entire new line of products to
meet the customer's needs and expand the market. Today, HP photo smart is preferred
by photographers in lieu of photo processing because HP's printer offer a simple new
way to get pictures from a digital camera onto paper. This outcome has increased the
market share and profits because two out of every three printers now sold are HP.
Through this planning process, our target market is customers with less disposable
income than the Gucci originals and classics market. The pricing will be approximately
1/3 the cost of the Gucci originals. The target market will be for those with moderate
income with available disposable income to fulfill their desire to own their first GFU
product. The Geographic shall be global and metropolitan; Demographics shall be under
40 single income of $40,000 or married with two incomes of $60,000; psychographic
target shall be aggressive professionals, social climbers and sports enthusiasts; behavioral
shall include clients of classical Gucci and their associates, clients and customers of
competitors, such as Ralph Lauren and Calvin Klein.
The Gucci fashion is the most admired designer brand in the world, market research firm conducted a survey, The Nielsen Company (Forden, 2008). 48 countries were participated in the survey with 25,000 online consumers. The survey was conducted by the Nielsen Company and issued by Bloomberg News in which one out of five consumers advised they would purchase Gucci products if money wasn't an issue (Forden, 2008). The survey was conducted in November, 2008 which polled the purchasing behavior and future aspirations of internet consumers in North and Latin America, Europe; Asia-Pacific, and the United Arab Emirates (Forden, 2008).
In a similar survey two years ago, Gucci shared the number one position with
Giorgio Armani, an Italian fashion labels (Forden, 2008). In the current global survey, Armani has slipped to the number 4 position (Forden, 2008). Chanel and Calvin Klein were tied for second place, while Versace, Louis Vuitton, and Christian Dior all ranked in fourth place alongside Giorgio Armani (Forden, 2008).
Competitive landscape is the intelligence of a business's marketing strategy in planning its competitive edge over its competitors to feature their product or service to increase sales and revenue. The competitive landscape is incorporated into a business plan which addresses the competitive analysis summary which details points and reasons why a company has a competitive advantage over its competitors and what makes it different (Steve, 2007). The following advantages and strengths of Gucci provide a strong competitive edge over its competitors:
1) Long-standing established business;
2) Strong brand image and international presence;
3) Control over distribution channels;
4) Increase in number of Directly Operated Stores;
5) Diversification of multi-brand groups of products (Cuizon, 2009).
The second phase is the competitive analysis matrix in which a business tables the differences between its competitors showing the advantages and disadvantages among its competitors (Steve, 2007). Gucci's weaknesses include the instability of management and the financial base (Cuizon, 2009). Gucci has maintained increasingly debt over the years yet some products continue to be promoted and marketed even though they are unprofitable (Cuizon, 2009).
Thirdly, a business incorporates the barriers into entry which explains why a business is a threat to the competition (Steve, 2007). Gucci has positioned itself over the year to market its products to the very wealthy and thus eliminated the competition among the market for the luxury products (Cuizon, 2009). The threat of imitation products and substitutions of Gucci products has caused a major threat to the brand products with decreasing profits that the luxury company should have received (Cuizon, 2009). The final stage entails a business's marketing and sales strategy explaining how the product or service will be marketed and outsells the competition (Steve, 2007). Gucci has the opportunity to expand into India and China to market luxury products and expand into different business segments and consolidate other luxury products (Cuizon, 2009).
Gucci has consistently achieved to embed their core values to reflect in all their products from perfume and sunglasses to jewelry, accessories, handbags and ready-to-wear apparel (Forden, 2008). To stay ahead of competitors, Gucci's chief executive and creative director is currently working to revive iconic symbols which include the family crest and a script logo on handbags and other accessories (Forden, 2008).
GFU stands to incorporate the known Gucci products into an untapped market for targeted customers who dream to own a Gucci product at an affordable price in today's struggling economy who otherwise could not afford the luxury product line. The development of GFU stands to net a large income and profit for the newly implemented segment of the Gucci brand markets. Gucci has surveyed how to rise above its competitors and remain strong in today's market with continued growth and maintaining its goal as the #1 brand product in the world.
Bhol, S. (2009). Replica Gucci handbags:-High style at low budget. Article Base, (), .
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Cuizon, Gwendolyn. The Marketing Strategies of Gucci. March 6, 2009. Retrieved
from website on September 12, 2009 from http://strategic-business-
Forden, S. (2008, February 27). Survey shows Gucci tops global brand competition. New
York Times. Retrieved from http://www.nytimes.com/2008/02/27/style/27iht-gucci.10479736.html
Steve. Business Plan Series: Part 5 - Competitive Landscape. June 5, 2007.
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Why Segmentation- Marketing Publication- Management Portal, Retrieved 9/11/09
Gucci For Us or GFU can position itself as 100% genuine leather products and trend setter every day wear fashion instead of the usual haute couture. As a ...
The solution examines the phase one marketing plan. Buyers influences are determined.