Marketing Management

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Marketing Management

Table of Contents
1. Introduction............................................................................................................................
2. An overview of GUCCI brand...............................................................................................
3. Marketing approach by GUCCI.............................................................................................
3.1 Market segmentation and targeting issues........................................................................
3.2 GUCCI's market position.................................................................................................
3.3 GUCCI's marketing mix and related issues......................................................................
4. Future developments............................................................................................................
5. Conclusion............................................................................................................................
6. References............................................................................................................................
7. Web References....................................................................................................................
8. Bibliography.........................................................................................................................

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1. Introduction
An effective marketing strategy can be identified as the key to success in any
organisation. The process of marketing can be identified as identifying, anticipating and
satisfying the customer requirements profitably making the right products available for
the customers at the right time, at the right place for the right price. So basically how an
organisation determine its marketing strategy will determine how far that company can
win the customers making them loyal for the company's products. This assignment will
pay particular attention on the marketing approach of the much renowned luxury fashion
and leather goods brand GUCCI identifying the basic elements of its marketing strategy
and marketing mix. The issues evident in their marketing approach will be analyzed in
detail identifying the suitable approaches that would resolve those prevailing issues. The
future developments anticipated will be evaluated under this assignment identifying the
best practices for GUCCI that will enable them to get closer to the consumers via their
products as well as via their services.

2. An overview of GUCCI brand

As per the GUCCI Website-the world of GUCCI, (2014) the brand GUCCI was
established by Guccio Gucci in Florence in 1921 in order to manufacture high end leather
goods and fashion items with classic and distinguished styles. He along with his three
sons expanded the products they manufactured in to a wide range offering the customers
with a variety of fine leather products and fashion items. GUCCI expanded its operations
over many countries and locations with its success in home market as one of the best
luxury fashion brands. At present GUCCI is having its operations in many markets around
the world whereby they operate their own high end retail outlets and as well sell its
products via high end franchisees in different countries. As per the GUCCI website
(2014) GUCCI offers a wide range of products including leather shoes, bags, luggage,
wallets, belts and also a wide variety of luxury clothing, skin care products, watches and
jwellery. With its touch of exclusiveness and high quality of the products GUCCI has
build its reputation as one of the most sought after high end luxury fashion brands making
many high end customers loyal towards its products. With its success in the high end
luxury fashion sector GUCCI has now become the biggest selling Italian brand and as per
Interbrand Best Global Brands, (2013) GUCCI has been able to maintain the position of
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38 indicating a brand value of $10151 million due to its strong marketing presence and
brand image.

Image 1- GUCCI logo

Source : ( http://www.glasses123.co.uk/store/categories/Brand-%252d-Gucci/ )

3. Marketing approach by GUCCI

3.1 Market segmentation and targeting issues
As described by Weinstein (2013, p.120) proper market segmentation is very much
important for the success of any organisation. Segmentation involves dividing the market
into different sub groups in order to more effectively market their products. The market
may be a wider population so that marketing a particular product to the whole market
may not be effective because not all the individuals in that market will not be interested in
purchasing that product. GUCCI understanding the above concept has identified main
subsections in the different markets in order to effectively market their different products
and services.
As per the GUCCI Website-About GUCCI (2014) the company started its operations as
one of the Italian leather products and a clothing manufacturer and the main objective of
GUCCI was to offer its customers a wide range of high quality products with a touch of
luxury. So the main marketing strategy GUCCI has been following can be identified a
differentiating strategy where it positioned itself as a fashion and a leather products brand
which offers exclusive high end goods keeping higher margins in order to maintain the
brand value and the tough of exclusiveness. In segmenting the market GUCCI identified
its main target segment as the high income earning high end customers who seek high
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quality products with a tough of exclusiveness and luxury in order to represent their
social classes and status. The main issue in identifying such a market segment to target
their products can be identified as the segment being too narrow with its definition of the
high income earning category. So GUCCI had to further subdivide its main target market
segment as men's products and fashion and again as women's products and fashion. There
GUCCI was in a position to exactly identify its target customers so that the products
could be designed and manufactured in order to meet the different requirements of the
respective customers. The products they offer are categorized mainly under the above two
target segments where they design and offer their products

which are clearly

distinguished between the above segments(GUCCI Website, 2014).

In its main market segments GUCCI's success depend upon the exclusiveness and the
touch of luxury they maintain in its brand. In targeting its products to its target segments
GUCCI focuses mainly upon the individuals who are in a matured age. This is mainly
because from the beginning GUCCI has been targeting the more affluent segment of the
customers and the individuals who fell into that category were mainly the middle aged
individuals. As per Kapferer (2013, p.228) today in the competitive business environment
the trend has now been shifted towards the youth category and the highest demand for the
luxury leather products and fashion comes from the young group of customers. So the
older strategy of targeting seems now outdates for GUCCI where they should focus more
on designing and manufacturing products which meet the demand and the needs of the
dynamic youth category. GUCCI must keep close contact with its competitor strategies
and the changing customer trends in order to identify the changing requirements if its
customers so that products can be manufactured with the touch of prestige, exclusiveness
and status which will attract the young segment of high end customers(GUCCI Website,
2014).

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Image 2 - GUCCI Products

Source : ( http://www.gucci.com/us/worldofgucci/articles/gucci-museum-icon-storeand-icon-collection )

3.2 GUCCI's market position

In catering to all its target markets it is very much vital for GUCCI to maintain its brand
image and market positioning strategy in order to maintain its brand consistency. As per
Williams (2010, p.138) GUCCI follows a differentiating positioning strategy where it
focuses on offering its customers a variety of high quality and durable luxury leather
products and clothing with the touch of exclusiveness, prestige and status. Its quality of
the products over the years have positioned its brand as a quality brand in the minds of
the customers which has lead it to occupy the 38th position in the recent Forbes list of
most valuable brands with a revenue of 4.7 billion US $ and with a brand value of 12.1
US $ billion for the last financial year 2013(Forbes list of most valuable brands, 2013).

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3.3 GUCCI's marketing mix and related issues

Image 3 - Marketing mix

Source : ( http://officialandreascy.blogspot.com/2013/08/download-free-businesspowerpoint.html )

According to Richter (2012, p.74) marketing mix can be identified as the different
components in the marketing approach of a company that enables it to cater to the
customer requirements profitably. So in getting closer to the customers it is very much
vital for GUCCI to effectively manage its marketing mix which will determine its success
in the modern dynamic fashion industry. The marketing mix of GUCCI can be identified
as follows.
Product Mix
As per Strydom (2005, p.110) the product mix of an organisation can be identified as the
list of products and services in its portfolio via which they are meeting the demand of the
customers for different products and services. The GUCCI group offers products under
many different brand names including Sergio Rossi, Bottega Veneta, GUCCI, Balenciaga,
Alexander and McCartney which falls under the category of luxury high end products.
GUCCI has over the years has maintained its brand to be associated with exclusiveness.
prestige and luxury. For its target customer segments GUCCI offers many products
specifically meeting the requirements of those segments. As per the GUCCI website
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(2014) for men GUCCI offers a wide range products including leather shoes, luggage,
leather jackets, belts, wallets and even perfumes. Those products are specifically made
using the highest quality material and exclusive designs in order to make those products
differentiated from the average products that are there in the market place. For women
GUCCI offers a wide range of products including leather hand bags, shoes, clothing,
perfumes watches and even sunglasses. And all these products are designed and
manufactured to meet the highest quality standards and luxury.
As described by Cochran (2003, p.28) customer feedback should be obtained
continuously in order to monitor their requirements and concerns. So GUCCI should pay
specific attention on the changing customer requirements and tastes so that the products
can be designed in order to meet those specific requirements. Higher lead times to bring
the new designs to the market can be identified one of the main weaknesses of GUCCI.
So the operations cycle should be restructured in order to reduce this lead time which is a
serious disadvantage for the brand. The most profitable product lines can be identified via
a product vise profitability analysis so that the unprofitable product segments can be
discontinued under the management.
Price Mix
As per Kapoor (2011, p.71) price mix can be identified as the only revenue generator in
the whole marketing mix. So getting the price mix correct will enable the organisation to
effectively improve its revenues and profitability. GUCCI is considered as one of most
sought after exclusive fashion brands so maintaining the brand consistency can be
identified as the key to success. The brand can be identified as the feeling of the
customers towards the products of the company. Over the years the exclusiveness,
prestige and the superior quality have been the core values of the brand so that in setting
the prices for the products GUCCI should maintain its brand consistency. As per the
Kering Group Website-Brands (2014) the exclusiveness remains in their products when
only a limited category of customers can afford to purchase those products. In that light
GUCCI sets higher margins than the average for their products which of course the
customers in its target segment prefer. Higher prices for the products represent the quality
and the brand value and it prevents average customers from purchasing GUCCI products.

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But one of the main weaknesses in the pricing strategy of GUCCI can be identified as the
fake products that are available in most of the Asian markets which dilutes the brand
value of the company. So as per Okonkwo (2007, p.240) GUCCI should pay specific
attention on these fake products and should take appropriate steps in order to prevent
those products from coming to the market. As those products are available at very low
prices that specifically dilutes the brand image for GUCCI.
Place Mix
As per Gilmore A. (2003, p.10) place mix deals with the distribution process of a
company. This involves making products available for the customers at the right places at
the right time. That will particularly lead for customer satisfaction thus making them
loyal. GUCCI makes its products available at high end retail stores, flagship stores
operated by the company itself and via many different high end retail franchisees and via
duty free stores . Via its distribution channels all around the world GUCCI makes its
products available at different countries where the demand for the luxury products is high.
GUCCI is currently expanding its operations in to fast growing Asian countries such as
India and China where the demand for the luxury high quality products is drastically
increasing.
As described by Currie (2004, p.175) in order to effectively face the increasing demand of
the customers for online transactions GUCCI can effectively develop its online channel
incorporating with the distribution function so that the customers can specifically search
for the products they require and select them online placing orders. For that to happen the
relationship with the suppliers, distribution channels will have to be strong where GUCCI
should pay specific attention on. As per the GUCCI Website (2014) Currently GUCCI
offers online shopping facilities via its website as a part of its place mix and the site can
be further improved in order to include many more additional facilities so that the
customers could get a convenient online shopping experience. Using technologies such as
Sence7 GUCCI is in a position to improve the visual capabilities of its online channel
maintaining its prestige and exclusiveness of the brand so that the customers can get a
unique online shopping experience.
Promotion Mix

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Promotion mix can be identified as one of the critical components in the marketing mix of
a company. As per Madura (2007, p.549) promotion mix is about getting the customers to
know about the products and the services of the company so that they will be urged to
purchase them. The promotion mix involves advertising, sales promotions, public
relations, direct marketing as well as personal selling. In that light it is very much crucial
for GUCCI to get its promotion mix right in order to attract more customers and to retain
the existing customers. As described by Jackson (2010, p.54) in marketing GUCCI should
pay specific attention on maintaining the brand consistency so that the modes of
advertising and marketing should be aligned with the exclusiveness, prestige and the
status of its brand.
As described in the Kering Group Annual Report (2012) GUCCI carries out its
promotional activities mainly via high end fashion magazines such as Fashion Week,
television, sales promotions, via the website and also via the word of mouth marketing
method. GUCCI maintains its retail outlets in order to meet the highest luxury standards
and the luxury appeal so that the customers feel the exclusiveness and the elegance of
GUCCI products one they enter into the shops. The sales representatives at the retail
outlets offer the best possible service to the customers ultimately making then satisfied
and contended. So that the most powerful marketing mode of GUCCI can be identified as
the word of mouth marketing method. As per Tamer (2009, p.491) one of the main issues
with regard to the promotion mix of GUCCI can be identified as the lack of adaptation of
their promotional activities to go in line with the different cultures and traditions of the
different countries. Specifically when operating their stores in the Asian countries with a
rich cultural value GUCCI should adapt their advertising and promotional activities in
order to go in line with the local cultures so that more customers could be attracted to
purchase their products.

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Image 4 - GUCCI Advertisements using renowned models

Source : ( http://www.freesamplemaster.com/ )
According to Levinson (2007, p.222) as future developments in the promotion mix
GUCCI could use the social media such as facebook and twitter in order to promote their
products. Currently GUCCI is using these media as a mean of promoting so that they can
be improved to get further closer to the customers and as well as to obtain their comments
and feedback on company products and services which will be very much useful in the
decision making processes.

Image 4 - Using social media to get closer to the customers

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Source : ( http://www.luxurydaily.com/kerings-dim-profits-brightened-by-luxurygains1/ )

4. Future developments
As per Kering Group Annual Report, (2012) currently there's a very high demand for the
luxury products from the emerging fast growing markets such as India and China so that
in order to exploit that opportunity it is very much essential for GUCCI to exploit the
means of expanding its operations to those fast growing markets. The fast growing
economy and the opportunities existing in those countries have resulted in many
individuals to enter into the high income earning category who seek for high quality
differentiated luxury fashion products and accessories. But one of the most important
factors for GUCCI to consider in entering into those markets can be identified as
maintaining the brand consistency so that in selecting the partners to operate their stores
GUCCI should carefully identify the brands which go in line with the values shared by
GUCCI. In entering into the Indian market GUCCI selected the Murjani Group of India
as their partners which is renowned for designing and manufacturing many renowned
international designer fashion items. So that in expanding its operations into other Asian
countries GUCCI should be mindful in order to select the suitable partners which is
strategically important for them in order to maintain the brand consistency which is their
key to success(GUCCI Website-About GUCCI, 2014).
According to the Kering Group Annual Report, (2012) one of the main threats for GUCCI
can be identified as the imitation of its brand by many low quality products which are
being sold at lower prices which is directly diluting its brand image. So GUCCI should
consider ways of manufacturing their products using the highest quality material and
making the customers aware of these fake products available so that the brand value and
the brand consistency can be maintained. Being operating in the luxury market the
demand for the products of GUCCI mainly depend on the quality of its products as the
customers are willing to pay higher amounts for the established brand depending on the
quality and the level of differentiation they offer. So GUCCI has close competitors such
as Louis Vuitton where GUCCI should consider means of differentiating their products in
order to attract the customers of the luxury segment to purchase their products. As per
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Kering Group First Half Report (2013) GUCCI is currently focusing on training its
service personnel to provide the best possible service to its customers which is again a
critical point whereby they can exercise the differentiation.
And as per Antoinette (2012, p.88) it would be better for GUCCI to consider restructuring
the business so that all the business segments and brands can be managed properly and
each segment will be able to identify and cater to the customer requirements profitably
building a closer relationship with the customers. That would lead for GUCCI brand to
get established as the market leader in those different segments building customer loyalty.

5. Conclusion
GUCCI can be identified as one of the leading luxury leather products and a fashion
brand operating a wide portfolio of products. Getting its marketing function right
integrating with all the other functions within the firm is very much important to maintain
its brand consistency which will determine the success of the company operations. Proper
segmentation and effective management of the marketing mix components enable GUCCI
to get a competitive edge in the dynamic fashion market identifying, anticipating and
satisfying the customer requirements profitably. Anyway the current issues prevailing in
the company structure and regarding the brand consistency will have to be resolved in
order to beat the competition attracting more and more customers to purchase the
company products. And the GUCCI will have to closely monitor the changing market
trends and market dynamics in order to develop new products to meet them satisfying
customer requirements which will enable the company to obtain a competitive edge.

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6. References
Antoinette, A. (2012), Guilty Gucci, 1st Edition, Urban Books, p88
Cochran, C. (2003), Customer Satisfaction: Tools, Techniques, and Formulas for Success,
1st Edition, Paton Professional, p28
Currie, W. (2004), Value Creation from E-Business Models, Revised, ButterworthHeinemann, p175
Gilmore, A. (2003), Services Marketing and Management, Illustrated, SAGE, p10
Jackson, J.B. (2010), Dj New Marketing: Increase Sales with Social Media, Search
Marketing, E-mail Marketing, Blogs, and More, 1st Edition, Dog Ear Publishing,
p.54
Kapferer, J.N. (2012), The Luxury Strategy: Break the Rules of Marketing to Build
Luxury Brands, 2nd Edition, Kogan Page Publishers, p.228
Kapoor, H. (2011), Service Marketing: Concepts & Practices, 1st Edition, Tata McGrawHill Education, p71
Levinson, J.C. (2007), Guerrilla Marketing, 4th edition: Easy and Inexpensive Strategies
for Making Big Profits from Your SmallBusiness, Revised, Houghton Mifflin
Harcourt, p222
Madura, J. (2007), Introduction to Business, Illustrated, Thompson/South-Western, p549
McDonald, M. (2012), Market Segmentation: How to Do It and How to Profit from It,
Revised, John Wiley & Sons, p240
Okonkwo, U. (2007), Luxury Fashion Branding: Trends, Tactics, Techniques, 1st
Edition, Palgrave Macmillan, p240
Richter, T. (2012), International Marketing Mix Management: Theoretical Framework,
Contingency Factors and Empirical Findings from World-markets, 1st Edition,
Logos Verlag Berlin GmbH, p74
Strydom, J. (2005), Introduction to Marketing, Illustrated, Juta and Company Ltd, p110
Tamer, C. (2009), International Business 1/e, 1st Edition, Pearson Education India, p491
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Weinstein, A. (2013), Handbook of Market Segmentation: Strategic Targeting for
Business and Technology Firms, 1st Edition, Routledge, p120
Williams, T. (2010), Positioning for Professionals: How Professional Knowledge Firms
Can Differentiate Their Way to Success, Illustrated, John Wiley & Sons, p138

7. Web References
Forbes list of most valuable brands, (2013), (Online), Available from :
http://www.forbes.com/powerful-brands/list/ [accessed on- 04-17-2014]
Gucci

products

website,

(2014),

(Online),

Available

from

http://www.guccitimeless.com/en/news[accessed on-04-25-2014]
Gucci

website,

(2014),

about

Gucci,

(Online),

Available

from

http://www.gucci.com/int/about/show[accessed on-04-28-2014]
Gucci

website,

(2014),

world

of

Gucci,

(Online),

Available

from

http://www.gucci.com/int/worldofgucci/mosaic/the_house_of_gucci/gucci_history
[accessed on-04-11-2014]
Kering

Annual

Report,

(2012),

(Online),

Available

from

http://www.kering.com/sites/default/files/document/kering_ra2012_va.pdf[access
ed on-04-17- 2014]
Kering

first

half

report,

(2013),

(Online),

Available

from

http://www.kering.com/sites/default/files/kering_2013firsthalfreport_2.pdf[accessed on-04-29-2014]
Kering

Group

Website,

(2014),

Brands,

(Online),

Available

from

from

from

http://www.kering.com/en/brands[accessed on-04-02-2014]
Kering

Group

Website,

(2014),

Group,

(Online),

Available

http://www.kering.com/en/group[accessed on-04-25-2014]
Kering

Group

Website,

(2014),

Press,

(Online),

Available

http://www.kering.com/en/pressreleases/gucci_and_safilo_introduce_new_sustain
able_eyewear_models [accessed on-04-04-2014]
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Kering

Group Website,

(2014),

Sustainability, (Online), Available

from

http://www.kering.com/en/sustainability[accessed on-04-18-2014]

8. Bibliography
Grieves, (2006), Product Lifecycle Mgmt, Tata McGraw-Hill Education.
MacKay, C. (2011), Effective Marketing in Easy Steps, Illustrated, In Easy Steps.
Malhotra, N.K. (2008), Marketing Research: An Applied Orientation, 5/E, 1st Edition,
Pearson Education India.
Pettinger, R. (2007), Introduction to Management, 4th edition, United Kingdom, Palgrave
Macmillan.
Walker, B. (2006), Marketing Strategy 5E, 1st Edition, Tata McGraw-Hill Education.

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