Product Management

Brand Evolution
Submitted to: Prof. Ramanuj Majumdar Product Management

Submitted by: Name: Avinash Chandra Kishan Reg No: 406/17

IIM Calcutta

Product Management Vision: Become one of the leading luxury groups providing excitement and glamour to a global heterogeneous customer base. [1] Background Gucci, also known as House of Gucci, is a fashion and leather goods label; founded in Florence. Recognized world over as a fashion brand; is known for its high quality leather products. The company has grown from a single shop in 1920 that sold fine leather goods with classic styling to a multi-brand conglomerate, with over 8 different brands and over 278 stores worldwide. Steeped in glamour, famed for timeless fashionable products, loved by movie stars and bequeathed to future generations - few fashion houses can boast as much mystique as Gucci. It has long been inspired by distinguished women of beauty actresses, princesses and socialites. Today, Gucci is guided creatively by a similar sort of heroine: Frida Giannini, a Roman whose taste, imagination and panache have driven this storied label to even greater heights. Gucci is renowned worldwide for its fashion authority, Italian craftsmanship and quality, with its exclusive products offered through a selected network of stores. [1] The Plot The year was 1921, an young lad named Guccio Gucci, who was working at Savoy Hotel in London, opened a leather goods company and small luggage store in Florence, Italy; inspired from the refined aesthetic of English nobility and combined with the unique skills of Italy, specifically the master craftsmanship of local Tuscan artisans. Within a few years, the label earned tremendous success with the sophisticated international tourists in Florence thronged to Guccis bottega, seeking the equestrian-inspired collection of bags, trunks, gloves, shoes and belts. Most of the local clientele were local horse-riding aristocrats, and their demand for riding gear led Gucci to develop its unique Horsebit icon an enduring symbol of the fashion house and its increasingly innovative design aesthetic. During the harsh times of Fascist dictatorship in Italy, faced with a shortage of foreign supplies Gucci began experimenting with atypical luxury materials, like hemp, linen and jute. One of its artisans most subtle innovations was burnishing cane to create the handle of the new Bamboo Bag, the curvy side of it was inspired by a saddles shape. An ingenious example of innovation at the verge of limited resources, the bamboo became the first of Guccis many iconic products. A symbol of royalty, the bag with burnished handle remains a huge favorite even today. During the Fifties, Gucci again found equestrian inspiration with its trademark green-red-green web strip, derived from a traditional saddle girth, a runaway success and a highly recognizable hallmark of the brand. Gucci started to establish its global presence as a symbol of modern luxury by opening stores in Milan and New York. Then came the turn of 1953 with the demise of Guccio Gucci, his sons Aldo, Vasco, Ugo and Rodolfo took over the business. Gucci products started gaining popularity for its timeless design, while being cherished by iconic movie stars and celebrities of elegance in the Jet Set era. Popular celebrities like Jackie Kennedy 2 IIM Calcutta

Product Management carried the Gucci shoulder bag, which is known today as the Jackie O; Liz Taylor, Peter Sellers and Samuel Beckett sported the unstructured, unisex Hobo Bag. Guccis classic moccasin with Horsebit hardware became part of the permanent collection at the Costume Institute, Metropolitan Museum of Art in New York. On receiving personal requests from figures like Grace Kelly Gucci created the now famous Flora silk print scarf for the Monaco princess. In the mid-60s, came yet another turn, when Gucci adopted its legendary interlocking double G logo, creating yet another chic Gucci visual insignia. Gucci continued its global expansion plan with stores in London, Palm Beach, Paris and Beverly Hills. On its visions of becoming a globally recognized brand, it opened stores in the Far East in Tokyo and Hong Kong. During this time, the company developed its first ready-to-wear collections, featuring GG printed shirts or GG buttoned fur-trim coats. The brand became famous for its unique mix of innovative audacity and legendary Italian quality and craftsmanship. Another brand adjustment and Gucci icons were re-invented in new shapes and colors burning the GG logo through suede using more luxurious materials, mike baby crocodile coats with sterling silver snakehead buckles. In 1977 with a bold move, its Beverly Hills flagship was revamped with a private Gucci Gallery, where privileged VIPs like Rita Hayworth or Michael Caine could browse for $10,000 bags with detachable gold and diamond chain or platinum fox bed throws. In 1981, Gucci staged its first ever runway show in Florence. In 1982, Gucci went public and the leadership was passed on to Rodolfos son, Maurizio Gucci, who held 50 percent of the companys shares. In 1987, Investcorp, a Bahrain-based investment company, began buying into Gucci, eventually competing the purchase all of the companys shares in the early Nineties. Gucci was re-launched to global renown through a groundbreaking mix of tradition and innovation. Tom Ford became the creative director of Gucci in 1994 and infused the luxury brand with a sense of daring and provocation that resonated with celebrities and the fashion world. With Fords uniquely glamorous vision, the stiletto and silk cutout jersey dresses with metallic hardware details became instant icons. In 1995, Domenico De Sole was appointed CEO, and Gucci made the highly successful transition to a fully public company. And in 1998, Gucci was named the European Company of the year by the European Business Press Federation for its economic and financial performance, strategic vision and management quality. In 1999, Gucci entered into a strategic alliance with Pinault-PrintempsRedoute, transforming itself from a single brand company into a multi-brand luxury group. Gucci achieved astounding global success and was named the most desirable luxury brand in the world by Nielson group. Meanwhile in 2006, Frida Giannini the sole Creative Director, utilizing Guccis rich heritage and its incomparable craftsmanship capabilities, created a unique vision for Gucci that fused the past and present; history and modernity. Key house icons were reinvented in a fresh new guise, including Flora, La Pelle Guccissima, the New Jackie, and the New Bamboo, as the houses tradition for innovation accelerated.

3 IIM Calcutta

Product Management Gucci continues to focus on strengthening the values upon which its enviable reputation was founded for its almost 90-year history: exclusivity, quality, made in Italy, Italian craftsmanship, and fashion authority. Setting it apart from its competitors, Gucci is able to claim a unique duality in its brand positioning pairing modernity and heritage, innovation and craftsmanship, trendsetting and sophistication. At the beginning of the new decade, the Florentine House launched two relevant projects which are united by a common philosophy of respect and care towards others, values that have been part of Guccis DNA and that of its employees since the company was founded: a eco-friendly program to reduce its impact on the environment, and the launch of Guccis first childrens collection, highlighting the brands reputation for quality and relevance by being exclusively made in Italy.

Positioning Target Segment The company targets men, women and children; while concentrating mostly on the women. The target segments are mostly the affluent, upper-middle to upper class, fashion-conscious, 30-55 years old. Competitors Dolce & Gabbana is an Italian luxury fashion house. It was started by two Italian designers Domenico Dolce and Stefano Gabbana in Milan, Italy. Gianni Versace S.p.A., more famously known as Versace, is an Italian fashion label founded by Gianni Versace in 1978. Giorgio Armani S.p.A., the Italian fashion house, is a leading name in the design, manufacturing, distribution and retailing of haute couture, ready-to-wear, leather goods, shoes, watches, accessories, eyewear, cosmetics and home interiors. The brand markets its product under highly specialized sublabels. Hugo Boss AG, founded by Hugo Boss in 1924 in Metzingen, Germany is a high-end men and women fashion and lifestyle house. Chanel S.A., commonly known as Chanel is a French fashion house founded by Gabrielle Chanel. It is recognized for its haute couture, ready-to-wear, handbags, perfumes and cosmetics. Prada S.p.A. is an Italian fashion label specializing in luxury goods for men and women ready-towear, leather accessories, shoes, luggage and hats. The label is referred as a status symbol in its target market. Louis Vuitton is a French fashion house founded by Louis Vuitton in 1854. The label is well known for its luxury product, ranging from leather goods to ready-to-wear, shoes, watches, trunks, jewellery, accessories, sunglasses, and books. LV sells its products through standalone boutiques, lease departments in high-end department stores, and through its website. 4 IIM Calcutta

Product Management Perceptual Map Luxury

Sophisticated

Crude

Affordable

Simplified for comparing with competitors

Gucci has developed an iconic style synonymous with sophistication and sensuality. The brand differentiates itself from the competitors as a high-quality, high-class and sophisticated product. The brand differentiates strategically in terms of product quality leadership and sophisticated designs. The brand has become a symbolic name for style and class. It endorses its products with the latest trend setters of Hollywood, the hot and the sex icons like Chris Evans, Drew Barrymore, Clare Danes, Evan Rachel Wood. Jennifer Lopez, Rihanna. This goes well with the target segment, since these celebrities are considered trendy as well as sophistication. Values: exclusivity, quality, made in Italy, Italian craftsmanship, and fashion authority Brand positioning: pairing modernity and heritage, innovation and craftsmanship, trendsetting and sophistication

References: 1. www.gucci.com 5 IIM Calcutta