Products of Chanel

Write about the Comparison of Marketing Between Two Companies for Gerard Wertheimer.

Chanel S.A. is a privately owned organization of French origin which is owned by Gerard Wertheimer and Alain Wertheimer. The company is a high fashion house which mainly focusses in the haute couture, luxury goods, ready-to-wear clothes and various fashion accessories. Gabrielle Chanel, a famous fashion designer catered to the taste of women who prefer elegance in dresses, trousers and suits. The product brands of Chanel are personified by the actresses and the various fashion models (CHANEL. 2018).

Christian Dior SE is an organization of French origin and the company is commonly known as Dior. The organization was founded in the year 1946 by designer Christian Dior abs the organization sells ready-to-wear retail fashion products, fashion accessories, leather goods, jewellery, footwear, make-up and fragrance. The company has its operations in many countries of the world including China. The operations of Dior in China will be taken into consideration for analysis (Dior.cn. 2018).

The report is based on the comparison of the various aspects pf business that are related to Dior and Chanel which include the marketing mix of the two companies, the external and internal environment analysis of the organizations.

Products – Chanel is considered to be a classy brand which offers products to the consumers who mainly belong to the upper class. The products of the company are famous for the precise and detailed skill and the high standards that are offered to the premium customers. The elegance of products is one of the major features.

Price – The company does not compromise with the quality of its products due to which the prices are kept quite high as compared to other fashion brands.

Place – The organization operates more than three hundred stores all over the world. The exclusivity of Dior products plays an important role in the high prices that the customers need to pay (Bettis et al. 2016).

Promotion – The promotional policy of the company is also quite pricey in nature as the products are exclusive and high priced. Chanel advertises its products in some famous and expensive fashion magazines.

People – The employees of the organization are also a major part of the exclusive products that are offered to the consumers (Carroll, Primo and Richter 2016).

Customer – Chanel tries to satisfy the fashion related needs of the high class customers who prefer premium and high quality products.

Price of Chanel

Company – Chanel has been able to successfully cater to the needs of the specific group of people who form the major customer base of the organization.

Competition – The major competitors of Chanel who can provide tough competition to the organizations based on its premium customer base are, Gucci, Burberry, Ralph Lauren and Hugo Boss (Dagnino, King and Tienari 2017).

Collaborators – Chanel has collaborated its operations with organizations like Intrexon who provides the company with expertise in engineering, modification and construction.

Context – The organization however has to face many limitations due to the issues that can occur related to the external environment. 

Product – Dior is known in the fashion industry for offering luxurious fashion products to the customers. The company has maintained its position in the industry as the creator of Haute Couture.

Price – The products of Dior are mainly targeted towards the high class customers and the company offers its products to the customers based on its exclusive creations and quality assurance (Engert, Rauter and Baumgartner 2016).

Place – The products of Dior reach the customers exclusively with the help of its stores and the company owned websites. The franchise stores of Dior are located in the prime locations of various countries.

Promotion – The promotional strategy of Dior is based on the trust that the customers have on the products that are offered by the company. The organization has published ads of its specific products in proficient magazines to cater to the high-profile clients.

People – The employees of Dior are committed towards providing the best of products to the high profile customers so that it can maintain its position in the fashion industry (Gamble and Thompson 2014).

Customer – The needs of the customers of Dior are related to the high class fashion products and accessories which are successfully fulfilled by the organization.

Company – Dior has maintained its position in the high class fashion market by catering to all the specific needs of the various customers.

Competition – The major competitors of Dior in the market are Dolce & Gabbana, Hermes International and Chanel.

Collaborators – Dior has collaborated with other organizations which can provide the company with logistics and distribution related support.

Context – Dior has been facing major issues in the industry related to the external environment where it has its operations (Hill, Jones and Schilling 2014).

Political factors – The political situation in France has been unstable for many years due to the loss of wise leaders. The gap between the poor and rich people in the society has also increased. The government of France is centralized in nature and maintain tight control over administration. The levels of unemployment in the country has also risen in the recent times. This can cause issue in the operations and revenue of Chanel (Karadag 2015).

Place of Chanel

Economic factors – The recession in the global economy has affected the various sectors and industries in France. The country did not face huge problems after the recession period, however, the economy was not quite stable as well. The government had been imposing huge taxes on the citizens of the country. This high taxation has further increased the unemployment levels. This is due to the disparity that is faced by the company due to the competition with foreign organizations. The economic condition and unemployment will affect the buying capacity of people (Jenkins et al. 2015).

Social factors – The disparity that has been observed in France based on the social class and levels pf income is a major social issue. The formation of the permanent lower class or underclass people have increased the crime rates and the youth of the country are also getting involved in various crimes. The productivity of the employees in the country is also decreasing due to the frequent strikes that are getting involved into. The racial violence and issues can further cause issues in the operations of the company in the market (Kotler, Berger and Bickhoff 2016). 

Political factors – The political issues that affect the organization are related to the informal and formal rules that they need to follow. The political issues of the company affect the various firms which operate in the country. The government is focussed on the development of the e-commerce related activities which has affected the operations of other organizations. The regulations and policies that are formulated by the government affect the operations of various organizations and profitability is affected as well.

Economic factors – The economy of China has shown huge growth in the recent years. The GDP of the organization has also grown which has shown the development of China. The major factors that have helped in the growth of the country are, the abundance of skilled labour, the rate of savings, the increase in export related business and the urban growth. The economic development of the country has huge impact on the SMEs which operate in China (Morschett, Schramm-Klein and Zentes 2015). The growth rate of GDP mainly suggests that the citizens of the country have contributed to its growth in the market. This in turn increases the buying power of the people of China. The labour cost in China is also quite low which has been helpful for the companies. The favourable economic condition of China can has positive effects on the growth of Dior and revenue increase in the country.

Promotion of Chanel

Social factors – The cultural and social aspects play major roles in the constant change in the demographics of China. These changes have altered the cultural values and the social trends in the country. the social behaviours and the family size have impacted the ways of making decisions (Rosenberg Hansen and Ferlie 2016). The literacy rate of the country is quite high and the usage of internet is also rising each day. The ecommerce related activities have increased and this has changed the ways of shopping of the local people. The high growth in economy and increase in the change of social aspects can further affect the sales of Dior in the online and physical platforms as well (Sakas, Vlachos and Nasiopoulos 2014).

Strengths – The brand that is held by Chanel is one of the most important strength of the company. The current value of the brand in the market is around 7.2 billion dollars. The sales reach of the company is around 5.2 billion dollars. Chanel has become an established company from many years. The revenues of the organization are also quite high as compared to the other fashion brands. The stylish and functional clothes that are offered by the company are classy in nature.

Weaknesses – Chanel has to face tough competition in the fashion market from other famous brands like, Louis Vitton, Prada, Dior, Hermes, H & M and Versace. The fashion house holds the 80^th rank in the entire world, however it needs to go a long way to become a leader in the industry (Trigeorgis and Reuer 2017).

Opportunities – Chanel already has an online presence which is not quite strong in nature. The organization therefore needs to work on this so that it is able to maintain the exclusivity in the market. The company should further think of increasing its presence in the world, especially in the various emerging markets. The launch of new services and products can also be helpful for the increase in revenue of Chanel.

Threats – The huge competition in the fashion industry can be a major threat to the profitability of the organization. The problem related copy products also needs to be tackled successfully by Chanel (Sakas, Vlachos and Nasiopoulos 2014).

Strengths – The high visibility of Dior in the industry among the target customers helps the organization to create a different position in the market. The various product offerings of the company also help in increasing the revenues of Dior.

People of Chanel

Weaknesses – The huge number of brands that are present in the portfolio of Dior has damaged the reputation of the company in the industry. The company also has to face many economic risks due to its presence in more than 35 countries in the world (Morschett, Schramm-Klein and Zentes 2015).

Opportunities – The changes that have occurred in the lifestyle of people and rise in income of middle class people has been a major opportunity related to the successful operations of Dior. The developing and emerging economies have been able to provide huge number of opportunities to the customers.

Threats – The major risk that is faced by fashion companies is the constant change of trends in the various areas where they operate. The imitation of products by the local companies is also a great threat that is being faced by the fashion companies. The local and the international players are also providing huge competition to the organizations like Dior. The government regulations of the countries of operations of these fashion houses can be a major factor or threat to the successful operations of the companies (Kotler, Berger and Bickhoff 2016).

For Chanel – One of the major limitations in marketing is the rank that the company holds among all the fashion organizations in the world. The company is facing high levels of competition from various other international brands which has been a major cause behind its loss of revenues to some extent. The lack of international presence also affects the profitability of Chanel in the industry.

For Dior – The huge number of brands in the portfolio of the organization will affects the marketing related activities of the firm. The risks that are faced by the company related to economic changes also affects the marketing policies that are formulated by Dior. 

For Chanel – Chanel can be recommended to expand its operations in the other countries and increase its international presence to compete with the other fashion houses.

The VALS framework can be used by Chanel for segmentation of its target market, which is based on the values, attitude and lifestyle of the customers. The customers who will be targeted with the help of this framework are the high income group people. The customers of Chanel will belong to the innovators and thinkers group of people.

For Dior – The marketing activities of Dior can be improved by formulating effective strategies for the different brands that are present in its portfolio.

The VALS framework will be used by Dior to form the target group of customers. The target customers of Dior are, divided based on the thought process and income of the people. These customers are the innovators. 

References

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CHANEL. (2018). CHANEL Site Officiel : Mode, Parfum, Beauté, Horlogerie, Joaillerie. [online] Available at: https://www.chanel.com/fr_FR/ [Accessed 12 Apr. 2018].

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