Burberry

INTRODUCTIONThe said company, Burberry, faces the key issues of how prominently should the company uses its famous checked pattern and also how should it cater to the different customer bases; its core customers and the non-target customers. BACKGROUNDBurberrys was started in 1856 and by 1920 The Burberry check pattern became a registered trademark. The brand in the next few years came to be increasingly known as a brand symbolizing both luxury and durability .In 1970 Burberry was bought by Great Universal Stores Plc. (GUS) and agreed to license the brand in Japan through Mitsui and Sanyo. Over the next decade, Burberry continued to grow worldwide through additional licensing and distribution agreements. But, as the brand became licensed across a range of categories, the price, design and quality of the products began to vary across local markets. In addition, a parallel trading also started taking root wherein, the wholesalers would sell to unauthorized distributors who in turn sold it to locations without any empathy towards the price, channels and the locations. Also, in addition to these, the other problems faced by Burberry were a concentrated customer base and over reliance on a narrow base of core products. Owing to these problems, the senior management of Burberry was revamped, and Rose Maria Bravo was brought in as the CEO, who in turn reinvented the brand in 1997. The immediate changes brought in by Bravo were cosmetic i.e. the companys name was changed from Burberrys to Burberry and a new logo and packaging was introduced. Subsequently, the brand was repositioned to attract younger customers whilst maintaining its core customer base. Therefore they positioned itself right in between lifestyle and fashion. Next she cut down the SKUs from 100000 to 24000 eliminating the outdated designs. Also these gave way to new product lines that could be consistent in presenting its image. Next, Burberry exercised control over everything from designing to distribution for the non-licensed products and anywhere expertise was required, it worked with licensees who had the right to design, manufacture and distribute products under the Burberry name. She also reined in the older agreements to curb the inconsistencies in price, design and quality across products. Now, the key issues that Burberry is facing in light of the changing environment are manifold. The pertinent questions being, What new product categories should it enter? Should they continue with the famous Check? If so, to what extent? Should they focus on the brands affiliation with the non-target customers? How do they continue growing without falling prey to its own success?Burberry in time having diversified to include not just womenswear, but also menswear and accessories under two different product lines: Continuity products having a life cycle of a number of years Fashion oriented products- introduced on a collection by collection basisHad the options to have extended its product into perfumes, childrenswear, footwear etc. Now, the issue that it faced was to move into those product extensions that would be in line with the companys vision. The next problem that Burberry faced was the ubiquity of its famous check. Burberry was always known for its check and in time the checks could be seen everywhere, from the trench coat to underwear. For a luxury brand ubiquity could kill you. If you were ubiquitous it would mean you are no longer luxury.[footnoteRef:1] Therefore this scenario raised the question for Burberry, How should it use its check to not lose its soul? Should it go for a more restrained use, or not use the checks at all. On one hand it had hard facts to support its use of checks: [1: Source: http://www.kornferryinstitute.com/briefings-magazine/summer-2011/beyond-burberry-check]

25% of company revenue came directly from prominent check products 10% of all apparel sales featured check 10% of all apparel sales featured check in a seasonal color variation 40% of all apparel sales used the check subtlyWhile on the other hand it had the primary concern of losing the value of the checks if it was so ubiquitous, the problem of counterfeiting and also of losing its customer base with the dilution of the unique proposition of the brand. Next, Burberry also realized that it had become amazingly popular with a young and hip crowd, the kind that would consist of football hooligans, D-list soap stars and the reality TV stars who were not its targeted market.[footnoteRef:2] This raised the issue of losing its core customer base if these affiliations hinted a different view than intended to the core customers. [2: Source: http://www.theguardian.com/media/2004/nov/01/marketingandpr]

All these issues led Burberry to finally analyze its next move, how prominently should it use its checks in advertisements as well as products to be able to cater to the consumer bases in light of staying true to its positioning of being an accessible luxury, of being not just aspirational but also functional.PROPOSED SOLUTIONThe way forward for Burberry suggested by us, to tackle the issues above are:1. Use checks subtly in ads and products This would ease the way for Burberry to transition in the long run into a brand that had far greater value than the association of Burberry with checks. Right now, one of the issue that Burberry is facing is that the checks are synonymous with Burberry, which can act as a restraint for Burberry to move further into products or product lines which does not have checks. Customers might not be able to associate with the brand Burberry, sans checks. Hence it becomes pertinent for Burberry to start transitioning slowly by using the checks subtly in ads and its products to help ease the customers transition.2. The use of checks should be in accordance to the different product segments The products and ads differ in different segments. For example in the lifestyle product segment, it becomes pertinent that the checks are prominent, because the customer base associates the brand with the checks. Whereas, for Burberrys fashion products, the ads and products can have subtle checks or no checks in lieu of prominent checks, as these customer bases do not associate the brand just with the checks.3. Different product lines for different customer base As Burberry is wedged in between, and it wants to portray itself as an accessible luxury, Burberry should come up with different product lines that cater to both these customer bases. For example- it can have a luxury product line like the PORSUM for the elite and also have a different product line, which, caters to the young and the hip crowd.4. Then slowly move away from check patterned products In time we believe, that Burberry should move away from its checks, as the brand should be of far greater value than the checks and the checks should not be able to superimpose itself on the brand. But, for this the way forward we believe should not be drastic and as mentioned above should be carried out subtly. 5. Reduce licensing further so as to have a better control over the value of the brand and to keep a check on counterfeiting6. Cohesiveness amongst different lines Once they come up with different lines, Burberry should be able to maintain cohesiveness amongst them in terms of the message that is put across to the different customer bases.