Chanel No.5Marketing Mix

Product

Chanel No.5-New Product Development

• New product Development Ideao To offer perfume to selected clients like competitors;o The source of idea is Coco Chanel; designer is Ernest Beaux;o Product Idea-’fresh long lasting perfume that smells like woman’’;

• Evaluation of alternativeso 10 samples named between 1 and 5 ,20 and 24;o Sample number 5 was preferred;

• Development of product concept;o Product concept-’a perfume designed for classy and adventurous woman that

smells like woman’;o Product image-timeless and sophisticated;o Concept testing-to measure the reaction of ‘high society’ perfume was used in a

dinner party hosted by Coco ;

Chanel No.5-New Product Development(cont.)

• Development of marketing strategyo The product was available only in Chanel boutiques in early years; o Promotion was relying on ’Word of mouth’;

• Development of producto No changes were made to original formula;o The perfume bottle which was too thin for delivery and shipping was changed to

rectangular shaped bottle;

• Test marketingo Initially the product was sold only in selected Chanel boutiques ;

• Introduction to market o The first target was US market; in 1924 the first ad appeared in NY Times;o Selected distribution in France; no ad campaign in France until 1940’s;

Saturated MarketCash Cow in BCG matrix;

Market Penetration Strategy;

CustomersLate adopters;

Attempt to reach customers by reminding ad campaigns;

Distribution;

Selective distribution which is non-characteristic for a product in maturity stage

Anti-Decline StrategiesRepositioned for two times;

Catherine Denevue ad campaign-in 1970’s

Nicole Kidman ad campaign-in 2012

Chanel No.5-Product life Cycle-Maturity Stage

Chanel No.5-Product Classification

• Market offeringo Product;o Emotional experience deriving from luxury image of product ;

• ‘Special product’o Hıgh price;o Customers with brand loyalty;o Inelastic demand;o Selective Distribution;

Chanel-No.5-Product Levels

• Core benefito Attract attention;

• Actual producto Brand name Chanel-one of the 10 most valuable brands;o Quality-high quality;o Packaging- 7,5 ml,15ml,30ml,50ml,100 ml perfume bottle;o Design-modern and minimalist;o Attributes-long lasting, combined scent with no dominant flower odor;

• Augmented producto Web site-online shopping, ordering and refunding support;o Delivery-ordinary shipment is free;o Toll free call center etc;

Chanel No.5-Product Decisions

• Product qualityo High quality of ingredients(Grasse jasmine);o Emotional/psychological message conveyed ;

• Product Attributeso The first perfume which aldehydes are used in;o Long lasting;o No dominant flower scent;

• Styleo Minimalist designed bottle which enables the water of perfume to be visible;o The bottle design was inspired from whisky bottle;

Chanel No.5-Product Decisions(cont.)

• Brando Brand name-comes from the name of Coco Chanel;o Logo-initials of the name of Coco Chanel;o Minimalist, modern design (little black dress);o Brand symbol-Coco Chanel;

• Packagingo Perfume bottle-Primary packaging;o Box-Secondary packaging;

• Labelingo Text written in Sans Serif letters;o Reminding of French origin(Paris);o Ingredients;

• PSSo Free delivery, gift packaging etc;

Chanel-Product Line Decisions

Product LinesClothing;Parfumery,Make-Up,Skin Care;Bags, Shoes,Accessories,

Watches,Jewellary,Eyewear,Other Accessories;

Line FillingGardenia, Jersey and 1932 perfumes are recently added to perfumery line;

Line StretchingChanel No,5 Grand Extrait 30 ml is sold for 4200$ which is far beyond of current price range in the line

Chanel-Product Mix DecisionsReady –To-Wear

Haute-Couture

Handbag Shoe

Leather Goods

Eyewear Acces.

Fragrance

Make up Skin care Other

Jacket Clothing ……. . Wallet ……. Glove No.5 Concealer

Cleansing Pets wear

Skirt Shoes ……. . Belt ……. Scarf Allure Foundation

Hydration Racket

Blouse ……. ……. . Case ……. Hat Chance Lipstick Sunprot. Porcelain

…… ……. ……. . …… ……. …. ……. ……. …….. …...

VersionsJacket Clothing Handbag S

hoe

Wallet Eyewear Scarf NO.5 Lipstick Cleansing

Porcelain

Little black

Cocktail Clutch Flat

Size Size Silk Parfume

Hydrating

Oil Based

Size

Tweet Long Dress

Classic Boot

Colour Model Chiffon EDT Long Lasting

Cream Based

Colour

Leather

Silk Sport . …… Colour ….. EDS ……. Water

….. ……. . …… …… ….. …… ……..

……

Chanel-Product Mix Dimensions

Product Mix with numbers

Ref. Chanel.com

Length of Mix 25(Fragrance)

Width of Mix 13

Depth of Mix 70(Lipstick)

Consistency Consistent

Length of Chanel No.5 line 9

Depth of Chanel No.5 line 15

Chanel-Branding Strategies

• Brand positioning;o Value-unique,prestigious,timeless,French elegance;o Beliefs-loyality,perfectinism,classy look with modern touch;

• Brand name selectiono The iconic personality of Coco Chanelin shapes the perception about brando Easily remembered;o Distinctive;o Extendable as the brand name doesn’t represent any specific product;o Easily translated to different languages;

• Brand sponsorshipso Eyewear production licence-Luxottica;o Co-branding-Karl Legerfeld for swimwear brand Eres;

Chanel-Branding Strategies(cont.)

• Brand Development

o Line Extension

a. Coco Mademoiselle bath foam;

b. Chanel No.5 EAU Premiere perfume;

o Brand Extension

a. Pet accessories;

b. Sport equipment(fishing rod ,tennis rocket);

Price

Chanel-Pricing Strategies

• Value-Based Pricing Strategy

o High price expectation because of luxury product ;

o Pricing below of consumer perception may damage brand image;

o Changing economic environment and increase in consumer consciousness make impossible to charge high prices without creating high perceived value;

o Instead of reducing prices company employs value added pricing (gifts, gift certificates, free delivery);

Chanel-Pricing Strategies(cont.)

• ‘Market skimming’o The first phase-Limited production, luxury consumer who is ready to buy,high

prices;o The second phase-Relatively wide distribution,upper middle class,slightly lower

prices;

• Product Line Pricingo Perfume 15 ml-142 €;o Perfume Spray 50 ml-67€;o Eau de toilette spray 50 ml-55€;

• Product Bundle Pricingo Duo Set No.5;Parfume Spray and Body Lotion;

• Optional Pricingo No.5 lotion is recommended to be used

together with soap;

Chanel-Price Adjusting Strategies• Seasonal discountso Clothing and seasonal bags;o Discount notification is firstly sent to exclusive customers;

• Special dayso Offering more products together in lower price instead of cutting single product

prices;

• Psychological pricingo Increase in bag prices in order to differentiate brand from

Torcy Burch and Michael Kors;

Place

Chanel-Distribution Strategies

Distribution Channels Distribution Strategy

Factors influencing distribution

Direct Indirect Exclusive Distribution Protection of company image

Chanel Boutique Valiram -Malaysia Reliance on local distributors in new markets

Providing sense of integrity

Directly Owned Stores

Chalhoub-Dubai Too much distributors could weaken control

Chanel.com The Perfume Shop.com

Distribution licances could undermine company image

Boots.com

Fragrantica.com

Promotion

Chanel No.5-Communication Strategies

• Stages of effective communicationo Target market- 18-30 years old,young,elegant women;o The purpose of communication-reminding;o Message design

a. Content-addresses to feelings(unforgettable scent,adventurous women);

b. Structure-no conclusion,message is delivered at the end of ad;

c. Format-mini-film formatted ads;o Message channel-

a. Personal-word of mouth(Brad Pitt ad);

b. Non-personal-magazine,ad,activitiy;o The source of message-celebritiesr(Merlyn Monroe,Nicole Kidman etc;)

Chanel No.5-Advertising

• Ad campaigno Purpose-reminding;o Advertising budget-high budget(Nicole Kidman campaign 42 million);o Advertising channel-magazine,internet,tv;

• Pull strategy targeted to consumers

o Special offers; Duo and trio sest which are sold cheaper ;

o Gifts,gifts certificates;

Chanel-Public Relations• Product promotions which are press members invited;

• Celebrity endorsed partys;

• Fashion blog;

• Mobile Art Exhibitions which organized in cities such as New York,Londra,Dublin;

• Sponsored events such as Tribeca Film Festival,Traditional Winter Launch ;

• Chanel Dinners with participation of celebrities

Thank You