Burberry case

Contents [hide] 1 Basic Information 2 Case Summary 3 Case Analysis 4 External Link 5 Relevent File Cabinet 6 Article Purchase Link

Basic Information

Author: Youngme Moon
Publisher: HBR
Case Number: 9-504-048
Publication Date: Oct 1, 2003
Revision Date: Apr 5, 2004
Course Category: Marketing

Case Summary

History
• Burberry started in 1856 when Thomas Burberry invented gabardine, a waterproof and breathable fabric for extreme conditions
• The trademark check pattern became the company signature and several well known celebrities like Peter Sellers, Audrey Hepburn wore the clothing.
• The brand became a symbol of luxury and durability
• Burberry grew worldwide through licensing among different categories as vast as wallpaper and chocolate
o Price, design, and quality were inconsistent among local markets. This hurt the brand image and Burberry lost its exclusivity.
o The company lacked a cohesive vision and the discipline to be a luxury goods retailer.
Rosie Marie Bravo Era
Bravo entered as CEO, with 25 years of retail industry experience. Her goal was to transform Burberry from a tired outerwear manufacturer into a luxury lifestyle brand.
• Bravo hired top talent from the retail industry in order to achieve her vision.
• Bravo created a contemporary logo and introduced new packaging.
Repositioned the brand to attract younger customers while retaining the core customer base. They wanted to become one of the luxury greats, “accessible luxury.” Bravo discovered a niche for Burberry between labels like Polo Ralph Lauren in apparel and Gucci in accessories.
Updating the Product Line
• Bravo slashed the number of SKUs from 100,000 to 24,000 in order to create a consistent look and maintain the brand identity.
• Hired a new design team to redesign traditional products and extend image to a range of new products.
• Products were classified as Continuity or fashion-oriented:
1) Continuity- long life cycle products like trenchcoats and handbags
2) Fashion-oriented- responded to fashion trends
Womenswear- Burberry introduced 450-500 apparel styles each season, including the popular check bikini, an attempt to evolve the icon.
Menswear- 330-350 styles per season, including tailored suits, raincoats, and shirts.
• Wanted to appeal to the 25 year old guy on his first job and the 60 year old investment banker looking for a classic look.
Accessories- these provided higher margins than apparel due to no size restrictions and they were less risky.
Burberry worked with licensees when the expertise was outside of their core competencies. Bravo also ended other license agreements in order to keep quality consistent across the board.
Prices were also raised to reflect the new positioning, gross margins went from 47% to 56%.
Expanding the Brand Portfolio: Burberry Prorsum
Bravo introduced lower-priced labels in some countries like Spain and Portugal.
• Prorsum was a high-class, high-end brand made from innovative fabrics, sold only in the best stores in the world.
• “it’s for people who are truly interested in fashion”, not for the masses.
• Prorsum was an attempt to capture a high end market
Advertising-
Bravo hired a famed team led by photographer Mario Testino and were given 10 million pounds of advertising budget.
• Goal was to associate the brand with a more trend-conscious, modern look, away from the stodgy reputation.
• Used models Stella Tenant and Kate Moss to develop a chic, fun, and witty brand image. This helped introduce a younger image and also sell check bikinis to the public.
Next Five Years
• Burberry became hip among a younger generation and celebrities like Madonna were wearing the product.
• Company received Contemporary Design Collection of the Year Award.
• Bravo won Time’s Fashion CEO of the year award.
Product Categories
• Product extensions were key to the company’s growth, such as Burberry Brit perfume line (complete with check design). They were also developing a childrenswear line.
• Concern over the popularity of the brand with non-target customers such as the hip-hop community and whether this could alienate core customers or not.
The Role of the Check
• The check was everywhere on Burberry products and it was estimated that 25% of company revenue was due to check products. Bravo wanted to bring some soul to it.
• Bravo wanted customer to “hunt for the pattern under a collar or inside a coat” and also wanted some products with no check at all.
• Bravo also realized that some customers who want the check to show that they own a Burberry product, a status symbol.

End Challenge: To manage the popularity of the brand so that there is long term growth, how does Burberry continue to grow without risking customer burnout?