Marketing – Chanel, Nike, Hot Topic
1. Within the United States, especially in Southern California, an individual’s appearance is crucial because it is used to make a first impression. A person is judged by what they wear and how they look.
For example, it is probable that many people would perceive a person wearing ratty clothes as uneducated and irresponsible while a person looking pristine in a designer ensemble is assumed to be intelligent and successful. In every city, there are multiple fashion brands with different styles and ranges of apparel and accessories.
Every season, new styles and designs are created which influence society. It appears as if more types of clothing exist than the actual number of people. With so many different alternatives of fashion, the fashion industry is trying to please too many customers with variety. There are currently various styles to choose from, and the clothes people wear categorize or label them long before they realize it. The three fashion brands that will be analyzed extensively are Chanel, Nike, and Hot Topic. These brands have apparel but are completely different in their target audience.
Chanel is a prestigious high-fashion brand; Nike is a popular athletic line; Hot Topic is musically and artistically edgier with a smaller target audience between the three. With these apparel brands, a person wearing each would be labeled or even stereotyped. One wearing a Chanel’s 2012 Spring/Summer ready-to-wear designer outfit with a white jacket, lambskin dress with pearls, and a glass pearl belt would be labeled as rich, successful, and intelligent. Another wearing Nike running apparel consisting of a shirt, shorts, and footwear is someone athletic and always on the go.
An individual in a Hot Topic black graphic music t-shirt with plug piercings would be stereotyped as “Goth”, tough, or edgy. 2. 2. | | | Geographic| * Located at tourist hot-spots * Found in shopping malls or shopping streets * Fashion Capitals * Where social status is important * Higher standard costs of living * North America: U. S. A, Mexico, Canada * Asia * Europe * Middle East * Oceania * South America| * Located in areas with daily physical activity * Near sports-oriented regions * Nike stores found in shopping malls or its brand is found in multiple athletic ear stores * United States * Europe * Canada * Africa * Australia * India * Indonesia * Malaysia * Middle East * New Zealand * Philippines * Singapore * United Kingdom| * This brand is mostly geared to the style of North America where it originated. * Found in shopping malls * United States * Puerto Rico * Ontario * Suburban living| Chanel’s headquarter is located in Paris, France where the fashion brand originated. The store is located worldwide near tourist attractions. The main travel destination that people choose to plan their vacation is where a Chanel store is mostly likely to be found.
The idea is that people who travel to hot-spots tend to be upper middle or upper class, so they have sufficient funds to purchase the Chanel brand. Chanel is one of the top designer brands known globally, so it is located in fashion capitals: New York City, Paris, Milan, Rome, China, Los Angeles, Miami, etc. Nike’s headquarter is located in Washington County, Oregon. This athletic brand is one the top sports line. Its stores are located globally and more widespread compared to the other two brands. Also, Nike brand products can be found in multiple athletic equipment stores: Sport Chalet, Finish Line, etc.
Nike is one of the most common sports brands that it is stocked in any department store with a small section for athletic wear: Nordstrom, Macys, Bloomingdales, etc. It is found in areas where physical activities are part of daily routines. All parts of the world take part in sports, which can be seen through the Olympics and the country’s own specific sport. Hot Topic’s headquarter is in Industry, California. The style of this brand is geared towards Americans which is why stores are only located in various areas of North America. They are mostly located in suburban shopping malls where the younger demographic spends their free time. | | | Demographic| * Age: * 30-60 years * Gender: * Female * Social Status: * Upper Class * Annual Household Income: * at least $125,000 * Ethnic: * Caucasian * European * Asian American * Family Life Cycle: * Young single * Young married without children * Middle-aged without children * Middle-aged without dependent children| * Age: * 8-50 years * Gender: * Male * Female * Social Status: * Middle Class * Upper Class * Annual Household Income * at least $50,000 * Ethnic: Widespread among diverse groups * Family Life Cycle: * Young single * Young married or divorced with/without children * Middle-aged married or divorced with or without dependent children| * Age: * 12-20 years * Gender: * Male * Female * Social Status: * Middle Class * Annual Household Income: * $50,000-$100,000 * Ethnic: * Caucasian * Asian American * Hispanic American * African American * Canadian * Family Life Cycle: * Young Single| Chanel’s customers range between thirty to sixty years old.
It only has apparel for older women because they are typically upper class with an annual household income of at least $125,000. Since Chanel is an expensive designer brand, not many ethnic groups are associated with it. The main ethnic groups are European, Caucasian, and Asian American. Europeans and Americans have higher household incomes, so they are able to afford the high prices. They’re young and single, young married without children, middle-aged without children, and middle-aged without dependent children, so they have more money for luxuries because they have no dependents.
Nike has a wider spectrum of customers from the age of eight to fifty years old. Females and males of all different ages take part in some sort of physical activity or exercise. Nike products are of quality, so their product line items vary in price; therefore, anybody of middle or upper class can afford it on a household income of at least $50,000 annually. This brand is global, so it targets a variety of diverse ethnic groups. Its market is for all family life cycles: young who exercise regularly or married with children having to run errands. Hot Topic’s customers are female and male tweens or teens from the age of twelve to twenty.
It can be seen that teenagers with less valued education shop there. The style is targeted to young single children, mainly middle class with an annual household income of $50,000-$100,000. It targets mainly those living in North America: Caucasian, Asian American, Hispanic American, African American, and Canadian. | | | | Psychographic| * Personality: * Fashionistas * Opinion Leaders * Motives: * Status * Trendy * Perceived quality * Lifestyles: * High-class lifestyle * Follow trends/styles * Enjoy luxuries * High-maintenance * Materialistic * Geodemographics: * Popular global cities * Fashion apitals * Upper class communities * Upper middle class suburbs| * Personality: * Athletic * Opinion Leaders * Relaxed * Motives: * Trendy * Quality * Exercise * Every-day attire * Reliability * Comfort * Lifestyles: * Health conscious * Sports-oriented * Always on the go * Geodemographics: * Heavily populated communities * Sports-oriented regions * Cities with professional sports teams| * Personality: * Edgy * Punk * Music lover * Motives: * Unique * Contrast Hollywood * Music Preference * Lifestyles: * Opposite of Pop magazines * Prideful to be independent of trends * More about music than societal trends * Geodemographics: * Young communities that appreciate music * Areas unaffected by magazine trends * Middle class suburbs * Regions with less valued education| Chanel targets fashionistas, people who wear high-end and trendy clothes. They are opinion leaders who influence the rest of society. For example, celebrities wear Chanel which creates the brand’s popularity.
Customers shop at Chanel because they want status which is to follow up-to-date trends and styles in today’s society. These people have a high-class lifestyle who enjoy luxuries, are high-maintenance, and very materialistic. Due to Chanel being a high-end brand, one of its key factors is its price because expensive items give people the perception of high quality. Chanel clusters potential customers in popular global cities where the communities are typically upper class. It’s vital for Chanel to target people living in fashion capitals, such as Los Angeles, Miami, Paris, Milan, etc. Nike targets athletes who are health conscious and sports-oriented.
Those who also wear Nike are opinion leaders which are why the brand is endorsed by well-known athletes from Michael Jordan to Roger Federer. Aside from athletes, Nike also targets customers for the product’s quality, reliability, and comfort. Nike clusters potential customers in heavily populated communities, cities with famous professional sports teams, and sports-oriented regions. Hot Topic targets young communities that appreciate music. This brand started off with selling products based on music artists and bands. It targets a younger dynamic group who wants to be unique and despises the typical Hollywood pop culture trends. People with a less valued education tend to shop at Hot Topic which is why the brand is stereotyped for those who are “punks. ” | | | | Benefits Sought| Extreme quality * Social status recognition * Aspirational reference group * Up-to-date on trends * Self-esteem| * Long-lasting quality * Increased training * Improvement as an athlete * Comfort * Aspirational reference group| * To be unique and different * Broadcast their music and art interests * Make a statement against pop culture trends| Chanel is instantly recognized as one of the top leading high fashion designer brands in the world. Due to its expensive prices, people assume it to possess prestigious quality before they buy their first item. Aside from quality, the fact that the apparel and accessories are well known to be costly is utilized as a means of social status recognition.
Any individual wearing a dress, jacket, or glass pearl belt can be instantly deemed as wealthy or financially well-off. Chanel has been deemed as an extravagant brand which is advertised by models and celebrities. It is found in the majority of fashion magazines which targets customers who want to be up-to-date on trends, so they can boost their self-esteem. From the opinion leaders influencing society, customers purchase from this fashion line because they want to be in the aspirational reference group of high class or celebrity status. Nike is a top athletic brand for apparel, gear, and footwear. Nike’s mission statement is “To bring inspiration and innovation to every athlete in the world. Due to the brand’s publicity and marketing, it creates a customer perception of quality that will last longer than generic sports brands. Along with the public stir of the brand, it targets customers in the aspirational reference group because they want to associate themselves with their favorite athlete or celebrity who wears the product. Aside from the trend, Nike is mainly intended for athletes to increase and improve their training which is why Nike has a product line for each type of sport: running, basketball, tennis, etc. Hot Topic started off trying to be unique and different with the brand’s main focus on music other than typical pop.
It first became popular with its t-shirts of multiple rock and metal bands. It is a way for customers, mainly teenagers, to broadcast their love of music. Their mission statement is “At Hot Topic, we believe music and the arts make everyone’s life a whole lot better, so we’ve decided to enrich kids’ lives by enabling them to express themselves musically and artistically! ” The brand understands that there are audiences out there who don’t prefer the pop culture trends, so this is a brand that encompasses and pleases them as well. | 3. The Marketing Mix| | | | | | | | | * Apparel:| * Apparel:| * Apparel:| | * Dresses| * Shorts| * Pants| * Jackets| * Bras| * Shorts| | * Accessories| * Jackets| * Band T-shirt| | * Glass pearl belt| * Hoodies| * Body Jewelry: | | * Footwear:| * Long-sleeve shirt| * Plug earrings| | * Heel boots| * Short-sleeve shirt| * Clothes graphics| | * Brand name| * T-shirts| * Cotton Fabric| | * Brand mark| * Footwear:| * Quality| | * Fabric: | * Running| * Customer Satisfaction| | * Cotton Tweed| * Gear:| * After-purchase service| | * Lambskin| * Socks| * 30 day return policy| | * Coated washed denim| * Customer ability to customize footwear| | | * Glass Pearl| * Quality| | * Quality| * Color| | | * Value| * Brand name| | | * Packaging| * Brand mark| | | * Customer Service| * Fabric| | | * Lifetime warranty by manufacturing defect| * Value * Customer Service| | | * Customer satisfaction| * Customer Satisfaction| | | | * 30 day return policy| | | | | | | | * Market price * Each article of clothing is at least $1,000 US| * Range in prices * Clearance/Sale Items * Discount deals * Retail store coupons| * Affordable price * Clearance/Sales Items * Discount deals * Regular store deals| | * Rarely discounted| * Outlet warehouses| | | | | | | | | | | | | | | | | | * Fashion magazines| * Magazines| * Music Magazines| | * Celebrity Endorsement| * TV advertisements * TV Shows| * Radio * Internet| | * Celebrity Advertisement| * Celebrity Endorsement| * Sales promotion * Music endorsements| | * Celebrity Events * Award Shows| * Sponsorships * Radio| * Musician/Artist sponsors| | * Fashion Shows| * Sales Promotion| * Music/Art Events| | * TV shows| * Internet| | | * Internet: Subscription| * Sports Events| | | * Beginning of the season unveiling| * Outdoor advertisements| | | * Boutique Window| * Newspapers| | | | | | | | | | * Exclusive Boutique * Extravagant store design| * Shopping Mall * Athletic Store Team * Sold Online| * Shopping Mall * Store has music, darker, artistic theme| | * High-End Shopping Mall| * Warehouse * Outlets| * Warehouse * Sold Online| | * High-income areas| * Trucking| * Outlets| | * Fashion streets| * Air-Mail| * Trucking| | * Air-Mail| * Department Stores| * Air-Mail| | * Boutique Window| * Distribution| * Shelf Placement| | * Shelf Placement:| * Shelf Placement:| * Glass Case Display| | * Near front of store * In plain sight * Not sold online| * Reaching Distance * Middle of the store| * Hanging on racks| | | | | The PRODUCT is the easiest designed strategy in the marketing mix compared to the place, promotion, and price.
Chanel’s apparel includes a dress, jacket, belt, and boots. The dress is made out of cotton tweed, lambskin, and precious pearls; the jacket is created from cotton tweed; the heeled boots are coated washed denim. The fabric provides value to customers who believe that they receive extreme quality from their purchase. These high paying customers purchase each of these items for their fabric, instead of going to a generic store full of regular cotton, spandex, and polyester. They desire the feeling of riches when they are covered in beautiful pearls and soft lambskin. Aside from the physical units, the product comes with the brand name and brand mark.
In the fashion industry, a person isn’t initially asked about the fabric or the material. They are asked about the brand because a top designer name is seen as prestigious and extravagant which is why the number one fashion question is, “Who are you wearing? ” In the end, fashion is not completely about whether or not an outfit looks good on a person. If the outfit is a brand name, it is put on a higher pedestal than other attire. Along with the ensemble, customer service is a key factor because Chanel clients are loyal. Chanel is popular with upper class clientele who associate themselves with the brand because of its social status; only the wealthy can purchase more than one article of Chanel clothing.
The fashion line has excellent customer service to maintain their high clients’ satisfaction before and after their purchase. When purchasing the product, the client also buys a lifetime warranty. However, this warranty only applies to any manufacturing defects or malfunctions. After women enjoy the fabulous customer service and purchase this ensemble, they are given their items in the well-known Chanel packaging. If the clothes were a gift, the store would wrap them in a black box with the white Chanel logo along with tissue paper and white ribbons free of charge. If the clothes were just part of a shopping spree, they will be wrapped in tissue paper and carefully placed in the signature black Chanel shopping bag.
All the packaging and added extravagances of the product will be donned with the brand name and brand mark because that is the main reason why women purchase from this fashion line. This Chanel outfit provides women with beauty and grace. Running apparel from Nike includes footwear, socks, shorts, and a shirt. The shoes are made with gel and soft cushion, so it can absorb the shock when a runner’s feet pounds the pavement. A runner can’t have shoes without thick socks. The shorts can either be loose or tight to keep the runner feeling cool and dry. The shirt can be a Dri-fit that keeps the runner warm, cool, comfortable, and dry. With women, some of the shirts come with a bra inside the top.
Similar to Chanel, Nike is one of the top leading brands in its athletic department, so athletes purchase the products for the brand name and brand mark. Due to it being a popular brand, it is presumed to have extreme quality which athletes desire to improve their training. Each article of clothing has the brand name and brand mark stamped on it, and each of the footwear has the brand mark largely displayed on all sides of the shoe. Nike footwear is unique because it enables customers the opportunity to put their own input into the design of their shoe; they can customize their own version with different colors, shapes, and designs. Nike makes sure to provide excellent service in which the employees must be knowledgeable about every product for each type of sport it carries.
A customer is able to rely on the employees to consider the client’s best interest. Nike also wants to ensure customer satisfaction which is why it guarantees customers a trial run of the product; if they are not happy with the item after the first couple days of testing them, they can return it. Otherwise, they have 30 day full refund policy. Hot Topic’s outfit is comprised of band t-shirts, pants, shorts, and plugged earrings. The pants and shorts are made from basic cotton or denim. The band t-shirts are partly made of cotton and polyester. The plug earrings are simply plastic. Their customers don’t consider the value or quality of the apparel as much as the color or graphics.
This brand mainly factors the customers’ appreciation of music, art, and expression which leads to customer satisfaction. Hot Topic provides excellent customer service before and after a purchase. The majority of society stereotypes those who adorn Hot Topic clothes as lazy, dirty, tough, “Goth”, and punk; however, the employees are approachable and energetic. After a purchase, a customer can go back to the store or browse their website to learn how to care for their purchase: how to properly wash their denim, iron their cotton t-shirts, or clean their leather purchases. Along with the purchase, customers are given a 30 day period to return their items for a full refund. The PRICE is a second factor that sways customers to purchase an item.
The Chanel outfit is costly and sold at market price because it is a luxury clothing line. The only way to know the cost of the clothes is to physically walk into any of the boutiques; the prices aren’t displayed on the boutique website. The majority of each article of clothing from Chanel is at least $1,000 US. This outfit targets the wealthy, so they easily have the sufficient funds to purchase these big-ticket items. Due to the customer’s high income, the price of the apparel isn’t of great concern; they only want onlookers to recognize that their clothes are expensive. The brand is rarely, close to never, discounted because it wants to keep its sense of richness.
If Chanel were to have discounts, then people of lower status may purchase the items which will discourage the wealthy who don’t want to be associated with that type of people. Therefore, once the market price is set, it is unchanging once the product item arrives at each boutique. The Nike running outfit’s target audience includes those of middle class, so the price is affordable. Since upper class citizens purchase this product as well, the prices vary depending on the quality, color, and design of the fabric. For example, mesh running shorts would be cheaper than dri-fit shorts. New products are set at market price for at least the first six months after its arrival in a Nike store or department store.
Discounts and sales are offered for the items when there is few supply of it left or when the seasons are about to change. The pieces of this running apparel are also distributed to retail and department stores. These department stores, such as Sports Authority, Sport Chalet, or Finish Line do provide its customers with discount coupons. For example, if they make a purchase of $100 before tax, they can receive $15 off the final total amount. Nike has multiple product items in its product lines, so there is an easiness to determine the price for each. Between the three outfits, Hot Topic is the least expensive because the clothes target a young demographic population who don’t have as much money to spend.
Even though the clothes are affordable to begin with, the brand always has multiple discounts in store and online. When a new supply of clothes is distributed to the retail stores, the price of clothes that have been there for a couple of months is lowered. There is no such thing as a particular style for each season. Abundant deals for any type of clothing attract tweens and teens who are spending their free time shopping and loitering at local shopping malls with friends and family. Teens appeal to stores with signs for deals, sales, clearance, and discounts; they want the best deals to save their money and allowance. Hot Topic is flexible in determining the price of the products as it acknowledges its young demographic market.
A good PROMOTION strategy is vital to increase sales, attract new customers, and maintain frequent shoppers. This entire Chanel wardrobe is pricey because they are promoted as apparel for the rich and powerful. This designer combination of the dress, jacket, belt, and boots is first previewed at an elaborate fashion show. Chanel executives choose a particular model or celebrity who can display the elegance, beauty, and style of each apparel. After the initial preview of a fashion show, the clothes will be advertised in popular fashion magazines: Vogue, Elle, In-Style, etc. Each of the advertisements has an elegant theme where the models are showing the extravagance and beauty that each piece of clothing and accessory offers.
The advertisement’s background is typically a fancy setting which captivates wealthy customers. After the initial unveiling at a fashion show, a celebrity may have the opportunity to purchase the outfit before the product is distributed to the boutiques. From this, a celebrity can where this outfit at a celebrity event: award show, charity event, or red carpet event. At all of these events, there is paparazzi and fashion news coverage who ask what the celebrity is wearing and who designed it. These celebrity events are widely broadcasted, so thousands of audiences will see the outfit firsthand. After the fashion show and celebrity advertisements, the outfit is be distributed exclusively to the Chanel boutiques worldwide.
Due to the outfit being part of the 2012 Spring/Summer collection line, Chanel will promote the outfit by placing the entire ensemble in the store’s display window, so people on a shopping spree can see. Typically, the best and new outfits are displayed at the front of the store and each piece article of clothing is placed next to each other on the racks and shelves. Due to Nike having the greater target audience between the three, it promotes the products at a higher rate. A marketing team would promote the outfit by advertising in various magazines, billboards, TV channels, sports events, radio, and online. The visual advertisements in magazines, billboards, TV, and the internet may portray an average person running in the clothes. An average person is used to model the running outfit because it needs to be relatable to the customer.
Popular athletes also endorse the product by wearing them daily or in advertisements because customers want to associate or relate themselves to celebrities: Michael Jordan, Roger Federer, Tiger Woods, etc. Beyond the pictures and models, the advertisements include a motivating statement that encourages everybody to be active. These clothes are also advertised online and in newspapers; Nike purchases ad space from newspapers and popular websites, such as Facebook, Yahoo, Twitter, etc. which the majority of their target audience views. The company also puts their advertising statement describing the running apparel and its benefits on popular radio stations, so people can tune in and listen.
However, the main promotion strategy Nike has is at sports events. This outfit is geared towards athletes, so the best promotion strategy is to advertise when sports fans or other athletes are watching. The running clothes’ main target audience is athletes, so it locates, displays, and advertises itself closest to where all the other athletes are. There are also sales promotions in newspapers, magazines, and on the radio to attract people who want to purchase the items but can’t afford to unless they were at an affordable deal. Hot Topic focuses on artistic expression and a love of music; therefore, it would advertise the outfit in music magazines.
This fashion brand’s main attraction is the band t-shirts which is why they are advertised in music magazines, so a band or singer’s fans can buy their t-shirts. Fans want to support and broadcast their love and appreciation of an artist or music group. Hot Topic’s slogan is “Everything about the music. ” which is why it is also promoted on the radio and popular music websites. In order to attracted customers, it would advertise about upcoming sales promotion. A major promoting strategy key is that the clothes have music endorsements or musician and artist sponsors. These musicians and artists sometimes take part in the design and style of the clothes; therefore, their fans would be ncreasingly interested to their products. Wherever the particular clothes are placed in the store, the musician, band, or artist would have their name and photo plastered next to the products to capture fans’ attentions. There are also advertisements at music and art events which is where their primary target audiences spend their social time. The demographic is younger in age, so the brand promotes the clothes with constant sales and deals to attract them. These tweens and teens wouldn’t even be able to afford the cheapest item at Chanel. The PLACE or distribution strategy is vital with making the outfits available when and where customers want them.
The Chanel outfit is sold exclusively in their boutiques; it isn’t sold in department stores or online. As of September 2010, there are only 310 locations worldwide. These Chanel boutiques are only located in high-end shopping malls where the high end customers shop: South Coast Plaza, Beverly Hills Mall, etc. Aside from shopping malls, these boutiques are placed in high-end fashion districts. A woman who spontaneously decides to go shopping would want to go to Chanel where she feels most comfortable and convenient. These stores wouldn’t be placed in low-income cities, such as the Bronx or Compton. The product is only placed in high income cities where its target audience lives.
All of the clothes and its accessories are designed and manufactured in Paris, France where its headquarters is located. Once each piece of clothing is manufactured, it is distributed exclusively to each boutique through air-mail. These items are to be handled with care when it is being distributed because a client would not want to pay a high price for a defective item. The Chanel clothes are never in warehouses or outlets because it destroys the luxury aspect of the brand. When each of the products arrives in the boutique, it is first placed in the boutique window where customers can see a look of the entire outfit before they enter the store.
The boutique window is the place where customers can have an idea of what they could potentially wear, shop, and purchase. It must be decorated lavishly to attract customers and entice them to walk into the store. Due to the extreme quality and benefit perception of the clothes, the store needs to have an extravagant and contemporary design. The outfit is brand new, so it would be placed near the front of the store in plain sight for the customers to have an easy access. The main factor of Chanel is that it has to be placed in high-income areas where its target audience predominantly lives. Nike’s outfit is more affordable and universal, so it is distributed in more diverse areas than Chanel and Hot Topic.
Nike has its individual stores placed worldwide; however, the products can also be found in department stores, including Nordstrom, Macys, Finish Line, Sports Chalet, etc. Wherever the items are placed, it would be in the athletic or sporting apparel to be easily located. In the Nike stores, there would be an athletic store theme to attract customers who tend to be athletic and active. These products are placed and distributed to shopping malls where these retail stores are mainly located. When it comes to shopping, people of all incomes would most likely go to the nearest shopping mall which is why the Nike running clothes are dispersed throughout different retail stores.
Due to Nike having the perception of quality, stores would place its items within reaching distance on the shelves. Department stores would generally place the Nike products in the middle of the store, so customers can also browse other types of brand items as they try to locate the Nike items. The running items are made in countries outside of the United States, so it would need to be air-mailed and trucked to various parts of the world. If customers want a better deal, they could locate any Nike warehouse and purchase the products directly from there, so they don’t have to pay the few extra dollars to cover the trucking and transportation costs.
Nike has a few outlets where clothes from different sport seasons are placed to allow customers to purchase the items at a discounted rate. Customers across the globe utilize the Nike running brand, so the clothes and shoes are also sold online through the Nike website or the individual retail stores’ websites. Nike understands that its items are highly universal to all age and ethnic groups; therefore, it considers multiple locations to sell their running apparel. Hot Topic’s target audience is smaller due to their younger age. Most tweens and teens spend their free time at shopping malls where the stores are located. The store has an artistic, dark, music theme which encompasses the types of customers.
The pants are hanging on racks near the back of the store because they aren’t as important as the tops and t-shirts. The t-shirts are folded and displayed on the walls of the stores behind glass coverings. A customer can walk up to the side of an entire wall, look at the different graphics and designs, and locate it on the shelves underneath the glass casings. The plug earrings are placed in the middle of the store in a large glass case near the cash register, so employees can keep an eye on the jewelry. The products are manufactured outside of the United States, so it has to be air-mailed and trucked to the different 642 locations only in the United States and Canada.
The clothes are mass produced, so the clothes are first sent to warehouses that then send a certain supply amount of the clothes to each of the stores. These products are also sold online at their exclusive website where additional items are found because they aren’t sold in stores. There are also a few outlets because the brand needs to be affordable for the younger population. When comparing the place of all three competitors, Nike has the best distribution because it has a more universal audience based on age, geography, ethnicity, and social class. 4. When comparing the competitors’ web sites, Chanel has a well-thought design but is the least user friendly of the three. The site is easy to maneuver through, but it isn’t as simple as Nike or Hot Topic.
The website’s design is based on the clothing season and separated by outfits rather than separating each product by “tops, bottoms, dresses, etc. ” as other clothing websites do. It appears as if Chanel is set on which article of clothing matches with each other. For example, a certain dress can only be worn with a particular jacket, belt, or shoes. The website doesn’t appear to allow a customer to mix and match the apparel to their liking. When a user clicks each individual outfit, there is an excellent screen shot and display of a model walking on the runway. Whichever direction the mouse cursor moves, the web page would follow the motion and give a better view of the entire outfit.
For example, after a person clicks on the initial outfit link, a large screen shot would appear that covers the whole page. When they would move the mouse cursor down, they could see the rest of the outfit, such as the shoes. With each outfit, there is a short description of each article of clothing’s fabric and material. The website provides most of the needed information for the outfit, except for the price. They don’t include the price because only the rich and wealthy would shop at Chanel, and they have enough money to not care or consider the price as most other shoppers. Due to Chanel’s target audience as high-end customers who are fashionistas, the website also includes footage of multiple fashion shows where they can view the different apparel and styles.
Women who shop at Chanel tend to care about fashion, so the website is interactive in allowing them to view exclusive fashion shows and see pictures and footage of the workings inside the Chanel studio. There is a “Chanel News” link that keeps loyal Chanel customers up-to-date on any upcoming events and gives them exclusive behind the scene workings. If a user wanted to stay updated on the clothing line, they can subscribe to the website to be notified of any new products. Aside from the clothes, the website provides a store locator based on the geographic world region. Chanel’s website is unique because it has a different design and theme due to it not providing users the ability to purchase the items online.
It gives off the true essence of how important fashion is to some women. When entering the Nike website, the user has to first select a language than the country which applies to them. This shows the universal and global effect of this brand. The site is user friendly as it separates each product into the sport it associates with. Running shoes or apparel would be found in the link for running while basketball shorts would be found under the basketball link. The website is more than just shopping for apparel. There is a link for customers to shop individually, and there are individual site links where people who are interested in different sports can click.
For example, if one were to click the running site, there would be a narrow range of products to shop from. Also, there are training tips, events, news, and footage. This website would be the most user friendly in comparison of the three because it considers the different types of users and their individual needs. For example, there is a list of shoe options a customer can choose from. They can choose footwear for their different foot condition and the degree of support they need. Even though it may be difficult for a consumer to determine which product they need from all of the options, it is better to allow the different factors for people who are short or tall, flatfooted, and lightweight or plus sized.
A user can easily choose between the links if they were to shop for tops, shoes, gear, fan gear, bottoms, or shirts. Each of the products has descriptions where it discusses the product’s benefits, fit, fabric, design, origins, and directions on after-care. Along with the product’s highlights, the website shares featured technology, such as how Dri-FIT works. There are also size charts to help customers figure out their most suitable measurements. Customers have the capability of posting and reading reviews where consumers rate the product based on its size, fit, comfort, and durability. The videos that the website provides show average people in the Nike products running and exercising in everyday places.
Since customers can purchase items online, they have the ability to check their order status and know where it is in the processing procedures. Athletes are under physical and mental pressure when they are training, so the website provides motivational and encouraging quotes and expressions. At the bottom of the webpage, there is a link to find the nearest store location to the user. There is also an opportunity for people to take pictures and send them to Nike about how they keep active and healthy. Users can also follow Nike through Twitter and YouTube. Hot Topic is also user friendly because it has a younger target audience. The website has more options and functions aside from buying apparel because younger generations are more tech savvy.
It is easy for a user to locate their needs because the clothing, accessories, and shoes are split up into categories at the top of the webpage: New Arrivals, Clothing, T-shirts, Denim, Accessories, and Shoes. There is also an option to choose what a user wants to see, such as male, female, or unisex apparel. The products are easily narrowed into subcategories of tops, bottoms, dresses, hoodies, swim, intimates, and kid sizes. The site provides a size chart to allow users to figure out which size is most suitable to their personal measurements. Next to the tabs that depict the clothes, there is a link for deals and clearance items. All the deals that the store is currently offering are largely advertised in red font that jumps from the black background color.
The deals are the first to be seen when a user uses the website. If a user wanted a specific band t-shirt, there is a feature at the bottom of the webpage to shop by their favorite artist. Also at the bottom of the webpage, there are clothes being advertised as “Girls & Guys Most Wanted. ” It is a way to further advertise a popular item. Whatever band, artist, or musician is trending at the time, the website shows the pictures and links of top artists, so a user is automatically sent to view products associated with that group or person. When a user chooses a particular item, there is a brief description of the item depicting the fabric, graphics, price, and directions on how to care for the product.
Beyond the apparel, there are news and videos about certain bands which include music videos or exclusive interviews. The website allows a user to find the nearest store from their location. There is also a “wish list” feature where a person can put certain items on that list and send them to friends and family who can view it. There are quick links to YouTube, MySpace, Facebook, and Twitter. A person can also have the opportunity to learn about jobs and model opportunities. Hot Topic has links about the store’s purpose and social responsibility. 5. A survey was given to fifteen women of different ages, who have various fashion styles, to get an idea if the three competitors successfully established themselves in the fashion industry.
These women are a mix of those who know about the fashion industry, are clueless about fashion, love to be stylish, and don’t care what they wear. 1. When purchasing an outfit, which competitor provides the best quality? a. Coco Chanel80% b. Nike, Inc. 13. 33% c. Hot Topic6. 67% 2. Which competitor has the best deals for its brand of clothes? a. Coco Chanel0% b. Nike, Inc. 66. 67% c. Hot Topic33. 33% 3. Who is Hot Topic’s target audience? a. Music lovers13. 33% b. Goths66. 67% c. Artists0% d. Fashionistas0% e. Other20% 4. Which competitor is more universal? a. Coco Chanel0% b. Nike, Inc. 100% c. Hot Topic0% 5. If you were to receive money for a shopping spree, which competitor would you choose to shop at? a. Coco Chanel53. 34% b. Nike, Inc. 33. 33% c. Hot Topic13. 33%
Based on the response percentages, it does appear that the competitors position themselves accurately to their main target audience. However, the majority of the poll believed that Chanel provided the best quality of the three. The younger and older demographic seemed to share the same perception of Chanel’s quality which may be a result of its brand image and high prices. The two who chose Nike said it had better quality because it was more suitable to their needs; they both are twenty years old. The only person who chose Hot Topic to have the better quality only shops at that store and is biased because she has a dislike of designer fashion brands. Due to it being a top fashion line, Chanel is successful in setting itself as a quality leader.
When it comes to the better deals, nobody chose Chanel as having a good price for its own style of clothing. Even the five older women chose Nike instead because they believed Chanel was pricey. This doesn’t affect Chanel because they aren’t trying to be a price leader which is why their prices are through the roof. Their clients are wealthy who don’t care too much about the costs, so price isn’t one of Chanel’s top priorities; it only sets high prices to keep the concept of riches and luxury. Five women chose Hot Topic as the price leader between the three competitors because they shop at the store on a regular basis. Hot Topic is doing a good job at marketing the products at affordable prices for the younger generations.
However, across the spectrum of age and ethnicity, the majority chose Nike as the price leader because it reaches a greater market-place than Hot Topic. Nike targets various types of people, so they are more knowledgeable about the products than those of Hot Topic which targets strictly a younger demographic. Hot Topic’s mission statement is about enabling kids to express themselves musically and artistically. The company expects its target consumers to see them as one who allows people to share their appreciation of music and art. However, less than 15% of the poll shows people believing that the company’s consumers are music lovers. The two who answered that the store is designed for music lovers are knowledgeable about the store and shop there frequently.
Aside from music, nobody believed that the brand was geared towards those who loved art. Over 65% of the poll assumes that “Goths” wear the clothes due to its black, dark, bold styles. People within the age of Hot Topic’s target consumers had a different view of the store than the actual company. Even though these people range in usage rate of Hot Topic’s clothes, they know about the style and products, but they stereotype the typical consumers. The three young girls who chose “other” shop at this store on a regular basis, but they don’t have any knowledge about what the company is trying to project to its audience. When asked which competitor is the most universal, all fifteen women chose Nike.
They understand and agree with Nike’s mission to affect and influence different type of consumers globally. They know that more people of different backgrounds, religions, ethnicity, income, etc. purchase Nike goods rather than the upscale apparel of Chanel and the musical styling of Hot Topic. Therefore, Nike is doing an excellent job when they are internationally expanding their 452 worldwide while Chanel is a company with only 310 stores worldwide. Nike’s ability to target a large market-place justifies their goal of increasing the number of stores to 738 between 2010 and 2015. If the fifteen women received free money to go on a shopping spree, they fit directly into each of the competitor’s target audiences.
The women who fit into Chanel’s target range of being at least thirty years old or a fashionista chose to have a fun day with Chanel. The other women who chose to purchase from Nike are athletes and don’t favor over-priced brand names, such as Chanel. These women want comfort and don’t consider the “in-style” fashion culture. Even though they were to obtain free money, they wanted to purchase as much as they can with the great Nike deals. The few who chose to shop at Hot Topic are frequent shoppers. They are not fashionistas or athletes. They are nineteen years old with a love art, music, and free expression. In the end, all three competitors are successful in reaching their main target audiences. 6. CHANEL – SWOT Analysis | STRENGTHS| WEAKNESSES| Reputation * Quality * Brand image * Wealthy target market * High demand & popularity * Fashion industry knowledge * Value added products * International Company * Elegant, sophisticated, luxury Concept * Knowledgeable employees * Exclusively owned designs (Tweed Fabric, embroidery, decorative chain, button)| * Small target market * High Price * Exclusively for women * Recession * Limited Production Designs| OPPORTUNITIES| THREATS| * Expand design production * Increase ad campaigns * Target new audiences: Men| * Counterfeits * Similar design by competitors * Cheaper competitors * Change in fashion trend|
Since Chanel was founded in 1909, it has accomplished an exquisite reputation of quality, beauty, and luxury in the fashion industry. The popularity of this brand is the reason why it has been strong for a long time. Even people who don’t shop at Chanel know about the clothing line and believe in its product’s extreme quality. The greatest strength Chanel has is its brand image which entices women to purchase and desire the extravagant products. Women mainly purchase the Chanel items in order to show other women that they are wearing Chanel, which is why the brand mark needs to be visible. As of 2010, Chanel’s net income is €280. 3 million and revenue is €1. 809 billion.
The reason for its financial and fashion success is its wealthy target market of high income women and celebrities. Even men who don’t know anything about the fashion industry know that Chanel is popular for women. This brand is one of the top fashion designers, so it has an extended knowledge of the industry: current styles, marketable designs, and clothing production. The brand image, quality, and reputation of Chanel add value to its products for women who are fashionistas and all about brand names because they love the elegant, sophisticated, luxury concept. It is an international company, so it is able to reach its wealthy clients globally.
The employees must be knowledgeable about the popular fashions, have an artistic, creative vision, and understand the benefits of each article of clothing. Chanel exclusively owns certain fabrics and designs that competitors do not have: tweed fabric, decorative chain, distinguished button, and detailed embroidery. Even though Chanel has wealthy customers, the fact that their target market is small is a weakness. Statistically, there is less high income than middle income or low income households. Chanel only designs and produces clothes for women, so that narrows its target market further. Other top brand name designers, such as Gucci or Louis Vuitton, advertise to male and female shoppers.
Chanel’s small consumer percentage limits its capabilities of expanding and selling to a larger audience. This company also limits itself when it comes to the production designs. The clothes that it designs are similar to each other. There hasn’t been much room for new styles, fabrics, or designs. With the economy suffering the past several years, the company’s high prices decrease the number of sales. When people are trying to save money, they are more likely to refrain from purchasing fruitless items and luxuries. With Chanel being trendy and influential in the fashion industry, they have opportunities to experiment. The company can attempt at expanding its design production.
Instead of strictly designing the typical types of styles, it can add a few different styles, so it can target a larger audience group. In order to expand its company to have a wider range, it could produce apparel for men in addition to the existing men’s fragrance. This way, it attracts a larger scope of wealthy males and females. If it were to expand its designs, target audience, and production, the brand would increase its ad campaigns to men magazines, TV shows, and male celebrities. One threat that Chanel and most companies in the fashion industry faces is the possible change in fashion trends. A particular style of clothing or brand may only be popular for a short period of time.
Even though Chanel has sustained its popularity for over a century, it needs to keep in mind that fashion is constantly changing. It has to be updated and advertised to a large range of people. If the company doesn’t take the opportunity to expand on its scope of style, other competitors may come out with similar designs. With these similar designs, competitors will offer a lower price than Chanel. Chanel would currently have more consumers, but the high prices hold many people back. With fashion, people always want to have a certain product from a designer, but they may not be able to afford it. Top designer companies have the threat of counterfeit products. For example, a Chanel handbag costs at least $1,000; however, a person can sell that same fake bag for $10.
It is hard for some to tell the difference between a counterfeit and authentic item without proper investigation. 7. Chanel has an excellent customer relationship management style when it comes to dealing with their loyal customers. Once customers make their first purchase, usually with a credit card, their information is captured in their data base, so employees can look back to see what was purchased. This data base allows the company to locate their customers’ locations and highlight any similar products that may interest the customer in the future. This information gathers basic demographic information, frequency of purchase, price of the purchase, and distance from their home to the boutique. On the ompany’s website, fashionistas or loyal customers are able to subscribe to the site in order to be alerted on new fashion/accessories, fragrance/makeup/skincare, and fine jewelry/watches arrivals. Customers feel they have an insider look and importance. However, there is a legal statement on the webpage for users to understand that the company isn’t liable for any risk that a user may face. Aside from the email list, the top priority customers receive a personal letter or phone call to invite them to the store to preview a new collection. In addition, Chanel’s knowledge management is strong in bringing customers back. Women appreciate the feeling of being important and special which is why interaction between a company representative and the customer is important.
Most of the customers are loyal, so this allows a representative to build a relationship with a customer and further understand their needs, wants, and desires. As far as I can tell, I believe that Chanel has a better customer relationship management than Nike and Hot Topic because it has a smaller target audience that they can place more emphasis and concentration on. A smaller range of customers allows the employees to interact with customers on a personal level. Chanel, Nike, and Hot Topic address the lifetime value that their customers represent. All three have an after care service where they can either go on the website or return to the store if they have any questions. The three competitors deal with their customers in their own way.
Chanel has a personal relationship interaction with its clients; Nike gives customers frequent purchaser awards; Hot Topic has a friendly service where it gives customers the will to return and purchase from the company in the future. 8. When it comes to a community outreach program, Chanel hosts charity events for different causes. They tend to have fashion shows or benefit dinners where celebrities host, attend, or advertise the event to attract people to attend or donate. For example, Chanel had a benefit dinner with Kate Hudson for the Natural Resources Defense Council’s Ocean Initiative. All the money received from ticket attendance went straight to the charity. Nike addresses the societal marketing concept better than Chanel.
The company has charity events, similar to Chanel, where celebrities attend dinners and shows; the profits from the tickets directly fund some charitable cause. Besides the charity events, the company believes in recycling. In 1993, Nike started their “Reuse-a-Shoe” program in an effort to keep their shoes out of landfills. Over the past nineteen years since this program begun, it was able to recycle over one and a half million pairs of shoes each year. The shoes and clothes that it produces are all recyclable in order to help clean up the environment. Nike also builds basketball courts and outdoor activity areas for schools and the Boys and Girls Club.
On Hot Topic’s website, there is a link to help users learn about the company’s social responsibility. They make sure to provide their customers with products produced legally and responsibly. The company has each manufacturer and product provider abide to their strict standards that prohibit forced labor, child labor, harassment, and abuse. Hot Topic ensures that employers provide health, safety, sufficient wages, and benefits to employees. 9. Since the downturn of the economy in 2005, Chanel had some difficulty. People during those times lost their jobs or were fearful of their termination. As a result, many started to save money by cutting out any unnecessary spending of luxurious that included Chanel products.
The company’s revenue declined for a few years; however, as the economy is slowly recovering, the revenue is increasing gradually. The main reason for its short decline in profit is its small target audience becoming smaller and prices remained expensive. Nike had its own share of hardship as its steady revenue dropped drastically in the beginning of 2009. Even though Nike’s products are more universal and targets a larger audience than Chanel and Hot Topic, it couldn’t escape the fact that people ceased to shop for clothes during the recession. Since that huge drop in 2009, Nike has positively gained much profit. As the years go by, its income statement shows that their income and profits are increasing by several hundred thousands of dollars.
For Nike to increase its profits and keep its sustainability, it reduced its expenses thirty to fifty percent. Chanel is growing back to what it originally was before the recession, while Nike has continued to soar since the company was founded in 1964. Hot Topic was founded in 1988 and reached great success starting in 2000. It was doing well until the downturn of the economy. The company’s main consumers are tweens and teens which are the reasons why it has a challenging time gaining back its past success. As the years go by, the income statement shows that the company’s total revenue is decreasing. In January 2011, it peaked at its greatest operating loss; however in January 2012, it decreased that amount but is still operating at a loss.
Hot Topic is attempting at earning back its profits by attracting people with constant deals which have been working at a slow pace. 10. Personal or relationship selling affects the final consumer who buys the Chanel outfit. Chanel requires all the different supplies of the final product to comply with certain guidelines and rules. The company verifies its supply chain. It is constantly verifying its supply chains to address risks of any human trafficking and slavery. They research their suppliers because they don’t take part in forced labor. Chanel also conducts selected audits of suppliers, including audits about the conditions of work and the use of forced labor.
They conduct internal and external audits that may or may not be announced prior to the investigation. Training is also provided for employees with direct responsibility for supply chain management. In the facilitating functions, Chanel researches its channel members through audits and extends credit and other financial services to facilitate the flow of goods through the channel to the final consumer. During the transactional functions, they contact potential customers, promote products, and solicit orders. They also negotiation how many goods or services to buy and sell, so they don’t have an oversupply of goods because their target audience is smaller than other clothing boutiques.
They also select the type of transportation to use which is presumably air-mail because the outfit is primarily manufactured in France. There are trucking distributions, but the items are carefully packaged to ensure safety. The outfits are delivered prior to the start of the season that it is being sold in, so top priority customers can have the first look. Chanel also assumes risk of owning any inventory because some pieces of the outfit may not be as popular as the other. 11. Chanel’s best clients are frequent customers. They aren’t necessarily categorized as being only high dollar people because all of the shoppers are wealthy. This company is a designer line, so its preferred customers are constantly making purchases.
When it comes to the outfit comprised of the boots, dress, jacket, and belt, Chanel could get their frequent customers to order more by sending them letters, emails, notices, or phone calls about a new arrival of clothing or accessories that may be to their liking. Chanel employees would be able to collect customer’s information from their data storage and segment which new products can be associated and sold to a particular shopper. For example, this particular outfit is all white, so an employee can suggest to whoever purchased the clothes to buy a matching handbag, sunglasses, hat, broach, or scarf. These women are top paying fashionistas who trust the knowledge of people working in the fashion industry, so they would be more inclined to purchase items that can be easily incorporated into their outfit.
From this, Chanel can suggest outfits to these customers during every different season; they can suggest a new particular jacket, dress, shoes, or accessory. 12. Personally being into fashion, I love the extravagance and beauty that Chanel’s campaigns exude. The photography and its design are exquisite. I don’t have a favorite ad in mind, but I love the ads where the photos are taken in outdoor scenery. The nature setting is captivating because the beauty of nature is combined with the apparel’s beauty. I love art, so I favor the black and white ads. Black and white photos seem to have a unique, elegant, and classy feeling because it’s vintage. Chanel also tends to have advertisements where a model would be in a dark room and have the light shine on her while she’s wearing the clothes.
The dark room makes the audience automatically draw their eyes to the bright light illuminating from the Chanel clothes. Overall, I believe that the photography and lighting of the campaigns play a bigger role than the background scenery. The way the light shines on the models make them appear to be a doll and completely flawless. I assume that I love the Chanel advertisement campaigns because I yearn for the company’s luxurious clothes along with the beauty and elegance that it provides customers. If I had the money, I know that I would be a loyal, frequent customer. Nike’s ad campaigns are realistic, encouraging, and motivational. My favorite Nike advertisements are of photos that capture natural, regular athletes in their movement.
I love viewing the different body movements, whether it is of them running, dancing, or stretching. The photos are taken in great detail, so you can see each movement that the athlete makes. The body movements give a sense of abstract artwork which I admire. The appearance of an athlete’s easy movements with Nike’s inspiring quotes is very motivational. I feel as if Nike does a better job than the three competitors at engaging and relating to their audiences. Sometimes, I appreciate a simple ad that captures a certain moment without any need of being over detailed or having popular celebrities. The Nike ad campaigns tend to have more computer graphics design with colors that are truly captivating.
The motivational words make me feel as if it is just simple to get up and do a physical activity, even though it may not be. With TV commercials, the company has a narrator dictate similar encouraging quotes in a voice that is too powerful to ignore. I am impressed with how simple Nike’s advertising campaign can be; however, it i