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Chanel Marketing

Chanels Luxury Marketing

Chanel’s Luxury Marketing: The Relevance of ‘Consumer Behavior Models’ for Improving Luxury Consumer Journey

Introduction

Brand is about company’s trustworthy relations with customers and their positive perception of company’s products. Often, consumers like the enterprise’s idea, which is reflected in every good the company produces. In such a manner, customers recognise the company’s products in every store, as well as know how to differentiate those products from other brands. Moreover, the majority of loyal buyers are ready to pay more for their favourite brands, in order to be recognised among their friends. Chanel has managed to build the brand that serves as a sign of good taste and membership in the ‘jet set’. This paper is dedicated to Chanel’s marketing strategies, which help to keep the brand at the high level, as well as to maintain a constant number of devoted customers.

Executive Summary

Chanel belongs to one of the most valuable brands in the world, and the price for this brand has reached $7.2 billion at the moment (‘The World’s Most Valuable Brands’ 2016). The form of ownership is a privately held company, which belongs to Wertheimer family. The organisation’s headquarter is situated in Paris, but the enterprise actively operates in the U.S. market as well. Although, the brand is known for its perfumes, it is not limited to their production only. Chanel additionally sells clothes, shoes, handbags, and watches. The most famous products include: ‘little black dress,’ ‘the Chanel №.5,’ and ‘the Chanel Suit’ (‘The World’s Most Valuable Brands’ 2016). Chinese customers consider this brand as the most desirable among many other luxury products and brands. Chanel has its own system of work, which presupposes that it does not grant its licenses to other producers and distributors (‘Chanel – Company Profile’ n.d.). Thus, Chanel sticks to the conservative principles of marketing. However, such an attitude finds its loyal customers who know what to expect from the company. Chanel has never followed short-term trends – it has always promoted the classics, which are derived from the famous Coco Chanel’s legend (‘Chanel – Company Profile’ n.d.). The company considers every product as a piece of art and invests a lot of capital in their successful marketing.

Introduction and Target Market

The company was founded in 1909 and gained its success with an introduction of the world’s famous perfume ‘the Chanel №.5’ (‘Chanel – Company Profile’ n.d.). The Wertheimer family has been maintaining all business operations of the company for more than 100 years now. However, the initial idea of the outstanding fragrance has belonged to Coco Chanel, which she developed back in 1921. She did not have sufficient amount of funds to market her innovation and asked Pierre Wertheimer for financial assistance (‘Chanel – Company Profile’ n.d.). In such a manner, two entrepreneurs started their collaboration, which had to go through many storms that were associated with author’s rights and the World War.

The Wertheimer family has recognised the potential in Chanel company and was reluctant to lose its control. Nevertheless, during some periods, the organisation has experienced mismanagement on its part from separate Wertheimer members (‘Chanel – Company Profile’ n.d.). Alain Wertheimer was the one who turned the brand into luxurious experience by removing its fragrances from the drug stores. Later, Alain was investing millions of dollars in the company’s advertising on a long-term basis to create a strong and recognisable brand. At the moment, the major target market includes wealthy women of all ages who come from big metropolitan cities (Tatcheva 2014). Thus, the company’s segmentation comprises only such developed world centres as New York, Beverly Hills, Miami, Madrid, Tokio, Paris. However, Chanel has started to experiment with its target audience due to the constant crises that made the sales drop. For example, the company concentrates its new promotion around independent, free-spirit, and young people from elite.

The Customer Luxury Journey

In spite of the online marketing popularity, the traditional methods to reach customers still remain the most efficient tool (‘Offline Marketing: Explore the Strategy of Offline marketing’ n.d.). ‘Chanel’ is not concentrated on the E-Commerce and implements technological achievements only if they fully correspond with the company’s understanding of art (Sherman 2016). Thus, the enterprise promotes confident, bright, and stylish women, engaged in fashion, for example, such celebrities as Catherine Deneuve and Kristen Stewart (Tatcheva 2014). When it comes to the social media, the company tries to adapt celebrities gradually to know the customers’ opinion (see Figure 3 for social media information). ‘Chanel’ posts its communication with consumers to build trustworthy relations and to express the interest in its buyers’ views (Zaryouni 2015).

At the same time, the company uses a very clever PR strategy, which would be impossible without the famous designer Karl Lagerfeld, who is the enterprise’s devoted employee. His name is known to every person who has, at least, the slightest interest in fashion. Moreover, Karl has created a short movie about ‘Chanel’ that is called ‘Once Upon a Time’ (Tatcheva 2014). The company also uses various events to increase its popularity. For example, it organises various dinner parties for celebrities and conducts exhibitions for the media and the public (Reynolds 2013). The exhibition ‘The Little Black Dress’ had made a big impact on fashion all around the globe. The exhibition was promoted in all big cities, such as New York, Paris, Berlin, Dubai, and Milan, where a number of potential ‘Chanel’ customers is very high.

Chanel is considered to be a leader of content marketing because it is ready to educate its customers with the help of online tools, as well as in stores (Tatcheva 2014). The company never forgets about the non-typical history of Coco Chanel and preserves the traditions coming from the past and until now. It imposes the image of an independent woman on all of its buyers and tends to transfer Coco Chanel’s traits of character to its production. The company’s followers must be stylish and feminine, while, at the same time, keeping the conservative rules of the woman-founder.

Converting Customers from Knowing the Brand to Purchasing

Economic problems in China have caused some serious problems in sales for ‘Chanel’, but the company still leads the ‘transparent’ policy with all of its stakeholders (Sherman 2016). At all times, the company sticks to its exclusivity that is represented in its shops, but it intends to increases its sales of beauty products and sunglasses via its online platform. Moreover, Chanel uses the latest technologies for its logistics and distribution channels (Sherman 2016).

‘Chanel’ reveals the number of its Sales Department on the official website for everybody who wants to sell its production (‘FAQ’ n.d. 2016). The company renames its call centre into ‘customer care’ to underline its exceptional service. The company promises an individual approach to every consumer and offers a telephone number to reach its responsible representatives. The online cooperation schedule includes all days of the week and employees are available from 9:00 AM to 9:00 PM during the work days and from 10:00 AM to 6:00 PM on weekends (‘FAQ’ n.d. 2016). The offline schedule in stores depends on the shop’s location, but, usually, comprises the whole day from 10:00 AM till 7:00 PM.

Post Purchase and Creating Customer Loyalty

Around 19% of all shoppers belong to the ‘brand lovers’, which is a significant portion of customers (see Figure 1 for global shopper segments). Therefore, the brand recognition plays an important role for many people. Chanel has its own logo, which serves as a big reminder of this company, as well as it quickly attracts the attention from the same customer niche (‘FAQ’ n.d. 2016). Concerning the first appointment with the company, it often has professional consultants at every shop. The company has developed an individual approach to all customers and advices products in accordance with individual consumer’s traits. Moreover, potential buyers can try items either while ordering online or at the Chanel store (‘FAQ’ n.d. 2016).

The company’s Instagram reflects 13% of customers’ reviews. YouTube and Facebook serve as complimentary means of receiving consumers’ opinions (Zaryouni 2015). Exhibits, which take place in Paris and based on the book ‘The Little Black Jacket: Chanel’s classic revisited by Karl Lagerfeld and Carine Roitfeld’, help the company’s international fans to keep in touch with the brand (Shea 2012). Additionally, ‘Chanel’ can always rely on the word of mouth, because the organisation has been strengthening its brand for generations to have the positive influence on people in future (Sherman 2016).

Real Life Experience of a Customer Journey

The majority of the brand’s customers belong to the ‘perfectionist’ style of shopping (see Figure 2 for consumer shopping index). For this reason, even if they trust ‘Chanel’, they still must be confident in every product’s detail. Shop consultants must be patient and attentive to be able to satisfy all the demands of such consumers. Nevertheless, the workers sometimes get irritated with multiple questions about an item and spoil the brand’s relations with buyers. Thus, ‘Chanel’ must redirect a part of financial investments from marketing to the personnel’s training. Professional courses may help the workers to realise the brand’s main values and improve their cooperation with customers.

Chanel Customers’ Shopping Styles and Chanel Shopping Experience

In general, three shopping styles can be associated with the brand ‘Chanel’: perfectionist, brand conscious and recreational (see Figure 2 for consumer shopping index). The company’s target audience includes wealthy women of different ages, which mean that its customers have a good understanding of style and fashion (Tatcheva 2014). For example, they may buy the clothes not because they need it, but to raise their mood. The recreational type of shopping is inherent to them, because they may have few items of the same clothes, but, additionally, they need this shopping process as a therapy. Also, such customers are ready to pay more for the sake of fashion and recognition, which confirms the brand conscious style. Perfectionism is important for them as well, because they want to look better than other people; otherwise, they would buy common clothes.

Chanel must consider all these factors in its marketing strategy. Therefore, the brand must make shopping as comfortable as possible for perfectionists and recreational shoppers. It must insist that its brand is affordable only for luxury target segment, as well as it cannot be acquired by anybody. In case the brand loses its customers, it can always reengage them by getting to know what went wrong during their shopping process. In particular, the company must study their consumers’ needs in more details and promise them the improved shopping experience.

Analysis and Evaluation of Chanel Use of the Customer Journey

Chanel is ready to do everything to increase its brand’s awareness, as well as to raise its price. The company does not stop investing much funds in its marketing to conduct exhibits that are known on a global scale and to engage celebrities and professionals from various marketing areas to underline its luxurious and outstanding style. Chanel has easily understood the modern shopping tendency, which includes more shopping experience than the fact of purchasing a new item (Sherman 2016). Thus, it continues to promote the story of Coco Chanel to impress shop visitors with the ‘presence of her spirit’ (Roxanne 2013). Additionally, the brand strongly sticks to one of its main principles ‘made in France’, which means that all rich and fashionable tourists try to visit Chanel boutique, while visiting this country. The sales staffs always act in a polite manner and intend to make a good impression on everybody who enters the shop (Roxanne 2013). The Chanel stores are mostly evaluated as ‘perfect’ with excellent service and friendly staff. Thus, customers-perfectionists may be confident that their principles will be followed by the company. Brand conscious buyers will gain positive experience, which is inherent to this brand. The perfect service will ensure that recreational visitors have everything for their comfort (Roxanne 2013).

Recommendations Based on Conclusion

Chanel has managed to build the brand, which can survive difficult economic times without significant changes. However, in spite of its conservative approach, the company still must notice major changes in its business environment. For example, it should reconsider its attitude concerning technologies, because all companies, which ignore new innovations, slowly fall behind in every competition. Moreover, Chanel should accelerate its changes associated with a new target segment. This strategy demands more detailed research in young customers’ needs and expectations. Thus, the company must think how to restructure its main philosophy, so that to teach it in the most comprehensive manner for the next generation of consumers. All of these alterations will have a big impact on Chanel, and it must be ready to go through the turbulent period, as well as to preserve its initial vision.

Conclusion

Chanel is a company with a special spirit that it intends to save under all changing conditions. It is ready to educate its customers, who make a significant part of the brand. However, the economic crisis, especially in China, demands novelties from the company. For this reason, it has already started its reorientation at younger consumers.

The company continues to avoid an abundance of new technologies, because its main focus is art. Nevertheless, young customers got used to organisations, which imply many innovations. As a result, Chanel must preserve its perfect service and high-quality marketing campaigns, while blending them with technological inventions. The company must understand that times are changing, and customers’ demands are progressively growing.


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