Chapter 7. Business Marketing

 

  When it comes to business, Chanel is known everywhere for its exclusivity. Chanel is run by the companies shareholder the Wertheimer family whom have been Gabrielle Chanel's early business partner. The company is held together privately differently than other luxury brands like Prada, and Gucci. Chanel never announces their business motives, attend industry conferences, nor do they report their performance figures publicly. Making it impossible for anyone on the outside to know exactly how big Chanel's business really is. As far as business marketing, Chanel is for personal consumption. The company is not a business market, making the brand a consumer market. Being a consumer market the company's buying and purchasing are approached more professionally and in a personal manner. 

 The company had joint ventures with department store where Chanel products are sold. Having these ties there is a level of trust and relationship commitment involved. Chanel shares this with those department stores, Macy's, Saks, Bloomingdales, etc. The company markets to men and women 16-80 that can afford to buy the brand.

 Chanel takes great pride in their customer service as well as goods and services when it comes to business purchasing decisions. Being a consumer market they are very personal when it comes to all aspects buying behavior and their purchasing decisions. They company builds strong relationships with their customers and are more than accommodating  to their needs, personal tailoring being one of them. This is one if the leading factors to why the company is so successful with an estimated $3 billion a year as well as being the leading house of luxury world wide. 

Chapter 8. Segmenting and Targeting Markets

  In 1909 when Chanel started, the company targeted women whom wanted to dress fancier with style and grace. Chanel then started off with hats and modern clothing but also eliminated the corset. The company still targets the same market today of women ages 16-60 but also adding men ages 20-60. Being a luxury brand name, only those more financially endowed tend to pay the price for Chanel since they can afford it. Chanel has a huge selection of different products; haute couture, ready to wear, resort line, men's and children, fragrances, cosmetics etc that cater to its target markets consumer wants and needs. 

  Chanel has over 200 stores world wide with geographic segmentation expanding in the large market in Asia as well as Europe. Chanel retail store and boutiques can be found in busy tourist attractions like New York, Miami, Paris, and Moscow. As far as psychographic segmentation, the company is true to the definition. Chanel targets consumers who's lifestyles can afford the brand, thus  individuals of lower and middle class tend to want the brand more because of its exclusivity, wanting what you can't have in other words. With the use of famous faces and beautiful models the company pulls it's consumers in with advertisements. Helping the house of Chanel to remain the ultimate house of luxury. 

Chapter 11. Developing and Managing Products

 Chanel is a established luxury fashion brand and beauty company, which is well known to the world and the fashion industry. Chanel is most famous for revolutionizing fashion for women and presenting a timeless style of elegance for all ages. Apart from founder Coco Chanel, the company's success in developing products remains on Karl Lagerfeld. Karl Lagerfeld has never failed in giving the consumer's what they desire in a luxury brand. Chanel is able to strike a strong balance between the past and the present which something that eludes many luxury competitors. The House of Chanel works with punky, of-the-moment models like Cara Delevingne while always upholding a timeless, prim and proper image.

  In recent years Chanel has undergone an industrial revolution. The old-fashioned fabrication has been replaced with state of the art production methods carried out in factories in Compiegne, Pantin, and Saint- Chamant. All manufacturers’ procedures are regulated down to the smallest detail. Chanel offers the classic product items in their boutiques throughout the year while, introducing new products with each fashion season. Chanel is most famous for The suit, The Cameilia, The Little Black Dress, jewelry, and fragrance & beauty.  

  For Chanel the development of new products and clothing is all about creativity. The foundation of creativity is the codes of the brand. These codes are iconic because eight times a year, for two haute couture and six ready-to-wear collections , Karl Lagerfeld and his studio to come up with new interpretations. The team of innovators create, collection after collection, inventing the Chanel story again. The company's strong to devotion to fine materials, technology, and to the brand's philosophy have contributed to number of product lines that have excelled. Currently, Chanel is one of the most successful business models founded on creativity. 

Chapter 10. Product Concepts

 When it comes to Chanel there isn't one specific product concept. Chanel sells a variety of different things, also known as a product mix. Those items such as couture, ready to wear, accessories, fragrances and jewelry. It's also known for its product line, for an example their accessories go hand in hand with their ready to wear clothing. Chanel was originally designed to for the comfort of women, so they'd feel comfortable and fashionable in classic tailored style. Chanel has various signature looks in their ready to wear line, such as tweed suits, the very famous quilted two chain bag, and also well known the little black dress. All these designs are still inspiration to designers today, and are often imitated. 

 Chanel has three main clothing lines that are known and often produced. Ready to wear, haute couture, and cruise/vacation. Ready to wear is what you'll find in retail stores, they come in certain sizes and are the finished product. They aren't customized to your body unless needed. Haute couture is customized and tailored fitted clothing. There's always a limited amount due to no two bodies being the same. Haute couture is more expensive then ready to wear since it's limited are the fabrics cost more. Lastly cruise/vacation wear, which basically clothing that's made for the comfort of vacation. But can also be worn just because it's more comfortable. 

 

 Product modification is no stranger to the company, Chanel is constantly reinventing it's self. Chanel spring 2013 introduced "Chanel Rougue Allure Luminous Intense in Envoutante" a deep shimmery mauve lipstick. Chanel Envoutante has a similar deep, beautiful shimmery quality as the Louis Vuitton monogram vernis. Chanel Envoutante, which roughly translates to “spellbinding” is not as deep as Chanel Rouge Noir, but is deeper than Chanel Rivoli. Chanel provides new product items for their make up line, which can be purchased at department store or chanel retail stores. 

 Chanel's product concept is no different from their mission statement and vision, which the company has stayed true to. The products the company till this day is a reflection of Coco Chanel and he vision to being the leading house of luxury. Chanel clothing underlines seduction and sex appeal of a woman. After all "A woman is closest to being naked when she is well dressed." 

Chapter 18. Sales Promotion and Personal Selling

 At Chanel there isn't numerous sales due to the company being such a expensive and exclusive brand. And almost never offers sales to the public. With the Chanel "Ready to Wear" clothing you'll never get a sale with the clothing being tailored to your exact body type. Being that, most of the sales Chanel consume is from customer whom can afford to pay the price. Sometimes prices for last season items are lowered and sometimes they rise due to the exclusivity of it depending on how popular that item may be. The Chanel items that are sold at department stores like Macy's or Saks have promotional sales on cosmetics and skin care. Chanel advertises in department stores with having customers sample new products by testing the makeup and skin care or fragrance with sale reps. They're four types of sale promotion used for cosmetics for Chanel; gift sets, makeup, new product samples, and complimentary shipping.

 Private sales is another type of sales promotion chanel uses. In specific Chanel retail stores private sales take place for a specific collection. For an example, at the 2010 New York City's "Fashion Night Out" for the Mercedes Benz fashion week, Chanel had a grand opening party for the soho location. Chanel gave many guest complimentary samples that night to promote upcoming products. Chanel often gives away complimentary stuff when they have launches for new product and open new retail stores. Usually at opening head of Chanel Karl Langerfeld attends as well as popular celebs, this always brings a buzz and advertises the company more in the media.

 As far as personal selling goes for Chanel, often times people who own chanel products will sell them online at popular sites like eBay and Amazon. The prices online usually skyrocket and most buyers are skeptical of buying products online due to Chanel's counterfeit problem. In terms of follow-up the company is excellent at making sure customer needs are met to the fullest, and every thing they are promised falls through. All the employees are properly trained and never fall on the way to use products. 

Chapter 17. Advertising and Public Relations

   Chanel has a wide range of advertisement that can be found in magazines, billboards, department stores where products can be purchased, and occasionally on television commercials. Their ads are worldwide and in various languages. On Chanel's website you can choose your language to view the site. Chanel spends millions each year on advertising, using various famous models and celebrities. Some famous faces like Brad Pitt for the fragrance Chanel No.5. Head of Chanel, Karl Lagerfeld picks the latest models that are used in today's campaigns and advertisements. Chanel's advertising is very important for their clothing, it helps promotes their ready to wear clothing down to every detail. Chanel has ads for all the products they sell. The company is not aggressive about advertising because its already globally known, so it attracts business all the time.

  
  Chanel is a global leader in the fragrance industry and a top innovator in fragrance advertising and marketing. Chanel continued to spend more on advertising than almost any other perfume company and, as a result, was earning the richest profit margins in the industry. In addition, the company had continued to expand into new product lines, including Chanel watches retailing for as much as $7,000, additions to its popular shoe line, and other high-priced clothes, cosmetics, and accessories. Chanel uses advertising appeal mostly when it comes to cosmetics and skin care line, showing the consumer with buying certain products it will improve their skin or denounce flaws in facial features.

   As far as Public Relations goes, Chanel has a variety of skills. Chanel throws dinner parties for celebrities to enhance its popularity. Chanel also has promotion with companies like Style.com and Vogue.com that advertise Chanel on their site. Chanel also has their own website with an FAQ and also a fashion blog. Chanel also offers exhibitions for media and the public. Chanel has regular merchandise demonstrations for publishing new products that invite media to report. For this Spring-Summer Ready-to-Wear collection, presented Tuesday, October 1st 2013, Karl Lagerfeld transformed the Grand Palais into an art gallery. An invitation to a vernissage of around 75 installations.

Chapter 15: Retailing

I recently visited one of the three Chanel New York locations for chapter 15. The store I chose was on W 57th street. This store seemed to be one of the smaller Chanel retail stores. The other two store are located in Soho and East 57th street. This store  was well put together and color coordinated as classic Chanel should be. Neighboring Chanel was Prada, Louis Vitton, and the famous fifth avenue Tiffany & Co that was featured in the classic "Breakfast at Tiffany's". 

Inside of the store are oak wood floors, black granite with glass display cabinets, holding Chanel's seasonal jewelry and watches. Across from that are shelves filled with the latest Chanel handbags, including the world known quilted handbag. Torwards the back are maniquins in Chanel's ready to wear clothing. They're are a limited amount if clothing in the store, so if you can find your size there's a big chance you can't get the item unless you order it and possibly meet with a tailor. Chanel clothing isn't sold online. The employees were dressed in business professional attire, white button ups black slacks and black blazer. Unfortunately pictures weren't allowed in the stores so I took one of the outside.

Chanel is a franchise with over 200 stores worldwide. Chanel products can be purchased at select department stores, including Bloomingdales, Saks, Nieman Marcus, etc. Chanel on W 57th is a destination store due to its location it attracts a lot of tourist and high end clients. The atmosphere of Chanel is very upscale and luxurious being surrounded by other high end upscale stores. Chanel also comes off as a retailing mix, you can purchase many different Chanel items at the store. Further more Chanel's fragrances and cosmetics can be purchased online or in department stores that are lucky enough to carry them. 

Chapter 6 : Consumer Decision Making

People who purchase Chanel buy it for the style, quality, and sense of class it brings. Chanel is always recognized, due to celebrities and media exposure. The company offers many products that are appealing to both men and woman, but mostly known to women. Chanel's products are not always the most affordable to people in the working class, and is always something to keep in mind as the consumer decision before purchasing. With Chanel being a luxury brand style comes with a price and some people are willing to pay the price. The company does not aim to be affordable, Chanel provides for luxury, customers not cost efficiency.  Consumer's continue to buy products based on the popularity of the product, which continue to grow and expand. Chanel has adapted to current times and the digital evolution with the Chanel website, Chanel app, Chanel News blog, the new Coco Chanel website. Also on Facebook and Twitter.

Chapter 5. Developing a Global Vision

 

Chanel founded in 1909 in Paris by, Gabrielle Chanel is one of the most famous of luxury brands. Chanel is a world known innovator in high fashion clothing, cosmetics, accessories, jewelry, and of course fragrances, Chanel No.5 is one of the top selling fragrances in the world. Chanel has over two hundred stores worldwide.Chanel's three New York locations are very popular among tourist. 

Chanel started to expand and go global launching a cosmetics line in 1924 and a range of skincare products in 1929. In the 1950s Chanel No.5 was a big hit. In a 1954 interview, Marilyn Monroe famously answered the question "What do you wear to bed?" with the line "Just a few drops of No5". The popularity of the perfume grew and grew but this wasn't necessarily a great thing. In the 1970s it was decided that No.5 had lost its exclusivity so it was reinvented and made less widely available.

 Chanel operates  business in five regions, each of which is led by regional heads Each regional head reports to the Global CEO. The Japanese division, Chanel K.K. has eight company-owned retail boutique. In Paris, where Chanel was founded, there are five company-owned retail boutiques. 

 Chanel's global vision has been to be "The Ultimate House of Luxury, defining style and creating desire, now and forever." I personally believe Chanel is living up to their vision. The House of Chanel is a model of what a luxury brand should be. Their dedication to only producing high end quality products is defining style. Due to this Chanel is ageless, also a result of Gabrielle's vision. Chanel will continue to expand globally as it has for the past decades. With the help of its employees promoting Coco's vision, Chanel will remain one of the worlds highest form of luxury.

Chapter 4. The Marketing Environment

 A target market is a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the need of that group, resulting in mutually satisfying exchanges. Chanel is a internationally established company that has been around for over a century, resulting in an extensive range of target markets.
Chanel's merchandise are an arrangement of clothing, accessories, perfumes, and cosmetics that attract people from around the around the world of all ages. Chanel isn't a affordable brand when it comes to retail, the preferable audience is for people of higher income and celebrities.

The clothing mostly attracts and targets generation x. Some also targets younger, like infant wear due to Chanel being a "ageless brand" and any woman of any age would appreciate wearing

  of course.The accessories, and handbags depending on the style can be wearable for any generation. As for cosmetics and skin care depending on the product, may be used for woman ages 16 and above.The skin care line offers many different products for the type of skin a woman may have. For example the ultra correction line repair cream is a product developed for anti-wrinkle maybe be used for woman in their mid 30's and older.  For younger woman, the mousse exfoliante pureté is a rinse-off exfoliating cleansing foam purity cleanser may seem more appealing to use.

As for Chanel's fragrance line, its also a target market for woman. Chanel No. 5 is one of the top sellers and very popular. The fragrance is said to represent the component lifestyle of a mature strong woman of elegance and sophistication. The scent is known to be very distinct and classy. The perfume is distinguished to be worn for mature chic, refined woman. Chanel has used Brad Pitt in a recent commercial to attract the eye of more women. I believe that was a great target move used as well as environmental management. As far as targeting towards a younger market, the fragrance Coco Mademoiselle is indicated for younger woman. The most recent commercial for Coco Mademoiselle stars Keira Knightley.

Chapter 3: Ethics and Social Responsibility

Ethics refers to the moral principles and values that generally govern the conduct of an individual or group. Ethics can also be viewed as the the standards of behavior by which conduct is judged. In ethics and social responsibility, fashion by far has one of the worst reputations. With issues like eating disorders, body image, use of animal fur, and the message it sends to the young.

Chanel has recently "gone green" reported using eco-friendly materials and craftsmanship in many of the newer clothing pieces. Chanel's spring/summer 2013 show at Paris' Grand Palais had gave fashion a whole new meaning to the idea of eco-friendly clothing. Showcasing the new designs, models strutted the catwalk along with giant wind turbines and titled solar panels. 

 Chanel has opened the doors and lead the way, for other brands to not use fur. Chanel does not test against animals in their perfume and cosmetics or use any type of animal in the products. Chanel revealed their faux fur look in 2010 as a alternative for real fur used in luxury brand looks.

Chanel had many charity events, and fashion shows that support a cause each year. Which the proceeds go to The Chanel Pour le Temps Charity Fashion Show is one one of the most anticipated events of the year. Chanel is more than just a luxury name, they have saved many Parisian ateliers from going bankrupt thanks to head of Chanel Karl Lagerfeld.

Chapter 2. Strategic Planning for Competitive Advantage

The business mission of Chanel S.A. is "to be the ultimate house of luxury, defining style and creating desire, now and forever." Chanel produces products favored by of both sexes. Chanel's strategic planning for competitive advantage isn't as loud or demanding than other fashion brands today. Chanel has been a very well established company for about a century now, as well as being known world wide. Today Chanel's success is in the hands of Karl Lagerfeld. He is the head designer and creative director for the fashion house Chanel as well as the Italian house Fendi.

SWOT analysis:

Strengths: 

•  Strong Brand Image: The Chanel logo is considered to be an "icon", as well as being highly recognized. The core of Chanel is timeless and classic designs that are globally known.
• High Quality Products: Leather and tweet are most commonly used in classic designs by the house of Chanel. Many of the pieces today are used by high quality and well known fabrics.
• Strong Management: Chanel INC. is an Equal Employment Opportunity (EEO) employer, which has highly trained individuals who are technically skilled and knowledgeable about their qualified area of expertise.

"Fashion is not something that exists in dresses only. Fashion is in the sky, in the street, fashion has to do with ideas, the way we live, what is happening". -Coco Chanel

Weaknesses:

• Price: For many, myself included, Chanel is overpriced and not for the working class, also known as the "Middle Class". For others Chanel is a reasonable price. But the brand is indeed expensive and a bit of a sacrifice for a "Icon".

•  Limited Production/Discontinuing: Chanel tends to discontinues many of there products after some time, due to being out of season. Limiting what customers can buy.  

       "A girl should be two things: classy & fabulous."-Coco Chanel.

  Opportunities:

  •   Expansion: Chanel has stores located in many places around the world. Including North and South America, Europe, Asia, as well as Australia. 
  • Technology:  Other than the website, Chanel also offers a application on the Apple store. 

    Threats:

    • Counterfeit: Illegal production of interfacing C logo and purse distribution are most commonly counterfeited. As well as quilted chain design.
      
      
      
      
      

Chanel History and Mission Statement

 "In order to be irreplaceable one must always be different." -Coco Chanel

CHANEL

is a Fashion House founded by the Couturier Gabrielle Chanel commonly known as "Coco Chanel". The House of Chanel  specializes in luxury goods (haute couture, ready to wear, handbags, cosmetics and others). The company is mostly famous for their Chanel number 5 perfume. Gabrielle Chanel started her company by making haute couture line with different silhouettes , by making the strict corset silhouette be gone. Gabrielle made a big impact in the fashion industry and she made herself a legend, she died in the 70s. After her dead the House of Chanel was in hold for 2 years and in 1983 , Karl Lagerfeld became the new designer of Chanel, he brought a new sense of style making the brand appear new, he changed Chanel's fashion lines from old lines to shorter cuts and eye capturing designs.Today the House of Chanel is one of the biggest Fashion Houses in the world, the brand has become successful and has captured the eyes of many Fashion lovers.

 Mission:
"To be the Ultimate House of Luxury, defining style and creating desire, now and forever."