EOC Week 4: Chapter Questions

1. Explain the social element of luxury brands, and explore how this concept relates to some of the challenges facing luxury brands, such as counterfeiting and parallel markets.

Luxury brands are run completely by social elements. When a brand becomes popular they become the most wanted brand, which is why they are able to charge the outrageous prices they charge. Celebrities and the upper class create an image for the brand. People idolize stars and want to wear everything they wear. With the prices being so high they cant always afford the newest purse or shoes, so that’s when counterfeiting becomes a problem. People will create a replica of the merchandise and sell it for a substantially lower cost. Also brands like Forever 21 will mimic things they see and make them with cheap materials and sell them for a much lower cost.

2. What is the meaning of a lifestyle brand? Why are most luxury brands described as such?

“A lifestyle brand successfully identifies itself with a lifestyle and a marketing segment to the point that its name or image is mentally triggered when the segment is mentioned.”
(Hameide 117) They are described as such because not everyone can afford a $3000 purse, so you have to live a specific lifestyle of high class to be able to spend the money and wear the luxury brands.

3. Explain how luxury brands seem to defy traditional marketing principles

“If marketing strategies are meant to increase sales volume and market shares and allow for maximization of profit through smaller margins but higher volumes, this is totally the opposite with luxury brands. Luxury brands are keen on deliberate limited production and exclusive distribution, in spite of any rise in demand. Luxury brands are expected (and accepted) to be harder to acquire.” (Hameide 149)

BOC Week 4: Hawaiian Tropic

Hawaiian Tropic has announced that they will be putting an end to their Hawaiian Tropic bikini contest and they are trying to relaunch their brand by creating a “New Face” competition through Facebook. “The brand, which introduced new, premium formulas and updated packaging in recent years, is inviting women to enter their nationwide Facebook contest and become the brand's new spokesperson. The woman who best embodies everything Hawaiian Tropic stands for - beauty, confidence, style, enjoying the sun and keeping skin healthy - will appear in Hawaiian Tropic advertising, receive an all-expense-paid tropical vacation and serve as an official brand spokesperson.” (http://finance.yahoo.com/news/hawaiian-tropic-introduces-modern-look-115800488.html) The have been known for their bikini contests since the beginning of the company.  They built their entire brand around it and its crazy that they are just completely ending it and starting new. Also its crazy because they are using one person as their spokesperson instead of a whole bunch of women. I do think its good that they will be focuses on healthy skin because it is so important when you are tanning. They need to pick a women who completely portrays their entire feel of the company. "We're looking for a new face of the brand who captures that sensibility, and shares the Hawaiian Tropic philosophy that broad-spectrum sun protection can be as luxurious and pampering as any other beauty product." (http://finance.yahoo.com/news/hawaiian-tropic-introduces-modern-look-115800488.html) The contest will start on May 6^th and go until May 31, 2013. The submissions will then be judged and the five finalists will be announced June 28, 2013. Once they are announced the judging goes into Americas viewers hands, who then vote for their favorite. 

Final: Birkin Bag

Birkin Bag

  "The Hermes Birkin bag is the ultimate It Bag, the most visible handbag status symbol this side of a Louis Vuitton print." (http://www.huffingtonpost.com/2012/07/18/birkin-bags-kardashians_n_1683478.html) Hermes came out with the Birkin Bag after speaking with Jane Birkin about her pocket less purse. Ever since then, the purse has been seen as a symbol of status, wealth and success. "Since that day, the Birkin bag has become one of the most iconic accessories in modern fashion. With the price of one of these handbags ranging from $5,000 USD to over 6 figures, there is an infamous waiting list known to be up to 4 years. Hermès does not sell Birkin bags online or through any online retailers, but consignment shops and online auctions have been known to re-sell older styles." (http://www.thefashionspot.com/runway-news/news//20964-fashion-historyq-the-hermes-birkin) Many women dream of having this purse. These purse are all individually handmade by the best craftsmen in the world. When creating just one Birkin bag it can take up to 48 hours of labor. They use only the best fabrics and they also use unique skins like ostrich and crocodile. "For all the stories of waiting lists and the $10,000 price tag, is the Hermes Birkin still the mother lode of handbags when every other woman at lunch is armed with one? This is true in Asia, especially in Hong Kong and Singapore, where Birkin bags are as ubiquitous as Coach bags are in the US." (http://www.forbes.com/sites/bluecarreon/2012/07/17/has-the-hermes-birkin-bag-lost-its-appeal/) They have really taken focus with the Asian consumers, but they are very popular in the US as well. Some say that they are becoming over worn because of people like the Kardashians, Ashley Simpson and some other pop stars. They are become less valuable in some peoples eyes. “Too many people who are not all that fashionable have it. And they carry it everywhere. In Asia, I have seen women carry their big Birkins to dinner parties. So not chic,” she said. “Since almost everybody has a Birkin bag, more and more ladies are opting for bags made from exotic skins now, not necessarily Birkins,” shared socialite and Singapore PR maven Olga Iserlis."(http://www.forbes.com/sites/bluecarreon/2012/07/17/has-the-hermes-birkin-bag-lost-its-appeal/) The competitors of the Birkin bag could be any of the luxury brands because they all focus on craftsmanship and fine fabrics or skins like ostrich. Its becoming a huge fad for exotic skin and everyone is doing it. Birkin does have the upper hand because they are universal and can be used for any occasion. "They're also no longer so precious: Lady Gaga wrote on hers with a Sharpie and aspiring reality TV starlet Francesca Eastwood got herself a red one then proceeded to burn it" (http://www.huffingtonpost.com/2012/07/18/birkin-bags-kardashians_n_1683478.html) This caused serious commotion for the brand and the people who own it. The photographer who burned the bag was criticized by the media and he then said that he would give the same amount of money, which was $100,000 to any family in need. The Birkins have been very talked about lately, but not all of it has been positive. 

EOC Week 3: Chapter Questions

1.                  Explain the VIP concept, and compare it to the traditional Four Ps.

VIP stands for Value, Integrity and product mix. “The VIP model endorses the product as the core of the brand and at the same time acknowledges the value-added elements introduced by the branding process. As a mix, it offers a good base for positioning, which in return is an effective base for any communicating strategy.” (Hameide 78) The four ps are product, placement, promotion, and price. These focus on the marketing aspect. It also focuses on the communication strategies.

2.                  Explain the concept of co-branding; give examples.

“Co-branding is the practice of using multiple brand names together on a single product or service. This form of alliance can have potential economic and commercial rewards for participating parties. “(Hameide 84-85) H&M does a lot of co-branding with designers like Karl Lagerfeild and Versace.They even use celebrities like David Beckham for an underwear line. It has become a huge hit and has brought in excellent amount of revenue for their company. Other companies that co brand would be Nike who worked Stella McCartney, Peyton Manning branded with Gatorade and RG3 with Maybach.

3.                 How do licensing and brand extensions compare as growth strategies?

Licensing is a great growth strategy because if you license a brand that’s well known, you have a better chance of selling the merchandise. Also if your product is being licensed that means that you will get additional money from when its sold in other places besides your store. “Brand Extension refers to increasing the range and type of product lines under the brand's umbrella.” (Hameide 89-90)

EOC Week 3: Apple Juice Scandal

Beech Nut Corporation trashed their brand with this scandal because they falsely advertised a product and it was a product for babies, which makes it even worse. The brand can not say they didn’t know what was in their product because a worker, LiCari, brought it to their attention numerous times. “The company itself had pleaded guilty the previous fall to 215 counts of violating Federal food and drug laws, and had agreed to pay a $2 million fine, by far the largest ever imposed in the 50-year history of the Food, Drug and Cosmetic Act.“ (http://www.nytimes.com/1988/07/24/magazine/into-the-mouths-of-babes.html?pagewanted=all&src=pm)  They completely lied about what their product and what they were selling. “Nestle has defended its subsidiary's acts as vigorously as it defended its own in the past. The company has spent what sources close to the case estimate as several million dollars in defending the two executives, and has agreed to keep both men on the payroll - at annual salaries of $120,000 and $70,000 - until their current appeals are exhausted.” (http://www.nytimes.com/1988/07/24/magazine/into-the-mouths-of-babes.html?pagewanted=all&src=pm)  I think its crazy that a huge corporation like Nestle was helping them when they went to court. They defended both the executives during the trial and also kept paying them, which is absurd. Nestle should have cut them off in order to save their reputation. It was a horrible thing to do as a company. It is completely unethical and they were lying to their loyal customers. Also their product could have harmful effects on the consumers, which sadly are babies. 

Final: Chanel No. 5

"In 1921, a clever French businesswoman and belle of the Parisian social elite created a scent that revolutionized the way women smell. Ninety years later Chanel No 5 is arguably still the world's most iconic perfume." (http://www.bbc.co.uk/news/world-13565155) Chanel No 5 changed the way both women and men viewed and wore perfume. She wanted to create a smell that was different than all the others and that had a fresh, clean smell. "Chanel later said, "It was what I was waiting for. A perfume like nothing else. A woman's perfume, with the scent of a woman." (http://www.bbc.co.uk/news/world-13565155) Many of the customers are older now, because they grew up wearing Chanel. When I think of the product I think of the smell of old women. It is a beautiful smell and will always be iconic, but its target is from the older generation. Many young women look at it as prestigious and classic more than hip and trendy. Many women will just buy it to have and not even use it. I personally don’t think it smells good on my skin, but when I smell it on my grandmother it is the most amazing scent. She said it is a nostalgic scent to her and she couldn’t imagine wearing anything else.   “Legend has it that Marilyn Monroe made Chanel N°5 famous, so the brand is reminding consumers of its connection to one of the world’s most iconic stars,” said John Casey, founder and director at FreshFluff, New York. “Marilyn has an everlasting power and presence, and so does the brand, reinforced through this connection and video tribute to Marilyn." (http://www.luxurydaily.com/chanel-invites-consumers-to-discover-history-of-n%C2%B05-through-video/) She had a huge influence on the sales of Chanel No 5 because she was such an icon herself. So many women looked up to her as a celebrity. The perfume says something about the women that wear it. It’s a luxurious smell that can be recognized by many. It creates a community of women that are upscale and classy. It even makes women feel so fresh but devious at the same time. "For Diana Vreeland, the perfume’s streamlined cubic bottle was “the best packaging since the beginning ... the most distinguished thing of any thing she put her name on.” Andy Warhol painted it, and Marilyn Monroe confessed she slept in nothing but the aromatic elixir." (http://www.vanityfair.com/hollywood/2012/11/brad-pitt-chanel-no-5-perfume) In its day t had no competitors. It was a completely different smell and idea from any other perfume that was on the market. I think the second best perfume would have been Miss Dior but not at a close second. I think that nothing will ever be able to replace such an iconic perfume. "Chanel said "I don’t want any rose or lily of the valley perfume; I want a more elaborate scent". "  (http://www.vogue.it/en/encyclo/mania/c/chanel-n-5) That is precisely what she got. 

EOC Week 2: Chapter Questions

1.                  Describe the relationship between branding and marketing.
Some people think that they are the same, but they are not. They work together to create the entire brand. Branding is a process that highlights a proposed value for a product and transforms it into a real customer experience. "Marketing supports the development of brands in all of its stages; it plays an integral role in the creation of the emotional value through the shaping of the brand personality and then communicating it to the outside world through its various communication channels." (Hameide 43)

2.                  How does the decision-making process differ between that of luxury brands and mass-market brands?

One difference between luxury brands and mass-market brands lies in the power and role of the designers. Luxury brands live on creative superiority and trendsetting. In many cases, full control and creative authority are given to the designer. "As a matter of fact, in many luxury brands, the position of brand managers does not exist. On the other hand, mass-market brands are, for the most part, trend followers." (Hameide 42) Mass marketing focuses more on marketing their products and will almost always have brand managers involved getting their product out to the consumers.

3.                  Explain the meaning of “brand identity” and highlight its role in the positioning strategy

Brand Identity can be simply described as the “meaning of the brand.” Identity is also affected by the image established by the user for the brand, which is an aspect the brand cannot directly control. The image is a mental perception of how the buyer sees and understands the brand's identity and value. (Hameide 60) Brand identity also use symbols to represent the brand and create a relationship with the customer and the brand.