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Retail Offer Advantage Through Brand Orientation in Luxury, High Fashion Stores

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Retail Offer Advantage Through Brand Orientation in Luxury, High Fashion Stores UNIVERSITY OF PIRAEUS DEPARPTMENT OF BUSINESS ADMINISTRATION Master in Business Administration RETAIL OFFER ADVANTAGE THROUGH BRAND ORIENTATION IN LUXURY, HIGH FASHION STORES Athens, Nov. 2006 Grujic Maja ΠΑΝΕΠΙΣΤΗΜΙΟ ΠΕΙΡΑΙΑ II Abstract The high fashion, up-market, high-street, or designer’s fashion, is highly successful, as measured by customer recognition levels, the premium prices that these can command in addition to the extent to which these brands can be applied across a range of product categories, where socially affected dimensions, such as brand image and the level of service provisions, are important for retailer’s success. The concept of branding in the context of fashion retailing is characterised by high levels of market concentration, centralisation and outlet standardisation. Also, new technoΠlogicΕal deΙvΡelopΑmenΙΑts have enabled fashion retailers to replicate competitor offers q uite easy, while fast fashion retailers, such as Spanish Zara, Mango or Swedish H&M are producing cheap versions of “in vogue” clothes, making fashionable apparel affordable to wide consumers ranges. In the pursuit of market share, the multiple fashion retailers are implementing branding strategies that aim to differentiate their product offer and reinforce their market positioning. This thesis provides a conceptualisation of brand orientation within the context of fashion retailing, specially the luxury, or, so-called, high fashion retailing. Most of the high fashion sold today is ready to wear collections and diffusion lines, targeted to customers of particular class, age, income, social status, and with particular orientations to fashion. In plethora of offers, retailer need to work on a number of distinctive features that will make its store special, not only because of the clothes it carries, but also because of the store location and image, aesthetics and atmosphere, staff and its attitude, communication messages, celebrities endorsements, etc. One way retailers have sought to differentiate their stores, and develop sustainable competitive advantage is through branding not only the products, but the total store experience. Branding is endemic in retailing, where products, ranges and the company itself may be branded, and is currently the dominant strategy around which retail competition is structured. Brand orientation expressed through brand’s distinctiveness, functional, value adding and symbolic dimensions which are tighΠtly cΑonneΝctedΕ to ΠretailΙ miΣx ΤelemΗentsΜ inclΙΟuding merchandise, communication I messages, trading format and customer service, is “responsible” for the success of the luxury fashion stores, selling either their own or other manufacturers’ brands. Previous studies suggested that to maintain a competitive advantage, a fashion retailer needs to translate its core values into coherent brand strategy, and more brand oriented the retailer the greater its offer advantage, because, at the heart of brand orientation is the pursuit of competitor differentiation. In this thesis, the case of contemporary Greek clothing retailer characterized as “lifestyle retail brand” will be examined on the basis of the brands it carries, services unique for local market that “add value” before and after the purchase, selective “branded” staff, smart communication messaging, exclusive location, prestigious clientele, etc. In other words, the leadership position of particular high fashion retailer is explained by focusing on its brand oriented strategies implemented in its multi-brand and mono-brand luxury stores. ΠΕΙΡΑΙΑ ΠΑΝΕΠΙΣΤΗΜΙΟ II Acknowledgements ACKNOWLEDGEMENTS To Dr. George Pannigyrakis my mentor and advisor, for his time, guidance, and encouragement in completion of the study. To my family back home, Vladimir, Smilja, Aleksandra, Petar and Marko, for their support throughout all these years, for all the love and understanding they were and still are embracing me with. Special thanks to my son, beautiful, wonderful, amazing Orpheus, to Zdravko my great brother who is always by my side, to Sakis, Olja, my best friend and sister in Greece, for her supportive phone calls. Special thank you to my mother, shΠe kΕnoΙwsΡ whΑy…ΙΑ In loving memory of my grandmother… ΠΑΝΕΠΙΣΤΗΜΙΟ III Table of Contents INTRODUCTION OF THE THESIS..................................................................................1 Background.......................................................................................................................................1 Problem Statement .........................................................................................................................5 Objectives of the Study .................................................................................................................6 Research Question .........................................................................................................................7 Framework of the study.................................................................................................................7 Definitions of the Study.................................................................................................................8 Outline of the Thesis ......................................................................................................................9 CHAPTER ONE: LUXURY FASHION BRANDS...................Π........Ε.......Ι...Ρ......Α.......ΙΑ........10 Fashion Products Classification ..............................................................................................10 Fashion artifacts............................................................................................................................13 Luxury Brands Concept..............................................................................................................15 Luxury, Lifestyle, High Street Fashion ...................................................................................18 Heritage and Tradition as a Basis of High Fashion Brands.............................................20 Branding the high fashion..........................................................................................................23 Luxury brands “democratization”............................................................................................28 Prestigious and Mass-tigious....................................................................................................30 Luxury Apparel Industry Trends...............................................................................................31 References of Introduction and Chapter One.......................................................................38 CHAPTER TWO: FASHION RETAILER AS A BRAND.................................................44 Fashion Retail Stores...................................................................................................................44 Fashion Seasons and Cycles ....................................................................................................49 Competition in high fashion market........................................................................................51 Luxury ΠMarkΑet FΝiguresΕ.....Π.........Ι...Σ.........Τ......Η.........Μ..........ΙΟ..............................................................54 IV Table of Contents The Major High Fashion Companies.......................................................................................56 The Greek fashion market ..........................................................................................................67 The City of Athens Fashion Offer.............................................................................................68 CHAPTER THREE: BRAND ORIENTATION – LITERATURE REVIEW.......................77 Brand Orientation as Market Orientation “Plus” .................................................................77 Market-Orientation Concept.......................................................................................................78 Brand Orientation Concept ........................................................................................................85 How Brand Orientation is defined in Literature...................................................................87 Brand Orientation in Retailing.......................................................Π........Ε........Ι...Ρ..........Α......ΙΑ.........90 Brand Orientation Strategies in Fashion Retailing............ .................................................92 CHAPTER FOUR: METHODOLOGY OF THE RESEARCH AND THE CASE STUDY111 Research Strategy.......................................................................................................................111 Case Study Design......................................................................................................................112 Data Collection Method .............................................................................................................113 The Carouzos Company- History Milestones.....................................................................114 The Carouzos Mission ...............................................................................................................115 The Company Today ..................................................................................................................116 The Brand Name ..........................................................................................................................118
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