RALPH LAUREN LUXURY ACCESSORIES BRAND AUDIT KELLY BOGAN – ALLISON BOWLES – POORVA RAUT – RACHEL RELYEA Objective of Brand Audit

Fall 08

Fall 14

A GREAT SHIFT OCCURRED IN APRIL 2014 (START OF RLC FISCAL 2015) WHEN VALERIE HERMANN WAS APPOINTED PRESIDENT OF LUXURY COLLECTIONS FOR RALPH LAUREN. IN THIS NEWLY CREATED ROLE, MS. HERMAN WILL JOIN THE FOUR-MEMBER OFFICE OF CHAIRMAN TO LEAD THE GLOBAL LUXURY DIVISION. MR. LAUREN STATES “THIS IS A VERY EXCITING MOMENT FOR OUR COMPANY. LUXURY EPITOMIZES THE ASPIRATIONAL AESTHETIC OF THE RALPH LAUREN BRAND, AND WE FELT THAT IT WAS TIME TO CAPITALIZE ON THE SUCCESS WE HAVE ACHIEVED BY LEVERAGING THE COLLECTIVE STRENGTHS OF OUR LUXURY PORTFOLIO AND PLACING THEM UNDER A SINGLE LEADER” (JONES, 2014)

WHEN AN IMPORTANT SHIFT IN STRATEGIC DIRECTION HAPPENS IT IS IMPERATIVE FOR THE COMPANY TO TAILOR MARKETING PROGRAMS TO FOLLOW THE NEW DIRECTION. TO HELP DEFINE THE NEW DIRECTION OUR TEAM OF TEXTILE BRAND MANAGEMENT AND MARKETING GRADUATE STUDENTS HAS CONDUCTED THIS BRAND AUDIT / TEXTILE BRAND ANALYSIS. PRIMARY AND SECONDARY RESEARCH WAS CONDUCTED TO PROVIDE A BALANCED VIEW OF THE RALPH LAUREN CORPORATION AND OF THE LUXURY ACCESSORIES MARKET.

THE RESEARCH OF THE TEXTILE BRAND ANALYSIS FOCUSES ON THE GLOBAL LUXURY ACCESSORIES MARKET AND THE RALPH LAUREN LUXURY ACCESSORIES DIVISION. PRIMARY RESEARCH FROM INTERVIEWS WITH RALPH LAUREN SENIOR EMPLOYEES SUPPORTS OUR SECONDARY RESEARCH FROM MARKET INDICES, SCHOLARLY JOURNALS, MARKETING ARTICLES, CONSUMER AND FINANCIAL REPORTS (PUBLICATION DATE RANGE OF 2010-2014).

THE CORE OBJECTIVE OF THIS REPORT IS TO EXAMINE THE CURRENT STATE OF THE LUXURY ACCESSORIES DIVISION OF RALPH LAUREN CORPORATION AND ITS POSITION IN THE GLOBRAL LUXURY ACCESSORIES MARKET IN 2014.

THE REPORT DOES NOT CLAIM TO BE COMPREHENSIVE, FOCUSING ON KEY INDUSTRY CATEGORIES, BUT RATHER SEEKS TO OFFER AN INDEPENDENT ANALYSIS OF THE BRAND AND PROVIDE RECCOMMENDTIONS FOR EXISTING AND NEW BRAND STRATEGIES FOR THE NEW DIRECTION OF THE RALPH LAUREN LUXURY DIVISION.

THE INTEGRATED TEXTILE BRAND ANALYSIS / BRAND AUDIT OF RALPH LAUREN LUXURY ACCESSORIES WAS PREPARED BY:

KELLY BOGAN – ALLISON BOWLES – POORVA RAUT – RACHEL RELYEA

UNDER THE DIRECTION OF DR. NANCY CASSILL

THE COLLEGE OF TEXTILES – NORTH CAROLINA STATE UNIVERSITY - FALL 2014

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

TABLE OF CONTENTS

CHAPTER 1: Ralph Lauren Corporation Overview 5-9

RALPH LAUREN CORPORATION OVERVIEW 5 MR. RALPH LAUREN 6 RALPH LAUREN CORPORATION – Brief History Timeline 6 COMPANY GOALS : Grow Luxury Business 9

CHAPTER 2: Luxury Accessories Industry Assessment 9-17

INDUSTRY ASSESSMENT 9 MARKET SIZES FOR LUXURY ACCESSORIES 13 FRAMEWORK OF LUXURY PRODUCTS 14 LUXURY ACCESSORIES IN US 16

CHAPTER 3: Ralph Lauren Luxury Accessories Market 18-27

‘THE WORLD OF RALPH LAUREN’ – LIFESTYLE LUXURY BRAND 19 RALPH LAUREN ACCESSORIES – CURRENT POSITION IN MARKET 20 TARGET MARKET 24 CONSUMER INSIGHTS 27

CHAPTER 4: Marketing Objectives 31

CHAPTER 5: Brand Inventory / Brand Measurement 32-37

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

BRAND IMAGE 32 BRAND ELEMENTS 33 RODUCT – ACCESSORIES 35 BRAND PORTFOLIO ANALYSIS 37

ICONIC RALPH LAUREN PRODUCT: The Ricky Bag Story 41

STRATEGIES – TOUCH POINTS 45

CHAPTER 6: Competitive Analysis 46-50

TOP COMPETITORS - Gucci and Louis Vuitton 49

COMPETITIVE DIFFERENTIATION 50

CHAPTER 7: SWOT 51-53

CHAPTER 8: Marketing Measurement 54-56

VALUE EQUATIONS 54-55

CHAPTER 9: Recommendations 57

References 59-62

Appendix 63

APPENDIX I: MARKETING 10P’S 63 - 66

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

1 - Ralph Lauren Corporation Overview

RALPH LAUREN CORPORATION OVERVIEW

Ralph Lauren Corporation is a global leader in the design, marketing, and distribution of premium lifestyle products in four categories: apparel, home, accessories and fragrances. For more than 46 years, Ralph Lauren’s reputation and distinctive image have been constantly developed across an expanding number of products, brands and international markets.

The Company’s brand names, which include Ralph Lauren, Ralph Lauren Collection, Purple Label, Black Label, Polo, Polo Ralph Lauren, Blue Label, RRL, RLX Ralph Lauren, Lauren Ralph Lauren, Ralph Lauren Childrenswear, Denim & Supply Ralph Lauren, Chaps, and Club Monaco, constitute one of the world’s most widely recognized families of consumer brands. (RLC 10K, 2014).

RALPH LAUREN CORPORATION STORY

Ralph Lauren Corporation is a publicly traded, United States-based holding company headquartered in New York, NY. Ralph Lauren Corporation began with the 1967 founding of the Polo Ralph Lauren Company by American designer Ralph Lauren. Back in the late 1960s, Ralph Lauren began his business with nothing more than a tie collection. His chance to create a big name for himself came when Bloomingdale's agreed to carry his line of neckties. But there was one condition: that he make them slightly narrower and remove his name from the label. He refused. Even at that early point in his career, Lauren understood the importance of defining his brand and then protecting it. That mind-set has stood him in excellent stead ever since.

Ralph Lauren went on to grow the company into a global lifestyle brand that embodies that image of American tradition. For over five decades Ralph Lauren maintains the legacy of American heritage and invites its customers to participate in that lifestyle. American Style. Ralph Lauren operates a multi-brand strategy while keeping the focus clearly on the overall Ralph Lauren name. With nine divisions and thirty five brand lines each targeting a different consumer group based on age and income, Ralph Lauren is among the most diverse players in lifestyle goods in terms of product category and price point. (RLC Luxury Goods, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

MR. RALPH LAUREN

Ralph Lauren was not a trained fashion designer. He was born as Ralph Lifshitz, not Ralph Lauren. His first foray into fashion was working as a salesman at Brooks Brothers. Later, he designed ties for men. He sold those designs in a small store, under the label "Polo." Ralph Lauren started in women's fashion by designing clothes for his wife. He had never been on a safari, but he made beautiful clothes in khaki. “He grew up in the Bronx, not an English manor. He wasn't skilled at playing polo, but he had a fantasy of how clothes could transform the wearer via styles and illusion. The idea was to dress for the life you wanted, and who you wanted to be. "Ralph Lauren says he writes through his clothes, it's not about fabric. It's about dreams" (Girvin, 2008).

RALPH LAUREN CORPORATION – Brief History Timeline

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

MARKET POSITIONING EXPANSION IN ASIA TO SUSTAIN GROWTH

Ralph Lauren Corp is a global leader in the design, Ralph Lauren has been focusing recently on expanding retail marketing and distribution of premium lifestyle products. operations in emerging markets like China and India (Ralph RLC is positioned well on a global platform with its presence Lauren Company Overview, 2014). RLC has been working on in US, Europe and Asian Market. RLC holds a giant share of understanding the complexities of logistics to sell in Asian 25.1% in the global market (Fig. 1) when compared to the market. There is a huge disconnecting with business global luxury brands attributed to its strong presence in practices but RL models have not figured out the exact digital marketing seamed with the premium lifestyle reason. It needs partnerships and business propositions to experience it provides its customers. succeed in this market. (M. Fisher, personal communication,

MARKET PRESENCE

RLC has its presence in US/North America, Asia and Europe. US serve to be the largest market for RLC which is followed by France at the second position. Its popularity in markets with major luxury buyers –can be understood as it is the 2nd most popular luxury fashion brand in Japan (Carr, 2012). The absolute value growth of RLC in US is $2,600million. (Ralph Lauren, 2014). U.S. remains the largest luxury goods market in the World however, by the end of 2014, China is predicted to surpass Japan to become the second largest luxury market in the world (Euromonitior, 2014). This poses a threat to RLC as it still needs to establish a strong foothold in the Asian Market.

WEAK MACROECOMIC CONDITIONS IN EUROPE ARE A NEAR TERM THREAT

Ralph Lauren's wholesale business is most vulnerable to the current situation of weak macroeconomic condition in Europe (Spain, Greece and Italy), as Europe contributes a Fig. 1.1 (Bogan, Bowles, significant percentage of the company's total wholesale Raut, Relyea. 2014) revenues. (Ralph Lauren Company Overview, 2014) Source: Experian Marketing Services, 2013 YTD 7

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

October 24, 2014). In 2010, Ralph Lauren acquired its in the Chinese market is now one of the key priorities for the previously licensed Ralph Lauren-branded apparel business company. Ralph Lauren plans to open nearly 60 new stores in the Greater China and Southeast Asia region. The brand in Greater China, primarily in premium locations over the focus and perception had been diluted due to the licensee's next 3 years to achieve this. (Ralph Lauren Company focus on selling lower price point products. Re-positioning Overview, 2014). Ralph Lauren's brand perception into a more premium brand

CORE COMPETENCIES

Ralph Lauren competes primarily on the basis of fashion, quality, value, and service, which depends on their ability to: · Anticipate and respond to changing consumer demands in a timely manner; · Maintain favorable brand recognition, loyalty, and reputation for quality; · Develop and produce high quality products that appeal to consumers; · Appropriately source raw materials at cost-effective prices; · Appropriately price our products; · Provide strong and effective marketing support; · Ensure product availability; and · Obtain additional points of distribution and sufficient retail floor space, and effectively present our products at retail. (RLC 10K, 2014)

CURRENT CHALLENGES

Over saturation in existing markets Ralph Lauren Corporation has thoroughly saturated existing mid-tier markets thanks to their unrivaled multi-channel distribution and exception brand recognition. It can even be said that saturation has reached a tipping point in these markets, risking over exposure and eroding desired the brand image of an elite, exclusive, high end product. The company needs leverage strong brand awareness in order to break into new markets and grow as a brand.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

COMPANY GOALS : Grow Luxury Business

Optimum growth potential in luxury markets Ralph Lauren has committed to growing their luxury business as a means to re-establish the elite, high-end brand awareness it once had; as well as expand into globally growing target markets and distribution channels. The luxury market is projected to grow 4.5% over the next three years (Luxury Goods Global Trends, 2013), which makes it a prime target for expansion. Ralph Lauren’s key tactic for breaking into this market is a heavy focus on luxury accessories like hand bags, watches, and eyewear. “The company keeps growing and the luxury part of the business has grown to a point where we felt it deserves its own focus” (Brooke, 2014)

STRATEGIC PLAN TO GROW LUXURY

Valerie Hermann takes leadership of new luxury division Ralph Lauren Corporation ‘s resent re-organized of its infrastructure illustrates the importance of the luxury market to the company. Valerie Hermann was brought into the organization in earlier this year as president of Ralph Lauren Luxury Collections. She is heading up the new division that includes Black Label, Blue Label, Collection, and accessories; and will be focused solely on building the luxury business for the company. She comes from a strong luxury background, having been with LVMH, Yves Saint Laurent and most recently Reed Krakoff. Ralph Lauren will benefit from having a singular vision to rally behind for all of Ralph Lauren luxury.

CURRENT COMPANY GOALS: STRATEGIC PLAN TO CHALENGES GROW LUXURY BUSINESS GROW LUXURY

• Over saturation in • Optimum growth • Valerie Herman existing markets potential in luxury takes leadership of markets new luxury division

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

2- Luxury Accessories Industry Assessment

INDUSTRY ASSESSMENT

“OVER THE YEARS, THE NOTION OF LUXURY HAS CHANGED. IN THE AND GROWING TARGET MARKETS. AS A RESULT THERE WILL BE NEW CLASSICAL LUXURY OF THE EIGHTEENTH AND NINETEENTH CODES AND MEANINGS THAT DEFINE LUXURY. CENTURIES, THE FOCUS WAS ON THE PRODUCT; DURING THE 1920S THIS FOCUS SHIFTED TO THE PRODUCT’S CREATOR. IN THE 1970S, “THE ENDUING QUALITY OF A PARTICULAR LUXURY GOOD CAN BE LUXURY BECAME DOMINATED BY THE MEDIA – IMAGES AND LUXURY PART OF ITS APPEAL, YET CONSUMERS – PARTICULARLY YOUNG BECAME THE BRAND. CHANGING CONSUMER BEHAVIOR AND FASHION-CONSCIOUS CONSUMERS WANT A PRODUCT THAT LOOKS COMPETITION IN THE LUXURY MARKET EXPLAIN THE SHIFTING NOTION FRESH AND UNEXPECTED” (HOFFMANN, 2011). IN ADDITION THE OF LUXURY” (HOFFMANN, 2011, P. 125). GLOBALIZATION OF LUXURY BRANDS HAS ALSO CONTRIBUTED TO THE DIVERSIFICATION OF THE LUXURY CONSUMER PROFILE. THE CONCEPT OF LUXURY IS CHANGING BY ANTICIPATING AND FOLLOWING THE CONSTANT SHIFT OF CONSUMER’S DREAMS, NEEDS THESE CHANGES PRESENT CHALLENGES FOR MARKETING TEAMS OF AND DESIRES. THERE ARE NO REAL BARRIERS ANYMORE IN THE GLOBAL LUXURY COMPANIES. THE LUXURY INDUSTRY IS STILL VERY CONSUMPTION OF LUXURY ITEMS; THIS IS SEEN AMONG THE YOUNG AND EVOLVING WITHIN THE EMERGING AND FRONTIER HETEROGENEOUS CONSUMERS OF LUXURY TODAY. THE MARKETS, AND WILL EXPERIENCE SIGNIFICANT GROWTH AS A RESULT. DIVERSIFICATION OF LUXURY CONSUMERS IS BROADENING THE MAJOR SHIFTS WITHIN CONSUMER PREFERENCES, SOPHISTICATION FOCUS BEYOND THE BRAND’S HERITAGE AND PRESTIGE. AND CONSUMER TYPES ARE HIGHLY LIKELY. LUXURY BRANDS WILL NEED TO BE PREPARED FOR THE NEXT BIG THING IN ORDER TO “A PATH CHARACTERIZED BY THE HISTORY OF AN INDIVIDUAL AND A COMPETE SUCCESSFULLY. “TO KEEP PACE WITH SUCH RADICAL SOCIO-POLITICAL-ECONOMICAL IS THE DEPARTING POINT FOR CHANGES IN THE CONCEPT OF LUXURY, LUXURY BRANDS HAVE TO BE INNOVATION AND CREATION IN THE LUXURY INDUSTRY” (HOFFMANN, MORE COMPETITIVE, INNOVATIVE AND AWARE OF CUSTOMER’S 2011). THIS STANDS TO BE A MAIN CHANGE FOR THE LUXURY SLIGHTEST NEEDS, DREAMS, AND DESIRES” (HOFFMANN, 2011). MARKET WITH THE EVOLVING FRAMEWORK OF EMERGING ECONOMIES

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

GLOBAL MARKET FOR LUXURY GOODS

The global luxury goods market is driven mainly by the strength of emerging economies, and luxury goods sales exceeded US$302 billion worldwide. (Luxury Goods Global Trends, 2013).

These charts demonstrate the global growth of wealth change by region. Disposable income is a driving force for luxury goods sales.

Note: (Luxury Goods Global Trends, 2013)

Note: (Luxury Goods Global Trends, 2013) The total global number of Social Class A Note: (Luxury Goods Global Trends, 2013) The total global number of Social Class A individuals individuals (whose incomes are over 200% higher than the average gross incomes of all (whose incomes are over 200% higher than the average gross incomes of all individuals aged 15 and individuals aged 15 and over) globally reached 443.6 million people in 2012. over) globally reached 443.6 million people in 2012.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

LUXURY GOODS – VALUE SALES AND GROWTH

Source: (Luxury Goods Global Trends, 2013)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

KEY MARKETS IN LUXURY GOODS – PRODUCT CATEGORIES BY RANKING

Source: (Luxury Goods Global Trends, 2013)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

MARKET SIZES FOR LUXURY ACCESSORIES

MARKET SIZES BY YEAR- LUXURY ACCESSORIES 70,000.00

60,000.00

50,000.00

40,000.00

30,000.00

20,000.00

10,000.00 - RSP US$ MN VALUE RETAIL 0.00 ASIA NORTH LATIN WORLD USA CHINA JAPAN PACIFIC AMERICA AMERICA

2009 35,509.40 10,409.20 10,547.40 9,893.40 2,883.40 3,150.80 1,538.10 2010 39,159.70 11,916.80 11,571.70 10,898.90 3,699.60 3,079.20 1,622.60 2011 44,080.50 13,872.40 13,398.80 12,695.20 4,756.50 3,085.80 1,765.50 2012 49,110.20 15,480.40 15,456.90 14,710.90 5,507.00 3,093.30 1,909.50

2013 53,477.10 17,242.30 16,920.30 16,125.80 5,960.80 3,536.70 2,161.20

2014 57,986.20 19,294.90 18,244.50 17,398.70 6,509.50 4,160.00 2,384.60 Note: Data in chart adapted from (Luxury Accessories in US, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

FRAMEWORK OF LUXURY PRODUCTS

EIGHT CHARACTERISTICS OF LUXURY PRODUCTS

I T IS NECESSARY TO UNDERSTAND HOW TO CLASSIFY WHAT MAKES A LUXURY PRODUCT. THIS FRAMEWORK ALLOWS MARKETING TEAMS TO KNOW WHO TO TARGET AND WHAT APPROACH TO TAKE IN BRAND POSITIONING.

TO SUCCESSFULLY MARKET A LUXURY PRODUCT, BEAU FRASER, PRESIDENT OF AN INTERNATIONAL ADVERTISING AGENCY, THE GATE, HAS CREATED THIS LIST:

…TO TRULY BE A LUXURY PRODUCT, IT NEEDS TO HAVE AT LEAST ONE OF THE FOLLOWING EIGHT CHARACTERISTICS:

Note: Chart and characteristic descriptions are adapted from ‘8 Characteristics of Luxury Products’ (Fraser, 2014). See Appendix for definitions of each characteristic.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

FRAMEWORK OF LUXURY LEATHER GOODS BRAND

T HE VARIOUS DIMENSIONS OR CHARACTERISTICS THAT ARE INHERENT IN LUXURY FASHION BRANDS ARE ILLUSTRATOR IN FIGURE #. ALL CHARACTERISTICS ARE INTERDEPENDENT AND MUST BE MANAGED SIMULTANEOUSLY TO ACHIEVE LUXURY STATUS. (HOFFMANN, 2011)

EACH LUXURY BRAND WILL ASSIGN DIFFERENT WEIGHTS OF ATTENTION TO EACH CHARACTERISTIC. AS A RESULT, THOSE KEY AREAS OF ATTENTION WILL DEFINE A PATH OF CREATION AND DEVELOPMENT FOR THAT LUXURY BRAND.

Source: (Hoffmann, 2011) 16

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

LUXURY ACCESSORIES IN US TRENDS IN USA LUXURY ACCESSORIES MARKET

ADVERTISING VARIED TASTES Luxury consumers of handbags and other accessories in the US Luxury bags and sunglasses are infrequently advertised on TV, with have varied tastes, with both heritage brands and trendier, modern brands instead opting for print advertising in popular fashion and luxury accessories finding niche markets. Aspirational and accessible lifestyle publications. A full page ad in Vogue magazine, one of the luxury brands trend towards more fashionable, more contemporary most popular and prominent media buys in luxury accessories, can pieces, whilst absolute brands such as Hermès are renowned for cost in excess of US$165,000. heritage pieces such as the iconic Birkin bag.

LUXURY ACCESSORIES TRENDS (IN US)

ACCESIBLE LUXURY BRANDS MOVING UP Luxury accessories are the entry point to designer fashion and Aspirational and absolute brands hope that the recovering economy prestige luxury, and accessible brands have gained share thanks to will allow consumers currently on the fringe between aspirational capitalizing on the market placement of luxury accessories. By and accessible to make the transition into aspirational. These brands offering a product that is affordable to many who could not also hope to earn back share by strengthening their appeal to ultra- otherwise afford luxury goods, accessible brands have tapped into a wealthy consumers. This will involve highlighting their exclusivity market that is inaccessible to aspirational and absolute brands. and their status as high-end luxury brands by raising prices.

Note: Information in chart adapted from (Luxury Accessories in US, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

WOMEN’S LUXURY BAGS – MARKET PROSPECTS IN US

WOMEN'S LUXURY BAGS Women’s luxury bags and women’s luxury small leather goods are the most promising categories of luxury accessories. Women’s luxury bags and small leather goods are crucial parts of the luxury backbone as they currently comprise more than 50% of all luxury accessory sales. Here is where the aspirational and absolute brands will first make their push to re-establish themselves as the flagships of luxury.

RESURGENCE OF ASPIRATIONAL HANDBAGS Women’s luxury bags are forecasted to continue aggressive growth through the resurgence of aspirational handbags. In 2013, volume growth was slightly slower than value growth. Weak volume growth further points to the coming transition from accessible to aspirational.

EFFORT TO CURB VOLUME GROWTH Retail volume of luxury accessories is forecasted to grow by 10% between 2013 and 2018. In comparison, retail volume grew by 30% between 2009-2012. Luxury manufacturers aim to curb volume growth as part of their efforts to re- emphasize the exclusivity of their products. This will be done primarily through raising price points.

MOST POPULAR PRODUCT The most sought after luxury accessory products continue to be the classic Louis Vuitton handbag and the Birkin bag by Hermès. Absolute and aspirational brands like Gucci, LV, and Versace peek the American imagination, and even more so for the leather goods that make up the bulk of the luxury accessory market in the US.

Note: Information in chart adapted from (Luxury Accessories in US, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 3- Ralph Lauren Luxury Accessories Market

WITH MARKET PREDICTIONS AND FORECASTING OF “A NET TOTAL OF 10 MILLION ADDITIONAL CONSUMERS YEARLY ENTER THE LUXURY MARKET TO REACH AN ESTIMATED 400 MILLION LUXURY CONSUMERS WORLDWIDE BY 2020, AND AN ESTIMATED 500 MILLION LUXURY CONSUMERS BY 2030. THE RACE IS ON TO CAPTURE AN EXPLOSION IN WORLDWIDE LUXURY CONSUMER GROWTH,” SAID CLAUDIA D’ARPIZIO, BAIN PARTNER IN MILAN AND LEAD AUTHOR OF THE REPORT. (D'ARPIZIO, 2014). AFFORDABLE LUXURY WILL STILL HAVE ITS PLACE, BUT WE MUST MAKE WAY FOR THE SO-CALLED ‘ABSOLUTE LUXURY’ SEGMENT THAT WILL PREVAIL AS CONSUMERS BECOME MORE SOPHISTICATED AND DISCRIMINATING, PROMPTING BRANDS TO UP THE ANTE TO APPEAR MORE EXCLUSIVE” (LUXURY GOODS, 2013).

RALPH LAUREN IS WELL POSITIONED TO EXPAND ITS LUXURY BRANDS BY LEVERAGING ITS EXISTING LOYAL CUSTOMERS TO DRIVE REVENUE GROWTH. THROUGH THE RECENT CREATION OF A DEDICATED LUXURY COLLECTIONS DIVISION ALONG WITH THE APPOINTMENT OF VALÉRIE HERMANN RALPH LAUREN PROVES ITS FOCUS ON RE-ESTABLISHING ITS POSITION AT THE PURE LUXURY END OF THE MARKET.

EVEN WITH THE CORPORATION’S LAUNCH IN 1967, RALPH LAUREN IS VIEWED AS A YOUNG PLAYER IN THE LUXURY GOODS MARKET. IN 2005, THE RICKY BAG BECAME THE CENTERPIECE OF RALPH LAUREN’S PUSH INTO LUXURY’S UPPER REACHES. THE RECALIBRATION OF THE RALPH LAUREN NAME INTO THE LUXURY LANDSCAPE WILL TAKE TIME TO ESTABLISH. FOR THIS REASON, GLOBAL PERFORMANCE AND MARKET SHARE MAY APPEAR WEAK COMPARED TO ITS COMPETITORS.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

‘THE WORLD OF RALPH LAUREN’ – LIFESTYLE LUXURY BRAND

Ralph Lauren designs products that are not just about fashion. They’re about living. They’re about how you live and how you want to live.

Ralph Lauren is a visionary figure of American lifestyle. The brand’s influential advertising and strategic marketing sells the aspirational image of wealthy, relaxed, life-of-leisure image of the American dream. Heritage has been and will continue to be a key tool for Ralph Lauren to harness the power of the past; heritage connects innovation and craftsmanship with Ralph Lauren’s symbolic luxury image of the affluent American lifestyle. For over five decades Ralph Lauren maintains the legacy of American tradition and invites its customers to participate in that lifestyle.

Ralph Lauren’s lifestyle is considered a main brand element for their position in the luxury goods market. This is seen by the use of imagery that extends well beyond the product; their campaigns feature cityscapes, leisure activities, and other scenes portraying a luxurious life, in which the product is not necessarily the focal point. Ralph Lauren Source: (Dauriz, Michetti, Sandri & Zocchi, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 invites his loyal and aspirational consumers to participate in the World of Ralph Lauren.

RALPH LAUREN ACCESSORIES – CURRENT POSITION IN MARKET

IMPACT OF ACCESSORIES DIVISION RALPH LAUREN - GROWTH INDEX ON RALPH LAUREN MARKET LUXURY ACCESSORIES

160 While growth in worldwide apparel sales accelerated in 2012, as compared to the 140 previous year, leather goods and other 137.2 accessories continued to record the highest 120 135.1 122.5 growth in comparison to other product 100 107.7 categories, according to Bain & Company. To 100 leverage this trend, Ralph Lauren aims to 80 grow new merchandise categories such as 60 handbags, footwear, eyewear, watches and jewelry. “Handbags, small leather goods, and 40 footwear contributed 8% of RL’s revenues in (FIXED EXCHANGE RATE) (FIXED EXCHANGE RETAIL VALUE RSP - RSP US MN $ VALUE RETAIL 20 fiscal 2013, and we believe this share will increase in the future with rapid sales growth 0 in these product categories” (Trefis, 2013). 2009 2010 2011 2012 2013 Growth Index by YEAR

Luxury Accessories

Note: Data from chart adapted from (RLC Luxury Goods, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

POSITION IN GLOBAL MARKET

Ralph Lauren competes at all price segments within luxury accessories owing to their strategy of consumer segmentation with various ranges. Women’s luxury bags will lead growth in luxury bags expanding by 34% over the forecast period. The company’s strategy appears to be paying off with it having gained over two percentage points in market share over the 2008-2012. (RLC Luxury Goods, 2014)

Global Brand Share of Christian Company Shares Ranking (by Global Brand Owner) Dior Retail Value of Luxury Goods Luxury Accessories 2014 1%

Yves Saint Loewe 2009 2010 2011 2012 2013 Laurent 2% Louis Vuitton Burberry 2% Chanel 4% 3% Coach Bottega Gucci Veneta Michael Kors 5% Louis Vuitton 19% Prada Ralph Lauren Hermès 7% Ralph Lauren Hermès Coach Bottega Veneta 8% 17%

Burberry Prada Chanel 9% Michael Gucci Yves Saint Laurent Kors 13% 10% Loewe Christian Dior

Note: Data in chart adapted from (Luxury accessories breakdown, 2014) Source: (Luxury Goods Global Trends, 2013)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

EMERGING GLOBAL MARKETS

Asia Pacific overtook North America for the first time in 2011 to become the region with the highest number of High Net Worth Individuals. Thanks to soaring demand from the region's newly rich, consumer spending gave the luxury goods sector a further boost. Rising incomes in Asia Pacific have not only led to higher consumer expenditure but also to changes in consumption patterns. Asian consumers are shifting towards greater discretionary spending. The increasing influence of Western culture, a growing number of affluent middle class consumers and the rise in the number of luxury shopping malls and high-end retail outlets have all contributed to Asia Pacific’s strong growth in luxury goods. As a result, Asia Pacific has created new an exciting opportunity for luxury brands like Ralph Lauren.

Luxury Goods % Growth 2012 Luxury Goods % Sales 2012

Source: (Luxury Goods Global Trends, 2013) Source: (Luxury Goods Global Trends, 2013)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

US AS THE STRONGEST MARKET

U.S. remains the largest luxury goods market in the World valued at US$78 billion in 2014 – luxury spending in the U.S. is over double that of second place Japan. By country in 2013, Ralph Lauren’s largest market by sales for luxury goods was the US, while its largest overseas market is France. Strong value growth in the US market reflects the successful Ralph Lauren store openings from 2008-2013. (RLC Luxury Goods, 2014)

Source: (RLC Luxury Goods, 2014)

Growth prospects for luxury accessories remain strong in the US and will lead growth overall driven by luxury bags. More specifically it is forecasted that women’s luxury bags will represent the lion’s share of growth.

“Ralph Lauren expects handbags, shoes and other leather goods to grow faster Source: (Luxury than the overall company for the next Accessories in US, 2014) several years.” (Smith, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

TARGET MARKET

THERE IS NO “ONE-SIZE FITS ALL” TARGET MARKET APPROACH IN LUXURY GOODS. EACH AGE GROUP AND GEOGRAPHIC REGION DEMONSTRATES DIFFERENT CONSUMER BEHAVIORS AND BRAND LOYALTY CHARACTERISTICS. RATHER THAN TREATING EACH GENERATION AND COUNTRY AS A SINGLE SEGMENTS, IN TODAY’S GLOBAL SOCIETY IT IS MORE MEANINGFUL TO IDENTIFY SIMILARITIES AMONG CONSUMERS ACROSS THE GLOBAL LUXURY GOODS MARKET.

PARTICIPATING IN LUXURY IS EXPERIENCED THROUGH THE RELATIONSHIP THE CONSUMER HAS WITH BRAND. THE EMOTIONAL ADVANTAGES ATTACHED TO THAT RELATIONSHIP BUILDS A SPECIFIC TYPE OF BRAND LOYALTY PER RELATIONSHIP TYPE.

RALPH LAUREN SELLS A WIDE BREADTH OF PRODUCT BECAUSE THE BRAND NEEDS TO HAVE AN EMOTIONAL APPEAL AND ASPIRATIONAL DRIVE TO SATISFY THE DIVERSIFIED MARKET SEGMENTATION.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

MARKET SEGMENTATION

ASPIRATIONAL UP-and-COMING YOUNG AFFLUENTS Aspirational consumers are the Relationship with the brand – Casual largest consumer segment globally acquaintance, budding friendship (39% of the population representing nearly 2 billion The Ricky bag is offered at different segmented people) and the first to unite price points to compete at several different income levels while still maintaining luxury materialism, sustainability, and status. This is where the $2,000 Ricky bag plays a cultural influence. roll in building a new relationship.

Relationship sought: Best Friend

STABLISHED E ULTRA - WEALTHY AFFLUENTS Relationship with the brand – Best Relationship with the brand – Old Friends, Friends, Buddies, Teammate Marriage partners, Master Slave Affluent American Woman : This is a Purchasing a handbag is an different kind of shopper - she is opportunity to be with the brand and buying clothes all the time. achieve the emotional connection of their strong relationship. She will spend 3-4 hours in the store by appointmnet with her personal There are a few capsule collections / sales representative.She has access to short runs for the ultra exclusive upcoming season look books. customer.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

TARGET CONSUMER PROFILE

SHE IS THE CONSUMER WHO LOVES HERITAGE BRANDS, AMERICAN CLASSIC STYLE, ICONIC PRODUCTS, SUPERIOR MATERIALS AND CRAFTSMANSHIP. SHE ASPIRES TO LIVE THE LUXURY LIFESTYLE AND HAS THE DESIRE TO PARTICIPATE WITH THE BRAND. SHE SEEKS THE EMOTIONAL EXPERIENCE OF A LUXURY HAND BAG PURCHASE AND ROMANCTACIZES THE HERITAGE OF THE ICONIC PRODUCT THAT WILL PROVIDE A STATUS OF ACHIEVED AFFLUENCE. · AS THE LUXURY ACCESSORIES MARKET FOCUSES ON WOMEN’S ASPIRATIONAL HANDBAGS AND AS VALERIE HERMANN GROWS THE COMPANY’S LUXURY BRAND PORTFOLIO THE TARGET CONSUMER SHOULD BE LURED IN BY EXCLUSIVE INNOVATIVE, YET CLASSIC PRODUCTS.

Source: (2014). Woman by train. Retrieved from http://www.pinterest.com/pin/414190496952513230/

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

CONSUMER INSIGHTS – WHO IS THE LUXURY ACCESSORIES CONSUMER?

THE CONNECTION BETWEEN A BRAND OR PRODUCT TO THE CONSUMER’S MIND AND EMOTIONS IS ACHIEVED THROUGH ACCURATE POSITIONING AND CLEAR BRAND IDENTITY. CONSUMER INSIGHTS AND PURCHASING BEHAIVORS PROVIDE A PATH FOR MARKETERS TO CREATE EFFECTIVE MARKETING STRATEGIES TO BUILD BRAND EQUITY.

CUSTOMER INSIGHTS

PLACE PURCHASING POINTS BEHAVIOR

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

“The physical experience of a luxury store PLACE remains a key component of luxury retailing, which is why some of the world’s most famous luxury retailers in London, Paris and New York continue to be heavily dependent on the footfall of HNWIs from the BRIC markets and other developing countries.” (Luxury Goods Global Trends, 2013) PLACE OF PURCHASE

STORE-BASED PURCHASE INTERNET PURCHASE “Stores should be located in prestigious locations demanding important logistic and financial means.” (Hoffmann, 2011) 95.50 2011 4.5 “The vast majority of US consumer luxury 95.20 2012 purchases are domestic, taking place in large 4.8 urban markets within the US. Upscale department stores (Neiman Marcus, Saks Fifth 94.80 2013 5.2 Ave and Barneys New York)” (Luxury accessories breakdown, 2014) 94.40 2014 5.6

“Luxury brands and consumers consider the in- store experience to be an important part of the luxury value equation, trying sunglasses brands, browsing the latest style of handbag or benefiting from the expertise of in-store associates.” (Luxury accessories breakdown, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

PURCHASING POINTS

INTERESTS AND BENEFITS SOUGHT

Product integrity – Quality, attention to detail, handmade and craftsmanship. A luxury product becomes a complete, holistic experience, lived in a multi-sensory manner over time by the consumer.

Brand signature / Brand Image– Recognizable styles, motifs, logos, colors, and materials that enhance the product’s allure and allows the consumer to recall the brand.

Price – Expensive products cannot be defined as luxury products. Price is an essential part of the brand that confirms the brand’s positioning. The price of luxury goods should be based on the imaginary, not on the costs. Price contributes to the luxury status and increases exclusivity.

Heritage –Very important with leather goods. The long history of a brand adds to the authenticity and creates nostalgia and credibility. It becomes a comparative advantage. History also relates to the country of origin and story of craftsmanship. “Luxury brands share certain brand personality traits like reliance, glamour, originality and sophistication. Brands whose

PURCHASE

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

image contains ‘heritage’ and ‘authenticity’ are more appealing Emotional –"Luxury consumers are often highly emotionally to consumers because they are more likely to succeed in the attached to the brand and very loyal. For outsiders, their love creation of emotional and symbolic attachment. The brand for the brand can even seem irrational. The relationship image is the most precious position of a luxury company since it between a customer and a brand often shifts from functionality is the ticket to an exceptional or ideal universe.23” (Hoffmann, to symbolism because the brand helps to project a self-image. 2011) p 130 The consumer uses luxury goods to show other people the person they are or aspire to be. Luxury goods thus become communication tools” (Hoffmann, 2011).

Exclusivity – They buy luxury products to impress others, self- direct pleasure, self-gift giving, and of course quality. Despite the many changes in the defining characteristics of what makes ‘luxury’ quality continues to be a staple. BEHAVIOR

PURCHASING ATTITUDE FOR LEATHER GOODS

Heritage is the entry Romancing the The purchase of a into the emotional craftsmanship of the luxury handbag is an value of the purchase. handbag triggers an occasional decision.

emotional connection to the purchase. A brand with rich Purchase is considered

history influences the to be special - a sign of consumers to buy a The desire to buy a achievement. high qaulity product handmade product and connect to the made by an 'expert'

brand's rich legacy and and not just a fashion Value is derived each

HERITAGE HERITAGE years of artisanship. label. time the luxury product is used or memory of EMOTIONAL the product emerges.

PRODUCT INTEGRITY

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

4- Marketing Objectives

GROW BRAND EQUITY FOR RALPH LAUREN ACCESSORIES

DRIVE BRAND SUPPORT PRODUCT CUSTOMER SALES AWARENESS INTRODUCTIONS AQUISTION

CONSISTENT CREATIVE MESSAGING STAY VISIBLE BUT MAINTAIN ACQUIRE THE ASPIRATIONAL SUPPORT SELLING PROCESS WITH OF ICONIC PRODUCTS EXCLUSIVITY LUXURY CONSUMERS FLAGSHIP STORES

ACHIEVE SUCCESSFUL RE-ESTABLISH BRAND IDENTITY AS SELL THE RALPH LAUREN POSITIONING IN EMERGING THE FLAGSHIP OF LUXURY LIFESTYLE MARKETS

ACCELERATE THE GROWTH OF REFINE THE RALPH LAUREN LUXURY BRAND PORTFOLIO LUXURY BRAND IMAGE

CREATE BRAND VALUE FOR RALPH LAUREN LUXURY DIVISION

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 5- Brand Inventory / Brand Measurement

RALPH LAUREN ACCESSORIES FOR MEN AND WOMEN REFLECT THE DISTINCTIVE DESIGN PHILOSOPHIES KNOWN THROUGHOUT THE WORLD OF RALPH LAUREN AND REPRESENT A CONTINUOUS DEDICATION TO IMPECCABLE CRAFTSMANSHIP AND ICONIC BEAUTY. (10 K REPORT, FY 2014)

BRAND IMAGE

AMERICAN HERITAGE Ralph Lauren is a visionary figure of American lifestyle. The brand’s influential advertising and strategic marketing sells the aspirational image of wealthy, relaxed, life-of-leisure version of the American dream. Heritage has been and will continue to be a key tool for Ralph Lauren to harness the power of the past. Heritage connects innovation and craftsmanship with Ralph Lauren’s American luxury lifestyle. Every element of the brand supports the elite, Americana heritage that Ralph Lauren has consistently portrayed over five decades. Figure 5.1 Ralph Lauren Mental Map (Bogan, Bowles, Raut, Relyea, 2014)

Figure 5.1 ACCESSORIES AS LUXURY DRIVER Ralph Lauren luxury accessories uphold the brand’s expectations of classic style, high quality, superior craftsmanship and elite exclusivity to create an aspirational connection to luxury consumers. The accessories business is Ralph Lauren’s greatest opportunity to drive the luxury business and integrate a strong luxury image to an already robust American heritage image. Accessories are integral in establishing a greater luxury presence. Figure 5.2 Ralph Lauren Accessories Customer Based Brand Equity Pyramid (Bogan, Bowles, Raut, Relyea, 2014)

Figure 5.2

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

BRAND ELEMENTS

THE RALPH LAUREN BRAND HAS KEY BRAND IDENTIFIERS THAT CONVEY THE STORY MR. RALPH LAUREN HAS BEEN TELLING FOR ALMOST 47 YEARS.

THROUGH THE SPIRIT OF CRAFTSMANSHIP, INNOVATION, AND AMERICAN TRADITION - A TIMELESS AND RESONANT LIFE-OF-LEISURE IMAGE IS CREATED THAT EMBODIES THE AMERICAN DREAM.

BRAND NAME “The name of most luxury brands refers to their founder, or to the most important designer, and often gives and indication of the country of origin” (Hoffmann, 2011). The Ralph Lauren name is synonymous with luxury and American lifestyle. In an industry with fierce competition brand names become hallmarks. Brands are seen as projects of meaning, and Ralph Lauren maintains control of how the brand name is used as a brand identifier. Mr. Ralph Lauren named his original line 'Polo' in 1972. As the brand continues to grow worldwide, it wants to clear up confusion between the Polo brand, the sport, and the collared shirt that tennis players started wearing in the '20s. To protect the founder’s brand name meaning in 2011 'Polo’ was dropped from its brand name.

LOGO The Ralph Lauren brand logo is an extension of the brand name. It serves as a key tool for Ralph Lauren brand recognition, because it indicates origin, and ownership. The (past) brand logo of the polo pony independently is a stamp of achieved elite status and to consumers represents membership of the affluent class. Even though ‘Polo’ was dropped from the Ralph Lauren name, it is still deeply connected to the brands roots - “More than 2,000 years on, polo continues to feed the sphere of the wealthy and the influential. Yet it has also become a globally recognized sport. Polo seems to be everlasting … which is also one of the key driving forces of global luxury. More than a sport, polo also corresponds closely to a luxury standard of living worldwide. “Polo is a lifestyle, not just a sport. What was built is a concept of a brand that people come in and ask for. For the naturalness, for that realness, it’s about unfashionable fashion, it’s about elements of style”, says David Lauren, senior vice president of advertising, marketing for Ralph Lauren.” (Sharma, 2010)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

CHARACTER “The story of the Ralph Lauren brand proposition isn’t so much about the product, but it’s about the man. Ralph is a truly inspired — and continuously aspiring — designer. He is the very character of aligning personal sensibilities and sentiment to the creation of visional product. And, all along, we’ve followed him, in his life and how that experience has lent itself to his gallery of offerings.” “That celebration and success is about Ralph’s legitimacy of story and the very character of its implied authenticity. That lends itself to absorption — it’s embraced — by global audiences.” (Girvin, 2008)

URL/WEBSITE · “By integrating its brand image and overall lifestyle into the web site, Ralph Lauren also was able to make e-commerce a more acceptable channel within the luxury industry. “Our goal was to get shoppers comfortable with the idea that they could by a $5,000 bag, tuxedo, or gown online,” Lauren said. “We wanted to show that the Internet was not just a cheap place to get coupons, but a place to build a luxury brand.” (Fiorletta, 2012) · “We just don’t sell clothes: we sell a dream and a lifestyle,” Lauren said. “When you shop in our stores and online, you’re inspired by this dream and lifestyle and want access into that world.” (Fiorletta, 2012)

Source: Ralph Lauren cover of magalog fall 2014. (2014).

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

PRODUCT - ACCESSORIES

“LUXURY TO ME IS ALL ABOUT QUALITY AND A KIND OF CRAFTSMANSHIP THAT IS RARE IN OUR WORLD. I HAVE ALWAYS BEEN COMMITTED TO CREATING THE BEST”– RALPH LAUREN (DELTA AIRLINE MAGAZINE, OCTOBER 2014)

ACCESSORIES ENCOMPASS A BROAD RANGE, INCLUDING FOOTWEAR, EYEWEAR, TIMEPIECES, FINE JEWELRY, HATS, BELTS AND LEATHER GOODS, INCLUDING HANDBAGS AND LUGGAGE

KEY ATTRIBUTES Size Style Ralph Lauren provides a wide Style is very personal. It has nothing to do with fashion. range of sizes for handbags, Fashion is over quickly. Style is forever – Ralph Lauren shoes and belts to choose Ralph Lauren products are easily identifiable as classic from. American style by customers, critics, and other designers. "He created a whole lifestyle, and kind of what 'American' Colors and Prints represents” (Gopnik, 2012) The Ralph Lauren The extent of breadth of “Americana” image is consistent between different market assortment of Ralph Lauren Fig. 5.3 (Bogan, Bowles, Raut, Relyea. 2014) tiers as well as in different global markets. Consumers accessories can be seen Source: http://www.ralphlauren.com/ are not confused about the meaning of the Ralph Lauren through the wide range of lifestyle. Their style is modern, sophisticated and accessories with exquisite. innumerable color options available in each product category. The color range available includes some exotic Material colors for handbags like RL gold, tan, mauve, khaki, Ralph Lauren’s Leather goods are made up of alligator, clementine, indigo and ivory. It also provides prints like crocodile, goat, python, lizard and calf skin (Ralph Lauren leopard print, zebra print on some of its iconic Ricky bags. Website). Ralph Lauren is the only brand which does not use any form of PVC in its goods and only sticks to using Craftsmanship - Made in Italy natural tanned leather. It believes in style and elegance “Ralph Lauren is extremely passionate about best of the and does not add any Ralph Lauren logo to its products as best craftsmanship and luxury” (Louise, personal it believes that the product in itself is iconic. communication, October 31, 2014). The accessories offered by Ralph Lauren are portraits of craftsmanship. Ralph Lauren believes in the goal to make

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 the best in everything. He strongly believes that the best the best and finest artisans in the field. Handbags are can be attained if care and attention to detailing is handcrafted by artisans through thoughtful heritage followed while making the product. Naturally such inspired details to add integrity and timelessness. These products can be obtained only through the expertise of bags are made from finest quality material by the finest artisans who have procured the knowledge and expertise artisans. Two expert artisans work for 10 to 12 hours to which was handed down to them over ages. Ralph Lauren craft each bag. Similarly, Ralph Lauren timepieces are believes that this expertise is rare and he tries to search crafted by expert craftsman from Switzerland who hand- and acquire this expertise through the array of hand-made pick the diamonds and personally design the dial and products they offer (Ralph Lauren Website).Hence, the mechanical machine. Ricky bags offered by Ralph Lauren are crafted in Italy by

PRODUCT DEVELOPMENT

Ralph Lauren is a product driven company. It is driven by its heritage and passion to make superior products. To help realize his vision of making the best in everything, Ralph Lauren, himself is driven by product development and is still dedicated to working with product development & merchandising teams. His biggest driving force is the passion for making superior products.

The process of product development begins with the Merchandising - Sales - Planning teams come in to design group in NY building the inspiration room. Ralph make the line plan by assessing what will sell within Lauren himself comes to design meetings and gives price points. They then pitch these products for ‘moods, themes, concepts, design direction’ to the materials and sourcing. Costing and manufacturing designing team. The Creative team searches for images, steps in at this point to confirm the logistics of the objects, colors, swatches and mood anything to put into supply chain. QC enters the picture to create the bible ‘Rig Room’. Ralph Lauren is then invited RL in to for all products so that the correct specifications sheets critique and adds stickers ‘Ralph Likes’ and ‘Ralph are distributed to manufacturers. Finally costing doesn’t like’ to all found inspiration. If there isn’t revisits are done to double check on any changes that enough ‘likes’ the process starts over and follows the have been made so that it is reflected in the costing. same steps until there is enough to work with. Spec packs are sent to manufacturing 9 months before Menswear is the driver for all other brands. The Rig product is in store. The entire process of product Room is created for menswear and then the ‘likes’ are development is an 18month cycle (concept to product). used for other brand’s lines but will always be focused (M. Fisher, personal communication, October 24, 2014). back to the Rig Room. These Rig Room items are then store in RL Archive in NY. Once this is done the

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

BRAND PORTFOLIO ANALYSIS

Fig. 5.4 (Bogan, Bowles, Raut, Relyea. 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

RALPH LAUREN ACCESSORIES – TOP PRODUCTS finest, hand-selected alligator. This timeless bag features a contemporary, compact HAND BAGS silhouette and is designed with signature custom made brass hardware.

Ricky Bags Modern, sophisticated and most iconic and timeless HOBO AND SHOULDER BAGS piece of the Ralph Lauren luxury collection is its Ricky Bags designed to sit neatly on the shoulder and can hold in Bag. It speaks volumes about the Ralph Lauren culture all the necessary belongings. These bags are a perfect and tells the Ralph Lauren heritage tale. Made out of example of luxury with functionality. pure leather it is hand crafted in Italy.

Price $ 1500 - $ 25000

Key Features · Made out of Ultra-soft Napa Leather, calfskin lining, interior lined with contrasting leather, Alligator, python and lizard skin · Custom logo-embossed leather-covered signature lock · Interior is lined with contrasting leather.

CLUTCHES The Quilted Ricky Clutch which is inspired by the Ricky Bag is hand crafted in Italy from ultra-soft nappa leather and features a channel-quilted pattern reminiscent of the interior of a vintage luxury car.

The Luxurious Cross Body Bag CROSS BODY BAGS Fig. 5.6 (Bogan, Bowles, Raut, Relyea. 2014) Inspired by iconic Ricky Bag, the luxurious Ricky Cross- Source: http://www.ralphlauren.com/ Body is handcrafted from the

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

EYEWEAR TIMEPIECES

Price Price $ 160 - $ 350 $ 7800 - $ 21900

Key Features Key Features · Haute, Classic Italian, Glamourous, Sophisticated, · Sensibility, Glamour, Timelessness, Astonishing · Made in Italy Beauty and Precision · Acetate frames with Ralph Lauren subtly etched on it · Premium collection of iconic watches. · Inspired by the Ricky Bag, Ralph Lauren has designed · Colours: White Gold, Rose Gole, Platinum, Stainless a Super Ricky Sunglasses. Steel. · Embellished with Diamonds · Hand Crafted by Swiss artisans with purest traditions of Swiss watchmaking. · Engraved interlaced Guilloche’ fine line patterns on its dial. · Hand designed machine with mechanical movement.

Super Ricky Glasses Fig. 5.7 (Bogan, Bowles, Raut, Relyea. 2014) Source: http://www.ralphlauren.com/

A timepiece from the Slim Classique Collection Fig. 5.8 (Bogan, Bowles, Raut, Relyea. 2014) Source: http://www.ralphlauren.com/

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

SHOES AND BELTS JEWELRY

Price Product Assortment $ 650 - $ 1250 Includes Cufflinks, Rings, Necklaces, Earrings, Bracelets, Bangles Key Features · Made in England Price · Material used includes smooth vachetta leather, $ 58 - $ 4900 alligator leather · Belts available in a variety of colors and designs Key Features · Classic pieces, gives a look of elegance · Embellished with Swarovski Crystals, turquoise stones, Glass pearls · Brass, silver, gold toned

Fig. 5.10 (Bogan, Bowles, Raut, Relyea. 2014) Source: http://www.ralphlauren.com/

Fig. 5.9 (Bogan, Bowles, Raut, Relyea. 2014) Source: http://www.ralphlauren.com/

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

Iconic Ralph Lauren Product – The Ricky Bag Story

Inspiration Ralph Lauren has introduced new products inspired by the Like every RL product which is inspired by some muse, the Ricky Bag like the Super Ricky Glasses and Soft Ricky Bag Ricky Bag is inspired by Ralph Lauren’s original muse, his or Mini Ricky Bag. The wife Ricky Lauren. Her style, her elegance and natural beauty is what has inspired him to make the Ricky Bag. These bags Ralph Lauren plans to enhance its luxury accessories debuted the market in 2005. Since 10 years they have been portfolio by heavily promoting its Ricky line, among othet icons of exclusivity and timelessness. Although Ricky bag has initiatives the company intends to build been 10 years old it has endless ‘stand-alone advertising’. upon the tremendeous results seen with the banner (Ralph Lauren Website) advertisements for its Soft Ricky high-end handbags. Its introducing three new styles As a Marketing Strategy looking for ways to stay Since its debut in the Luxury market the Ricky bag has up-to-date and will invest in the product by using higher been used by Ralph Lauren as an iconic luxury product to quality material. establish itself in the luxury market and shift its brand This will help Ralph Lauren to further cement its position in image from mid-tier products into a luxury brand. The Ricky global luxury bag has seen some modulations and variations during this accessories arena by delivering more value to consumers. process but the basic form of the bag and its craftsmanship (Kelesidou, F. (2014)) has still remained the same over the years.

Ralph Lauren has always promoted luxury through its Ricky bag and it is used as an instrument to showcase Ralph Lauren luxury on all digital platforms and in its advertisements. As Ralph Lauren is trying to focus on entering the Asian market with focus on China, the Ricky Bag will prove to be instrumental in providing entry for Ralph Lauren into the hearts of the luxury Chinese customers. In an attempt to promote luxury and as the entire concept of luxury revolves around the Ricky Bag,

The Iconic Ricky Bag Fig. 5.11 (Bogan, Bowles, Raut, Relyea. 2014) Source: http://www.ralphlauren.com/

Travelling Ricky Bag To celebrate the launch of the three newest “Soft,” “Mini” and “Chain” variations of its iconic Ricky Bag, Ralph Lauren is exhibiting a spectacular “Giant Ricky Bag” at stores around the world. The Ricky XXL by Ralph Lauren is traveling around the world and going places right from New York to Tokyo and Paris also celebrating Ralph Lauren’s pop-up store in Galeries Lafayette. Taking cues from the Soft Ricky Bag, its beautifully crafted archetype, the Giant Ricky took a team of four expert artisans approximately one month to create. Echoing the supple silhouette and handwork throughout — from shaping to creasing to tacking — the Giant Ricky is beautifully outfitted with all of the Soft Ricky’s authentic details, from Italian-made leather construction to its key bell, grommets and functioning lock. This over-sized Ricky edition is over four times the size of the Soft Ricky. (Travelling Ricky Bag) In order to pay tribute to the fashion house’s iconic Soft Ricky bag, Ralph Lauren initiated the world tour of the Ricky bag in 2013. The colossal bag attracted onlookers while an exclusive Galeries Lafayette edition of Soft Ricky bag lured shoppers at Ralph Lauren’s ephemeral outpost in Paris.

The Travelling Ricky Bag Fig. 5.12 (Bogan, Bowles, Raut, Relyea. 2014) Source: http://www.ralphlauren.com/ Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

THE RICKY COLLECTION

The Ricky Bag with Lights The Ricky Bag with lights is a seamless fusion of luxury and technology with an illuminated interior and a port for charging any type of mobile phone. This modern and sophisticated bag has tremendeous potential to become the next big thing in the world of luxury.

Ricky Drawstring Bag The Ricky Drawstring Bag is crafted in Italy from ultra-soft nappa leather and features a drawstring closure that cinches at the back for a clean finish.

Soft Ricky The exquisite Bone Soft Ricky Bag is made in Italy from layers of ultra-soft hand-stitched Italian nappa leather and features a contrasting bonded- calfskin lining. This lightweight version of the iconic Ricky Bag takes up to eight hours to construct.

The Mini Ricky The mini Ricky is inspired by the iconic Ricky Bag and is handcrafted in Italy from layers of hand-stitched, ultra-soft nappa leather and designed with a contrasting bonded-calfskin lining that adds a rich pop of color.

The Ricky ID Chain Bag The Ricky Bag with Lights The Ricky ID Chain Bag is handcrafted in Italy from ultra-soft nappa leather and Fig. 5.13 (Bogan, Bowles, Raut, Relyea. 2014) features a gleaming silver-toned chain shoulder strap. This timeless bag has a small Source: http://www.ralphlauren.com/ structured silhouette and a contrasting Asphalt bonded-calfskin lining.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

ROLE OF BRAND

The iconic Ricky Bag makes the brand what it is in today’s Luxury Market. The brand funnel explains the process of customer’s decision to purchase the product because of its Brand Image. As the Ricky Bag has become the identity of Ralph Lauren this brand funnel has been built up for the Ricky Bag. The iconic design, craftsmanship and uniqueness build the awareness in the minds of the consumers. This is followed by the sense of style, luxury and elegance provided by the Bags. This leads the customers to obtain a sense of pride and sophistication, which ultimately results in a status symbol for the customers. The resulting purchase of the timeless and elegant Ricky Bag by its luxury customer will result in strengthening the brand image in the luxury market.

Awareness - Iconic Design, Uniqueness, Timeless, Craftsmanship

Function - Sense of style,

Elegance, Exclusivity

Value - Pride, Sophistication

Personal Status

Brand Funnel Fig. 5.14 (Bogan, Bowles, Raut, Relyea. 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

STRATEGIES – TOUCH POINTS

See Appendix I for further detail and summary

PRESENTATION The first floor of the flagship store is solely dedicated to accessories - emphasizing the importance of the product. Flagship stores are modeled like galleries with architectural display cases, limestone floors, warm lighting, clean black and white, and artwork on display. Salespeople on the floor have expert product knowledge. The feel of the website mimics that of their own retail stores and easy to navigate both in the real and digital world - the visual and physical set up of the stores creates a clean, sophisticated, and inviting luxury experience for the luxury target consumer.

PROCESSING With help from the placement of accessories on the first floor of the flagship store, rotation and re-arranging of products is easy for these small items. Every few weeks product is re-arranged to keep the line fresh between shipments (Conversation. Mimicopoulos. 2014).

PLACEMENT Digital marketing efforts are integral to the success of placement in the consumers mind for Ralph Lauren. The World of Ralph Lauren and the Ralph Lauren Style Guide online gives consumers advice on what to buy, trends, builds the Ralph Lauren lifestyle, and gives insight to product inspiration and craftsmanship. The Magalog is another digital tool that combines a magazine and catalog format to showcase product in a setting placing the consumer in the Ralph Lauren luxury lifestyle once again. In following the effort to push the luxury accessories image the last page of the Magalog is an ad for the Soft Ricky Bag (Magalog. 2014). The website also features videos narrated by Ralph Lauren himself on inspiration, craftsmanship and new innovations in product.

PROMOTION In addition to the Travelling Ricky Bag as a major point of emphasis for the promotion of luxury accessories, Ralph Lauren does all its own advertising. This allows the company to tell a cohesive story and message about the products featured. Advertisements generally portray a lifestyle rather than a specific item and include a variety of products offered and, in some cases, licensing partners. (10 K Report, FY 2014). Although they have a strong digital presence, the primary advertising medium is print, with multiple page ads appearing regularly in a range of fashion, lifestyle, and general interest magazines (10 K Report, FY 2014).

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 6- Competitive Analysis

Over the past 5-7 years luxury goods has seen the driving with the highest numbers as the richest social class. (Luxury forces of accessories and their importance to building brand Goods, 2014). equity for luxury brand. Hard goods and accessories lead The Ralph Lauren marketing team will continue to engage global growth within luxury sales from $51,251 in 2013 to customers in a memorable experience around the $53,488 in 2014 (US$ million). The love of luxury coming product/service. As the brand matures so will the from emerging markets in Asia Pacific is building on the relationship with its customers to ultimately create an affinity competition. Luxury sales are fuelled by the expanding middle with them. It is necessary to convey the classic American class and increasingly sophisticated consumer base (Luxury luxury personality that the loyal Ralph Lauren customer Goods, 2014). relates and/or aspires to. In a sea of European luxury brands, Ralph Lauren entered the luxury market in 2002 with their Ralph Lauren has the opportunity to spread craftsmanship launch of the Ralph Lauren Women’s Collection apparel line. and American heritage to the luxury consumer. Since then the brand has introduce hard and soft good accessories for men’s and women’s to further grow the Ralph Ralph Lauren competes primarily on the basis of fashion, Lauren luxury division. quality, value, and service, which depends on their ability to: · Anticipate and respond to changing consumer demands in a timely manner; Joining a highly competitive market almost a century after · Maintain favorable brand recognition, loyalty, and reputation their competitors poses many challenges for the brand. A for quality; main challenge that Ralph Lauren Luxury faces is how to · Develop and produce high quality products that appeal to expand the luxury division and still maintain their exclusivity consumers; and price points in order to attract the highest income · Appropriately source raw materials at cost-effective prices; consumer. · Appropriately price our products; · Provide strong and effective marketing support; Ralph Lauren is up for the challenge to compete with its top · Ensure product availability; and European competitors, Gucci and Louis Vuitton in the global · Obtain additional points of distribution and sufficient retail market. One key advantage Ralph Lauren has is its hold on floor space, and effectively present our products at retail. the already developed US luxury market. The US still leads

GUCCI

Gucci is the best-known brand of Italian luxury fashion globally. The Gucci fashion house headquarters are in Florence, Italy. The Gucci brand is the epitome of high fashion, Italian style, and traditional craftsmanship. Gucci is under parent company, Kering SA. On the luxury side, Kering’s brands include: Bottega Veneta, Gucci, Balenciaga, Alexander McQueen, Stella McCartney, Yves Saint Laurent and Boucheron. Gucci remains the jewel in its crown. (Kering SA, 2014). Kering SA currently ranks #5 in US Luxury Goods and #3 In China, where Ralph Lauren is not ranked (Kering. 2014) Although Ralph Lauren leads in luxury ready-to- wear over Gucci in the U.S., Gucci remains a leader above Ralph Lauren in the luxury accessories realm. (Kering SA, 2014)

Figure 6.1 Guicci Customer Based Brand Equity Pyramid (Bogan, Bowles, Raut, Relyea, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

LOUIS VUITTON

Louis Vuitton Malletier, commonly referred to as Louis Vuitton or shortened to LV, is a French fashion house founded in 1854 by Louis Vuitton. The label's LV monogram appears on most of its products, ranging from luxury trunks and leather goods to ready-to-wear, shoes, watches, jewelry, accessories, sunglasses, and books. Louis Vuitton is one of the world's leading international fashion houses; it sells its products through standalone boutiques, lease departments in high-end department stores, and through the e-commerce section of its website (Euromonitor). For six consecutive years (2006–2012), Louis Vuitton has been named the world's most valuable luxury brand. (Bloomberg)

One of the world's leading international fashion houses selling its products through standalone boutiques, lease departments in high-end department stores, and through the e-commerce section of its website. (Louis Vuitton)

Figure 6.2 Louis Vuitton Customer Based Brand Equity Pyramid (Bogan, Bowles, Raut, Relyea, 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

TOP COMPETITORS - Gucci and Louis Vuitton

Louis Vuitton Gucci Ralph Lauren

Heritage Est. 1854, French Est. 1921, Italian Est. 1967, American

Products Shoes, jewelry, timepieces Shoes, jewelry, timepieces Shoes, jewelry, timepieces Eyewear, Luggage/Handbags, Eyewear, Luggage/Handbags, Eyewear, Luggage/Handbags, small leather small leather goods, and belts. small leather goods, and goods, and belts. Signature Collection Famous for its handbags. belts. Shoes for Women.

Average Pricing $3,500 - $18,400 Handbag $1,100 - $3,300 Handbag $1,100 - $18,500 Handbag

Promotion LV monogram, never mark down Celebrities: Jackie O., Audrey $1,100 - $18,500 Handbag product, celebrities: Michelle Hepburn. Social media, digital Williams, Angelina Jolie media

Best Market for Asia Pacific, North America, North America, China, Italy, North America, France, Canada, South Sales Eastern Europe South Korea, UK Korea, UK 460 stores in 50 countries 278 stores worldwide 138 stores worldwide (7 flagships)

Retail Products prominently displayed. Alluring window displays, “Gallery like” feel to store, architectural Environment Stores vary in product model like salespeople display cases, limestone floors, warm stocked. Uses concessions in dressed in all black, free flow lighting, clean black and white colors and department stores such as layout and rich décor. artwork on display. Salespeople have Harrods, Bergdorf Goodman, expert product knowledge. First floor is Barney’s dedicated to accessories.

POD Expert leather goods Strong brand imagery through American heritage, established luxury craftsmanship, long heritage, GG logo, Italian heritage, apparel before launching accessories, brand imagery through LV logo, craftsmanship classic design, only use leathers or exotic Premium luxury animal skins for handbags, iconic Ricky bag

Figure 5.2 Louis Vuitton Customer Based Brand Equity Pyramid (Bogan, Bowles, Raut) COMPETITIVE

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

COMPETITIVE DIFFERENTIATION

COMPETITIVE ADVANTAGE - Strengths of Ralph Lauren vs. Competitors · Ralph Lauren magalog biannual publication is an advertising advantage that narrates a story line for the brands season collections. · Cost focus and product differentiation for Ricky bag, the centerpiece of Ralph Lauren’s push into luxury’s upper reaches with an alligator version priced at $22,500 (Smith, 2014) · Hire of Valerie Hermann to strategize the future growth of the luxury division in the global market · Considered one of the main ‘multi brand’ luxury labels because of their breadth of product offerings vs. its competitors · Ralph Lauren luxury division started with apparel and then grew to add accessories vs. its competitors who began with accessories and then added apparel · Ralph Lauren products exclusively use leather, alligator, python and lizard vs. competitors who heavily use signature logo coated vinyl fabrics and PVC · Ralph Lauren small Ricky takes 20+hours to make 1 · Wide range of accessory style offerings to pair with Ralph Lauren Collection or Purple label apparel · Do not target specific demographic, they are designing unique products for the brand. Whoever wants to participate is invited join the lifestyle.

COMPETITIVE DISADVANTAGE - Weaknesses of Ralph Lauren vs. Competitors · Luxury accessory competitors are all European brands with strong heritage and 100 years+ experience in leather goods · Ralph Lauren does not have their own manufacturing for accessories which is a disadvantage vs. its competitors · Selling women’s handbags is a big challenge because of the high competition. Strategic advertising is key in making an impact on the consumer’s purchasing decision.

Figure 6.3 Ralph Lauren Heritage Brand Awareness (Bogan, Bowles, Raut, Relyea, 2014)

· 7- SWOT

· RALPH LAUREN’S MAIN STRENGTHS COME FROM A STRONG HERITAGE AS A THOROUGHLY AMERICAN BRAND AND A VERY WELL ESTABLISHED NORTH AMERICAN MARKET. RALPH LAUREN MUST BE ABLE TO TRANSFER THE STRENGTH OF THEIR AMERICANA HERITAGE TO CONNECT TO LUXURY CONSUMERS IN THEIR EXISTING MARKETS AS WELL AS EMERGING GLOBAL MARKETS LIKE CHINA. IF THE BRAND WISHES TO TRANSCEND THEIR MID-TIER AND ACCESSIBLE LUXURY IMAGE TO BECOME A TRUE LUXURY LEADER, THEY MUST POSITION THEMSELVES AGAINST BRANDS LIKE GUCCI AND LOUIS VUITTON, WHO ARE BOTH ESTABLISHED MAINSTAYS IN THE GLOBAL LUXURY MARKET.

STRENGTHS

STRONG HERITAGE BRAND THAT TELLS A STORY THAT IS CONSISTENT DIGITAL PRESENCE: MAGALOG AND ECOMMERCE AND EFFECTIVE ACROSS REGIONAL AND GLOBAL BOUNDARIES · Biannual publication is a strong, cohesive digital advertising · Ralph Lauren is easily identifiable as classic American style tool that narrates a story line for the brand’s seasonal by customers, critics, and other designers. "He created a collections and reinforces the luxury lifestyle image. Ralph whole lifestyle, and kind of what 'American' represents” Lauren e-commerce consistently ranks highly in usability and (Gopnik, 2012) The Ralph Lauren “Americana” image is overall presence. The brand embraces cutting-edge consistent between different market tiers as well as in technology, as illustrated by the Spring 2015 “4D” different global markets. Consumers are not confused about holographic runway show. Digital tools will be valuable the meaning of the Ralph Lauren lifestyle. when communicating the brand image to emerging markets. · · ACCESSIBILITY TO A RANGE OF GLOBAL LUXURY MARKETS WEAKNESSES · U.S. is Ralph Lauren’s largest market and France is second. Ralph Lauren is the second most popular luxury fashion RELIANCE ON SALES IN US MID-TIER MARKET brand in Japan (Carr, 2012). Having a strong logistical · The largest portion of Ralph Lauren’s sales comes from the network in existing global markets could be a gateway to mid-tier market, which erodes the brand’s luxury image. setting up logistics in emerging global markets where Ralph Ralph Lauren must find a way to grow the luxury portion of Lauren continues to struggle. the business without alienating their existing mid-tier · customer base. · Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

BRAND IMAGE ASSOCIATED WITH ACCESSIBLE LUXURY DAMAGED PRESENCE IN ASIAN MARKET · Multiple diffusion lines capitalize on the desirability of luxury · “The Asian market has attracted many luxury goods players. or designer labels with middle-income consumers. These Ralph Lauren has been slower than most to expand and will lines can saturate the market and create consumer face steep competition from more established brands in the confusion. (“Luxury Goods”, 2013). True luxury consumers market” Euromonitor International. (“Luxury Goods”, 2013). are more likely to associate Ralph Lauren with Coach or Distribution channel logistics remain a barrier to entry for Michael Kors than Gucci or Louis Vuitton. Asian market.

OPPORTUNITIES

ASIA RESTRUCTURING CELEBRITY ENDORSEMENT · Re-organization of its Chinese business will help Ralph · Competitors like Gucci and Louis Vuitton use famous Lauren establish itself as a more premium player and re- faces to connect their product to aspirational consumers. establish its brand equity in this market. (“Ralph Lauren Celebrities with ties to the luxury lifestyle could help Corp”, 2014). validate Ralph Lauren in the luxury accessories market. · Asia will be the largest luxury market in the world; capturing a significant share of the Asian market would VALERIE HERMANN/ NEW HIRES TO BOLSTER PURE LUXURY improve Ralph Lauren’s global luxury image. · “Valérie Hermann took on the role of President of the newly created luxury collections division in 2014. FOCUS ON EXPANDING LUXURY ACCESSORIES Hermann has an extensive background in luxury goods · "If you look at a lot of luxury brands today like Vuitton, including time spent with Louis Vuitton, Reed Krakoff and Chanel, Prada and Gucci, more than 70% of their Yves Saint Laurent. Ralph Lauren’s decision to create products are accessories… Our goal is to build our this division and appoint Hermann indicates that the accessories business to be a much larger part of our company wishes to bolster its credentials at the pure business." -David Lauren (Smith, 2014) Ralph Lauren luxury end of the market.” (“Ralph Lauren Corp”, 2014) has thoroughly extended their line of Ricky bags by offering it in every size, color, and fabrication THREATS imaginable. The next step for growth is extending the line into new silhouettes, like the drawstring version of COMPETITION WITH ESTABLISHED LUXURY LIFESTYLE BRANDS the Ricky bag that was recently released. · European brands with a strong heritage and 100+ years

of experience in leather goods dominate the luxury market. Ralph Lauren will have to convince luxury consumers that even though they are newer to the luxury

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

market, the brand’s Americana heritage and high quality especially in first tier cities, such as Shanghai. (Luxury craftsmanship are valid when compared to competitors. Goods, Global Trend and Prospects, Euromonitor, 2013). Ralph Lauren’s exhaustive brand hierarchy that spans COMPETITORS HAVE STRONGER HOLD IN ASIAN MARKET many markets and target consumers could confuse · Gucci and Louis Vuitton have rapid growth and strong luxury consumers and discourage a true luxury image. luxury image in China. Competitors have overcome the distribution logistics problems that slow growth for DAMAGED IMAGE IN ASIAN MARKET Ralph Lauren. “The Asian market has attracted many luxury goods players. Ralph Lauren has been slower than most to expand and will LUXURY CONSUMERS ARE BECOMING MORE CONSCIOUS OF face steep competition from more established brands in the OVER DIVERSIFIED BRANDS market” Euromonitor International. (“Luxury Goods”, · The ubiquity of other luxury goods brands has weakened 2013). Distribution channel logistics remain a barrier their desirability. This aligns with a shift in China to entry for Asian market. towards a more discerning luxury goods consumer base,

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 8- Marketing Measurement

VALUE EQUATIONS

Fig 8.1 (Bogan, Bowles, Raut, Relyea. 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

VALUE EQUATIONS EXPLANATION

THE POSITIVE CONSUMER VALUE COMES FROM 3 MAIN FOCI AS SEEN IN THE NUMERATOR IN THE ABOVE EQUATION FROM FIGURE 8.1. RALPH LAUREN’S DIGITAL MARKETING AND MERCHANDISING ALLOWS CONSUMER TO EASILY NAVIGATE E-COMMERCE AND ACCESS THEIR MAGALOG –A COMPREHENSIVE ONLINE FUSION OF MAGAZINE AND CATALOG TO SHOW DISTINCT STYLE AND BRAND IMAGE. ITEMS CAN ALSO BE CUSTOMIZED ONLINE. RALPH LAUREN’S STRONG RANK IN DIGITAL PRESENCE SHOWS ITS VALUE TO THE CONSUMER. IN ADDITION, A LONG HERITAGE OF CLASSIC AMERICAN STYLE IS PORTRAYED CONSISTENTLY THROUGHOUT ALL BRAND ELEMENTS AND PRODUCTS. LUXURY STYLE AND CRAFTSMANSHIP IS APPARENT IN PRODUCT AND MATERIAL AND THE SAME LUXURIOUS AND EXCLUSIVE PRODUCTS ARE AVAILABLE ACROSS GLOBAL MARKETS.

CONSUMER VALUE IS FURTHER ENHANCED DUE TO THE VARIABILITY OF PRICE POINTS ALLOWING FOR A RANGE OF CONSUMERS READY TO MAKE SMALL ‘BEGINNER’ LUXURY PURCHASES OR LARGE ONES. CUSTOMIZATION OF PRODUCT CREATES A LOW RISK FOR THE CUSTOMER, BUT MAY INCREASE PRICE. RETURN POLICY REMAINS A RISK FOR THE CONSUMER.

RETAIL VALUE IS VERY GOOD IN TERMS OF RALPH LAUREN’S OWN RETAIL LOCATIONS WHERE THE OVERWHELMING MAJORITY (~90%) OF THE LUXURY PRODUCT IS SOLD (CONVERSATION. FISCHER. 2014). SINCE RALPH LAUREN MANUFACTURES AND THEN AVOIDS A ‘MIDDLEMAN’ WHOLESALER – LOW MARGINS ARE POSSIBLE. THEIR OWN CENTRALIZED DISTRIBUTION CENTER IN GREENSBORO, NC MAINTAINS AND DIRECTS THE MERCHANDISE FOR THE BRAND IN ITS MAJORITY FOR THE US MARKET; IT IS A HIGHLY EFFICIENT AND TIMELY SYSTEM.

RANKS IN SALES, PROFIT, AND MARKET VALUE SHOW POSITIVE GROWTH AND OUTLOOK FOR THE COMPANY (FORBES. 2014). POTENTIALLY STANDING IN THE WAY OF A HIGHER RETAIL VALUE FOR RALPH LAUREN’S LUXURY GOODS AND ACCESSORIES SPECIFICALLY, IS THE LACK OF ESTABLISHED STANCE IN THE LUXURY BUSINESS AND LUXURY ACCESSORY BUSINESS. THEIR COST ALSO REMAINS HIGH FOR THE PRODUCT DUE TO THE QUALITY OF MATERIALS AND CRAFTSMANSHIP.

OVERALL, VALUE EQUATIONS GIVE RALPH LAUREN A GOOD OUTLOOK FOR THE FUTURE OF THE BRAND IN THE LUXURY ACCESSORIES MARKET.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

LUXURY RATING BASED ON EIGHT CHARACTERISTICS OF LUXURY PRODUCTS

RARITY

EXCELLENCE

EXPENSIVENESS

TIMELESSNESS

HONEST

TAILORED

EXPERIENCE

PLEASURABLE

Fig 8.1 (Bogan, Bowles, Raut, Relyea. 2014)

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

9- Strategic Brand Management Recommendations

INCREASING LUXURY AWARENESS IN EMERGING MARKETS : POP-UP SHOPS Fast forward almost 10 years and luxury brands are now using pop-up stores to display the ever-increasing number of designer and artistic collaborations housed in the world’s most luxurious retail stores. Gucci opened a pop-up store in London’s trendy Covent Garden in 2010 to celebrate the launch of its trainer range, with Mark Ronson, and in August 2012, luxury goods giant Louis Vuitton opened seven pop-up stores around the world to celebrate the launch of its much-publicized collaboration with the Japanese Artist Yayoi Kusama. Most recently, House of Dior moved into the world’s most famous department store, Harrods, with a pop-up shop of limited editions, an exhibition of couture and a café full of pretty colored delicate dainties. (Luxury Goods, Global Trend and Prospects, Euromonitor, 2013)

INCREASING LUXURY AWARENESS IN EMERGING MARKET : DISTRIBUTION CHANNELS Partnering with distributors already established in the Chinese market could help Ralph Lauren overcome logistics issues. Rather than using licensing partners as was done (poorly) in the past, the brand should fuel sales through flagship stores in the region as they do in the U.S. Alliances with existing Chinese businesses could help expedite the logistics issues with landlords and shipment deliveries that have plagued Ralph Lauren’s previous attempts at the Asian luxury market. This distribution method would also reinforce the luxury image in Asia by positioning the brand against other luxury brands with flagship stores in the region and give Ralph Lauren much tighter control on the product entering the market.

MATERIAL INNOVATION Purchasing a handbag is an emotional experience that extends beyond the moment of purchase. From a consumer point of view, value is derived each time a luxury product is used, or a service memory emerges. The appreciation for the unique product quality builds on the emotional connection the consumer attaches to the product and ultimately the brand.

Ralph Lauren has strategically positioned the Ricky Bag to be the iconic product for Ralph Lauren accessories. One of the Ricky Bag’s many points of difference is the use of quality leathers and animal skins. As technology advances and the desire for innovation rises there should be material research for future products that would allow for a deeper-rooted connection. The Light

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014 up Ricky Bag is the perfect example of how to advance a classic heritage product to cater to the high demands of the ever-changing market and consumer behaviors.

INCREASING LUXURY AWARENESS: EMPHASIS ON MADE IN ITALY Ralph Lauren said, “When I started my business…I went out to make the best tie I could make. Today, my goal is to make the best bag” (Craftsmanship. Video. Ralph Lauren. 2014). The world of Ralph Lauren is a lifestyle brand created through telling stories of its founder and the American dream and heritage style. The Luxury division should seek to emphasize the integration of artisan craftsmanship passed down from craftsman to apprentice over generations and where their highest quality leather goods are made – Italy. The American attitude has always been to innovate and be resourceful – Ralph Lauren is no different – he will seek to find the best of the best in material and craftsmanship using the global resources at his disposal. “Made In Italy” already holds a strong association with luxury and high quality leather goods and would benefit the luxury division by educating consumers on the meaning of that label on their luxury products. Integrated communications efforts in advertising and promotions should highlight this point to help establish Ralph Lauren’s stance in the luxury handbag and accessories market.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

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Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

Fall 08

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

Appendix

APPENDIX I: MARKETING 10P’S

PEOPLE consumer - the target markets get a consistently high quality Ralph Lauren is a lifestyle brand and they pride themselves in Ralph Lauren product that they will continue to buy and buy offering a breadth of product in a range of price points. The higher and higher into the chain throughout their life. target markets for the luxury accessories will vary based on disposable income and consumer brand loyalty and desire to PRODUCT participate in the Ralph Lauren lifestyle. Depending on See Figure 5.2 product category (i.e. handbag vs. timepiece) we would see certain demographics purchasing specific items within those POSITIONING categories or taking over categories all together. For Ralph Lauren is positioned against the likes of Louis example, a small leather wallet would be entry-level Vuitton, Bottega Veneta, Hermés, Yves Saint Laurent, participation with Ralph Lauren accessories (Conversation. Gucci, Prada, & Chanel (Conversation. Mimicopoulos. Fischer. 2014). Age range, geographic area, and gender 2014) ranges but the major factor in target consumer is disposable As far as substitute and alternate products - RL Accessories income and the items those ultra-wealth consumers choose to is competing against other luxury product categories such as purchase. designer ready-to-wear apparel, fine wines and premium We can break down the target consumers for luxury products beauty products - all luxury products intended for ultra- into 4 groups: wealthy and affluent consumers’ disposable incomes. · Aspirational The majority of Ralph Lauren’s luxury business is done · Young Affluents through their own retail locations, but they also distribute · Established Affluents through e-commerce (direct-to-consumer) and wholesale. · Ultra-Wealthy ← Ralph Lauren’s primary target for Their flagship stores serve as the hub for their luxury Luxury Accessories and the growth of the brand as a products and are the primary seller of luxury and collection luxury accessories brand items. This is where they are rotated and showcased; product is consistent among stores as long as it is appropriate for the We want each consumer to be valued and have a way to geographic location - i.e. styles and designs do not change participate in the brand - through marketing, the Ralph (Conversation. Fischer. 2014). Lauren lifestyle is built and grows the love of product in the

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

PRICE PLACEMENT Pricing for luxury products is comparable to those of similar Ralph Lauren utilizes a combination of digital marketing material and style to Ralph Lauren’s competitors. strategies to present the product to the consumer · Hand bags are a high margin business · Digital: · Handbags range from $1500 - $25000 o Magalog – combination digital magazine and · Eyewear: $160 - $350 catalog to display product and product · Timepieces: $7800 - $21900 combinations · Shoes & Belts: $650-$1250 o Ralph Lauren Style Guide (online) · Jewelry: $200 - $4800 o ‘Making of Product’ videos to show craftsmanship, inspiration, etc. PACKAGING o Fashion Shows (also live events) When ordering online, Consumers receive bags either direct from manufacturing or the DC · Handbags come in navy stiff cardboard boxes with gold lettered ‘RALPH LAUREN’ · Each handbag comes with a registration card and a felted storage and protective bag to keep the handbag dust-free and in mint condition · Small leather goods also come in navy boxes with gold lettering · Handbags and accessories purchased in flagship stores or retail shops will have similar singular item packaging but may be loose (customer preference). These products will still include felted storage bag for handbags.

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

PRESENTATION PROCESSING All merchandising is done in-house. In general, luxury products direct to consumer thru e- · Flagship or owned retail venues: commerce are not made until ordered - the majority of luxury o “Gallery like” feel to store, architectural display product and accessories purchased this way are not held in cases, limestone floors, warm lighting, clean wholesale for any length of time. The great majority of the black and white, and artwork on display product, however, is sold through Ralph Lauren’s own retail o Salespeople have expert product knowledge. locations and will have a small stock of product due to high o First floor is dedicated to accessories. cost and quality. · 2 main showrooms (to sell each season’s collection) Quality Control is in-house (Conversation. Fischer. 2014) o NYC - men’s Madison Ave mansion · QC is located in Hong Kong and a couple other global o NYC - women’s 650 Madison Ave main offices cities · Online - RalphLauren.com · There is a written QC “bible” for the company that outlines · Madison Ave Mansions: all quality measures for products o Placement in stores is located on main floor (if · The QC process and ‘bible’ has been developed over 45 there are multi floors) so that the consumer years enters the shopping experience with the idea of a special / easily accessible purchase. R&D (Conversation. Fischer. 2014) · 5 x / year there is new luxury accessory products in the · Research & Development is in-house and done at the store. (PF, Fall, PS, Spring, Holiday) Greensboro location. · Despite only introducing new products 5 x/year the · 24 Employees work on fabric finishes, colors, coatings, product is ‘refreshed’ every few weeks trims, etc. o This is where anything from dye formulas down to dyestuff type and water temp is determined for product. · There is a separate designated R&D facility in Italy for handbags and footwear · Factories and Fabrics for Luxury lines are in Italy allowing a direct connection to luxury and confirms that the best handwork/tailoring/high end luxury construction and materials are used for the brands highest priced products

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

PROMOTION:

· RL Advertising is internal · Ad campaigns and magalog focus on accessories · Other communications/promotions

o Runway

o Presentations

o Fashion Events

o RL Luxury Lifestyle Journal

o Trend Style Guide

o Magalog

o World of Ralph Lauren

o Craftsmanship video

Special events/promotions for consumer education:

· Traveling Ricky Bag

· Quality/Artisanship Shows (Conversation. Mimicopoulos. 2014). The artisans come prepared with leather tools and sections of the bag pre made to demonstrate in the style of a ‘home cooking show.

Special events are held in high-end retail stores (i.e. Bergdorf Goodman) or Ralph Lauren stores for leather goods factory artisans to come and demonstrate how bags are made. This teaches the sales staff the importance of craftsmanship to the product

PLAYBACK Ralph Lauren does internal auditing for the company (Conversation. Fischer. 2014).

Ralph Lauren Luxury Accessories – Brand Audit Bogan, Bowles, Raut, Relyea 2014

THE INTEGRATED TEXTILE BRAND ANALYSIS / BRAND AUDIT OF RALPH LAUREN LUXURY ACCESSORIES WAS PREPARED BY:

KELLY BOGAN – ALLISON BOWLES – POORVA RAUT – RACHEL RELYEA

UNDER THE DIRECTION OF DR. NANCY CASSILL

THE COLLEGE OF TEXTILES – NORTH CAROLINA STATE UNIVERSITY - FALL 2014