Diesel For Successful Living Case Analysis ADV 388K Integrated Communication Management Group 4 Abigail Klein (AMK3766) Natalia Lara (NTL397) Sophia Liu (YL25797) Monica Sherry (MBS2773) Jiahuan Yan (JY8892) The University of Texas at Austin Situation Analysis Demographic Environment The demographic environment differs Between D-Diesel and StyleLaB. D-Diesel focuses on high school students, college students, young professionals and people in the HIP generation. Many of these people are in the middle or upper-middle class and their ages range Between 16-25 years of age. StyleLaB focuses on members of Generation X, ages 25- 34. Many people in Generation X are professionals or managers in the upper-middle and lower-upper social class. The clothing industry in the mid to late 1990’s experienced an increase in market segmentation. Some consumers Began spending large sums of money on casual wear for leisure and others for the workplace. Additionally, Being trendy started to mean Being dynamic, lively, moBile and casual. Economic Environment People with medium to medium-high incomes tend to purchase D-Diesel products while StyleLaB is aimed to attract consumers with medium-high income. In 1997, Diesel’s consolidated annual turnover amounted to 503 Billion lire, 85 percent of which was generated outside Italy. Sociocultural Environment D-Diesel tends to target people with a teenage-spirited lifestyle, such as a shopaholic, neo hedonist, triBe member and trend followers. D-Diesel customers tended to Be open-minded as well as innovation receptive. In contrast, StyleLab targets travelers and worldly consumers who are visually educated, fashion perspective and culturally aware. Customers of StyleLaB either like the D-Diesel Brand and feel it has Become too mainstream or they value the possibility of creating their own style. Additionally, once the consumer has taken the time to think aBout D-Diesel’s advertisements, they can pick up on a hidden order Behind the work, a meaning that is less shocking and more a Balanced oBservation of the realities of the world we share. As shocking as D-Diesel advertisements can Be, they more often than not manage to rise aBove a purely attention-getting level either by containing a serious point of social concern or, simply But effectively, By causing us to ponder the meaning of life. No other clothing company would appear to offer such philosophical discourse. Competitive Environment Diesel was ranked number two in the jeans industry in Europe and they had high expectations for StyleLaB. D-Diesel (denim leisure clothes) competes with Armani Jeans, Levi’s Mustang and Calvin Klein Jeans and sold garments comparaBle to GAP at a much higher price point. Comparatively, StyleLaB (high casual wear) will compete with Miu Miu, Prada Sport, CP Company, and D&G. One key factor in the competitive environment is price. Within Diesel, prices are even different. For example, D-Diesel jeans sold for $100 USD and a jacket at $139 USD while StyleLab sold pants at $150 USD and jackets at $415 USD. 2 Product Environment Originally, Diesel was a typical young design company focused on launching new products. Beginning in 1991, they started to develop a gloBal Branding campaign – “Diesel for successful living.” In 1998, Before the launch of StyleLab, the brand’s portfolio of Diesel Spa consisted of three main product lines: D-Diesel, Diesel Kids and 55DSL. D-Diesel was the core Business line, focusing on denim jeans and skirts. Their products were characterized by very high durability and quality. The Diesel Kids line was targeted at kids who did not want to Be treated like kids. The 55DSL line was aimed at extreme action sports fantasy, which was full of a surprisingly fresh color combination. Under the current circumstances, some consumers are willing to spend a large amount of money on casual wear for the workplace and leisure. Because of this, there was a new market opportunity in high casual wear. According to Diesel, D-Diesel and StyleLaB should have distinct Brand identities But with some common roots: freedom, gloBal outlook, creativity and thoughtfulness. D-Diesel stands for irony and irreverence while StyleLaB stands for sophistication and mystery. Diesel focuses on denim while StyleLaB experiments with a variety of innovative faBrics. StyleLaB is more exclusive, refined, expensive and more innovative in its use of design and materials when compared to D-Diesel. It also offers less of a street look than D-Diesel and targets consumers who are design conscious. Company Analysis Overall, Diesel is a strong company. They focused heavily on developing the Diesel style. Diesel garments were featured in many popular and independent movies as well as participating in video game production. Additionally, Diesel was one of the first clothing companies on the Internet in 1995. Diesel also has different media teams and different goals for advertising StyleLab and D-Diesel. For StyleLaB, this consists of a distribution plan unique to their products. Historically speaking, Diesel transferred from a simple jean laBel into a major fashion Brand in 1985. Its products were availaBle in more than 50 countries through 10,000 independent retailers and 40 company owned stores, including flagship outlets in New York and London. In 1997, its consolidated annual turnover amounted to 503 Billion lire, 85 percent of which was generated outside Italy. SWOT Analysis Strengths Weaknesses • Successful Brand: • StyleLab: o Diesel is a strong Brand. It o The profitaBle market in high went from only a jean Brand casual wear is uncertain. to major fashion laBel. • Potential Dilution: 3 o In 1997 Diesel’s consolidated o Multiple horizontal turnover amounted to 503 extensions of Diesel could billion lire; 85 percent of dilute its identity therefore which was generated outside Diesel could suffer from its of Italy. own success. • Promotion: • Advertising: o Diesel pays great attention to o Diesel's ironic and tacky product placement among advertising caused actors, musicians and resentment among the celebrities without paying general public and triggered the stars or giving anything a response. away. o Diesel has no precise o Diesel’s design, advertising definition of the target for and management style StyleLab. embodied a love of humor, o Diesel's vision of consumer creativity and irrelevance paradise was to be towards established rules. interpreted ironically. o Advertising campaigns were o Diesel ads were too highly artistic, colorful and sexy. involved and often confusing o Diesel is an Innovative Brand. to consumers. They required They were one of the first wit and involvement to Be clothing companies on the deciphered. Internet. o The Diesel for successful o Diesel created a hotel that living campaign resulted in envisioned the brand’s sarcasm directed at Diesel philosophy. The hotel was a themselves. success among Big influencers like people such as Cindy Crawford, Grace Jones, Yoko Ono and JFK. • Products: o Diesel offers a wide variety of products. For example only about 30 percent of the D- Diesel collection was denim. o D-Diesel’s products are high quality and durable. o Diesel has Been aBle to expand to include a wide variety of successful product lines. • StyleLab: o They offer wearaBle clothing from a “ laBoratory of surprising style” for 4 customers. It is more exclusive, refined, expensive and more innovative in its use of designs and materials. Opportunities Threats • Market: • Perception: o There is an opportunity for a o The perception that casual high-end casual wear line in wear should not be the market. expensive. • Attitude towards attire changes: • Competition: o The clothing industry in the o StyleLab was positioned at mid and late 1990’s the lower end of high casual experienced increasing wear, competing with Miu market segmentation. In Miu, Prada Sports, CP particular, some consumers Company and D&G. were now willing to spend o Other companies could Begin large money not only on using new styles and fabrics smart clothes But also on to compete, taking a portion casual wear, both in of the original market. workplace and for leisure. • StyleLab: o Being trendy started to mean o It is hard for many dynamic, lively, moBile and consumers to justify casual. spending $150 on a pair of • Designers: jeans. o StyleLab would help manage Diesel's most important assets, their designers. In doing so designers are free to experiment with new faBrics and cuts. • Target Customers: o StyleLab could focus on previous D-Diesel customers who still like the brand and its values but felt D-Diesel had Become too mainstream. o StyleLab could appeal to people who are looking for cutting edge style and who value the possibility of creating their own style. 5 Problem Statement How does Diesel associate Both D-Diesel and StyleLaB while maintaining separate identities By determining the Branding strategy of their new line, StyleLaB? Critical Factors 1. Distinct brand identities, but while sharing some common roots D-Diesel and StyleLaB should have distinct Brand identities But with some common roots: freedom, gloBal outlook, creativity and thoughtfulness. D-Diesel stands for irony and irreverence while StyleLaB stands for sophistication and mystery. From a product perspective, Diesel focuses on denim while StyleLaB experiments with a variety of innovative faBrics. Additionally, StyleLaB offered less of a street look and is more exclusive, refined, expensive and innovative in its use of design and materials compared to D-Diesel. Another common root is their target market. D- Diesel targets people who are 18-25 years old while StyleLaB targets past Buyers of D-Diesel who liked the Brand But had outgrown it. This is a critical factor because if the Brands do not share common roots, it is difficult for the Brands to Be linked in any way. 2. StyleLab’s main focus is to build the image of the brand Since D-Diesel is already an estaBlished Brand it has different marketing goals, such as supporting the brand and products equally.