Caroline Grant 12/17/13

I. Brand Analysis A. Company: Chanel Location: There are roughly 310 Chanel store locations around the world. Chanel stores are located in every fashion capital; from here to Asia. The main Chanel headquarters are located in Paris, France. Activities: Chanel has an individual organizational structure. The major organizational activities at Chanel would be; balancing between being a Global luxury brand company and an individual French company. Subsidiaries: The two major subsidiaries of Chanel are; Chanel Inc. and Fragrances Exclusive Inc. These two subsidiaries are both located in NYC. History: Chanel is a Parisian fashion house founded by Gabrielle Coco Chanel, in 1909. Coco Chanel was raised in an orphanage in France. She learned to sew at her Convent school. Coco created her globally recognized brand logo from the shapes formed in the windows of her Church. Christos D. Barre writes During the Great Depression, Coco Chanel, with help from Arthur Capel, opened up her first shop on rue Cambon. Her fashion became known for prioritizing freedom of movement by not featuring ostentation and redundance in her designs. She established Chanels original, fluid and comfortable lines. Elite women from around the world began to flock to the now legendary store to commission couture garments from her. The House of Chanel became an icon of elegance. Chanel from that point on was synonymous to elegance, wealth and elitism the ultimate sign of French high class (Barre, 1). Financial Data: As of November 2013; Chanel was listed as Forbes #74 Worlds Most Valuable Brands. Forbes states that the Brand Value of Chanel is $7 Billion. It also states; sales for 2013 are $4.4 Billion. Annual Report: Chanel is a privately owned company. Therefore, I would have to purchase the Annual Report of Chanel. David Wu a luxury good analyst stated Sales rose 26 percent in 2011, according to the filing, the best growth rate among its five peers for that year. The label has positioned itself in the top-end of the luxury segment, with a winter line-up that includes $5,000 dresses and $4,000 quilted handbags. Perfume and cosmetics sales -- especially the No. 5 scent -- remain Chanels biggest business, and probably represent around 55 percent of its revenue. This graph shows the Income Statement trend for Chanel.

Income Statement Trend

Key Personnel: Karl Lagerfeld(Creative Director),Jacques Polge(Master Perfumer), Gerard Wertheimer(CoOwner), Alain Wertheimer(Co-Owner), Maureen Chiquet(Global CEO), John Galantic(President, U.S. COO). Recent News: Recent News for Chanel would be Chanel Dallas. Only a few days ago on December 13th; Chanel had a runway show at Fair Park in Dallas. This was the first time since 1957; that Chanel has chosen Dallas as its inspiration for their Metiers dArt traveling fashion show. Dallas, Texas is now getting a ton of attention from the fashion industry. B. Category: Chanel is a privately owned French company. Chanel is a luxury fashion brand. They have many different product categories that include; fashion clothes, perfume, skincare, makeup, and jewelry. Methods of Distribution: Chanel is vertically integrating its supply chain. Sameer Reddy states a strategy to keep them alive, going so far as to incorporate a subsidiary to manage these satellite ateliers called PARAFFECTION, which in total employs 130 with an annual turnover of around 35 million euro. Chanel only accounts for 60 percent of their turnover, however; the workshops operate entirely independently, also supplying to competing houses, high-end ready-to-wear and private clients. They are actively encouraged to train new craftsmen and inaugurate younger collections (Reddy, 1). Legal Considerations: Chanel states regarding their supply chain Chanel, Inc. and its affiliates (collectively Chanel) recognize the importance of fair labor practices within our company and our supply chain. Chanel condemns the evils of human trafficking and slavery and understands the importance of eradicating the practices worldwide. It is our goal that third party suppliers within our supply chain comply with all applicable laws regarding human trafficking and slavery. C. Share of Products: Chanel No.5 is the companys flagship product and continues to keep a leading share position in the overall fragrance market.

New Products: Chanel Resynchronizing Skin Care Benefits/Appeals: Skin Care is a major appeal to the consumer demographic of Chanel. Innovating new serums made by Chanel will most definitely be purchased by their consumers. Recent News: InStyle Magazine voted Chanel Resynchronizing Skin Care as a top beauty purchase for 2013. D-E. Brand Analysis/ Consumer Profile:
Chanel

Parent Company

Chanel.S.A

Category

Apparel and Accessories

Sector

Lifestyle and Retail

Be your own hero; Theres no thrill like discovery; Explore your world; Tagline/ Slogan Keep it classy

USP

Haute couture and prt-a-porter clothes(ready to wear) Consumer Profile

Men and women who practice an active lifestyle and are interested in Segment high fashion

Target Group

Urban men and women from higher affluent class

Wealthy, Stylish and well balanced French fashion for those who have Positioning a versatile and different attitude SWOT Analysis

1. Pioneers of prt-a-porter clothing 2. Chanel S.A. operates some 310 Chanel boutiques; 90+ shops in Asia, 70+ shops in Europe, 128 shops in North America, 2 shops in Strength South America, and shops in Oceania & Middle East. 3. Highly established brand worldwide since many years

4. Classic and timeless designs are a major part of their collection 5.They have about 1300 employees 6.Comfortable and functional clothes with the perfect style 7.Strong brand equity and loyalty 8.They are the market leaders in this segment

1.Stiff competition from other premium brands means market share is limited Weakness 2.Despite good brand visibility, brand switching is high

1.Online sale and E-marketing gaining a lot of importance 2.Emerging markets and various expansions and acquisitions abroad Opportunity 3.Product innovation and takeovers

1.Competitors in the same business providing similar kind of clothes and accessories 2.Economic slowdown and downturn also has an effect on production 3.Counterfeits and price wars are also a viable threat 4.Other cheaper and lower brands trying to copy their timeless styles Threats and selling at much affordable rates Competition

1.Gucci 2.Versace Competitors 3.Louis Vuitton Moet Hennessy

(The above was taken from mbaskool.com)

F. Advertising/Marketing Communications: Chanel uses an integrated marketing communication. Their promotional strategy includes; fashion shows and magazines. Chanel is always featured in the top fashion magazines of the world. Famous people including models and other figures are photographed wearing Chanel. Chanel also uses influentially famous people including; Marilyn Monroe and Charlize Theron as their public figure.

G. Media: Chanel spent $112 million on measured media in the U.S. in 2012. $71 million has gone to magazines. In 2011, Chanel had spent $130 million on U.S. measured media. Magazines were accounted for being $85 million. H. Promotions: Chanel optimized site page for mobile devices. Rachel Lamb of Luxury Daily stated Chanel led iconic luxury brands through the mobile-optimization of its makeup, fragrance, watch and jewelry sites. The brand left behind key competitors such as Christian Dior, Louis Vuitton, Hermes and Gucci, which do not have optimized sites, by adding another way to showcase its products. Users could search for and browse through fragrance, makeup and skincare products, as well as special offers and a store locator starting in February. Consumers could also quickly buy products from their phone. Chanel added to this strategy by allowing users to view its fine jewelry and watch sites on mobile devices. I. Internet/New Media: Chanel.com is the website for Chanel. You can read Recent News about Chanel, purchase products, and learn the history. Chanel has every major social media page. K. The Brand Value of Chanel has increased this year. The brand seems to increase each year. It has become one of the most well-known top luxury brands. II. Brand Exploratory A. I interviewed 5 people and asked them about Chanel. The questions I asked are as followed: 1. Do you know what Chanel is? 2. Do you know what types of products they sell? 3. What do you believe is the strength/uniqueness of Chanel products? I observed their responses and this is my interpretation: 1. 5 of the 5 people I asked knew what Chanel was. 2. 3 of the 5 people were able to list all the products Chanel has. The other 2 people; responded perfume and clothing. 3. 3 of the 5 people believed that Chanels uniqueness is their strength. Meaning they associated Chanel with being a classy luxury brand. The other 2; responded that it is associated with being expensive. Therefore, meaning Chanel must be of good quality. I had the 5 people I interviewed tell me their demographics. Below is the demographic of the individuals I interviewed: 1- Caucasian, 20-30 years of age, female, and works as a nurse.

2- Caucasian, 20-30 years of age, male, and works as a recruiter. 3- Caucasian, 40-50 years of age, make, and works as a recruiter. 4- Caucasian, 10-15 years of age, female, and is a 4th grader. 5. Asian, 20-25 years of age, make, and is a student.

B. I do not believe Chanel needs to change regarding their brand associations or existing brands. They have a concrete brand. Their existing brands are well known. Chanel is an excellent example of a successful luxury brand.

References Barre, Christos D. "CHANEL | Christos D. Bare." Christos D Bare. N.p., n.d. Web. 17 Dec. 2013. Metcalf, Tom. "Chanel's Wertheimer Family Seen With $19 Billion Fortune."Bloomberg.com. Bloomberg, 24 Sept. 2013. Web. 17 Dec. 2013. "MBASkool-Study.Learn.Share." Chanel. N.p., n.d. Web. 17 Dec. 2013. Lamb, Rachel. "Top 10 Luxury Marketing Ideas in 2011." Luxury Daily RSS. N.p., 03 Jan. 2012. Web. 17 Dec. 2013.