module rinciples of marketing big assignment hermés marketing mix strategy

4 INTRODUCTION In the world of luxury fashion, there are few brands that embody the essence of timeless elegance, meticulous craftsmanship, and unwavering dedication to quality quite lik

TRƯỜNG ĐẠI HỌC KINH TẾ - ĐHQGHN

KHOA TÀI CHÍNH NGÂN HÀNG –

MODULE: PRINCIPLES OF MARKETING

BIG ASSIGNMENT

HERMÉS MARKETING MIX STRATEGY

Date of birth: 23/09/2004

Student code: 22050483

Teacher: Nguyễn Văn Phương Class code: BSA2002-E

Hà Nội, ngày 30 tháng 1 năm 2024

2

TRƯỜNG ĐẠI HỌC KINH TẾ - ĐHQGHN

KHOA TÀI CHÍNH NGÂN HÀNG –

MODULE: PRINCIPLES OF MARKETING

BIG ASSIGNMENT HERMÉS MARKETING MIX STRATEGY

Date of birth: 23/09/2004 Student code: 22050483

Teacher: Nguyễn Văn Phương Class code: BSA2002-E

Hà Nội, ngày 30 tháng 1 năm 2024

3

Table of Contents

INTRODUCTION 4

PART I: HERMES INTRODUCTION 5

1 Some information about Hermes 5

2 Hermes product and service 5

PART II: HERMES MARKETING ENVIRONMENT, MARKET SEGMENTATION, CHOOSING TARGETED MARKET AND PRODUCT POSITIONING 6

2.1 Hermes marketing evironment 6

2.2 Hermes Maket segmentation 8

2.3 Hermes targeting 9

2.3.1 Hermes targeting customer 9

2.3.2 Hermes Targeting market 10

2.4 Hermes Product positioning 10

2.5 Hermes customer behavior 11

PART III: HERMES MARKETING MIX STRATEGY FOR BIRKIN BAG .11

1 Product strategy: 11

2 Price strategy: 13

3 Promotion strategy: 13

4 Place and distribution strategy: 14

PART IV: RECOMENDATIONS 15

CONCLUSION 15

SOURCES 16

4

INTRODUCTION

In the world of luxury fashion, there are few brands that embody the essence of timeless elegance, meticulous craftsmanship, and unwavering dedication to quality quite like Hermes This assignment will discuss about many aspects in Hermes marketing and it s marketing mix strategy ’

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PART I: HERMES INTRODUCTION

1 Some information about Hermes

Hermès International, often known as Hermès of

Paris or Hermes, is a French luxury goods firm It has

continuously been regarded as the world's most valuable

luxury brand in several valuation and rating assessments

conducted by top consultancies Hermès has an iconic

reputation in the world of luxury Hermès holds a strong

position in the highly competitive and brutal world of

luxury due to its long legacy, superb workmanship,

attention for detail, and high standards of quality and

professionalism throughout the manufacturing process

Thierry Hermès established the company in 1837 as a harness workshop in Paris His first intention was to meet the demands of European noblemen by providing saddles, bridles, and other leather riding gear In the early twentieth century, Thierry's son Charles-Émile Hermès relocated the company's shop to 24 Rue Du Faubourg Saint-Honore in Paris, where it still stands today and serves as the company's global headquarters

Gradually, the company’s product offerings expanded through generations The company now employs over 15,000 people and runs 311 locations worldwide, including in the United States, Russia, and Asia As of 2023, it was one of the world's largest and most admired luxury brands, with revenues of € 10,063 million and profits of more than € 2,226

million (Roll, 2022)

2 Hermes product and service

Hermès manufactures a wide range of ready- -wear clothing as well as accessories, to including blazers, jackets, coats, dresses, sweaters, skirts and scarves The brand is also recognized for its luxury jewelry, watches, and perfumes In addition to its famed fashion pieces, Hermès manufactures a wide range of home design goods, including furniture, dinnerware, bedding, and home accessories Hermès also provides interior design, personal shopping, and private tours of its locations Hermès has its own web store, where customers may buy its items and services The firm also provides a number of exclusive promotions, including limited-edition items and special prices

The Birkin Hermès bag is an icon in the fashion world, highly sought-after by celebrities and the handbag-obsessed The Birkin Hermès design is a collaboration between Jane Birkin and Hermès CEO Jean-Louis Dumas The Birkin Hermès Bag

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remains a coveted Hermès bag thanks to its signature Hermès craftsmanship and exclusivity The Birkin Hermès Bag takes expert artisans a minimum of 18 hours to create and is marked with a code that identifies its year of creation, the workshop it was crafted in, and the artisan who made it How to Buy a Birkin Bag directly from Hermès requires an extensive purchase history with the brand Hermès only allows boutiques to purchase a select number of Hermès Bags Birkin on a bi-annual basis and the style of Birkin Hermès delivered to boutiques is rarely known ahead of time

Image: Some design of Birkin Bag

PART II: HERMES MARKETING ENVIRONMENT, MARKET

SEGMENTATION, CHOOSING TARGETED MARKET AND

PRODUCT POSITIONING

2.1 Hermes marketing evironment

Hermès is one of the leading brands in the lifestyle and retail sector Hermès SWOT analysis evaluates the brand by its strengths & weaknesses which are the internal factors along with opportunities & threats which are the external factors Let us start the SWOT Analysis of Hermès: (Story, 2022)

1 Brand Reputation: Hermès has built a

reputation for quality, exclusivity, and

prestige over its long history It’s recognized

globally as a high-end luxury brand and is

often associated with the world’s most

affluent consumers

2 Quality and Craftsmanship: Hermès is

renowned for its artisanal craftsmanship an

superior quality, which contributes

significantly to its brand image Products

1 E-Commerce Expansion: There is an increasing trend towards online shopping, especially in the luxury goods sector Expanding its online presence and e-commerce capabilities could allow Hermès reach a broader audience and adapt to changing consumer behaviors

2 Emerging Markets: As the middle and uppe classes continue to grow in emerging marke there are opportunities for Hermès to expan

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such as the Birkin and Kelly handbags are

handcrafted and produced in limited

quantities, contributing to their exclusivity

3 Diverse Product Portfolio: Although best

known for its leather goods, Hermès has

successfully diversified its product portfolio

which includes jewelry, watches, home

furnishings, perfumery, and ready- -wear to

clothing This diversification reduces

dependence on any single product categor

4 Global Presence: Hermès has a strong

global footprint with boutiques in major

cities worldwide They have a particularly

strong presence in the Asia-Pacific region,

which has seen significant growth in luxury

consumer goods

5 Controlled Distribution Network: Hermès

tightly controls its distribution network,

primarily selling its goods through its stores

This allows it to control the customer

experience, protect the brand image, and

preserve the exclusivity of its products

6 Cultural and Artistic Commitment:

Hermès is firmly committed to the arts and

culture, manifested in the Fondation

d’entreprise Hermès, contributing to its

reputation and appeal among discerning

consumers

its global footprint Countries such as India, Brazil, and parts of Africa present significan potential for luxury goods as their economie grow

3 Sustainability and Ethical Fashion: Consumer awareness and demand for sustainable and ethically-produced products are increasing Hermès could appeal to mor environmentally-conscious consumers by emphasizing sustainable production method and transparency

4 Personalization and Customization: Personalization is a growing trend in the luxury market Offering more bespoke or customizable products could enhance customer engagement and differentiate Hermès from competitors

5 Millennial and Gen Z Market: Younger consumers are becoming a significant segm

of the luxury goods market Creating produc

or marketing strategies that appeal to millennials and Gen Z could present an important growth opportunity

6 Brand Collaborations: Collaborations with other brands or influential figures could help Hermès to reach new audiences and tap int different markets

7 Digital Marketing and Social Media Engagement: Greater investment in digital marketing and social media can help the bra reach a broader and younger audience, rais brand awareness and potential sales

1 Brand Reputation: Hermès has built a

reputation for quality, exclusivity, and

prestige over its long history It’s recognized

globally as a high-end luxury brand and is

often associated with the world’s most

affluent consumers

2 Quality and Craftsmanship: Hermès is

renowned for its artisanal craftsmanship an

superior quality, which contributes

significantly to its brand image Products

such as the Birkin and Kelly handbags are

1 Economic Instability: Given that Hermès operates in the luxury market, economic downturns could significantly affect its sales

as consumers tend to cut back on luxury purchases during such periods

2 Changing Consumer Trends: The fashion industry is subject to rapid and often unpredictable consumer tastes and preferen changes If Hermès cannot adapt to these changes quickly enough, it could impact its sales and brand image

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handcrafted and produced in limited

quantities, contributing to their exclusivity

3 Diverse Product Portfolio: Although best

known for its leather goods, Hermès has

successfully diversified its product portfolio

which includes jewelry, watches, home

furnishings, perfumery, and ready- -wear to

clothing This diversification reduces

dependence on any single product categor

4 Global Presence: Hermès has a strong

global footprint with boutiques in major

cities worldwide They have a particularly

strong presence in the Asia-Pacific region,

which has seen significant growth in luxury

consumer goods

5 Controlled Distribution Network: Hermès

tightly controls its distribution network,

primarily selling its goods through its stores

This allows it to control the customer

experience, protect the brand image, and

preserve the exclusivity of its products

6 Cultural and Artistic Commitment:

Hermès is firmly committed to the arts and

culture, manifested in the Fondation

d’entreprise Hermès, contributing to its

reputation and appeal among discerning

consumers

3 Increased Competition: The luxury market is highly competitive, and Hermès competes with other high-end brands for market share New entrants or innovative offerings from existing competitors could pose a threat

4 Counterfeiting: Like many luxury brands, Hermès faces the threat of counterfeiting High-quality counterfeit products can damag the brand’s reputation and reduce its perceived exclusivity

5 Supply Chain Disruptions: Hermès’

commitment to craftsmanship and quality involves complex supply chains, which political instability, labor disputes, natural disasters, or pandemics could disrupt

6 Regulatory Risks: Changes in trade policies import/export regulations, and other laws ca impact Hermès’ operations, particularly as it operates in many different countries with different legal frameworks

7 Sustainability Concerns: As consumers become more environmentally conscious, there is increasing pressure on fashion bran

to demonstrate sustainability Failure to do s could harm Hermès’ reputation

8 Overdependence on Certain Markets: Hermès derives a significant portion of its sales from the Asia-Pacific region Economi

or political instability in this region, or changes in consumer behavior, could impac Hermès’ performance

2.2 Hermes Maket segmentation

• Geographic: Hermès has a global presence and caters to luxury consumers in various regions, including Europe, Asia, and the Americas The brand tailors its marketing efforts to suit the preferences and cultural nuances of different markets

• Demographic: Hermès caters to an affluent consumer base with high disposable income The brand targets individuals who appreciate fine craftsmanship, quality, and exclusivity

• Psychographic: Hermès focuses on customers who value sophistication, elegance, and timeless style The brand appeals to those seeking unique and prestigious products that showcase their refined taste and status

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2.3 Hermes targeting

Hermès employs a selective targeting strategy, aiming to appeal to an exclusive segment of affluent customers who appreciate luxury and seek exceptional quality and craftsmanship The brand targets individuals who desire unique and timeless luxury products, willing to invest in items that exude prestige and exclusivity Hermès focuses on building long-term relationships with its target customers, nurturing brand loyalty and advocacy

2.3.1 Hermes targeting customer

Hermès is a luxury fashion brand known for its high-quality craftsmanship, exclusive designs, and exceptional materials The brand’s target customers can be categorized into different customer personas, each with unique characteristics, preferences, and needs Here are three primary customer personas for Hermès:

1 The Affluent Professional

- Demographics: This customer is typically between 35 and 60 years old, with a high income and a successful career in industries such as finance, law, or technology They have a college degree or higher and likely reside in affluent urban or suburban areas

- Psychographics: They value quality, exclusivity, and craftsmanship and are willing

to pay a premium for luxury goods They have a sophisticated taste and prefer timeless, classic styles that showcase their success and status They are well-traveled and appreciate the cultural significance of Hermès as a global luxury brand

- Buying behavior: This customer regularly purchases Hermès products, such as leather goods, silk scarves, and ties They may also invest in high-ticket items like Birkin and Kelly bags as a symbol of status or as an investment

2 The Fashion Forward Trendsetter

- Demographics: This customer is typically between 25 and 45 years old, with a high disposable income They work in creative industries such as fashion, design, or entertainment and are often seen as influencers among their social circles

- Psychographics: They are fashion-conscious and always on the lookout for the latest trends and styles They appreciate the exclusivity and prestige associated with Hermès, but also value the brand’s unique collaborations with contemporary artists and designers

- Buying behavior: This customer frequently purchases limited edition and seasonal items, such as fashion accessories, ready-to-wear collections, and special edition bags They may also share their purchases on social media, generating buzz and helping to maintain Hermès’ status as a desirable luxury brand

3 The Aspirational Shopper

- Demographics:This customer is typically between 20 and 40 years old, with a moderate income and a strong desire to elevate their social status They may be early

in their careers, working in industries such as marketing, education, or retail

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- Psychographics:They aspire to live a luxurious lifestyle and are willing to save and invest in a few high-quality, status-enhancing items They admire the craftsmanship, heritage, and reputation of Hermès and see owning their products as a sign of success

- Buying behavior:This customer may save up to purchase one or two iconic Hermès items, such as a silk scarf, a leather belt, or a small leather good They may also shop during sales or at second-hand luxury stores to find more affordable options These customer personas represent different segments of Hermès’ target market, each with distinct preferences, motivations, and buying behaviors The brand’s ability to cater to these diverse personas is one of the reasons for its enduring success in the luxury fashion industry Hermes targets high- d luxury consumers who value quality, exclusivity, and en craftsmanship The brand’s target customers are typically high-net-worth individuals who are willing to invest in high-end luxury products that are crafted with the utmost attention

to detail and quali (Team, 2020) ty

2.3.2 Hermes Targeting market

Hermes’ target markets are primarily in developed countries, particularly in Europe and North America The brand has a strong presence in France, where it is headquartered,

as well as in other European countries such as Italy and the United Kingdom Hermes also has a significant presence in North America, particularly in the United States In addition

to its core target market of high-end luxury consumers, Hermes has also expanded its reach

to appeal to a broader audience The brand offers a range of products at different price points, including its perfumes and accessories, which are more accessible than its iconic leather goods This strategy allows the brand to appeal to a wider customer base while maintaining its position as a symbol of luxury and exclusivity

Image: Hermes target markets by geography

2.4 Hermes Product positioning