Burberry Corporation was started in 1856, when the first store of gentlemen outfits was opened by Thomas Burberry. By the beginning of the World War I, the enterprise was booming and, due to its position, Burberry won the contract to supply the British troops with trench coats. Due to its contribution to the country during its time of need, the company’s reputation grew steadily. In 1020s, Burberry check targeting the British middle class was introduced. The Burberry branded trench coats gained popularity and worldwide appeal making the company among the top-notch market leaders in gentlemen outfits. Despite the success in early and mid-20th century, the huge popularity had started to wane by 1980s. The less variance society no longer yearned to clad like the upper or middleclass, and this change of dressing culture led to a failure of Burberry brand in the United Kingdom.
Change of Branding Strategy
The company was almost on its knees in the 1990s resulting in the fall in profit margin from $37 million before 1990 to less than $25 in 1997. The management was engaged in a series of serious rethinking that led to the recruitment of Rose Marie Bravo as the company’s new CEO. Marie was responsible for the turnaround of Saks Fifth Avenue, a chain store in the US, and had the necessary expertise to introduce radical changes Burberry needed the most. In 1997, the company decided to rebrand and adopted “doing a Gucci” strategy after the Tom Ford and De Sole’s stunning success. When Marie Bravo took the leadership of the company in 1997, she resolved to strategize the makeover of the Burberry brand similar to Gucci.
In the first three years since her appointment, Marie was able to transform Burberry into a 2 billion ultra-fashionable multinational brand. This transformation became a textbook example of how to transform an organization that other businesses and luxury brand now refer to as “going a Burberry”. Before 1997, the company focused more on the domestic market. The globalization of Burberry increased the reputation of the brand not only in UK, but also in other emerging markets of the period. The company invested huge amounts of money focusing on repositioning itself as a global iconic asset. However, there were several problems that Burberry encountered in trying to create a global brand.
There were some inherent dangers of globalization of Burberry brand since 1997. According to experienced industrial observers, most luxury brands tend to perform better than the mass market brands during hard economic times. According to Johnson, Scholes and Whittington, the luxury products are just a collection of basic products exceeding customer’s satisfaction level through applying additional attributes. Brands play very diverse roles in the market. They can be functional, rational, emotional, or intangible depending on the ability of a given brand to meet the required demand to express the customers through the choice of brand. For this purpose, the most challenging task is to convince the customer about advantages and benefits of the product in a manner that the advantages remain in mind for the successful implementation of brand strategy.
According to Ruigrok and Van, there are several ways in which a company can become a global brand. For example, Coca-Cola has managed to reach over 80% of the countries in the world through franchise. However, the lack of common laws that govern business operations in the world makes globalization a high-risk strategy. Burberry encountered the challenge of copyrights where the infringement of the trademark. Since 1997, the company spent approximately 2 million per annum in their efforts to fight counterfeits. According to Jobber, the company has to liaise with all police departments in the countries of operation to dragnet the fake dealers. In addition, it incurred huge internet market surveillance and monitoring services to help identify the channels of distribution in collaboration with local custom officials in the countries of operation.
Due to the increasing demand of counterfeited and pirated products, most global brands have suffered losses in terms of billions of dollars. Internet usage has fueled this problem because it easier for pirates to hide under the guise of pseudonyms, do their business and remain anonymous through the Internet. The answer to this problem is to empower the right owner of the intellectual property rights to monitor, pinpoint and enforce them to create and develop as many online promotional channels as possible. This will help in reducing the influence of the counterfeit marketers and make the products accessible. In addition, Burberry should create an anti-forgeable logo that can easily help the quality oriented buyers differentiate original products from a counterfeit.
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