Burberry
In
Beirut Souks

“One Brand, One Company”
“The brand is not this kind of cold, static name outside a shop or outside a building or on a piece of clothing. There are values and a culture behind it."
Brand equity is a very valuable term to the British luxury brand Burberry: it lies in the famous checker pattern which is now Burberry’s trademark. Christopher Bailey’s wise words reflect the enterprise’s global strategy. But what did Burberry do to double its net income in just five years? Well, the secret is Britain’s most paid CEO, Angela Ahrendts. The hire of Angela in 2006 turned things around dramatically at Burberry’s headquarters: she understood Burberry’s core competences and its history; she understood the brand and the recent trends in the luxury sector.
About Burberry
Mission:
To maintain the integrity and vitality of Burberry, while continuing to remain relevant to ever-changing markets and consumer tastes. (World Press, 2012)
Vision:
To be the first digital end to end company.
"Our vision is that a customer has total access to Burberry, across any device, anywhere," says Angela Ahrendts. "They get exactly the same feeling of the brand and a feeling of the culture. Everyone can come to Burberry World and understand the journey that Burberry is on.” [ (SalesForce) ]
Core Values:
Protect, Explore and Inspire.
The Business Strategy:
It consists of the following steps; starting with “Leveraging the franchise”: market innovation and product excellence; “Intensifying the non-apparel development”: men’s accessories, shoes and large leather goods and through licensing;“Accelerating retail-led growth” like retail expansion and optimization; “Investing in under-penetrated markets” like china acquisition; and “Pursuing operational excellence” like study of monthly cash flow.
Burberry’s Repositioning strategy:
Burberry started by repositioning its brand to overcome the losses. The first step was updating the brand’s picture through the change from Burberry’s to Burberry with a new logo and packaging. Second, Burberry allocated a huge part of its budget on advertisements using only British figures to appear on the ads. Third is represented by the opening of the London Flagship on the New Bond Street. It was vital since it situated Burberry next to other luxury brands. This attracted international media attention to the store. At the end, with these basic steps, Burberry’s uniqueness, reliability, credibility and extensions were re-established globally.
Burberry’s Global Strategy:
New international strategy: To focus on the most basic item Burberry had; the trench coat; but with a modern twist. Ahrendts knew that the web is what Burberry needed to grow. Therefore, she created the salesforce chatter, salesforce platform and the marketing cloud: Now customers can buy Burberry products wherever they are. Their objective was clear: a total integration between the brand, the customers, the company and the employees (SalesForce). In simple back: It’s all about connections and integration. This is what is defined as social currency. (BeetTv)
Today, the consumers and their behavior around social media and social networks have fundamentally changed. And Burberry recognized that by changing its entire value chain by putting the customer at the beginning. Through social currency, Burberry made their runway rehearsals in Paris and London available one hour before the actual show on face book. This allowed the collection to be shoppable globally because the customer will be able to connect with the brand or with others about the brand. Now Burberry produces what is being ordered only to be delivered directly to the customer or to one of its retail stores. This way, Burberry is producing all of its collections several times in a year with no inventory problems, no outlet stores, little financing, no more forecasting and no more mark downs at the end of the season. (BeetTv)
In addition, Consumers can reach Burberry’s products through retail (71%) (Including digital) and wholesale (24%) channels. It also has licensing agreements in Japan and globally (Burberry).Yet In Lebanon; it is represented with a franchise with the Aishti Group (largest luxury retailer in Lebanon).
Burberry’s target market:
“Burberry maintains a broad appeal across dual gender audience of ages 20s to 50s, with high spending levels. As Burberry is synonymous with quality, style and elegance where beautiful craftsmanship is contrasted with form and function, the brand appeals to people who appreciate the British clean, smart and timeless classic style. It exudes sophistication and elegance, and at the same time, maintains modern edginess and British sensibility.” (World Press, 2012)
Can Burberry compete in the Lebanese market according to its global strategy?
The MEA (including Lebanon) constitutes 2% of the global luxury market and it is always evolving. The consumption rate in the region totaled up to 12% by 2013 (Lescashiersfm) .The region shows a very young profile with half of the population under 30. Knowing that the decisive factor of economic, social and civil growth of a country is its level of education, I have to state that Lebanon has the highest level of education in the MEA being 87.4% (Wikpedia) .Thus, Lebanese are well aware of all the brands in the world, know a lot about quality and target brands which represent elegance and class. In Lebanon, women do all the shopping and they like to do it together considering it an important leisure. Friends and family are the source of inspiration when making purchasing decisions. Malls make a huge role in the social life since they are considered as the main shopping destination. In Lebanon, consumers are logo driven and spend almost 300 $ a month on clothes. Beirut is considered a market window, and Burberry saw this opportunity by franchising Aishti (a very well known brand store) to sell its children’s wear and the Prorsum line. After that, Aishti decided to open Burberry’s own 245 square meter boutique at Beirut souks (Beirut’s number one shopping destination) carrying its entire ready to wear collections, jewelry and sunglasses. In addition, Burberry didn’t change its pricing strategy nor its marketing strategy. For example, when the store was open, only a small opening ceremony was launched and then featured in a couple of magazines. And, you rarely see an advertisement or billboard of Burberry’s new collection sold in downtown Beirut.
Looking at Hofstede’ cultural dimensions, we see that Lebanon has a high power distance (75) accepting hierarchal powers when the UK has a low one (35). Lebanon is a collectivist country (IDV= 40) when UK is an individualistic country (IDV= 80). This is explains why Burberry decided to open its own store in Beirut’s most popular shopping destination. Lebanon is a masculine (66) country putting high importance on competition just like the UK with a score of 66, meaning that these countries live to work. Lebanon has a preference to avoid uncertainty, that’s why they prefer to buy from a well known brand like Burberry which has its own identity. It makes it a Universalist country .The UK; however, has a low UAI. As for the long term orientation, the score for Lebanon isn’t available.
Finally, Burberry’s global marketing strategy works well in Lebanon because of Burberry’s brand identity. Burberry is all about the British elegance and elite status. By culture, Lebanese people want to feel elite and superior; hence, they tend to buy from Burberry to show off this status. They are loyal to the brand because it becomes a part of their personalities. Since Burberry is loyal to its heritage: being British, royal and of high quality; and since the Lebanese are loyal people by nature, they tend to value this quality along with the traditions of Burberry; this pushes them to buy more frequently from the brand. Burberry is showing success in Lebanon because Lebanese tend to shop in groups and the culture adapts to the technological innovations adopted by Burberry who also opened its own store to make the customers experience what buying from Burberry is . Burberry’s culture fits perfectly the Lebanese culture.
Appendix A:
Burberry’s History
1856: Brand established by 21 year old dress maker Thomas Burberry.
1891: Company moves into its first London stores, 20 Haymarket.
1897: Explorer F.G Jackson started wearing Burberry.
1909: Opening of Paris store at 8 Boulevard Malesherbes.
1912: The Tielockon coat is patented. It closes with a single strap and buckle fastening and only features a button at the collar.
1913: Burberry moves to a bigger London Premise.
1915: Sir Ernest Shackleton wears Burberry Gabardine.
1920: First women green gabardine ski suit.
1926: first advertisement in the British daily news.
1933: The Esquetrian Knight logo was trademarked in 1901
1947: The introduction of the new Burberry trench coat.
1992: Burberry’s women trench coat was created.
2005: Kate Moss as Burberry’s campaign model.
2007: campaign with British figures and photographer
2009: The new global headquarters open in Horseferry House in London. The opening of the American Headquarters in 444 Madison Avenue NYC.
2013: Campaign featuring 10 year old Romeo Beckham, son of famous British football player David Beckham and British pop star Victoria Beckham.
Appendix B:
Burberry’s strategy
“Innovative product design, digital marketing initiatives and dynamic retail strategies drive consistent performance” I) Leverage the Franchise a) Brand momentum i) Burberry World live ( The Regent Street Store offering a full collection with digital enriched environment) ii) Beauty( a directly operated structure) iii) Digital (the website which offers global product delivery) iv) Brand Recognition (named the number 1 with the greatest increase in brand value). b) Marketing Innovation v) Digital Engagement (twitter & YouTube live campaigns, most followed brand on Facebook, leading lifestyle brand on Instagram). c) Outdoor Investment (The art of the trench social media platform was taken outdoor.) d) Product Excellence vi) Outwear (core of the apparel business). vii) Mens ( 24% of total revenue) viii) Product Hierarchy ( runway made to order was launched) II) Intensify Accessories e) Men’s accessories f) Soft accessories g) Large Leather Goods h) Festive ( giftable products) i) Watches j) Eyewear III) Accelerate Retail- Led Stores k) Driving productivity ( training, physical and digital synchronization) l) Customer Focus m) Real estate Investment n) External recognition ( 2nd as most innovative companies in retail 2013) IV) Invest in Under-Penetrated Markets o) Engaging the Chinese luxury Consumer ( 150 mandarin sales associates) p) Developing the Middle East( customized Eid El Feter Campaigns) q) Building Central and Latin America r) Entering New Markets s) Elevating wholesales Presence V) Pursue Operational Excellence t) Technology Investments ix) Process Innovation (back office Finance and HR with enhanced risk compliance systems). x) Social entity u) Planning v) Supply Chain xi) Optimizing Logistics (in house digital operations). xii) Investments in UK manufacturing (the Woodrow facility).

Appendix C
Burberry’s Brand Positioning

Appendix D

Burberry’s distribution Channel

Appendix E
Burberry’s Brand Pyramid

Appendix F
Brand Reputation

Appendix G
Effect of digital marketing strategy on Revenues.

Numbers in Burberry’s Emerging markets (including Lebanon)

Appendix H
Product Mix triangle

Works Cited
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