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HERMES

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by

Clémence Rauch

on 4 May 2014

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Transcript of HERMES

History
1837:
Creation by Thierry Hermès of a manufacture of high quality leather saddlery. Flourishing industry at the time as horses were the main means of transport.
1867:
Entry into the world of luxury (clientele made of Kings and president from al over) thanks to winning at the universal exhibition
1897:
The founder's grand sons watched the growing use of personal cars and development of the locomotion: increase luggage offering and adapt it.
Work on export



Conservative base strategy
Continuity
: Faithful to foundations : craftsmanship, quality, family, authenticity
Convey: Classic, modern twist, unique styles: not about being in fashion: never go out of fashion
Do
not
luxury
industry: rejects mass production
`= Long term Positioning: justified exception in the luxury world
Emphasis on product quality
Made in France
Diversification: controlled coherent
up till 2000s Positioning:
social status
rather than pleasure and self expression
Product strategy
: Horizontal extension into new categories, no vertical extension on price range
Successful:
2 billions € sales, 25% margin, compared to slowed down movement for competition
Becoming a generalist luxury House
Diversification starts to intensify : Hermes resembles more a generalist luxury house like its main competitor Louis Vuitton

1920:
Collections of accessories for travel, automotive, sport.
Gloves, belts, silk scarves, jewelry..

1930s
: Continuation of this strategic orientation: development of woman's apparel product line.
Famous creations that became emblems of the brand: the Kelly bag and the most famous one the: carré scarf.

1950
: Development of the perfume branch

Original Brand image and associations
- High quality and value of craftmanship
- Logo reflects that
- Roots in Equestrian World
- Family framework: Stayed family owned and managed till 2006 then back to family in 2013: Axel Dumas
- Creative spirit
- French luxury goods
- Affiliation to sports and travel
Factors to take into account
Esthetics identified with brand identity
Similar architecture in all stores
Authentic, century old luxury mixed with modern features
Mouldings, silky fabrics
Discrete elegance, family house feel
Marketing Strategy

Thank you!
With increasing sales worldwide, does the brand identity have to evolve or be preserved, and how has this been achieved?
Goods usually mass produced in luxury sector
Marketing strategies in luxury nowadays focus on wide reaching media, extensive marketing
Service makes luxury
Digital media revolution
Hermes, luxury house, balance between
innovation, international and wider reach
Respect of traditional values and quality
Feelings of exclusivity for the consumers
Objectives
Luxury brands have democratized their CRM, get closer to consumer: Hermes's balance
1 millions fans on facebook: they are no longer passive, considered as contributers, share experience, interests...
Maintain the prestige image: no excessive online activity, focus on quality
Communication
Using
mass communication
means, digital platforms
Respect for
heritage in message:
founding values and qualities, craftwork
Main
Pattern: telling stories
poetic, unique, fantasy evoke feelings => provoke the desire to enter the world of Hermès.
Themes of sport and nature
Creative and original in media and content yet coherent with fundamentals
Same advertising worldwide
reflect strong identity and uniqueness, source of appeal to consumers

Successful: Condé Nast prize 2006 for advertising campaign: "Au fil du fleuve" and launch of the perfume "Eau des merveilles"
Specificity
: Every year the CEO chooses a theme around which to market the products. 2013:freshness whether at see or in snow.

2014: La métamorphose
the metamorphosis
A modern, innovative film that reflects the history and values of the brand
Instill youth spirit: target younger segments
Tropical setting: back to the human roots
Métamorphose: transformation of the precious materials into crafted luxury goods
link products with nature
Drop the negative aspect of a conservative strategy

Quantitative:
Appeal to new markets
Take an edge off direct competitors LVMH (Louis Vuitton, Fendi, Dior), YSL, Chanel, Gucci, Burberry

Qualitative:
Consolidate brand equity Internationally
Transform clients into ambassadors
Propose new services


Public Relations
Corporate PR that has marketing effect:
fondation d'entreprise to help young artists and talents to emerge
Help to craft and creation
Implication in education
= Reflect humanist values, nourish human and cultural capital, philanthropy

Shift: Going digital and experience marketing
BEFORE 2009:
Weak web presence: reflect craftsmanship values
Luxury world increasingly marketed by digital tools
Web now at the heart of marketing campaign,
integrated strategy, reach of the younger segments
Instituional website, eshop, twitter, facebook..
First app: advice on silk carré, fun and practical
Continuation:
Silk bar pop up store:
interactive shopping experience, retro diner atmosphere
Interactive games
associated to universal or very modern values: return to
childhood, environment
Retail Environment
Conclusion
Positioning:
unique, authentic luxury brand with strong attachment to craftwork's values and aesthetics.
All aspects of the marketing program aligned to ensure quality products and services, convey that to the consumers' mind and make their consumption experiences optimal.

Strategy
: control of production, marketing balance between innovation, appeal to more customers, and luxury exclusive feeling

Less inclined to suffer from counterfeit goods market because main point of difference is quality of goods and history of the brand, no strong shiny logos on the products.
Better sales in retail stores than other distributors thanks to environment
Investment in more stores worldwide
Guarantees product excellency
Control of the production process
Exclusive distribution for Leather goods, own stores
Full transcript