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Chanel No. 5

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by

Thy Nguyen

on 26 August 2014

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Transcript of Chanel No. 5


- More sizes of package to bring more choices of price for customers

- Expand the communication of core value to a younger group of fashionable lady

- Create stronger desire and demand for Chanel No. 5 for Vietnamese women

- Create perception of Chanel No. 5 as a necessary good that every Vietnamese woman desire Reinforce current core value of luxurious, classic perfume to the existing mature users.
 Expand the communication of core value to a younger group of fashionable lady who seek for professional, independent and modern personal status
 Create stronger desire and demand for Chanel No.5 for Vietnamese women.
 Create perception of Chanel no.5 as a necessary good that every Vietnamese woman desire

CHANEL No. 5
Tran Thanh Tung - s3426052

Nguyen Hoang Yen Thy - s3461521

Nguyen Mai Ha Cam Tu - s3463599

Phan Le Thanh Truc - s3466598

Diep My Xuan Thanh - s3461554

ABOUT
CHANEL

Chanel was founded in 1909 by Coco Chanel, a French designer.
Ranking & Achievements
GROWTH RATE
5.7%
SALES
PRODUCT CATEGORY
CHANEL AND VIETNAMESE MARKET
Fake Products
TARGET CUSTOMER
- Women specific age 35 - 45
- Niche strategy
- High class income >$1,500
- Classic: classic, achieves
- Occupation: top manager, owner, celebrity
professionals, etc.
Current 4 P's
PRODUCT STRATEGIES
Levels of products
Product Lifecycle
Branding development strategy
Shopping products
Specialty products
Vietnam
Augmented product
- toll free call center
- consulting services at stores
- after sales services
- experience
Actual Product
- brand, quality, price
- design, package
- attributes
Core Value
- have a good smell
- attract others' attention
- show their status
Adapted from Bitesize (n.d)
SIZE
LINE EXTENSION
CONCENTRATION
BRAND EXTENSION
Perfume
Bath & Body
Strength
Weakness
- high brand equity
- high quality perfume
with guaranteed product safety
- wide variety of products
- successfully provide customers' experience
- lack of experience in doing business in a price-sensitive market like Vietnam
PRICE STRATEGY
Chanel No. 5 is bought less frequently and people tend to compare it with other brands such as Dior, CK, etc.
NEW PRODUCT STRATEGY
- Skimming price strategy
PRODUCT MIXING PRICING STRATEGY
Product Line Pricing
PRICE ADJUSTMENT STRATEGY
Product Bundle Pricing
Discount - Quantity discount
Segmented - Product form pricing
Strengths
Weaknesses
Develop different lines of product, variety in quantity and bundles help customers be more flexible in choosing this luxury brand
- products are still too fancy for many people
- high rice will make people compare Chanel with other brands since Vietnamese are price-sensitive
Contractual VMS
Channel intensity in Vietnam
PLACE STRATEGY
WHOLESELLER
RETAILER
CONSUMER
Indirect Marketing
PRODUCER
Chanel S.A
DFS Company (under LVMH Corporation)
IPP Corporation
Consumer
Strength
Weaknesses

- greater sales volume potential

- carry inventory, cost sharing

- local distributor offer personal consumer assistance, service, data rich environment, market research

-Create markets by offering clusters of competing brands.

- complicated and less control over products

- more channel conflict

- also sells Chanel No. 5's competitors
Strengths
Weaknesses
- reliance on local distributors in new market

- fewer resources required compared to corporate VMS

- more sales, more market coverage and faster to expand
- possible conflict between the owner and distributor

- hard to control compared to corporate VMS
Exclusive distribution

Chanel was first officially brought into Vietnam market on April 7th 2014 and now has only 2 stores in HCMC
Strengths
Weaknesses
- enhance the brand's image as if cannot be found everywhere

- promote brand loyalty

- maximize control
- low sales volume

- customers must make more effort to reach the stores

- unofficial distribution channels
141 Nguyen Hue Street, District 1
Rex Hotel base floor
34 Le Duan Street, District 1,
Diamond Plaza, base floor
Chanel's Place Strategy
- Chanel strategically located is retailers to achieve maximum customers' daily visits

- Great location: in a busy interaction and big shopping malls with enough purchasing power to ensure revenue growth averaging 15-20% / year.

- Both stores are located in crowded streets near the city center where there are many foreigners and upper class residents
Unofficial distributors
PROMOTION STRATEGY
Promotion tools
Magazines
POP displays & demonstrations
Samples
Coupons
Strengths
Weaknesses
- different promotional tools make company's name more well-known

- big celebrity names help build brand's image

- Chanel No. 5 is not well advertisted in Vietnam
Special events - Public relations
Conferences
Marketing
Direct-mail marketing
Celebrity endorsement
Marilyn Monroe
Catherine Deneuve
Nicole Kidman
Suzy Parker
Brad Pitt
MARKETING OBJECTIVES
MARKETING OBJECTIVES
MARKETING OBJECTIVE: Place & Promotion
- Increase the number of official stores

- Create customers' preference of shopping at Chanel's official stores
- Foster advertising and promotion in Vietnam

- Develop online selling
RECOMMENDATIONS
Recommendation - Place
Unauthorised distribution of products
Illegal distribution of products
Illegal distributions of products
Improvements
- Distribute flyers, release information about fake and low quality products
Research about Chanel No. 5's price of unauthorized stores -> Discount in-store products in a short amount of time to catch potential customers' attention
- Open more stores in luxurious malls to increase the product reach of customers
- Open a separated store on a crowded street like Le Loi, Nguyen Hue or Nguyen Trai to raise awareness for customers about official and authorized stores and also products
Recommendations - Promotion
Samples
Special coupons
Advertising specialties for HCMC only
- small sample of other types of Chanel perfume
- a small wallet
- a small bag
Recommendations

- Promotion
- Use Vietnamese celebrity to bring Chanel No. 5 closer to Vietnamese

- Take advantages of fashion magazines, websites, etc.

- Sponsor events such as Miss Vietnam of Vietnam Next Top Model to build luxurious image and strong impression on the public
Recommendations - Price & Product
- Communicate the value of Chanel no.5 in enhancing women's independence, seductiveness and successfulness
- More choice of volume with wider range of prices
- Enhance customers' service at store so as to attract their awareness of real value of Chanel
Fashion
Eye-wear
Fragrance
Make-up
Skin care
Watch
- DFS Company (under LMVH corporation) together with IPP corporation brought Chanel to Vietnam
- IPP corporation is a liscened distributor for the Vietnamese market
Mr. Jonathan Hanh Nguyen
President of the Pan-Pacific Group (IPP)
Conclusion
- Objectives:
Raise Brand Awareness
Build stronger Desire and Demand
Target new Customers.

- Market Share Target:
Market share increase by 0.2%
Rank in top 10
- Market Share ranking: 17(beauty and personal care)

- $7B Brand Value – 74 World’s most valuable brand (Forbes 2013)

- "One of the most iconic and influential logo in fashion industry" (Famous logo n.d.)

(Goodwin 2013)
(Luhrmann, 2004)
(C 2014a)
(C 2014b)
Total Sale $4.4 billion (Forbes 2013)
(C 2014c)
(C 2014d)
Reference
Bitesize, n.d, ‘Product lifecycles’, BBC Bitesize, viewed August 16 2014, < http://www.bbc.co.uk/schools/gcsebitesize/design/graphics/evaluationictrev3.shtml>

C 2014a, Shop No.5, Chanel.com, viewed 17 August <http://www.chanel.com/en_US/fragrance-beauty/N%C2%B05-136328>

C 2014b, No. 5 Trio Set, Chanel.com, viewed 17 August <http://www.chanel.com/en_US/fragrance-beauty/Fragrance-N%C2%B05-N%C2%B05-137380/sku/137381>

C 2014c, No. 5 Parfume Bottle, Chanel.com, viewed 17 August <http://www.chanel.com/en_US/fragrance-beauty/Fragrance-N%C2%B05-N%C2%B05-88173/sku/88175>

C 2014d, Shop No.5, Chanel.com, viewed 17 August <http://www.chanel.com/en_US/fragrance-beauty/N%C2%B05-136328>

Chanel, n.d, ‘Store Location’, Chanel S.A, viewed August 11 2014, < http://www.chanel.com/en_US/fragrance-beauty/Fragrance-88106#storelocator>

Giang, H 2013, ‘Bố chồng Tăng Thanh Hà 'buôn' hàng hiệu số 1 Việt Nam’, Baomoi.com, viewed August 15 2014, < http://www.baomoi.com/Bo-chong-Tang-Thanh-Ha-buon-hang-hieu-so-1-Viet-Nam/45/11483541.epi>


Income Inequality
Vietnamese Market Share: 2.8%
Rank 11
(Passport 2014)

Goodwin, W 2013, ‘InStyle - June 2013’, image, Theperfumegirl.com, viewed 17 August 2014, <http://www.theperfumegirl.com/perfumes/fragrances/chanel/chanel-no-5/>

Luhrmann, B 2004, ‘Nicole Kidman United’, image, Nicolekidmanunited.com, 2014, viewed 17 August 2014, http://www.nicolekidmanunited.com/Articles/Vogue/2004ZChanel/index.html

Nhuong Quyen Viet Nam News, 2010, ‘Franchise in Vietnam’, Nhuong Quyen Viet Nam News, viewed August 14 2014, <http://www.nhuongquyenvietnam.com/news/newsdetails/8803.htm>

Passport 2014, ‘Chanel SA in beauty and personal care (world)’, Passport, July, viewed 10 August 2014, <file:///C:/Users/s3461554/Downloads/Chanel_SA_in_Beauty_And_Personal_Care_(World)%20(1).pdf. >.

Forbes 2013, ‘Chanel’, forbes.com, viewed on August 18 2014, <http://www.forbes.com/companies/chanel/>

Passport 2013, ‘Frangrances in Vietnam’, Euromonitor, Viewed August 17 2014, <http://www.portal.euromonitor.com.ezproxy.lib.rmit.edu.au/Portal/Pages/Search/SearchResultsList.aspx>

Passport 2011, ‘Vietnamese Consumers in 2020: A look into the future’, Euromonitor, Viewed August 17 2014, <http://blog.euromonitor.com/2012/05/kenyan-consumers-in-2020-a-look-into-the-future.html>.

Paula, A, Terzi, P 2009, ‘Chanel No.5’, Brandchannel, viewed August 17 2014, < http://www.brandchannel.com/features_profile.asp?pr_id=455>


- Create stronger desire and demand for Chanel No.5

- Expand the targeted customers

- Increase brand’s awareness
Full transcript