#1: Brand Identity

PART 1: BURBERRY’S BACKGROUND

Brand Heritage

Thomas Burberry was an 21 year old apprentice to the country drape when he decided to open his own store. Burberry was thus founded in 1856, in Basingstoke, Hampshire, England. Business thrived and by 1870 Burberry became known for it’s outdoorwear.

In 1879, Thomas Burberry invented gabardine – a breathable fabric made using an innovative process whereby the yarn was waterproofed before weaving. This fabric was not only water-resistant but also extremely durable. A patent was taken out in 1888.

Burberry was the original name, but then the company soon switched to using the name Burberrys, after many customers from around the world began calling it Burberrys of London.

Burberry is now a leading luxury brand with a global business. The brand is carried in boutique stores and franchises across the globe while overseeing a fashion catalog, a fragrance and cosmetic line.

The Burberry brand is defined by its authentic British heritage and is globally recognized by the iconic trench coat, trademark check and Prorsum horse logo. 257 years after its founding, Burberry still stuck by its founding principles of quality, function and modern classic style, rooted in the integrity of its outerwear.

1856: Opening of First Burberry store

1866: Invention of Gabardine, the water-resistant, durable and breathable fabric

1888: Opening of emporium in the Haymarket, London, which still stands today as Burberry’s headquarters

1911: Outfitters for Ronald Amundsen, the first man to reach the South Pole, and Ernest Shackleton, who lead an expedition to cross Antarctic

1914: Creation of the modern day “trench coat”

1920: Creation of the iconic Burberry check

Business Strategy

Burberry aims to maintain the integrity and vitality of its brand, while continuing to develop a business which remains relevant to ever-changing markets and consumer tastes. It uses a five-pronged approach strategy; namely “Leveraging the franchise”; “Intensifying the non-apparel development”; “Accelerating retail-led growth”; “Investing in under-penetrated markets”; and “Pursuing operational excellence”.

1. LEVERAGING THE FRANCHISE

Enhance consumer responsiveness and operate more efficiently and effectively, through more coordinated use of brand assets and greater integration of its global organization.

1.1 Marketing innovation

• Burberry.com site
  The site, known as Burberry World, is part of the ongoing efforts to build the Burberry community around the world. It features in six languages and transactional across 45 countries. Burberry World is the ultimate expression of the Burberry brand, allowing customers globally to connect with all its aspects, from heritage, to music and video, to the full product offer. Through the use of dynamic audiovisual content Burberry World engages, entertains and interacts. An ultimate online luxury shopping experience is established through a personalized customer service application that allows customers to call and chat with sales staff in real time and in 14 languages.

• Extended luxury leadership position in social media
  Burberry engages consumers through extensive social media platforms to connect them with the brand. Burberry continues to build its leadership position amongst luxury brands on Facebook, Twitter and YouTube. It also launched the brand on Chinese social media sites Sina Weibo, Kaixin001, Douban and YouKu, after establishing country-specific Twitter accounts in Brazil, Mexico, Japan, Turkey and Korea earlier in 2011. The Group’s own social media site, artofthetrench.com, aims to inspire people around the world and across generations to share their experiences of the iconic trench coat.

• Continued transformation of fashion shows
  In order to reach a wider global audience, Burberry adopts livestream technology to broadcast key moments in previously closed-door events. ‘Retail theatre’ technology also allowed the livestreaming of shows directly to flagship stores globally. The development of instant digital commerce purchase capability, supported by supply chain innovation, allows customers for the first time to buy directly from the runway for delivery in seven weeks. Further innovations, e.g. streaming shows in 3D to five locations around the world, and hosting shows on iconic video screens, have continued to broaden global reach and awareness.

• Further digitization of the brand
  Burberry continues to invest and focus on infrastructure development in its creation and distribution of digital assets, advocating the spirit of innovation and excellence in its world-class creative and IT teams.

1.2 Product excellence

• Key apparel categories outperformance
  Outerwear i.e. the iconic trench and other contemporary styles, is the core and key growth driver of Burberry’s apparel business. At the top end of the pyramid, fashion outerwear drove outperformance from Prorsum, Burberry’s runway collection.

• Integrated menswear
  SS11 was Burberry’s first fully in-house global menswear collection. Historically a licensed business, the Group exited all its licenses, enabling the relaunch and repositioning of this category. This first pure collection drove outperformance in menswear during the year, with reported growth of 31%.

• Further built childrenswear
  Childrenswear was formally integrated into the global business in 2010/11 with products aligned with core design and merchandising strategies.

There is intensification of ongoing efforts to correct legacy issues that are inconsistent with the global luxury positioning of the Burberry brand. A key focus has been to upgrade the brand’s positioning with wholesale partners. Some Japanese non-apparel licenses were terminated, and the restructuring and transformation of the Spanish business were successfully completed.

2. INTENSIFYING NON-APPAREL DEVELOPMENT

Intensify and focus on under-penetrated non-apparel categories to leverage its design and merchandising expertise and iconic branding, through investment in product development, marketing and supply chain.

Non-apparel remains a key driver of growth, being Burberry’s fastest growing product category. These are:

• Large leather goods
  Large leather goods remain the backbone of the Burberry non-apparel business.

• Men’s accessories
  Men’s accessories was amongst the strongest performing categories within non-apparel through wholesale and retail channels, driven by a significantly expanded assortment servicing increased demand.

• Shoes
  Women’s shoes represent an important growth opportunity for Burberry. Its boots, a natural complement to the Burberry outerwear offer, performed particularly strongly.

2.1 Licensing

• Beauty
  Burberry Beauty reinforces the brand’s core trench and outerwear heritage through its focus on natural, effortless beauty. It was first introduced through wholesale partners and later directly to customers on burberry.com. It is now supported by digital assets and used in all Burberry advertising campaigns and runway shows.

• Global licenses
  Burberry has three global licensing agreements: fragrance (Interparfums), timepieces (Fossil) and eyewear (Luxottica). Burberry strengthened its organization to manage its relationships more intensively, aligning strategies to grow their potential in-line with owned categories.

3. ACCELERATING RETAIL-LED GROWTH EXCELLENCE

Shift company culture and operation processes from a static wholesale model to a dynamic retail model.

• Retail expansion and optimization
  26 mainline stores were opened during 2010/11, including a new flagship in Beijing, while 34 concessions were added. In line with the Group’s flagship cluster strategy, half of the new stores were opened in existing high profile markets, while store renovations included major upgrades in Boston and Las Vegas.

• Digital integration
  Investment in in-store “Retail Theatre” technology enabled Burberry to leverage innovative content across all platforms, synchronizing consistent messages to customers across all mediums for the first time. This also provided unrivaled audiovisual experience for customers in stores. iPads were also introduced to selected stores globally, allowing access to increased inventory through Burberry World.

• Productivity gains
  A global Customer Service team offers 24/7 tailored support to customers in 14 languages, by telephone, email and through the new “Click to Call” and “Click to Chat” functions on Burberry World. Client Services, which provides a personalized luxury service to important clients, expanded to 30 locations across the world, and the Burberry Experience sales and service program extended from the Americas, Asia and Europe to Emerging Markets including China.

• New concept tests
  The Brit store concept was rolled out in 2010/11, following the opening of the first test store in New York. Five new stores showcasing this casual, contemporary expression of the Burberry brand were also opened.

4. INVESTING IN UNDER-PENETRATED MARKETS

Focus on and invest in under-penetrated markets; both developed and emerging, through distribution channels and a variety of business models.

• China acquisition
  The Group acquired 50 stores across 30 cities, which had previously been operated by its Hong Kong-based franchisee, giving Burberry control of its brand in the fastest-growing luxury market in the world. 10 new stores have opened since the acquisition, including Burberry’s most digitally-advanced flagship in the world in Beijing. Merchandising and inventory initiatives have also successfully driven productivity in existing stores.

• Extended presence in Latin America, India and new markets
  Burberry continued to extend the Burberry presence in these high growth markets like India, Sao Paulo and Dubai. Stores were also opened in Emerging Markets this year through franchise partners.

• Building wholesale
  The Group built separate London, Brit and childrenswear corners in department stores, exiting generic outerwear departments and adding real estate for menswear. A focus on building in-season replenishment capability supported growth. The Group also focused on building the Burberry Travel Retail business.

5. PURSUING OPERATIONAL EXCELLENCE

Continue to pursue goal of being recognized as much for operational expertise as for product and marketing excellence.

• Enhanced capabilities
  Reinforcing and refining core back-end disciplines was a central focus, specifically in replenishment, planning, logistics and sourcing. Enhancement of replenishment practices and development of a global pricing architecture were done across all product categories, enabling better execution and inventory management. Improvements in sourcing and quality programs were introduced to factories and distribution centers globally. Logistics enhancements enabled the execution of monthly deliveries and fulfillment of in-season reorders.

• Introduced monthly flow
  Burberry executed a synchronized monthly flow of new product and floorsets across its physical and virtual real estate, featured in tailored digital assets. Requiring a coordinated and integrated approach across the business, this new approach introduces a refreshed offer each month, while providing a strong platform from which to connect customers more regularly with the brand.

• Continued SAP implementation
  80% of stores were covered by the end of the year, with the incorporation of China and Burberry Middle East scheduled for the near future. Burberry also successfully implemented a new, single SAP HR database for the records of employees in 25 countries across Europe, the Americas and Asia. Hence Burberry can align its global HR processes and structures, and provide global visibility for the first time.

• Prioritized organizational effectiveness
  Further senior level governance structures have been established to leverage operating best practice globally and to coordinate all capital investments. The foundation was also set for the establishment of a global shared services team to drive efficiencies and enhance financial control across the business, while global strategy teams have been established to build detailed foresight for all regions. Externally, partnership working continues to bring benefits in key areas such as corporate responsibility. Burberry also joined the Ethical Trading Initiative during the year, making it the first luxury brand to do so.

(Adapted from Buberry plc)

PART 2: BURBERRY’S BRAND PYRAMID

Word Association Map

This is the association map showing what consumers think of when they think of the Burberry brand. These words are a compilation of our own associations of Burberry, our casual survey among our friends and family, as well as our research on what people are saying about Burberry on online communities and forums. Words that are relatively larger in size have been mentioned more frequently by consumers and hence greater in association strength. These include “Emma Watson”, “Checks”, “Expensive”, “British”, “Trench”, “Bags”, “Classy” and “Beige”. Other interesting medium-sized words to take note of include “Boring”, “Elite” and “Branded”.

Brand Pyramid

Salience

Burberry seems to have a moderate brand salience. It has high brand name recognition, but scores lowly in brand recall and brand logo recognition. Several strong, favourable and unique brand associations include “Checks”, “Trench”, “British”, “Bags” and “Beige”. Burberry also has strong product category membership in the outerwear and bags category.

Performance

Burberry has quite a high brand performance. Burberry sticks by its British identity, promising its customers the true-blue English style, through clean and smart designs, with checked prints being a well-recognized symbol of the brand. The Burberry trademark also gives consumers the assurance of consistency in the quality and durability of products delivered. In terms of service, Burberry has been very effective in terms of receiving timely information and help through its well-managed official website and social networking sites like Facebook. In fact, going digital is one of Burberry’s key strategies to ensure that customers’ needs can be served efficiently and effectively and this has won the company the ‘Digital Innovation Award’ in 2010.

Imagery

The brand supports a relatively strong image that is synonymous with quality, style and elegance. 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. However, it is also associated with being old and boring among the y0unger target market.

Judgment

Burberry has quite a positive brand judgment in the eyes of the general consumers. The Burberry brand has been known as one of the oldest and most respected British fashion brands. Consumers recognize it for its symbolic trench coat, high quality products, distinctive checks prints and classic British style. However, in the eyes of the younger consumers, Burberry does not stand out and seems overpriced, and hence they have a low consideration for this brand.

Feelings

The Burberry brand evokes more private and enduring feelings of social approval and self-respect. Consumers feel a great sense of social approval because they feel elite, fashionable and attractive when people see them wearing the Burberry brand. Consumers also have a strong sense of self-respect because they feel confident, sophisticated and wealthy when they are wearing the brand on themselves.

Resonance

Burberry has a strong, loyal following who takes pride in expressing their personal styles through the brand. As such, the brand enjoys a high repeat purchase rate from this group of consumers. By owning a Burberry product, consumers feel that they are a part of the elite community, almost on par with the A-list celebrities who are often seen in Burberry’s apparel or carrying Burberry’s accessories. This elite community, gathers online at Burberry World to connect with the brand, and with each other. Burberry has also undertaken strong efforts to actively engage its consumers to better understand the brand story, as seen from the Art of the Trench initiative. The brand also actively engages its consumers through social media to give them the latest updates, such as new product launches or campaigns.

All in all, Burberry’s brand resonance is moderate because the level of intensity and the depth of the psychological bond that it has with its consumers are not very high. This may be due to the wide array of choices that consumers have.

PART 3: BURBERRY’S POSITIONING

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.

Brand Positioning

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