The solid consumer perception of the brand ethics and quality product offering back then set an immediate competitive advantage around the introduction of the additional items added to the clothing range. The Diesel brand portrays a lifestyle, something for the consumer to buy into rather than just buying a piece of clothing and this is reflected in one of their tag lines to ‘make people feel different and provocative’(Ennic Gilli Fort 2005).
They themselves are passionate about the products they create and their commitment to produce quality, comfortable and trendy clothing have undoubtedly helped to build the consumers trust and belief in them and what they stand for. These brand qualities are carried right through their range and the consistent brand promises they emit only add to the success of selling their products. Diesel continues to diversify their collection and since 2000 have launched a premium sunglasses range, popular fragrances, wrist watches and even a hotel chain!
The move to extend the brand outside a clothing range has allowed them to widen their target market and acquire customers from segments they may not have with just as a clothing brand. The product extension can also increase the retention of their current customer base by offering even more desirable consumables and in turn build on the consumer’s emotional feeling to want the products. The Brand name itself is carried forward to the new product categories and this can potentially give an immediate competitive advantage in a sometimes overcrowded marketplace.
... it from competing products and which assures consumers that the product will be of high and consistent quality" The brand image of a product has to ... For example luxury items such as fast cars and expensive clothing connote wealth and taste so the people who want to ... from Gucci or Prada because these companies brand themselves as top of the range luxurious items that command premium prices. Items ...
Another benefit for Diesel is the trust created between the customer and the brand through quality consistently in their clothing, the customer knows what to expect from their purchase. This trust can be seen as an emotional attachment which in turn can strengthen consumer loyalty to Diesel. Pricing: Premium pricing can give the perception that Diesel is a more of an exclusive brand but also, the brand success can allow their products to fall within the premium price range thus only increasing the bottom line through the sales of high margin products.
The result of selling high margin products which ultimately leads to a greater cash flow, and this allow Diesel to incorporate above the line marketing campaigns in to their marketing strategy. A healthy budget can be set aside for these mass campaigns only strengthening the brand further. People: I think undoubtedly the dedication, passion and creativity of Diesel’s workforce shows through in their brand and also makes them a desirable brand to be employed by. Place: Diesel flagship stores and selective distribution of their products are another benefit for Diesel.
The stores embody the core image of the brand and the marketing within these stores is to focus on channelling this image to the customer on entering the store. Promotion: Diesels strong brand which exudes passion and energy is clearly shown in their marketing strategy. Using a combination of ‘above the line’ and ‘below the line’ marketing techniques, their promotions are always aimed at engaging the customer and creating a two way dialogue. Both methods are beneficial to the brand but in different ways. Through Diesels above the line campaigns, they can reach the mass market and attempt to push the lifestyle aspect they really believe in.
This can be seen in their advertising campaigns consistently, where the images used can be thought provoking, sometimes bold and occasionally controversial, the most recent ‘Be Stupid’ campaign being an example. The idea is to encourage the customer to interact with the brand, the lifestyle, on the chance if they like it, they’ll also like the products. The launch of Diesel U Music in 2001 is a prime example where engagement and interaction with the customer is key to its success, ‘A year ahead of MySpace Diesel:U:Music ventures online forming one of the fore runner digital music communities’ (Diesel, 2012) Benefits for the consumer: Price:
An examination of brand equity leading to customer loyalty in the clothing industry using the Loyalty Ladder model. Abstract Purpose – The aim of this paper is to examine if there is a correlation between brand equity and brand loyalty. The author will research the sources of brand equity for three international clothing companies: Abercrombie & Fitch, Marks & Spencer, H&M and ...
Quality and price transparency amongst the range of products mean the customers know what to expect from their purchase and can trust the brand. Consumers are willing to pay for quality goods and they then benefit from the quality. Product: It could be said that wearing Diesel clothing says something about the person who wears them, the consumer may feel it gives them status. The consumer’s personality may be expressed through the clothes they wear, and Diesels distinctive clothing range focuses on quality and identity but at the same time their marketing campaigns embody a funky vibe that it’s cool to be uncool with slight comical aspect. Mazurek 2011) The consumer can also engage with the brand and can feel part of the lifestyle portrayed through the ad campaigns. There can be a perception in the wearers mind that the clothing can enhance their self-image and thus fulfil the need for self-expression. Consistency, consumers know what to expect from the premium product they’re purchasing – Diesel consumers know what to expect when they purchase a Diesel product. There is a clear quality and price transparency which builds a trust between the customer and the Diesel brand.
This can mean there is less risk involved when the consumer comes to making decisions in the buying process. The customer’s perception of the brand must encompass value and promises of quality, clearly Diesel consumers benefit here as Diesel deliver on both. (Jacobson 2010) Q2. Conduct a comprehensive SWOT analysis on the Diesel Company. Note this question also requires you to research the company history. SWOT Definition: Situation analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
SWOT stands for strengths, weaknesses, opportunities, and threats. Internal Internal Positive Positive Negative Negative External External Strengths: Diesels brand identity is global, and its presence is over 90 countries worldwide backs this up. They have worked hard developing and refining what the brand stands for. The tag line, ‘For Successful Living’, born from the 1991 global marketing strategy represented the brand perfectly and paved the way for the fashion phenomenon that followed. Matt Haig 2004) Creative and passionate staff are a positive for any company and with Diesel the fact that their workforce are fully committed and believe in the brand itself shows through in their products and promotional campaigns. Rosso’s leadership skills drive the workforce, he is admired and it could be said he is a very inspiring character. According to Lipke (2010) Renzo was named as a Global Leader by Millennium Promise, a social group who were set up in 2005 by two men, Jeffery Sachs and Ray Chambers, their aim is to halve worldwide poverty by the year 2015.
Introduction to Business Business plays a major role within our society. It is a creative and competitive activity that continuously contributes to the shaping of our society. By satisfying the needs and wants people cannot satisfy themselves, businesses improve the quality of life for people and create a higher standard of living. It is a way for individuals to provide goods and services to ...
Rosso serves as an ambassador for Millennium Promise and also provides funding for the project. And in the words of the founders himself Jeffery Sach’s “To have Renzo on your side is energy and creativity and ingenuity and reach. When you have someone who is world-class energy and world-class creativity, it makes a huge, huge difference”. (David Lipke 2010) Weaknesses: Diesels premium pricing strategy can be seen as a disadvantage to them as an item is only worth what a consumer is prepared to pay for it.
The perception of quality and brand image must shine through in the products and meet the expectations of the customers. If these expectations are not met the risk is in not retaining and producing a loyal customer. This analogy can also feed into the fact that they do not own the majority of the stores retailing their products. The lack of control over the concession stores means that Diesel has to trust and rely on the individual retailers to promote products the Diesel way. This can mean that the Diesel image portrayed to potential customers is not consistent with the brand guidelines.
Opportunities: Brands often use celebrity endorsements in order to heighten brand awareness and drawn attention to mass marketing campaigns. According to Spielman (1981), the use of a celebrity in an advertising campaign can make the ad more distinguishable and give a sense of sincerity. A celebrity endorsement is an obvious opportunity for Diesel as a global brand to make their products even more desirable however it could be debated whether their campaigns would ever actually require an endorsement as they are quite successful as they are. Threats:
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The black economy and the sale of counterfeit goods can seriously damage a brand image. Companies can experience a profit loss and the consumer is exposed to low quality products which can in turn affect brand loyalty. It is estimated by Reconnaissance International, a publishing/consulting firm, the black market costs the global economy $500 billion and proceeds have been used in criminal activity which in itself is a huge issue. (Brian H Murray 2004) The recent worldwide economic downturn has been more than a concern for most organisations.
As a lot of consumers have tightened their purse strings, demand for certain products fall and the clothing industry is certainly not immune to the crisis. Back in 2009 Diesel seemed to have escaped the negative effects of the downturn according to their CEO (at the time) in this statement, and also had no intention of trimming prices either “A lot of brands will go out there with lower pricepoints. But is Apple discounting the iPod? No. Is Diesel going to screw around with our denim? No. It’s a short-term economic blip, we’re still up single digits this year.
We’re going to attack the market with innovations, not cost reductions. ” Good to hear some positivity, however I fear no one is out of the woods just yet. Q3. Discuss using Diesel and other related clothing brands as examples, the benefits and limitations of premium pricing. In your opinion, what impact do you feel the global economic turndown has had on the premium clothing industry? Definition Premium Pricing: Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price (Gittings 2002).
Pros and Cons of Premium Priced Clothing Pros: It can be argued that premium pricing can create demand for a product. In Diesels case the decision to reduce, by 40%, the number of outlets where the Diesel products are sold meant they could carefully choose where the products are available thus creating more demand. This was a strategic and deliberate move, which chose stores where consumers were will willing to pay a premium price for the perceived luxury items. As the distribution on some products halved, pricing doubled on other products which only made the items more exclusive and they weren’t as widely available.
In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services. In modern economies, prices are generally expressed in units of some form of currency (For commodities, they are expressed as currency per unit weight of the commodity, e.g. Tshs per kilogram.) Although prices could be quoted as quantities of other goods or services ...
Diesel was able to advertise in high-end magazines and boosted their advertising budget considerably after the move. . (Malone 2005) The G-Star Jeans brand is another example of where premium prices are charged based on the consumer perception of the brand. The brand positions itself as creating authentic, innovative, avant-garde clothing. With unique qualities clearly identifying their jeans and the continuous innovation to stay on trend, they have built up a strong consumer following which allows them to charge premium prices. (www. infobarrel. om, No date) For both, a premium pricing strategy can also result in a healthy profit margin! Cons: Premium pricing strategy can have a negative side in that it is assumed that the consumer will pay the price. The risk can be that the consumer expects a high quality product and if those expectations are not met a bad buying experience is felt. Another disadvantage is that competitors can undercut prices and this can potentially lead to a loss of sales. Selective distribution in order to make the products more exclusive and therefore keep at premium prices can also lead to a narrower segment of the market accessing the products. Giddens, Parcell, Brees 2002) Effects of the global economic downturn on the premium clothing industry, in my opinion: I think the downturn in the global economy has had a heavy impact on the fashion and clothing industry in relation to companies. On trend and branded clothing tend not to be on the priority list when a consumer comes to purchasing new clothes these days in my opinion, there’s just not enough pennies in the pocket and I think customers will search for bargains more often than not.
Created by two avid surfers, Billabong is a brand designed by surfers, for surfers. In 1973, Billabong offered little more than a small range of surf wear: mainly surfboards and board shorts. But today, Billabong is a brand that encompasses the Australian surf culture by offering products that cater not only for the surfer inside many of us, but for fashion and lifestyle needs. 1.2 CURRENT TARGET ...
This can obviously have a negative impact on the overall profits of high end product thus potentially forcing the brand to undercut prices in order to sell. Another negative effect I believe is the loss of jobs in local areas where clothing is manufactured. Any company in a time of crisis will strive to keep buying and production costs at a minimum to increase profit margin. This has seen clothing organisations, in for example the US, source material from cheaper overseas countries such as China and have the garments manufactured abroad also, for example Vietnam.