Burberry Case Study about Consumer Behavior By: Chenoy Ceil 1 Electronic copy available at: https://ssrn.com/abstract=3520418 Executive Summary Consumer behavior is an essential part of the marketing for brands that are trying to influence the purchasing behavior of consumers. Burberry as a brand has been able to influence the purchase decisions of consumers by utilizing motivational, perception, personality and lifestyle strategies. This paper looks at the various factors that are utilized by Burberry that act as marketing stimulus for influencing the purchasing decision of their consumers. Some recommendations dealing with the brand perception of Burberry are also provided to help Burberry improve their sales and create a unique fashion brand for itself. Motivation, personality and emotion are important factors that affect consumer decision making, especially in the case of high fashion products. Looking at all these various factors in detail, this paper concludes that motivation, perception, personality and lifestyle have been carefully utilized by Burberry to reposition its brand for the modern age. 2 Electronic copy available at: https://ssrn.com/abstract=3520418 Table of Contents Executive Summary ....................................................................................................................................... 2 1. Introduction ............................................................................................................................................... 4 2. How Burberry uses Motivational Theories ............................................................................................... 5 3. How Burberry uses Perception Theories .................................................................................................. 6 4. How Burberry uses Personality Theories .................................................................................................. 8 5. How Burberry uses Lifestyle Theories ..................................................................................................... 9 6. Recommendations and Conclusion ......................................................................................................... 12 References ................................................................................................................................................... 13 Appendix ..................................................................................................................................................... 15 Appendix A: Burberry Strategy ............................................................................................................... 15 3 Electronic copy available at: https://ssrn.com/abstract=3520418 1. Introduction Understanding consumer behavior in the 21st century requires a close understanding of how consumers have evolved in the digital age. Consumer behavior is the study of how consumers make, select, dispose or purchase ideas, products, services or experiences to satisfy their needs and desires (Solomon, 2017). Consumers and customers are the end users or buyers of the goods and services, and to study what influences their decisions is important for business to thrive and grow (Noel, 2009). Luxury brands and the concept of luxury fashion brands have exploded internationally in the last 20 years (Balmer and Burghausen, 2015). Burberry as a luxury brand was started in the year 1856 by Thomas Burberry and it soon became eponymous as a luxury brand. The first store of Burberry opened in the year 1891 in Haymarket, London (Robins and Ricca, 2012). Headquartered in London, Burberry designs, manufactures and sells ready to wear clothes and accessories that are built on innovation and luxury. This paper looks at how consumer goods are purchased and utilized by consumers and what motivations drive the consumer behavior. Looking specifically at the luxury brand Burberry, the analysis is made of how Burberry uses motivational, perception, personality, and lifestyle theories to drive consumers towards the brand. Marketing’s impact on consumers is immense in driving the perception of the brand and Burberry has been able to utilize various strategies to market the brand effectively. 4 Electronic copy available at: https://ssrn.com/abstract=3520418 2. How Burberry uses Motivational Theories Burberry as a brand represents the clean, British style of traditional apparel with clean looks and high-quality material (Noel, 2009). The brand has strengthened itself as a luxury brand with its indistinguishable pattern and celebrity endorsements that have helped the brand become globally recognized (Peng and Chen, 2012). Motivation is often described as an energizing force that activates certain behaviours influencing decision making (Peng and Chen, 2012). Motivation theories range from genetic biological approaches to needs-based approach towards consumer behavior. Maslow forwarded the hierarchy of needs theory to establish the importance of needs such as survival, safety, love, esteem and self-actualization, which are all at the root of any human being (Wright, 2006). Motivation starts with a physiological or psychological need and is reinforced by a deep urge or desire to achieve that goal or incentive (Wright, 2006). Maslow’s need hierarchy theory explains what motivates consumers to own or acquire a brand of luxury product. The need for esteem and a positive self-image explains why consumers need to own luxury brands such as Burberry. Motivation theories range from utilitarian motivation to hedonic motivation. While utilitarian focuses on the most basic needs, hedonic motivation is formed from luxury items and the need to engage in latest fashion. Burberry has targeted the market segmentation of luxury fashion goods and utilizes various marketing campaigns to motivate consumers to buy their products (Stankeviciute and Hoffmann, 2012). By having a diverse range of products that are marketed effectively across the globe based on the purchasing power of the consumers, Burberry has been able to create a unique differentiation within its own brand (Pike, 2015). This has helped the brand to cater to the needs of the consumers based on their demands. Burberry has also focused on utilizing social media to learn 5 Electronic copy available at: https://ssrn.com/abstract=3520418 about the latest fashion trends that are driving the fashion circles around the globe. By listening to their consumers effectively, Burberry has been able to introduce create your own style brand of clothing that appeals to the youth. Burberry has also made inroads into streetwear and casual wear those appeals to the latest fashion trends (Burberry, 2018). By understanding the motivation behind the fashion choices of the modern generation, Burberry has been able to strategically position itself as a lifestyle choice for their heritage consumers as well as create new and unique innovative designs for their modern consumers. 3. How Burberry uses Perception Theories Perception is how consumers perceive the brand and what factors influence the perception of the end users. Perception is defined as how consumers process information when exposed to marketing stimuli, that ultimately affect their decision making (Stankeviciute and Hoffmann, 2012). In the age of digital development and technology advancement, Burberry utilizes social media and brand extension strategies to increase profits and satiate shareholders’ requirements (Stankeviciute and Hoffmann, 2012). Earlier to 2006, the Burberry brand was associated with trench coats. However, between 2006 and 2014, the brand transformed itself under the leadership of CEO, Adriana Ahrendts to become a leading fashion house with revenue skyrocketing from 743 million pounds in 2006 to 2523 million pounds in 2015 (Na, 2016). Burberry has been successful as a brand due to its latest marketing strategies with commercials, celebrity brand endorsements, iconic images, photo shoots and exclusivity for its consumers (Luttrell, 2018). Burberry has carefully crafted its brand image as a luxury brand, targeting high net worth individuals to showcase the usage of its products. 6 Electronic copy available at: https://ssrn.com/abstract=3520418 Burberry has been able to influence the perception about the brand by utilizing steady growth methods. Initially, the brand focused on a small array of core products and narrow consumer base of middle-aged, fashion conservative men who wanted to consume the brand (Pike, 2015). However, in the modern age, perception is driven by modern designs and streetwear style that is different from the heritage clothing of Burberry. In 2017, Burberry took the initiative for a new strategy to focus on the latest designs that will help the brand to redefine the perception of the brand (Burberry, 2018). To meet this objective, the brand is now focusing on streetwear and modern style and has introduced a two phase strategy. In the first phase, the brand will focus on content creation and crating the brand perception with social media and innovative advertisements (Burberry, 2018). With personalized luxury products, Burberry is focusing on drawing the attention of the modern fashion icons and utilizing digital partnerships with global media houses to showcase the innovative designs of Burberry. Burberry is also focusing on improving the luxury store experiences by revamping its existing stores with newer designs (Burberry, 2018). The focus is on improving the customer experience of the luxury brand, and to achieve it Burberry are utilizing various avenues to constantly engage with the customer. In the 21st century, corporations are not just focusing on profit maximization, but also have a need to become sustainable and showcase their impact on the communities in which they thrive. To achieve the sustainable perception within their consumers, Burberry has already created the Burberry foundation that focuses on tackling women inequality issues (Burberry, 2018). The brand is also focusing on creating community cohesion by facilitating access to creative industries to numerous backward society individuals and women (Burberry, 2018). This has tremendously helped the brand to establish itself as a sustainable brand. 7 Electronic copy available at: https://ssrn.com/abstract=3520418 4. How Burberry uses Personality Theories Personality is defined as the behavioural tendencies that are reflected by individuals and brands when they are subjected to different situations. Understanding the personality of the consumer is important for brands to understand what factors will influence their purchase decisions (Balmer and Chen, 2017). Burberry has created the brand personality to help it achieve its goals of brand perception. To this end, the brand has showcased its bags, accessories, and clothing lines as fashionable, yet practical (Balmer and Chen, 2017). The bags are durable and this helped the brand to create the image of sincere and trusted (Balmer and Chen, 2017). As a globally recognized brand, Burberry has marketed itself as epitomizing the British style of dressing with a sense of recognizable design, image of elegance, and focus on quality rather than extravagance (Balmer and Chen, 2017). This has clearly worked to their favour in promoting the brand image in Asian countries such as India and China. The perception of the brand is not just motivated by popular culture, royalty and traditionalism, but also by its sense of usage and practicality. Burberry has clearly utilized its marketing strategies to expand the brand image and personality to become accessible within Europe as well as to other parts of the world. Burberry started off as manufacturing raincoats but was able to transform the personality of the brand as a posh consumption good with its cool fashion label (Wooton and Horne, 2010). The high end fashion associated with the Burberry brand has helped it to maintain its fan following around the world (Wooton and Horne, 2010). With its easily distinguishable pattern, Burberry managed to create a unique brand experience for its consumers. However, Burberry was able to create the unique perception of the brand by targeting specific consumer groups who can afford the pricing (Wooton and Horne, 2010). As a brand, Burberry had to re-position and re-build its image from raincoat manufacturers to supplier and manufacturer of high end fashion. 8 Electronic copy available at: https://ssrn.com/abstract=3520418 The personality theories reflect how a person responds to a certain stimuli that motivate their decision making. Under the Freudian model, personality is often created in the subconscious and it is the unconscious needs that drive a person to make purchase decisions (Kumar, 2008). For a consumer to make purchasing decisions, it is important for their personality to reflect the kind of need that they have. Freud’s personality theory of id, ego and superego can be utilized for drawing the needs of consumers as the pleasure needs are often left hidden in the submerged unconscious brain (Wright, 2006). Burberry has tapped into this subconscious need of consumers to own luxury products that reflect their brand image. Burberry utilizes its brand image to create a brand personality that is instantly likeable, trustworthy and credible. To cater to the subconscious needs of consumers, Burberry highlight’s its value as creating self-esteem among its consumers (Choi and Shen, 2017). 5. How Burberry uses Lifestyle Theories Lifestyle is defined as how individuals have created values around how they behave. Lifestyle is important for brands to understand the consumer behavior as this will allow brands to provide the right form of marketing stimuli to influence their decisions. Burberry has been able to create the lifestyle brand with its approach towards utilizing online technology to enhance their performance around the globe (Choi and Shen, 2017). Lifestyle is a choice of living that is adopted by the consumer to reflect how that person utilizes its money and time to spend. Burberry targets the high net worth individual market with customized advertisements that hit the target market with content that exhibits elegant, stylish, and simple clothing designs. To connect with consumers and create the brand image, the company also showcases past campaigns from previous years that bring back the long standing history of the brand as a luxury 9 Electronic copy available at: https://ssrn.com/abstract=3520418 product (Luttrell, 2018). When buying a Burberry product, consumers associate themselves with the British lifestyle and the rich heritage and craftsmanship of the brand (Pike, 2015). There is distinctness to the Burberry brand that adds to the history of the company and helps consumers to easily associate with the brand. Consumption of Burberry products is based on the associations that the brand managers and marketers have been able to generate. Burberry marketers have been able to update the meanings associated with traditional Burberry trench-coats and patterns by transforming the signature garments as design classics and continuity products with long lifespans (Pike, 2015). Lifestyle consumption is based on different lifestyle dimensions such as interests, opinions and activities. To capture the interest of consumers, Burberry has constantly balanced its traditional patterns with careful extensions and responsive innovations that are reflective of modern fashion trends (Pike, 2015). Further, Burberry’s unique positioning compared to its competitors has also helped the brand to set itself apart from others. With unique positioning in terms of style and pricing, Burberry has made a quick turnaround from the economic downturn of 2008 to become a successful fashion brand (Pike, 2015). This is largely due to the defined target market for Burberry that has helped the brand to market itself to high net worth individuals. Burberry has also created diverse collections with differing distribution channels, demographic reach and price points (Pike, 2015). While Burberry London collections have been targeted towards geographies with lower price points, Burberry Lifestyle diffusion collection has dominated sales by volume due to higher price and gross margin garments from the Prorsum and London collections (Pike, 2015). 10 Electronic copy available at: https://ssrn.com/abstract=3520418 Burberry Positioning Source: Pike, 2015 Burberry utilizes various eMarketing channels such as traditional media and social media to draw attention towards the lifestyle branding. Traditionally, Burberry has positioned itself with retail outlets in various parts of the world to reflect the purchasing power of the consumers. For example, in London, New York and Paris, Burberry reflected itself as a costly brand showcasing the local lifestyle of the consumers (Pike, 2015). This has been achieved with social media and billboard advertisements that reflect the brand image, power and status (Pike, 2015). Burberry has also introduced bespoke, made-to-order services to enhance the consumer’s experience and lifestyle in choosing Burberry (Pike, 2015). In November 2017, Burberry set out with a new strategy to improve their customer experience and increase the lifestyle quotient for their consumers (Burberry, 2018). Burberry understands the importance of innovation, creativity and personalization in the luxury sector and to meet the demands of luxury consumers, the brand is now focusing on casual, fun fashion such as streetwear and casual fashion that meets the lifestyle choices of their consumers (Burberry, 2018). 11 Electronic copy available at: https://ssrn.com/abstract=3520418 Burberry is also utilizing social media effectively with their presence on Facebook, Twitter and Instagram to showcase the latest fashion trends and better communicate the product attributes. Burberry is now showcasing innovative and exciting assortments of their luxury collection that expresses the opinions and point of view of their customers (Burberry, 2018). All these factors are strongly influencing the lifestyle choices of their consumers and will help the brand to reenergize its offerings. By showcasing the brand benefits with effective communication, Burberry is capable of allowing consumers to better express their personality (Saviolo and Marazza, 2013). Burberry is focusing on better communicating the consumer experiences by utilizing digital media to create a two-way communication channel. This is helping the brand to listen to their consumer demands and create innovative products that define the lifestyle choices of their consumers. 6. Recommendations and Conclusion In conclusion, it can be said that Burberry has been utilizing the various motivation, personality, perception and lifestyle factors to their advantage to influence the consumer behaviour. As a modern fashion lifestyle brand, Burberry has inherited the heritage British style of clothing with modern streetwear fashion. The brand has kept the modern separate from the heritage brand by allowing sub brands within the brand Burberry. This has helped the brand to maintain the perception of the brand among its old customers and create excitement among its new consumers. Burberry’s strategy to remain relevant in the modern of fast fashion and casual fashion is to transform the company to meet the current demand. The modern strategy is reflected in their 2017 strategy as shown in Appendix A. However, Burberry’s foray into streetwear may be seen as a detriment to the brand image of heritage British lifestyle. It is 12 Electronic copy available at: https://ssrn.com/abstract=3520418 recommended that Burberry utilizes separate branding to showcase its streetwear and casual lifestyle wear as this form of clothing is largely different from the traditional Burberry patterns and trench coat style of clothing. This will help retain the existing consumers as well as influence new consumer behavior towards the brand. Brand personality is also influenced by brand perception. To influence the brand perception, Burberry has traditionally expressed the brand attributes and benefits with their communication style. It is recommended that Burberry utilizes the traditional channels of communication as well as social media to continue their efforts of showcasing the traditional values associated with the brand. This will help revamp the brand perception and by utilizing innovative advertisements, brand association between the traditional patterns of Burberry and modern lifestyle can be achieved. 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Strategic Thinking: A Nine Step Approach to Strategy and Leadership for Managers and Marketers. Kogan Page. Wright, R. (2006). Consumer Behaviour. Thomson. 14 Electronic copy available at: https://ssrn.com/abstract=3520418 Appendix Appendix A: Burberry Strategy Burberry Strategy 2017/18 Source: Burberry, 2018 15 Electronic copy available at: https://ssrn.com/abstract=3520418