Consumer Behaviour

Segmentation

  • High income group
  • Uniqueness
  • Spiritual value

Positioning

In the marketing strategy, after market segmentation and analysis of the target market, brands position themselves according to the customer segment they are targeting. This is referred to as the positioning aspect of the STP approach. Positioning is the place the brand occupied withing the minds of customers and the way it is distinguished from the offerings of market competitors. As analysed in the segmentation part of Chanel’s marketing approach, the company segments the market on the basis of high income, spiritual value and uniqueness. Chanel does so mainly because luxury brands like Chanel do not necessarily compare themselves with other brand in the market, but try to focus on their unique identity and differentiate the brand through personality, identity and character (Atwal & Williams, 2017).

For Chanel being unique is what counts, not what the brand is in respect of others. Chanel delivers uniqueness through its unique design and symbols and this uniqueness manifests itself in customer experience (Mosca, 2016). This makes the brand and its customers highly recognizable. Moreover, as a luxury brand, Chanel positions itself as unique with the help of brand logo and name. This is also what creates brand awareness and relationship in the first place (Zhang, Cude & Zhao, 2020). This is especially true in case of luxury brands as they provide expressive and symbolic value in order to create brand image (Stepian, Lima & Hinner, 2018). Chanel also uses it uniqueness to gain competitiveness and the uniqueness it delivers makes it one of the most recognizable brands in the world (Athwal, Wells, Carrigan & Hanninger, 2019). Furthermore, targeted customers of luxury brands mainly wish to feel special and they are mainly value seekers (Mamat, Noor & Noor, 2016).

In order to cater for such needs, Chanel delivers value through customer experience. Their packaging, stores and service quality are also part of the value their offer and contribute to the value generation more than the products themselves (kim, Yi Luk, Xia, Xu & Yin, 2019). Chanel offers sophisticated stores, high quality packaging and services. Chanel reflects this uniqueness in their packaging and brand image through authenticity and minimalism, along with its heritage. Target segment of Chanel seeks extraordinary brand experience in order to compensate for high prices and this is what Chanel delivers, which is an indispensable intangible asset for luxury brands like Chanel and directly translated into revenue (Guo, 2019).

In addition to the uniqueness of the brand, Chanel also caters for the target segment which is looking for spiritual value from luxury products. This segment uses prestige products to reveal that their social status is different from others. Yu, Hudders & Cauberghe (2017) mentioned that luxury is all about meaning and that the very essence of its value is constructed upon the inflation of its symbolic value over the actual functional value of its services and goods (Li, 2016).

References for Consumer Behaviour

Athwal, N., Wells, V. K., Carrigan, M., & Henninger, C. E. (2019). Sustainable luxury marketing: A synthesis and research agenda. International Journal of Management Reviews21(4), 405-426.

Atwal, G., & Williams, A. (2017). Luxury brand marketing–the experience is everything!. In Advances in luxury brand management (pp. 43-57). Palgrave Macmillan, Cham.

Guo, Y. (2019). Research on Strategy Innovations of Luxury Marketing Based on Consumer Behaviors.

Kim, S., Yi Luk, K., Xia, B., Xu, N., & Yin, X. (2019). Brand name and ethnicity of endorser in luxury goods: does a glocalization strategy work in China?. International Journal of Advertising, 1-19.

Li, Y. (2016). Global consumer behaviour in luxury goods markets. In Global Marketing Strategies for the Promotion of Luxury Goods (pp. 1-28). IGI Global.

Mamat, M. N., Noor, N. M., & Noor, N. M. (2016). Purchase intentions of foreign luxury brand handbags among consumers in Kuala Lumpur, Malaysia. Procedia Economics and Finance35, 206-215.

Mosca, F. (Ed.). (2016). Global marketing strategies for the promotion of luxury goods. IGI Global.

Stępień, B., Lima, A. P., & Hinner, M. (2018). Are millennials a global cohort? Evidence from the luxury goods sector. Journal of Intercultural Management10(2), 139-158.

Yu, S., Hudders, L., & Cauberghe, V. (2017). Targeting the luxury consumer. Journal of Fashion Marketing and Management.

Zhang, L., Cude, B. J., & Zhao, H. (2020). Determinants of Chinese consumers’ purchase intentions for luxury goods. International Journal of Market Research, 1470785319853674.

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