CONSUMER BAHAVIOUR MIDTERM PROJECT PRODUCT CATEGORY: HERMES VS.

GUCCI HANDBAGS Student: Anja Bulajic

Both Gucci and Hermes are among most successful fashion houses in the world specialized in producing luxury goods items from leather goods, clothes and accessories to jewellery , decor, perfumes, having long history, and clear identities. In order to fully understand and define the target consumer of each of the two brands within handbags product category, I'll elaborate on marketing activities, production details and the philosophy behind these brands. To begin with, Hermes company, in this case Hermes bags are considered by many to be the last true luxury goods in the fashion industry. The reason behind such a strong reputation lies in the fact that they are made of finest leather and fabrics, sewed by hand and in order to buy one, in needs to be ordered. The bags on display in the boutiques just present the options. In reality, it is required to wait several months while it is made to the customer's specifications. Moreover, Hermes handbag is not made to become an 'it' bag. Most of the designs have been unchanged for almost a century, are timeless, don't bear ostentatious logos thus

conveying uniqueness, simplicity and refinement. Hermes is still one of the rare luxury companies which are run like a small, intimate business despite the fact that it could become a multibillion-dollar company easily through increasing production to eliminate waiting lists and sell bags ready-made in the store. Furthermore, marketing activities are carefully controlled, subtle, just as the image of the brand itself. Visiting a company's website was, for me, a totally unexpected experience. It is designed in a simple, unpretentious manner, with a humorous drawings, very playful and approachable, which is not to be expected if we take into the consideration websites of the competitors. The emphasis is placed on the goods, clearly showing how each bag looks like from inside out, which are the materials used, and the price in a very clean, tastefully created way. Also, such a marketing strategy makes sense and appeals to me very much as it is so far from everything one would expect, and that's what makes the whole experience memorable. Their consumer is clearly targeted and it is high class, old money, who trust the brand already and are likely to understand the brand's marketing strategy in a right way. Simply, they can afford themselves to be unpretentious and discreet and identify themselves with such an image of the brand. Old money people are raised and grown up in wealth, are accustomed to it and don't feel the need to demonstrate it

to the society. Their status is not a matter of discussion. Additionally, they concentrate more on excellence in quality, design, use of precious materials, craftsmanship, recognize the value of made-to-order product.

The target customer, apart from being old rich, is a woman, aged 30-60, a heiress, aristocrat, both single or married or perhaps a woman who has a highly successful, well paid job, values aesthetics and is motivated by need for power, uniqueness. As for the lifestyle, she is a believer, loyal customer, mostly conservative, conventional, who knows that for an average price of 6 000$ gets the promise of a high quality product which is a classic, timeless. Furthermore, she travels a lot to exclusive, exotic destinations, plays tennis or golf, attends art exhibitions, goes to theatre, is well-educated and well-read, but prefers to keep her life personal as much as possible and doesn't enjoy over exposure or places, people, that are considered to be trendy. Her life is structured around family, close friends and like-minded people.

Gucci, on the other hand, although being a renowned fashion company has a completely different brand identity, marketing activities and target consumer. It is an Italian brand, part of the Gucci Group, owned by French company

PPR. It was found in Florence in 1921. As for the handbags product category, the production is high-tech. In addition to that ,the image of the bag is worked on by a team in London, Paris and Milan on a three-dimensional computer. Unlike at Hermes, where artisans study the skins and try to figure out the best way to cut them, at Gucci the computer makes a map. Handbags are sewn on machines and produced in 2 to 3 hours with the craftsman working on twenty bags at a time- 5 times as many as at Hermes. Bacci's studio( Gucci's handbag craftsman) only produces 250 bags a month because it did the most demanding design with the best quality skins. Bacci also managed subsupplier who did another 2000 bags a month. When we talk about advertising activities, Gucci uses controversial, provocative, aggressive techniques thus pushing the message and the product relentlessly. Some of their advertisements were even banned by advertising standards and being awarded by others at the same time. It's website is modern, shiny, flamboyant, provocative, offering the possibility to view and purchase products online. Furthermore, the stores are located on exclusive locations and window displays communicate the same image described regarding the website.

The target consumer is aspirational, one that feels the need to be identified with the logo, the brand itself. Handbags, as 'entrance products' to luxury brand are

an adequate choice for such a consumer because almost everyone nowadays can afford to have a luxury brand handbag. Also, it is visible on the body and gives a wearer the chance to publicly declare his/her status or aspirations. In this way, marketers count on the irrational side of each human being and target towards experiential marketing. The key is to engage customers in a memorable experience around the product, developing a relationship with a customer, creating an affinity with them. Gucci handbags, in my opinion, are targeted both at the rich and the masses. As far as masses are concerned, it could be a woman aged 25-40, who aspires to be a part of a jet-set, celebrity lifestyle, adores the actress chosen to be a new ambassador of the Gucci brand and needs a proof of personal value through identification with her, or simply to show to the society or to her environment that she is doing well in life. She would save for buying a Gucci handbag, has an averagly paid jobs, goes out with her boyfriend or girlfriends to trendy places, wears trendy clothes, listen to trendy music etc. She is motivated by a hedonic need which is subjective, personal, and in the most cases aimed at self confidence boost. Another type of target consumer could be the nouveaux riches, for whom buying the Gucci handbag would mean investing in logo, recognition, power, prestige, they so much strive for. She is also aged 25-40, married or not, and wants to have everything that money can buy. Most probably goes to places, destinations,

proposed by popular culture, listen to the trendy music, wears trendy designer clothes, watches reality shows, reads celebrity lifestyle magazines etc. Status, and demonstration of status is of utmost importance for her along with having fun while shopping.

The Hermes and Gucci customers are similar, in my opinion, regarding general expectations we usually link with luxury goods items. The promise of quality, that both type of consumers rely on, excellence in production, design, the value of final product and why that particular price stands behind the product. In addition to that, both product groups are targeted at women, who are, as it happens to be proven, still the major target for fashion industry, especially handbags and small leather goods. Moreover, the shared characteristic of any luxury brand and what all of them concentrate on, is the importance of the irrational within the consumer's mind, as luxury sells products that are not targeted at our basic human needs. It is tremendously demanding task to sell something that you wouldn't normally need, something that is more intangible than tangible.

As far as differences of the two brands consumer's are concerned, they significantly outnumber similarities. The most obvious difference is the one between the

philosophy of the two brands, production, business and marketing strategy, values. The Hermes consumer would probably never buy Gucci bag, because the identity of Gucci is not one that old rich people could relate to. The uniqueness, perfection, hours of sewing a bag by hand, refinement and simplicity is an identity which attracts this kind of people to Hermes. A truly luxurious experience which doesn't lie in showing off the logo. Also, the other way around, Gucci customer wouldn't buy a Hermes bag, or she would rather choose Gucci bag than the one from Hermes because her main purpose is demonstrating a status to the society, belonging to the tribe. Furthermore, other differences are related to the target customer's lifestyle, motivation, values, demographics and psychographics which determine our shopping decisions.

To my view, both of the companies are doing successfully within their chosen target consumer group. As for Hermes, it is a conscious decision to work as a small fashion house, targeted only at high class customers, without having plans to grow too much. It is that secret ingredient which gives appeal to the company, and because of that it will never lose its identity. On the other hand, profit margins at Gucci are

high, advertising messages provocative and aggressive, productions is based on assembly line, which could be an image of success for the moment, but perhaps not the best long term solution. Identity is what keeps a luxury brand being luxurious. When growing too much, business is taking the risk of losing it.

Hermes as a brand, and a whole product range appeals to me personally very much, and I wouldn't make any changes to the way they run the business. But, if I take Gucci into consideration, I would definitely pay closer attention to the companies growth, and try to maintain the luxury aura around the brand. Regarding marketing, being controversial and provocative is part of their image, and I wouldn't change that radically, but would for sure put an emphasis on marketing in an intelligently provocative way, with a deeper message, rather than being controversial at any cost and only for the sake of publicity.

BIBLIOGRAPHY: Michael R. Solomon, Gary Bamossy, Soren Askegaard and Margaret K. Hogg Consumer Behaviour a European Perspective:Prentice Hall, 1999 Thomas, Dana. Deluxe: How luxury lost its luster: Penguin Books, 2008