Analysis on the Marketing Strategy of Chanel
Wang Zihan
The Second High School attached to Beijing Normal University, Beijing, China
Author’s Email: wangzihanjanice@163.com
ABSTRACT
Chanel is an independent brand in the luxury industry. The main purpose of this article is to analyze the whole supplier
audience and the industry environment. The result shows that the exquisite design concept is throughout all of the
products. Chanel's market scope is gradually expanding. In addition to the affluent class that was originally targeted, the
market of Chanel has gradually penetrated the performance of low and medium consumption level. It is no longer out
of reach for most young people.
Keywords:
Luxury Industry, Coco Chanel, Supplier Audience, Industry Environment
1.
INTRODUCTION
Coco Chanel was born Gabrielle Bonheur Chanel on
August 19, 1883, in Saumur, France. Her early years were
anything but glamorous. At age 12, after her mother’s
death, Chanel was put in an orphanage by her father, who
worked as a peddler. Chanel was raised by nuns who
taught her how to sew a skill that would lead to her life’s
work. Her nickname came from another occupation
entirely. During her brief career as a singer, Chanel
performed in clubs in Vichy and Moulins where she was
called “Coco.” It is said that the name comes from one of
the songs she used to sing, and Chanel herself said that it
was a “shortened version of cocotte, the French word for
'kept woman,'” according to an article in The Atlantic.”[1]
This article is to do market research on Chanel, which is
a unique brand in the luxury industry.
2.
BACKGROUND
2.1.
Sales Volume
Earlier, as, an old fashion house, Chanel published its
annual sales report for 2019, with sales of nearly $12.3
billion. Chanel maintained strong growth in the first year
after the death of Lord Buddha. Asia became its most
profitable market for the second year in a row, an increase
of 10% compared with 11.1 billion in 2018. Although the
group did not disclose the sales of individual items, the
list of clothing and handbags designed by creative
director Virginia Viard was the best, with sales increasing
by 28%[3].
Figure 1
Sales Channel Trend Data[2]
Advances in Social Science, Education and Humanities Research, volume 543
Proceedings of the 2021 6th International Conference on Social Sciences
and Economic Development (ICSSED 2021)
Copyright © 2021 The Authors. Published by Atlantis Press SARL.
This is an open access article distributed under the CC BY-NC 4.0 license -http://creativecommons.org/licenses/by-nc/4.0/.
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Chanel also warned that sales would drop sharply by
2020, mainly because the epidemic forced the closure of
physical stores, as well as the change and decrease of
consumer demand. In addition, Chanel did not have
mature the development of e-commerce platform, which
made the brand face an unprecedented crisis. From the
trend data, we can clearly understand that sales value has
stable growth. Chanel is affected by the new crown in
2020, which leads to the decline in sales of the whole
brand. Chanel has always maintained an independent
style. For example, Kering and LVMH both intend to
annex Chanel, but Chanel has not published any financial
reports in 108 years, which makes people curious.
However, Chanel's chief financial officer, Philippe, is still
a unique brand Blondiaux said the company's current
financial position is very sound and has all the means to
remain independent. "This financial statement shows that
our financial position is very sound and we can maintain
our position as a private, independent company for
centuries to come." That's what Blondiaux said[3].
2.2.
Brand
Chanel distributes its products through many
channels, such as exclusive stores, e-commerce websites,
multi-brand stores and high-end supermarkets, so that the
products are sold worldwide. There are more than 300
Chanel boutiques in the world. With the increasingly
demanding consumer demand, the old bottle and
consumers do not support the increasing consumption
standards, so it is necessary to upgrade Chanel 5 perfume
again in bottle shape, making it completely independent
of other high-end perfume.
Mrs. Chanel transformed the perfume bottle into a
style similar to minimalism, forming a new fashion force,
and this minimalist design touched the elegant atrium of
ladies and gentlemen.
For Chanel's reform, the most important link is its
control of advertising. Chanel often brings unforgettable
memories to the viewers with the visual effect of impact,
and also conveys a noble, fantastic and inviolable look.
Chanel has extremely strict control over the media of
advertising, which must be closely related to the target
consumer groups of Chanel, such as fashion magazines,
high-end hotels or clubs, etc. In terms of the number and
cycle of advertising, Chanel is targeted and planned, and
their advertising requires precision rather than wide
coverage.
3.
ANALYSIS
3.1.
Product
There are tailored suits, women's wear, advanced
garments,
perfume,
make-up,
skincare
products,
footwear,
handbags,
glasses,
watches,
jewelry
accessories, leather bags, etc. Chanel products also
position different product series for different groups of
people, and these products are also determined according
to Chanel marketing strategy. In 1921, Ms. CHANEL and
the famous perfume master Ernest Beaux, launched the
world's most popular designer perfume: CHANEL N°5
perfume, up to now CHANEL N°5 is still the world's first
selling perfume. Marilyn Monroe's quote "I only wear
N°5 to sleep" became the immortal legend of CHANEL
N°5. The logo of "double C" has also made this bottle of
perfume the most profitable product in Chanel's
history.[4]
So far, Chanel's official website is still the focus of
recommended products. Chanel rarely produces men's
products. But as time goes on, Chanel has launched a
series of blue perfume, but men's clothing is missing
because of women's desire to be independent of men.
Until now, Chanel's perfume and make-up are also well
known worldwide. Now Chanel has launched the BRIC
series, the most advanced series of Chanel make-up.
Rarely seen high-end advertising on TV or in the street.
But it can be seen in magazines in private clubs or first-
class cabin, which shows that their products and
advertisements
are
matched
by
lean.
Targeting
consumers rather than advertising widely.
Chanel has created a surprising success in the field of
cosmetics and perfume, Chanel products can always meet
the needs of users, in line with the noble and simple style,
conquered women, and made women's status improved
to a certain extent. Chanel's service is also very good in
boutiques or cosmetics shop. Staff will ask your
passionate demand and then arrange recommended
products according to your requirements and then
carefully check the production date and expiry date to
ensure that the products are in good condition. Chanel's
main consumer groups are positioned as middle and
senior class people. Most of them have strong
consumption ability. As for the top class, Chanel has
private customization or limited edition. For each product
audience, Chanel has a clear and accurate planning. For
example, the color makeup is more inclined to the lower
middle class and the upper middle class In the color
make-up, there are also BRICs series, which are luxury
cosmetics for high-end customers.
3.2.
Price
The price of Chanel is also different, like the watches
and jewelry bags or clothes in the boutique, the price is
around thousands of pieces, the basic ones are around
tens of thousands of pieces, while the more expensive
ones are customized or limited edition ones are over
hundreds of thousands or hundreds of thousands.
Chanel's cosmetics and skincare products are cheap.
Chanel usually doesn't have a discount all the year round.
On websites or in a big store like Lane Crawford, we
might have a discount sometimes. Chanel counters do not
Advances in Social Science, Education and Humanities Research, volume 543
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support any installment payment but with the
development of mobile payment and we can try to use
Alipay loans pay. Chanel's pricing has always been very
mysterious. Chanel and Dior Louis Vuitton belong to the
same first-line brands. In addition to the uneven prices of
boutiques is generally between 10000
￥
and 100000
￥
.
Cosmetics shops mainly rely on sales to make huge
profits. The price positioning is relatively reasonable, and
there is little difference with the same level of brand
price.[5] In the last century, Chanel has established its
own brand. In addition to the above reasons, there are
some other reasons for Chanel's audience, such as
Hollywood stars or world-class rich people, because they
don't care about the price of the product. What they care
about is the unique design of the product.
3.3.
Distribution
Chanel does not have any agents and wholesalers. All
the Chanel products that can be bought are available in
the counter or online or offline stores, while cosmetics
are sold separately in cosmetics stores. Sales channels
and distribution, for example, in boutiques, are only
available in relatively luxurious store fields. For example,
in Beijing, only SKP and International Trade stores have
sales channels, while cosmetics stores target consumer
groups that are not as basic as boutiques and can be found
in slightly larger mall. Worldwide, Chanel's user groups
are mainly celebrities or royal nobles. Chanel boutiques
can also be seen at airports in New York, Boston,
Amsterdam, Sao Paulo, Sydney, Hamburg, Cannes,
Miami, Bangkok, Geneva, Tokyo, Saint Tropez, Moscow,
Los Angeles, Paris, Dubai and London Boutiques. They
are located in the most luxurious and most famous shops
in the locality. Chanel has a total of about 310 boutiques,
128 in North America, 94 in Asia, and 70 in Europe. The
rest is perfume and make-up, which are located in various
high-end stores[6].
3.4.
Marketing
They are reluctant to put the advertisement in the
public. But in recent years, it has changed. Nell will
choose some Hollywood stars or supermodels to speak
for them and shape their brand influence through their
influence. When stars wear custom-made high-end gifts
and hold beautiful bags when they are at the awards
ceremony or walking on the red carpet, the media and
news critics will focus on the stars. The relationship
between brands and stars just like a secret agreement,
both of them can benefit greatly from it. The shooting
method of Chanel's advertisement is in a traditional style.
What Chanel occupies in fashion is the dominant position
of women's clothing. Until today, Chanel's women's
clothing is also unique in the world. With the rise of
digital advertising, even the traditional Chanel has joined
in the publicity. In order to further improve the brand
awareness, Chanel also opened a fashion show week to
show Chanel's noble and simple style. At the same time,
they also invited some high-end customers to watch and
order clothes. This sales process can not help but be
admired. Sometimes, they will choose to hold art touring
exhibitions to promote worldwide, starting from April
2012 in Tokyo by December 2013, in Singapore and
other 16 major cities, such as New York, Paris, Shanghai,
Dubay and Moscow.
3.5.
Consumer Emotion
Chanel's marketing gives people a sense of quick and
effective introduction. Their high requirements for
advertising and the accuracy of their advertising are
unique in the whole luxury jewelry brand. Their
advertising and influence can be accurately put into the
right consumers anytime and anywhere, instead of the
paved advertising like Louis Vuitton.
Chanel’s promotion is aimed at the necessity of
consumers, which is undoubtedly more efficient and
rapid than the wasteful mindless advertising. But with the
rise of digital media, Chanel has also shifted its attention
to it, and Chanel's advertising is as simple and effective
as founder Gabrielle Bonheur Chanel. Chanel did not
speculate too much on consumer psychology, but focused
on the product itself, constantly innovating style and
improving quality, so as to make the brand more famous.
In this era of capital rampant, this brand with craftsman's
heart is precious. It is the spirit of Chanel brand to create
an eternal style and avant-garde and exquisite design that
has moved so many consumers.
4.
COMPARISON BETWEEN DIOR AND
CHANNEL
Dior and Chanel are the same first-line brands, but
compared with Chanel, Dior's performance in 2020 is
particularly prominent. Now Dior is subordinate to the
Louis Vuitton group. With the influence of renowned
stars, the cross-border alliance of sports brands and
luxury goods has been greatly expanded. Moreover,
Dior's turnover is ahead of Chanel's products compared
with Chanel Dior's products, cosmetics, watches,
perfume, jewelry, men's wear, high fashion and private
custom.
5.
CONCLUSION
Chanel always adheres to the unique personality and
style, and has the courage to innovate and maintain the
influence of the brand. At the same time, Chanel's
promotions are also diverse, mainly focusing on film and
television advertising, newspaper advertising, online
publicity, window advertising, outdoor advertising as the
center. Moreover, Chanel's sales area and location are
also selected as large cities, high-end shopping malls and
exclusive stores. The famous Chanel 5 perfume is also
the love of Queen Marilyn Monro. Marilyn Monro once
said in an interview: "I sleep only in Chanel 5." This
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greatly improved Chanel's influence and popularity, so
far, Chanel No. 5 still exudes charming light. Chanel's
famous logo to double C and camellia, are a unique style,
with elegant, simple charm. Chanel's products range from
clothing, leather goods, watches, jewelry, shoes and
maintenance products. Most of the price is at the top of
the pyramid, but it still does not reduce the number of
consumers. This is the light of Chanel. It is no longer out
of reach for most young people. This is also because the
market of Chanel has gradually penetrated the
performance of low and medium consumption level.
AUTHORS’ CONTRIBUTIONS
In the whole process, the author herself collects,
organizes, thinks, revises and finally completes this
article.
ACKNOWLEDGMENT
I would like to give my sincere gratitude to the
teachers' help. This paper is finally completed with their
extraordinary patience and consistent encouragement.
REFERENCES
[1]
Coco
Chanel.
Biography.
FEB
27,
2020.
https://www.biography.com/fashion-designer/coco-
chanel
[2]
Sales Channel Trend Data. Bing. 2020.
http://www.dsanz.co.nz/statistics/graphs/chanel/Sales_c
hanel_Trends_by_Valu.gif
[3]
LAUREN SHERMAN. Chanel Surpasses $11
Billion in Sales, Dismisses Rumours of Imminent
Sale. Business of fashion.JUNE 17, 2019
[4]
History
of
Chanel.
Daxueconsulting.
2020.
https://daxueconsulting.com/analysis-on-chanel-in-
china/
[5]
Chanel. 2020. https://www.chanel.com/us/
[6]
Chanel
Marketing
Mix
(4Ps)
Strategy.
Mbaskool.2020.
https://www.mbaskool.com/marketing-
mix/products/17280-chanel.html
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