The benchmark of human appeal always increases for both man and woman. From the era of shabby clothes to noble fashion, from de-emphases to emphasis skin care and toilette. Those of the changes label human civilization. Nowadays, the standard of toilette and fashion are very demanding. It is difficult for substantial fashion enterprises to maintain its market. However, Dior can achieve it. What is the market position of Dior? How Dior makes the business and keeps its stable.
Christian Dior was born in Normandy, France in 1905, and channeled his love for art by opening an art gallery.
In 1938, he entered the fashion world as a designer for Robert Piquet. After serving in World War II, Dior returned to Paris and had a very successful collaboration with Pierre Balmain at Lucien Lelong. With the help of Marcel Boussac, Dior was able to open his own fashion house in 1946. His opulent designs made him successful in the post-war era, and his brand quickly expanded into furs, perfumes and accessories.
In 1957, Dior suddenly died and Yves Saint Laurent became the head designer. Since Saint Laurent, other well-known designers at this fashion house include Marc Bohan, Gianfranco and. John Galliano.
3.0 Marketing Environment
3.1 Marco Environment
* Political Factor
Dior is a French brand, which is very elegant. French possess one complete legal and tax system. Actually, French government carries out free market policy, so it provides a free and substantial development space for Dior. Moreover, French has a trading agreement with EU that helps Dior successfully sell products and promotion to other Europe countries. Cite as (Louis E. Boone & David L. Kurtz 2006)
* Economic Factor
In French economy, it can’t fully prosperous. For example, GDP is not growing significantly and there is remarkable unemployment rate. It will seriously affect Dior policy implementation. For instance when employment level is down, Dior can’t employ enough staff for developing. On the other hand, after American second grade mortgage problem, it leads Europe Central Bank to fix interest rate. It definitely helps Dior to reduce loan interest burden, then, exchange rate between EU and US have difference. It also helps Dior invest efficiently and effectively. Cite as (Louis E. Boone & David L. Kurtz 2006)
* Social Factor
In view of social factor, Dior face keen challenges. Nowadays, there is unbalance distribution of wealth in the world. It affects Dior to expand its market, as consumer can’t afford price. Income recourse just comes from some people. It makes Dior development style narrow. Luckily, Dior can take advantage of society since Education level increases. That makes living condition and lifestyle is noble. It generates a lot of tasteful buyers for buying Dior’s products.
* Technological Factor
Nowadays, information technology changes day by day. Dior catches these characteristics, so it establishes official website which can communicate and realize the customers need.
3.2 Micro Environment
In the global market, Dior face many competitions. Locally, there are L.V, agnes b etc. In Europe, there are Burberry Gucci etc. They are also substantial fashion enterprises producing similar product, which can replace of Dior.
3.3 Internal Environment
* Function & Department
Dior is successful tin the market. It not only possesses excellent design, it also relies on top management team who decide the direction of company. Moreover, Dior is cosmopolitan brand. There are many adherents, investors and bank supporting Dior financial and development. It brings comparative advantage to Dior which use for generating own manufacturing team in China. Because of own manufacturing team absolutely maintains product quality as well as reduces production cost. In addition, Dior can use this financial advantage dividing market segmentation, as they input more recourse for research and analysis. It makes the market segmentation be more efficient and effective.
4.0 SWOT analysis
* Strong brand name
Dior is a cosmopolitan brand. To consumers point of view, Dior’s products are elegant noble and tasteful why a majority of consumers have this perspective? It is because Dior creates an unique style of its fashion. Those fashions are in quality since they put more effort and attention to every step. From design to production. Dior doesn’t discharge its duties carelessly, but it establishes its brand to be known widely. The strong brand name can help Dior increase market status.
Main competitors of Dior
* Good Designer and management
Dior employs a lot of famous designers, such as John Galliano. He is a creative and initiative designer. John Galliano holds all of the fashion shows, which are dumfounded and praised by audiences. Undoubtedly, designers are important assets of Dior. In addition, Dior also possesses an excellent management team. They create a ambitions direction for Dior. The successful position of Dior depends on those designers and management.
Dior Designer: John Galliano Dior Director: Bernard Arnauult
* Financial Support
Dior is the famous brand, so a majority of investors and bankers trust Dior. They are willing to provide capital for Dior to expand its business since Dior not only is a cosmopolitan brand, but also potential and profitable enterprises. It attracts investor, potential investor and bankers to support Dior financially.
* Employment Problem
Dior is the substantial listed company. It must possess staff in a great quantity. It is not easy to control too much staff effectively. Dior may face some employment problem, such as human recourse mismatch, staff discipline and salaries distribution. Those problems will directly affect Dior competitors.
* Unsatisfied with some type of consumer
Although Dior products are good. It only serves particular buyers. Dior neglects some markets such as obese buyers and old buyers. According to research, obese guys quickly increases, if Dior gives up this market, it will make loss.
* Takeover Armani
Armani is also international brand. The director of Armani decides to retire few years later. Dior can takeover Armani, so that it can create synergy and increase reputation. Dior can press down product and advertisement cost by synergy and develop various styles, since the style of Dior and Armani have divergence. It makes a different product line to maximize profit.
Armani Director: Giogio Armani
* Cooperation with other company
Dior can cooperate with other companies to expand the market, such as crossover with mobile or furniture producer. Some fashion enterprises have tried before. For example PARDA mix up with Korea mobile producer LG to develop a smart phone. It makes PARDA reputation and market shares grow. Dior can select mobile producer, such as NOKIA helping develop one dignitary and functional mobile. It must increase Dior reputation and market shares.
PARDA x LG smart phone
* Establish new product line for other style
The fashion style of Dior only fits some particular targets. The market shares will be narrow, since some of the fashion brands will snatch a part of market shares. Then, Dior should create another style and build specific product line. For example, leisure wearing and formal dressing. In order to ensure market position, Dior must seriously consider.
Although Dior is one of the cosmopolitan brands, there are semiprecious level competitors to challenge Dior current position, such as L.V, Gucci, and Burberry. They also possess reputation and profitability. Those brands products can directly affect Dior turnover sales, so Dior must draw attention with those brands.
* Global economic trend
In 2006, strong consumption pushed up American economy. It indirectly pushes up global economy. Dior turnover sales obviously increase. However, since March 2007, the risk of American second mortgage has started up until now. The global economy burden a risk consumers purchasing power decrease remarkably. It seriously affects Dior because it is a luxury products producer. In attempt to obviate economic crisis, Dior must adjust the selling strategy and cost control.
* Designer stay or resign
Designers are the important assets of Fashion Company. It is not easy to find or train potential designer because top designer stay behind another brand, even though there is a contract to restrict them. Dior must put more resources to protect designer team in order to keep the image and remain attraction.
5.0 Market Segmentation
It relates to segmentation base and profile. There are three major market segmentation including Demographic, Psychographic and Behavioral.
5.1 Segmentation Base
* Demographic Base
Sex-Christian Dior is designed for Lady. It includes fashion, accessories, skin care and cosmetics.
-Dior Homme is Man product line.
Income-Dior is luxury product producer, so the price of product set on high price. Dior expects the consumer to earn ranking form $20,000 to $45,000 per month.
Occupation- Dior expects consumer who are profession or management level. It is because this occupation species can earn relatively high salaries, so the price of Dior products can be accepted.
Social class-Dior expects consumer to be upper middle or above classes, as Dior run noble direction. It can match Dior image
The above variables provide an objective factual and descriptive base for categorizing consumer, so that Dior can find consumer direction. Cite as (David. W. Cravens & Nigel. F. Piercy 2003)
* Psychographic base
Lifestyle-Tasteful consumers are the targets of Dior, since the product design is mainly suitable for this type of consumer.
This type of variable provides a subjective, interpretative and explanatory base for categorizing consumer. Although this base can’t offer too much variable for Dior, it let Dior know unique style is their main weapon.
* Behavioral base
Benefit sought- Dior knows customer focusing on product quality and sale service.
Loyalty status- The consumers may have medium faith of Dior product.
The above variables make Dior know who will use product, so that Dior can mainly focus on this type of consumers. Cite as (Joshua Grossnickle & Oliver Raskin 2001)
5.2 Market Targeting
* General Criteria
The market segments of Dior are tasteful people who are professional, manager or rich people. In fact, the size of this market is quite large. Then, a potential growth is concealed in this market, since the social unceasing evolution. People receive higher level and living standard also inevitable. They need to identify their position. Luxuries are their first choice.
There are many competitors existing nearby Dior, such as L.V, Gucci. They have the same market was approached by those competitors of Dior. However, this market structure is complex. They have the same market and those products can be substitutes. For example Dior cosmetic, Gucci cosmetic,
However, this market structure has one advantage. It is difficult for other new competitors to enter the field as Dior and other competitors win the fame for long time, financial background is also reliable.
* Specific Criteria
In fact, Dior customer base isn’t sufficient. Although Dior utilizes much resource to constitute the customer base, there are too much competitors to struggle for the same market. It is difficult for Dior to break through the siege. It is not easy to provide meaningful marketing mix strategy that can satisfy with consumers, Nevertheless, Dior can achieve by its strong brand and successful segmentation. Dior segments can be measured in term of monitoring the effect of market mix strategy.
* Target Strategy of Dior
Dior carries out Differentiated target and Niche, as Dior serves not only one segment. Different segment will have different marketing mix strategy to fit the consumer need.
Moreover, Dior also focuses some specialized sub-segment. Special product is produced by Dior to satisfy this small group.
5.3 Market Positioning
Dior marketing mix strategy distinguishes consumers’ point of view.
* Product Attributes
Dior product is elegant. It is a luxury for people.
* Usage Occasion
Consumers not always purchase Dior product. It is not necessary for them to buy every day or week. They may purchase Dior product once or twice a year.
* Against from competitors
Dior market segment is steadily increasing and the competitors’ sales also don’t fluctuate. Dior stays at a safe place.
* Product Categories
1. Dior Homme- man fashion
2. Christian Dior- Lady fashion
3. Dior – Lady accessories, skin care and cosmetics
2.Christian Dior 3. Dior
Lady Wearing Cosmetics
Dior marketing mix strategy owns competitive advantage for below areas:
* Product Differentiation
Although Gucci, L.V are very famous brands, their products are already commonplace which nothing special, Nonetheless, Dior product can bring fresh and unique excitement to consumers.
* Image Differentiation
C.D is the logo of Dior. It is well-know brand for every one. It is like people see M as they will think of McDonald.
6.0 Analysis of 4ps
Dior product divides into few types. As for man causal wear is Dior Homme. For Lady wear is Christian Dior, for cosmetics and skin care is Dior, which has stricted quality control. There is no excuse for Dior to produce flawed product. Dior has strong brand supported by long in time history. A lot of customers hold favorable attitude towards a brands, so Dior product can attract faithful adherent.
Dior products are luxuries .the price is also costly. Although the price of Dior product is expensive, it doesn’t affect the demand of this luxury. The price setting relates to s few aspects. First, it is a must to consider competitor price such as L.V Gucci. Second, product’s quality, warranty, image are crucial. Then reputation value, Dior can consider to decrease price, which can probably increase market shares.
In fact, Dior does not have too much promotion. It just promotes the product through newspapers, website and some specific magazines, since a vast of people already know Dior. If Dior can remain more budgets for promotion. The reputation of Dior must rise. Dior can consider which type of advertising is the most effective for them. It is acceptable to adopt T.V, Huge advertising board.
In HK, Dior shops are located in famous shopping mall and popular place such as Habour City. It is not only conformable, but also convenient for consumers. In order to take the advantage of concentration, Dior should establish more shops in famous area.
From my point of view, I suggest Dior keep noble image and put more resources into promotion such as sponsor famous football team, green campaigns, so Dior can establish a health and active image. On the other hand, Dior should search another source of consumers in order to increase market share. Because of luxury clients source are too narrow. It is necessary for Dior finding another segment.